**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





**FORM
      10-KSB**





x
            Annual
                Report Pursuant to Section 13 or 15(d) of the Securities Exchange
                Act of
                1934




For
      the
      fiscal year ended: December 31, 2007




o
            Transition
                Report Pursuant to Section 13 or 15(d) of the Securities Exchange
                Act of
                1934




For
      the
      transition period from ______________to ______________




Commission
      File Number 000-52679




**CHINA
      DISCOVERY ACQUISITION CORP.**


(Name
      of
      Small Business Issuer in Its Charter)





**Cayman
                Islands**
              (State
                of Incorporation)
            
            **N/A**
              (Small
                Business Issuer
              I.R.S.
                Employer I.D. Number)**70
                Cao Bao Rd., Building C, Suite 1302, Shanghai, China**
              (Address
                of principal executive offices)
            
            **N/A**
              (Zip
                Code)





**650-521-6800**


(Issuer’s
      Telephone Number, Including Area Code)





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


**None**





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


**Ordinary
      Shares, $.0001 par value**


**Ordinary
      Share Purchase Warrants**




Check
      whether the Issuer (1) has 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 requirement for the past 90 days. Yes
xNo
o




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




Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act)


Yes xNo o




Issuer’s
      revenues for the fiscal year ended December 31, 2007 were $0.




As
      of
      March 30, 2007, the aggregate market value of the ordinary shares held by
      non-affiliates of the Registrant was approximately $31,625,000.




As
      of
      March 30, 2008, there were 7,105,000 ordinary shares, par value $.0001 per
      share, outstanding.




Transitional
      Small Business Disclosure Format (check one): Yes
oNo
x







**PART
      I**





**ITEM
      1. DESCRIPTION OF BUSINESS**




**Background**




We
      are a
      Cayman Islands exempted limited life company incorporated on January 8, 2007
      in
      order to serve as a blank check company for the acquisition of, or acquisition
      of control of, an operating business that has its principal operations located
      in the People’s Republic of China. We refer to the People’s Republic of China as
      China or the PRC throughout this Annual Report. Our efforts to identify a
      prospective target business will not be limited to a particular industry.




On
      June
      26, 2007, we closed our initial public offering of 5,000,000 units with each
      unit consisting of one ordinary share and two warrants, each to purchase one
      ordinary share at an exercise price of $5.00 per share (“IPO”). On July 2, 2007,
      we consummated the closing of an additional 750,000 units that were subject
      to
      the over-allotment option. The units from the initial public offering (including
      the over-allotment option) were sold at an offering price of $6.00 per unit.
      Simultaneously with the consummation of the IPO, we consummated the private
      sale
      of 105,000 units (“insider units”) at a price of $6.00 per unit and 1,033,334
      warrants (“insider warrants”) at a price of $0.60 per insider warrant,
      generating total proceeds of $1,250,000. The insider units and insider warrants
      were purchased by Beatrice Hom, our chief operating officer, chief financial
      officer and a member of our board of directors, and Francois Shih, one of our
      special advisors. Gross proceeds from our initial public offering (including
      from our private placement of units and warrants) were $35,750,000. We paid
      a
      total of $2,233,956 in underwriting discounts and commissions (after deferring
      $345,000) and for costs and expenses related to the offering. After deducting
      the underwriting discounts and commissions and the offering expenses, the total
      net proceeds to us from the offering were approximately $32,266,000, of which
      $32,123,000 was deposited into the trust account. In addition, all of the
      proceeds from the private sale of the units and warrants were deposited into
      the
      trust fund, for a total of $33,372,500 held in trust (or approximately $5.80
      per
      share sold in the offering). The net proceeds deposited into the trust fund
      remain on deposit in the trust fund earning interest. As of December 31, 2007,
      there was $33,984,377 held in the trust fund.




We
      are
      not presently engaged in, and we will not engage in, any substantive commercial
      business until we consummate a business combination. We intend to utilize our
      cash, including the funds held in the trust fund, capital stock, debt or a
      combination of the foregoing in effecting a business combination. A business
      combination may involve the acquisition of, or merger with, a company which
      does
      not need substantial additional capital but which desires to establish a public
      trading market for its shares, while avoiding what it may deem to be adverse
      consequences of undertaking a public offering itself. These include time delays,
      significant expense, loss of voting control and compliance with various Federal
      and state securities laws. In the alternative, we may seek to consummate a
      business combination with a company that may be financially unstable or in
      its
      early stages of development or growth.




**Opportunities
      in China**




Opportunities
      for market expansion have emerged for businesses with operations in China due
      to
      certain changes in the PRC’s political, economic and social policies as well as
      certain fundamental changes affecting the PRC and its neighboring countries.
      We
      believe that China represents both a favorable environment for making
      acquisitions and an attractive operating environment for a target business
      for
      several reasons, including:




·
            prolonged
                economic expansion within China, including gross domestic product
                growth
                of approximately 9% on average over the last 25 years, including
                9.5% in
                2004, 9.9% in 2005, 10.7% in 2006, with a projected rate of 10.9%
                for 2007
                (National Bureau of Statistics of
                China);









·
            increased
                government focus within China on privatizing assets, improving foreign
                trade and encouraging business and economic
                activity;




·
            favorable
                labor rates and efficient, low-cost manufacturing
                capabilities;




·
            the
                recent entry of China into the World Trade Organization, the sole
                global
                international organization dealing with the rules of trade between
                nations, which may lead to a reduction on tariffs for industrial
                products,
                a reduction in trade restrictions and an increase in trading with
                the
                United States; and




·
            the
                fact that China’s public equity markets are not as well developed and
                active as the equity markets within the United States and are
                characterized by companies with relatively small market capitalizations
                and low trading volumes, thereby causing Chinese companies to attempt
                to
                be listed on the United States equity
                markets.




We
      believe that these factors and others should enable us to acquire a target
      business with growth potential on favorable terms.




**Government
      regulations**




***Government
      regulations relating to foreign exchange controls***




The
      principal regulation governing foreign exchange in China is the Foreign Currency
      Administration Rules (IPPS), as amended. Under these rules, the Renminbi,
      China’s currency, is freely redeemable for trade and service related foreign
      exchange transactions (such as normal purchases and sales of goods and services
      from providers in foreign countries), but not for direct investment, loan or
      investment in securities outside of China unless the prior approval of the
      State
      Administration for Foreign Exchange (“SAFE”) of China is obtained. Foreign
      investment enterprises (“FIEs”) are required to apply to the SAFE for “Foreign
      Exchange Registration Certificates for FIEs.” Following a business combination,
      involving a change of equity ownership of a PRC operating entity or through
      contractual arrangements with a PRC operating entity. Our subsidiary will likely
      be an FIE as a result of our ownership structure. With such registration
      certificates, which need to be renewed annually, FIEs are allowed to open
      foreign currency accounts including a “basic account” and “capital account.”
Currency translation within the scope of the “basic account,” such as remittance
      of foreign currencies for payment of dividends, can be effected without
      requiring the approval of the SAFE. However, redemption of currency in the
      “capital account,” including capital items such as direct investment, loans and
      securities, still require approval of the SAFE. This prior approval may delay
      or
      impair our ability to operate following a business combination. On November
      21,
      2005, the SAFE issued Circular No. 75 on “Relevant Issues Concerning Foreign
      Exchange Control on Domestic Residents’ Corporate Financing and Roundtrip
      Investment Through Offshore Special Purpose Vehicles.” Circular No. 75 confirms
      that the use of offshore special purpose vehicles as holding companies for
      PRC
      investments are permitted as long as proper foreign exchange registrations
      are
      made with the SAFE.




***Government
      regulations relating to taxation***




Until
      recently, the PRC domestic corporate income tax rate was 33%, and foreign
      invested companies were eligible for tax incentives, depending on their sectors
      and locations. However, as part of the recent government policy to improve
      the
      level and quality of foreign investment, China adopted the PRC Enterprise Income
      Tax Law and its Implementing Regulations on March 16, 2007 which became
      effective as of January 1, 2008. The Implementing Regulations of the Enterprise
      Income Tax Law were promulgated by the State Council on December 6, 2007 and
      became effective as of January 1, 2008. The new law unifies the income tax
      rate
      for domestic and foreign invested enterprises at 25%. All companies incorporated
      in China, regardless of type, ownership or location will be subject to the
      same
      tax rate, although some preferential rates will still apply to encourage the
      development of certain sectors, such as hi-tech enterprises, agriculture and
      fishery. Businesses who received preferential rates under the old system will
      have five years to integrate into the new system. Tax incentives will remain
      available for investments in the west and north-east of the country and in
      high-technology industries.









***Regulation
      of foreign currency exchange and dividend
      distribution***




*Foreign
      currency exchange* .
      Foreign
      currency exchange in China is governed by a series of regulations, including
      the
      Foreign Currency Administrative Rules (1996), as amended, and the Administrative
      Regulations Regarding Settlement, Sale and Payment of Foreign Exchange (1996),
      as amended. Under these regulations, the Renminbi is freely redeemable for
      trade
      and service-related foreign exchange transactions, but not for direct
      investment, loans or investments in securities outside China without the prior
      approval of the SAFE. Pursuant to the Administrative Regulations Regarding
      Settlement, Sale and Payment of Foreign Exchange, foreign-invested enterprises
      in China may purchase foreign exchange without the approval of SAFE for trade
      and service-related foreign exchange transactions by providing commercial
      documents evidencing these transactions. They may also retain foreign exchange,
      subject to a cap approved by SAFE, to satisfy foreign exchange liabilities
      or to
      pay dividends. However, the relevant Chinese government authorities may limit
      or
      eliminate the ability of foreign-invested enterprises to purchase and retain
      foreign currencies in the future. In addition, foreign exchange transactions
      for
      direct investment, loan and investment in securities outside China are still
      subject to limitations and require approvals from SAFE.




*Regulation
      of Foreign Exchange in Certain Onshore and Offshore
      Transactions* .
      Pursuant to recent regulations issued by the SAFE, PRC residents are required
      to
      register with and receive approvals from SAFE in connection with offshore
      investment activities. SAFE has stated that the purpose of these regulations
      is
      to ensure the proper balance of foreign exchange and the standardization of
      the
      cross-border flow of funds.





On
      October 21, 2005, SAFE issued the Notice on Issues Relating to the
      Administration of Foreign Exchange in Fund-raising and Reverse Investment
      Activities of Domestic Residents Conducted via Offshore Special Purpose
      Companies, or Notice 75, which became effective as of November 1, 2005.





According
      to Notice 75:





·
            prior
                to establishing or assuming control of an offshore company for the
                purpose
                of financing that offshore company with assets or equity interests
                in an
                onshore enterprise in the PRC, each PRC resident, whether a natural
                or
                legal person, must complete the overseas investment foreign exchange
                registration procedures with the relevant local SAFE branch;





·
            an
                amendment to the registration with the local SAFE branch is required
                to be
                filed by any PRC resident that directly or indirectly holds interests
                in
                that offshore company upon either (1) the injection of equity interests
                or
                assets of an onshore enterprise to the offshore company, or (2) the
                completion of any overseas fund raising by such offshore company;
                and





·
            an
                amendment to the registration with the local SAFE branch is also
                required
                to be filed by such PRC resident when there is any material change
                involving a change in the capital of the offshore company, such as
                (1) an
                increase or decrease in its capital, (2) a transfer or swap of shares,
                (3)
                a merger or division, (4) a long term equity or debt investment,
                or (5)
                the creation of any security interests over the relevant assets located
                in
                China.









Moreover,
      Notice 75 applies retroactively. As a result, PRC residents who have established
      or acquired control of offshore companies that have made onshore investments
      in
      the PRC in the past are required to complete the relevant overseas investment
      foreign exchange registration procedures by March 31, 2006. Under the relevant
      rules, failure to comply with the registration procedures set forth in Notice
      75
      may result in restrictions being imposed on the foreign exchange activities
      of
      the relevant onshore company, including the payment of dividends and other
      distributions to its offshore parent or affiliate and the capital inflow from
      the offshore entity, and may also subject relevant PRC residents to penalties
      under PRC foreign exchange administration regulations.





As
      a
      Cayman Islands company, and therefore a foreign entity, if we purchase the
      assets or equity interests of a PRC company owned by PRC residents, such PRC
      residents will be subject to the registration procedures described in the
      regulations as currently drafted. Moreover, PRC residents who are beneficial
      holders of our shares are required to register with SAFE in connection with
      their investment in us.





As
      a
      result of the lack of implementing rules, other uncertainties concerning how
      the
      existing SAFE regulations will be interpreted or implemented, and uncertainty
      as
      to when the new regulations will take effect, we cannot predict how they will
      affect our business operations following a business combination. For example,
      our ability to conduct foreign exchange activities following a business
      combination, such as remittance of dividends and foreign-currency-denominated
      borrowings, may be subject to compliance with the SAFE registration requirements
      by such PRC residents, over whom we have no control. In addition, we cannot
      assure you that such PRC residents will be able to complete the necessary
      approval and registration procedures required by the SAFE regulations. We will
      require all our shareholders, following a business combination, who are PRC
      residents to comply with any SAFE registration requirements, although we have
      no
      control over either our shareholders or the outcome of such registration
      procedures. Such uncertainties may restrict our ability to implement our
      acquisition strategy and adversely affect our business and prospects following
      a
      business combination.




*Dividend
      distribution* .
      The
      principal laws and regulations in China governing distribution of dividends
      by
      foreign-invested companies include:




·
            The
                Sino-foreign Equity Joint Venture Law (1979), as
                amended;




·
            The
                Regulations for the Implementation of the Sino-foreign Equity Joint
                Venture Law (1983), as amended;




·
            The
                Sino-foreign Cooperative Enterprise Law (1988), as
                amended;




·
            The
                Detailed Rules for the Implementation of the Sino-foreign Cooperative
                Enterprise Law (1995), as amended;




·
            The
                Foreign Investment Enterprise Law (1986), as amended;
                and




·
            The
                Regulations of Implementation of the Foreign Investment Enterprise
                Law
                (1990), as amended.




Under
      these regulations, foreign-invested enterprises in China may pay dividends
      only
      out of their accumulated profits, if any, determined in accordance with Chinese
      accounting standards and regulations. In addition, wholly foreign-owned
      enterprises in China are required to set aside at least 10% of their respective
      accumulated profits each year, if any, to fund certain reserve funds unless
      such
      reserve funds have reached 50% of their respective registered capital. These
      reserves are not distributable as cash dividends.









***Regulation
      of foreign investors’ merging Chinese enterprises***




On
      August
      8, 2006, the Ministry of Commerce, the State-owned Assets Supervision and
      Administration Commission, State Administration of Taxation, State
      Administration for Industry and Commerce, China Securities Regulatory Commission
      and State Administration of Foreign Exchange jointly promulgated the Provisions
      for Foreign Investors to Merge Domestic Enterprises, which became effective
      September 8, 2006, replacing the Interim Provisions for Foreign Investors to
      Merge Domestic Enterprises issued in March 2003 by four authorities, the
      Ministry of Foreign Trade and Economic Cooperation, State Administration of
      Taxation, State Administration for Industry and Commerce and State
      Administration of Foreign Exchange. The State-owned Assets Supervision and
      Administration Commission and China Securities Regulatory Commission newly
      join
      the regulation promulgation.




The
      requirements and approval procedures for the Equity Acquisition and Assets
      Acquisition remains unchanged as those in the interim regulation. The new
      regulation adds one chapter on the acquisition with equity as the consideration
      including one section on the special purpose company. This chapter stipulated
      the relevant conditions and approval procedures in detail making such
      acquisitions workable. The currently mandatory requirement for the submission
      of
      fund remittance into China will be changed.




The
      Anti-monopoly Chapter in the new regulation is more or less the same as the
      existing interim regulation, although Chinese government is recently tightening
      such control.




We
      cannot
      predict how such regulations especially the anti-monopoly examination will
      affect our future completion of a business combination. However, we are
      confident our strong and in-depth understanding of Chinese market would help
      us
      minimize the negative impacts.




***Use
      of contractual arrangements***




The
      government of the PRC has restricted or limited foreign ownership of certain
      kinds of assets and companies operating in certain industries. The industry
      groups that are restricted are wide ranging, including certain aspects of
      telecommunications, advertising, food production, and heavy equipment
      manufacturers, for example. In addition there can be restrictions on the foreign
      ownership of businesses that are determined from time to time to be in
“important industries” that may affect the national economic security or having
“famous Chinese brand names” or “well established Chinese brand names.” Subject
      to the review requirements of the Ministry of Commerce and other relevant
      agencies as discussed elsewhere for acquisitions of assets and companies in
      the
      PRC and subject to the various percentage ownership limitations that exist
      from
      time to time, acquisitions involving foreign investors and parties in the
      various restricted categories of assets and industries may nonetheless sometimes
      be consummated using contractual arrangements with permitted Chinese parties.
      To
      the extent that such agreements are employed, they may be for control of
      specific assets such as intellectual property or control of blocks of the equity
      ownership interests of a company. The agreements would be designed to provide
      our company with the economic benefits of and control over the subject assets
      or
      equity interests similar to the rights of full ownership, while leaving the
      technical ownership in the hands of Chinese parties who would be our nominees.
      These agreements likely also would provide for increased ownership or full
      ownership and control by us when and if permitted under PRC law and regulation.
      If we choose to effect a business combination that employs the use of these
      types of control arrangements, we may have difficulty in enforcing our rights.
      Therefore these contractual arrangements may not be as effective in providing
      us
      with the same economic benefits, accounting consolidation or control over a
      target business as would direct ownership.









**Effecting
      a business combination**




*Selection
      of a target business and structuring of a business combination*




We
      anticipate that target business candidates will be brought to our attention
      from
      various unaffiliated sources, including investment bankers, venture capital
      funds, private equity funds, leveraged buyout funds, management buyout funds
      and
      other members of the financial community. Target businesses may be brought
      to
      our attention by such unaffiliated sources as a result of being solicited by
      us
      through calls or mailings. These sources may also introduce us to target
      businesses they think we may be interested in on an unsolicited basis, since
      many of these sources will have read the prospectus for our IPO and know what
      types of businesses we are targeting.




Our
      officers and directors, as well as their affiliates, may also bring to our
      attention target business candidates that they become aware of through their
      business contacts as a result of formal or informal inquiries or discussions
      they may have, as well as attending trade shows or conventions. Our officers
      and
      directors have close relationships with many private equity sponsors and leading
      mezzanine lenders and a broad range of industry segments.




While
      we
      do not presently anticipate engaging the services of professional firms or
      other
      individuals that specialize in business acquisitions on any formal basis, we
      may
      engage these firms or other individuals in the future, in which event we may
      pay
      a finder’s fee, consulting fee or other compensation to be determined in an
      arm’s length negotiation based on the terms of the transaction. In no event,
      however, will any of our officers, directors, initial shareholders, special
      advisors or any entity with which they are affiliated (collectively, our
“founders”), be paid, from us or a target business, any finder’s fee, consulting
      fee or other compensation prior to, or for any services they render in order
      to
      effectuate, the consummation of a business combination (regardless of the type
      of transaction that it is). If we determine to enter into a business combination
      with a target business that is affiliated with our officers, directors, special
      advisors or initial shareholders, we would do so only if we obtained an opinion
      from an independent investment banking firm that the business combination is
      fair to our unaffiliated shareholders from a financial point of view. We also
      do
      not anticipate acquiring an entity that is either a portfolio company of, or
      has
      otherwise received a financial investment from, an investment banking firm
      (or
      an affiliate thereof) that is affiliated with our officers, directors, special
      advisors and initial shareholders. However, if circumstances change and we
      determined to acquire such an entity, we are required to obtain an opinion
      from
      an independent investment banking firm that the business combination is fair
      to
      our unaffiliated shareholders from a financial point of view.




Our
      management will have virtually unrestricted flexibility in identifying and
      selecting a prospective target business. We have not established any other
      specific attributes or criteria (financial or otherwise) for prospective target
      businesses. In evaluating a prospective target business, our management may
      consider a variety of factors. Examples of factors that may be considered
      include the following:




·
            financial
                condition and results of operation;




·
            growth
                potential;


·
              experience
                  and skill of management and availability of additional
                  personnel;
 ·
                capital
                    requirements;
 ·
                  competitive
                      position;
 ·
                    barriers
                        to entry;
 ·
                      stage
                          of development of the products, processes or
                          services;
 ·
                        degree
                            of current or potential market acceptance of the products,
                            processes or
                            services;
 ·
                          proprietary
                              features and degree of intellectual property or other
                              protection of the
                              products, processes or services;
 ·
                            regulatory
                                environment of the industry; and
 ·
                              costs
                                  associated with effecting the business
                                  combination.




These
      criteria are not intended to be exhaustive. Any evaluation relating to the
      merits of a particular business combination will be based, to the extent
      relevant, on the above factors as well as other considerations deemed relevant
      by our management in effecting a business combination consistent with our
      business objective. In evaluating a prospective target business, we will conduct
      an extensive due diligence review which will encompass, among other things,
      meetings with incumbent management and inspection of facilities, as well as
      review of financial and other information which is made available to us. This
      due diligence review will be conducted either by our management or by
      unaffiliated third parties we may engage, although we have no current intention
      to engage any such third parties. We will also seek to have all prospective
      target businesses execute agreements with us waiving any right, title, interest
      or claim of any kind in or to any monies held in the trust account. If any
      prospective target business refused to execute such agreement, we believe we
      would cease negotiations with such target business.




The
      time
      and costs required to select and evaluate a target business and to structure
      and
      complete the business combination cannot presently be ascertained with any
      degree of certainty. Any costs incurred with respect to the identification
      and
      evaluation of a prospective target business with which a business combination
      is
      not ultimately completed will result in a loss to us and reduce the amount
      of
      capital available to otherwise complete a business combination.




We
      have
      engaged EarlyBirdCapital, the representative of the underwriters, on a
      non-exclusive basis, to act as our investment banker to assist us in structuring
      a business combination and negotiating its terms (but not for purposes of
      locating potential target candidates for our business combination). We
      anticipate that these services will include assisting us with valuing and
      structuring any proposed offer to be made to a target business and negotiating
      a
      letter of intent and/or definitive agreement with any potential target business.
      We will pay EarlyBirdCapital an additional cash fee at the closing of our
      business combination of 1.0% of the total consideration paid in connection
      with
      the business combination, with a maximum fee to be paid of $300,000.




*Fair
      Market Value of Target Business*




The
      target business that we acquire, or acquire control of, must have a fair market
      value equal to at least 80% of our net assets at the time of such acquisition,
      although we may acquire a target business whose fair market value significantly
      exceeds 80% of our net assets. We anticipate structuring a business combination
      to acquire 100% of the equity interests of the target business. We may, however,
      structure a business combination to acquire less than 100% of such interests
      of
      the target business but will not acquire less than a controlling interest (which
      would be at least 50% of the voting securities of the target business). If
      we
      acquire only a controlling interest in a target business or businesses, the
      portion of such business that we acquire must have a fair market value equal
      to
      at least 80% of our net assets. In order to consummate such an acquisition,
      we
      may issue a significant amount of our debt or equity securities to the sellers
      of such businesses and/or seek to raise additional funds through a private
      offering of debt or equity securities. Since we have no specific business
      combination under consideration, we have not entered into any such fund raising
      arrangement and have no current intention of doing so. The fair market value
      of
      the target will be determined by our board of directors based upon one or more
      standards generally accepted by the financial community (examples of which
      may
      include actual and potential sales, earnings and cash flow and book value).
      If
      our board is not able to independently determine that the target business has
      a
      sufficient fair market value, we will obtain an opinion from an unaffiliated,
      independent investment banking firm with respect to the satisfaction of such
      criteria. We will not be required to obtain an opinion from an investment
      banking firm as to the fair market value if our board of directors independently
      determines that the target business complies with the 80% threshold.









*Opportunity
      for shareholder approval of business combination*




Prior
      to
      the completion of a business combination, we will submit the transaction to
      our
      shareholders for approval, even if the nature of the acquisition is such as
      would not ordinarily require shareholder approval under applicable law. In
      connection with any such transaction, we will also submit to our shareholders
      for approval a proposal to amend our amended and restated memorandum and
      articles of association to provide for our corporate life to continue
      perpetually following the consummation of such business combination. Any vote
      to
      extend our corporate life to continue perpetually following the consummation
      of
      a business combination will be taken only if the business combination is
      approved. We will only consummate a business combination if shareholders vote
      both in favor of such business combination and our amendment to extend our
      corporate life.




In
      connection with seeking shareholder approval of a business combination, we
      will
      furnish our shareholders with proxy solicitation materials prepared in
      accordance with the Securities Exchange Act of 1934, as amended, which, among
      other matters, will include a description of the operations of the target
      business and audited historical financial statements of the business. We will
      publicly announce the record date for determining the shareholders entitled
      to
      vote at the meeting to approve our business combination at least two business
      days prior to such record date.




In
      connection with the vote required for any business combination, all of our
      founders, including all of our officers and directors, have agreed to vote
      their
      respective shares issued to them prior to the IPO (“founder shares”) in
      accordance with the majority of the ordinary shares voted by holders of the
      ordinary shares issued in the IPO (“IPO Shares”). As a result, if a majority of
      the IPO Shares are voted in favor of a proposed business combination, our
      initial shareholders will vote all of their founder shares in favor of such
      proposed business combination. This voting arrangement shall not apply to shares
      included in units purchased privately or purchased following the IPO in the
      aftermarket by any of our initial shareholders, officers and directors.
      Accordingly, they may vote these shares on a proposed business combination
      any
      way they choose. We will proceed with the business combination only if a
      majority of the IPO Shares are voted in favor of the business combination and
      holders of IPO Shares owning less than 30% of the shares sold in the IPO both
      exercise their conversion rights and vote against the business
      combination. ****




*Conversion
      rights*




At
      the
      time we seek shareholder approval of any business combination, we will offer
      each holder of IPO Shares the right to have such shareholder’s ordinary shares
      converted to cash if the shareholder votes against the business combination
      and
      the business combination is approved and completed. Our founders will not have
      such conversion rights. The actual per-share conversion price will be equal
      to
      the amount in the trust account, inclusive of any interest except for up to
      $1,050,000 that may be released to us to fund our working capital requirements,
      calculated as of two business days prior to the consummation of the proposed
      business combination, divided by the number of shares sold in the IPO. As of
      December 31, 2007, the per-share conversion price was $5.80, or $0.20 less
      than
      the per-unit offering price of $6.00.









Public
      shareholders wishing to exercise their conversion rights must (i) vote against
      the proposed business combination and (ii) request that we convert their shares
      into cash. Additionally, we may require public shareholders to tender their
      certificates to our transfer agent prior to the meeting or to deliver their
      shares to the transfer agent electronically using Depository Trust Company’s
      DWAC (Deposit Withdrawal At Custodian) System, at the holder’s option. The proxy
      solicitation materials that we will furnish to shareholders in connection with
      the vote for any proposed business combination will indicate whether we are
      requiring shareholders to satisfy such certification and delivery requirements.
      Traditionally, in order to perfect conversion rights in connection with a blank
      check company’s business combination, a holder could simply vote no against a
      proposed business combination and check a box on the proxy card indicating
      such
      holder was seeking to convert. After the business combination was approved,
      the
      company would contact such shareholder to arrange for him to deliver his
      certificate to verify ownership. As a result, the shareholder then had an
“option window” after the consummation of the business combination during which
      he could monitor the price of the shares in the market. If the price rose above
      the conversion price, he could sell his shares in the open market before
      actually delivering his shares to the company for cancellation. Thus, the
      conversion right, to which shareholders were aware they needed to commit before
      the shareholder meeting, would become a continuing right surviving past the
      consummation of the business combination until the converting holder delivered
      his certificate to us for conversion at the conversion price. The requirement
      for physical or electronic delivery prior to the meeting ensures that a
      converting holder’s election to convert is irrevocable once the business
      combination is approved. There is a nominal cost associated with the
      above-referenced tendering process and the act of certificating the shares
      or
      delivering them through the DWAC system. The transfer agent will typically
      charge the tendering broker $35 and it would be up to the broker whether or
      not
      to pass this cost on to the converting holder. However, this fee would be
      incurred regardless of whether or not we require holders seeking to exercise
      conversion rights to tender their shares prior to the meeting - the need to
      deliver shares is a requirement of conversion regardless of the timing of when
      such delivery must be effectuated. Accordingly, this would not result in any
      increased cost to shareholders when compared to the traditional
      process.




Any
      request for conversion, once made, may be withdrawn at any time up to the date
      of the meeting. Furthermore, if a shareholder delivered his certificate for
      conversion and subsequently decided prior to the meeting not to elect
      conversion, he may simply request that the transfer agent return the certificate
      (physically or electronically). It is anticipated that the funds to be
      distributed to shareholders entitled to convert their shares who elect
      conversion will be distributed within 10 business days after completion of
      a
      business combination. Public shareholders who convert their shares into their
      share of the trust account still have the right to exercise any warrants they
      still hold.




If
      a vote
      on our initial business combination is held and the business combination is
      not
      approved, we may continue to try to consummate a business combination with
      a
      different target until June 26, 2009. If the initial business combination is
      not
      approved or completed for any reason, then holders of IPO Shares voting against
      our initial business combination who exercised their conversion rights would
      not
      be entitled to convert their IPO Shares into a pro rata share of the aggregate
      amount then on deposit in the trust account. In such case, if we have required
      holders of IPO Shares to tender their certificates prior to the meeting, we
      will
      promptly return such certificates to the tendering shareholder. Holders of
      IPO
      Shares would be entitled to receive their pro rata share of the aggregate amount
      on deposit in the trust account only in the event that the initial business
      combination they voted against was duly approved and subsequently completed,
      or
      in connection with our liquidation.




We
      will
      not complete any business combination if holders of 30% or more of the IPO
      Shares both exercise their conversion rights and vote against the business
      combination. Accordingly, it is our understanding and intention in every case
      to
      structure and consummate a business combination in which holders of
      approximately 29.99% of the IPO Shares may exercise their conversion rights
      and
      the business combination will still go forward. We have set the conversion
      percentage at 30% in order to reduce the likelihood that a small group of
      investors holding a block of our shares will be able to stop us from completing
      a business combination that otherwise may approved by a large majority of our
      shareholders. This may have the effect of making it easier for us to consummate
      a business combination.









*Liquidation
      if no business combination*




Our
      memorandum and articles of association provides that we will continue in
      existence only until June 26, 2009. This provision may not be amended except
      in
      connection with the consummation of a business combination. If we have not
      completed a business combination by such date, it will trigger our automatic
      dissolution. This has the same effect as if our board of directors and
      shareholders had formally voted to approve our winding up and dissolution and
      formally began a voluntary winding up procedure under the Companies Law. As
      a
      result, no vote would be required from our shareholders to commence such a
      voluntary winding up and dissolution. We view this provision terminating our
      corporate life by June 26, 2009 as an obligation to our shareholders and will
      not take any action to amend or waive this provision to allow us to survive
      for
      a longer period of time except in connection with the consummation of a business
      combination. Under the Companies Law, in the case of a full voluntary
      liquidation procedure, a liquidator would give at least 21 days’ notice to
      creditors of his intention to make a distribution by notifying known creditors
      (if any) who have not submitted claims and by placing a public advertisement
      in
      the Cayman Islands Official Gazette, although in practice this notice
      requirement need not necessarily delay the distribution of assets as the
      liquidator may be satisfied that no creditors would be adversely affected as
      a
      consequence of a distribution before this time period has expired. We anticipate
      the trust account would be liquidated shortly following the expiration of the
      21
      day period. As soon as the affairs of the company are fully wound-up, the
      liquidator must lay his final report and accounts before a final general meeting
      which must be called by a public notice at least one month before it takes
      place. After the final meeting, the liquidator must make a return to the
      Registrar confirming the date on which the meeting was held and three months
      after the date of such filing the company is dissolved.




If
      we are
      unable to complete a business combination by June 26, 2009, we will distribute
      to all of our public shareholders, in proportion to their respective equity
      interests, an aggregate sum equal to the amount in the trust account, inclusive
      of any interest, plus any remaining net assets (subject to our obligations
      under
      Cayman Islands law to provide for claims of creditors). We anticipate notifying
      the trustee of the trust account to begin liquidating such assets promptly
      after
      expiration of the 21 day period and anticipate it will take no more than 10
      business days to effectuate such distribution. Our initial shareholders have
      waived their rights to participate in any liquidation distribution with respect
      to their initial shares and the shares included within the insider units. There
      will be no distribution from the trust account with respect to our warrants
      which will expire worthless. We will pay the costs of liquidation from our
      remaining assets outside of the trust fund. If such funds are insufficient,
      our
      founders have contractually agreed to advance us the funds necessary to complete
      such liquidation (currently anticipated to be no more than $15,000) and have
      contractually agreed not to seek repayment of such expenses.




If
      we
      were to expend all of the net proceeds of the IPO, other than the proceeds
      deposited in the trust account, and without taking into account interest, if
      any, earned on the trust account, the per-share liquidation price, as of
      December 31, 2007, would be $5.80 or $0.20 less than the per-unit offering
      price
      of $6.00. The proceeds deposited in the trust account could, however, become
      subject to the claims of our creditors (which could include vendors and service
      providers we have engaged to assist us in any way in connection with our search
      for a target business and that are owed money by us, as well as target
      businesses themselves) which could have higher priority than the claims of
      holders of IPO Shares. Beatrice Hom, Michael Hsu, Wing Yip, Vincent Shen and
      Xiong Yin have agreed that if we liquidate prior to the consummation of a
      business combination, they will be personally liable to pay debts and
      obligations to target businesses or vendors or other entities that are owed
      money by us for services rendered or contracted for or products sold to us
      in
      excess of the net proceeds of the IPO not held in the trust account. We cannot
      assure you, however, that they would be able to satisfy those obligations.
      Furthermore, if they refused to satisfy their obligations, we would be required
      to bring a claim against them to enforce our indemnification rights.
      Accordingly, the actual per-share liquidation price could be less than $5.80,
      plus interest, due to claims of creditors.









Holders
      of IPO Shares will be entitled to receive funds from the trust account only
      in
      the event of the expiration of our existence and our automatic dissolution
      and
      subsequent liquidation or if they seek to convert their respective shares into
      cash upon a business combination which the shareholder voted against and which
      is completed by us. In no other circumstances will a shareholder have any right
      or interest of any kind to or in the trust account.




Additionally,
      in any liquidation proceedings of the company under Cayman Islands’ law, the
      funds held in our trust account may be included in our estate and subject to
      the
      claims of third parties with priority over the claims of our shareholders.
      To
      the extent any such claims deplete the trust account, we cannot assure you
      we
      will be able to return to our public shareholders the liquidation amounts
      payable to them. Furthermore, a liquidator of the company might seek to hold
      a
      shareholder liable to contribute to our estate to the extent of distributions
      received by them pursuant to the dissolution of the trust account beyond the
      date of dissolution of the trust account. Additionally, we cannot assure you
      that third parties will not seek to recover from our shareholders amounts owed
      to them by us. Furthermore, our board may be viewed as having breached their
      fiduciary duties to our creditors and/or may have acted in bad faith, and
      thereby exposing itself and our company to claims for having paid public
      shareholders from the trust account prior to addressing the claims of creditors.
      We cannot assure you that claims will not be brought against us for these
      reasons.




**Competition**




In
      identifying, evaluating and selecting a target business, we expect to encounter
      intense competition from other entities having a business objective similar
      to
      ours. There are numerous blank check companies that have completed initial
      public offerings that are seeking to carry out a business plan similar to our
      business plan. Additionally, we may be subject to competition from entities
      other than blank check companies having a business objective similar to ours,
      including venture capital firms, leverage buyout firms and operating businesses
      looking to expand their operations through the acquisition of a target business.
      Many of these entities are well established and have extensive experience
      identifying and effecting business combinations directly or through affiliates.
      Many of these competitors possess greater technical, human and other resources
      than us and our financial resources will be relatively limited when contrasted
      with those of many of these competitors. While we believe there may be numerous
      potential target businesses that we could acquire with the net proceeds of
      the
      IPO, our ability to compete in acquiring certain sizable target businesses
      will
      be limited by our available financial resources. This inherent competitive
      limitation gives others an advantage in pursuing the acquisition of a target
      business. Further, the following may not be viewed favorably by certain target
      businesses:




·
            our
                obligation to seek shareholder approval of a business combination
                may
                delay the completion of a
                transaction;




·
            our
                obligation to convert into cash ordinary shares held by our public
                shareholders in certain instances may reduce the resources available
                to us
                for a business combination; and




·
            our
                outstanding warrants and options, and the future dilution they potentially
                represent.









Any
      of
      these factors may place us at a competitive disadvantage in successfully
      negotiating a business combination. Our management believes, however, that
      our
      status as a public entity and potential access to the United States public
      equity markets may give us a competitive advantage over privately-held entities
      having a similar business objective as us in acquiring a target business on
      favorable terms.




If
      we
      succeed in effecting a business combination, there will be, in all likelihood,
      intense competition from competitors of the target business. We cannot assure
      you that, subsequent to a business combination, we will have the resources
      or
      ability to compete effectively.




**Employees**




We
      have
      four executive officers. These individuals are not obligated to devote any
      specific number of hours to our matters and intend to devote only as much time
      as they deem necessary to our affairs. The amount of time they will devote
      in
      any time period will vary based on whether a target business has been selected
      for the business combination and the stage of the business combination process
      the company is in. We do not intend to have any full time employees prior to
      the
      consummation of a business combination.




**Risks
      Associated with Our Business**




***We
      are a development stage company with no operating history and, accordingly,
      you
      will not have any basis on which to evaluate our ability to achieve our business
      objective.***




We
      are a
      recently organized development stage company with no operating results to date.
      Since we do not have an operating history, you will have no basis upon which
      to
      evaluate our ability to achieve our business objective, which is to acquire
      an
      operating business. We have not conducted any discussions with respect to any
      business combination and we have no plans, arrangements or understandings with
      any prospective acquisition candidates. We will not generate any revenues until,
      at the earliest, after the consummation of a business combination.




***If
      we are unable to consummate a business combination, holders of IPO Shares will
      be forced to wait until June 26, 2009 before receiving liquidation
      distributions.***




We
      have
      until June 26, 2009 to complete a business combination. We have no obligation
      to
      return funds to holders of IPO Shares prior to such date unless we consummate
      a
      business combination prior thereto. Only after the expiration of this full
      time
      period will holders of IPO Shares be entitled to liquidation distributions
      if we
      are unable to complete a business combination. Accordingly, investors’ funds may
      be unavailable to them until such date.




***Because
      there are numerous companies with a business plan similar to ours seeking to
      effectuate a business combination, including companies seeking to consummate
      a
      business combination with companies in China, it may be more difficult for
      us to
      do so.***




There
      are
      numerous similarly structured blank check companies which have completed initial
      public offerings with business plans similar to ours and there are a number
      of
      additional offerings for blank check companies that are still in the
      registration process but have not completed initial public offerings. While
      some
      of those companies must complete a business combination in specific industries,
      a number of them may consummate a business combination in any industry they
      choose. Therefore, we may be subject to competition from these and other
      companies seeking to consummate a business plan similar to ours. Because of
      this
      competition, we cannot assure you that we will be able to effectuate a business
      combination within the required time periods.









***A
      decline in interest rates could limit the amount available to fund our search
      for a target business or businesses and complete a business combination since
      we
      will depend on interest earned on the trust account to fund our search, to
      pay
      our tax obligations and to complete our initial business
      combination.***




We
      will
      depend on sufficient interest being earned on the proceeds held in the trust
      account to provide us with additional working capital we will need to identify
      one or more target businesses and to complete our initial business combination,
      as well as to pay any tax obligations that we may owe. While we are entitled
      to
      have released to us for such purposes certain interest earned on the funds
      in
      the trust account, a substantial decline in interest rates may result in our
      having insufficient funds available with which to structure, negotiate or close
      an initial business combination. In such event, we would need to borrow funds
      from our founders to operate or may be forced to liquidate. Our founders are
      under no obligation to advance funds in such circumstances.




***If
      third parties bring claims against us, the proceeds held in trust could be
      reduced and the per-share liquidation price received by shareholders will be
      less than $5.80 per share.***




As
      of
      December 31, 2007, the per-share liquidation price of the funds held in trust
      was $5.80. Our placing of funds in trust may not protect those funds from third
      party claims against us. Although we will seek to have all vendors and service
      providers we engage and prospective target businesses we negotiate with, execute
      agreements with us waiving any right, title, interest or claim of any kind
      in or
      to any monies held in the trust account for the benefit of holders of IPO
      Shares, there is no guarantee that they will execute such agreements. Nor is
      there any guarantee that, even if such entities execute such agreements with
      us,
      they will not seek recourse against the trust account. A court could also
      conclude that such agreements are not legally enforceable. Accordingly, the
      proceeds held in trust could be subject to claims which could take priority
      over
      those of holders of IPO Shares. If we liquidate before the completion of a
      business combination and distribute the proceeds held in trust to holders of
      IPO
      Shares, Beatrice Hom, Michael Hsu, Wing Yip, Vincent Shen and Xiong Yin have
      contractually agreed with us that they will be severally liable to ensure that
      the proceeds in the trust account are not reduced by the claims of target
      businesses or claims of vendors or other entities that are owed money by us
      for
      services rendered or contracted for or products sold to us. We cannot assure
      you
      that they will be able to satisfy any indemnification obligations that may
      arise. If they refused to satisfy their obligations, we would be required to
      bring a claim against them to enforce our indemnification rights. Therefore,
      we
      cannot assure you that the per-share distribution from the trust fund, if we
      liquidate, will not be less than $5.80, plus interest then held in the trust
      fund, due to such claims.




Additionally,
      if we are forced to declare insolvency or a case for involuntary liquidation
      is
      filed against us which is not dismissed, the proceeds held in the trust account
      will be subject to applicable Cayman Islands insolvency law, and may be included
      in our bankruptcy estate and subject to the claims of third parties with
      priority over the claims of our shareholders. To the extent any such claims
      deplete the trust account, we cannot assure you we will be able to return to
      holders of IPO Shares at least $5.80 per share.




***Our
      shareholders may be held liable for claims by third parties against us to the
      extent of distributions received by them.***




Our
      memorandum and articles of association provides that we will continue in
      existence only until June 26, 2009. If we have not completed a business
      combination by such date and amended this provision in connection thereto,
      our
      corporate existence will cease except for the purposes of winding up our affairs
      and liquidating. As a result, this has the same effect as if we had formally
      went through a voluntary liquidation procedure under the Companies Law (2004
      Revision) of the Cayman Islands, referred to in this Annual Report on Form
      10-KSB as the Companies Law. In such a situation under the Companies Law, a
      liquidator would give at least 21 days’ notice to creditors of his intention to
      make a distribution by notifying known creditors (if any) who have not submitted
      claims and by placing a public advertisement in the Cayman Islands Official
      Gazette, although in practice this notice requirement need not necessarily
      delay
      the distribution of assets as the liquidator may be satisfied that no creditors
      would be adversely affected as a consequence of a distribution before this
      time
      period has expired. We anticipate the trust account would be liquidated shortly
      following expiration of the 21 day period. As soon as the affairs of the company
      are fully wound-up, the liquidator must present his final report and accounts
      before a final general meeting which must be called by a public notice at least
      one month before it takes place. After the final meeting, the liquidator must
      make a return to the Registrar confirming the date on which the meeting was
      held
      and three months after the date of such filing the company is
      dissolved.









Additionally,
      in any liquidation proceedings of the company under Cayman Islands’ law, the
      funds held in our trust account may be included in our estate and subject to
      the
      claims of third parties with priority over the claims of our shareholders.
      To
      the extent any such claims deplete the trust account, we cannot assure you
      we
      will be able to return to holders of IPO Shares the liquidation amounts payable
      to them. Furthermore, a liquidator of the company might seek to hold a
      shareholder liable to contribute to our estate to the extent of distributions
      received by them pursuant to the dissolution of the trust account beyond the
      date of dissolution of the trust account. Additionally, we cannot assure you
      that third parties will not seek to recover from our shareholders amounts owed
      to them by us. Furthermore, our board may be viewed as having breached their
      fiduciary duties to our creditors and/or may have acted in bad faith, and
      thereby exposing itself and our company to claims for having paid holders of
      IPO
      Shares from the trust account prior to addressing the claims of creditors.
      We
      cannot assure you that claims will not be brought against us for these
      reasons.




***An
      effective registration statement may not be in place when an investor desires
      to
      exercise warrants, thus precluding such investor from being able to exercise
      his, her or its warrants and causing such warrants to be practically
      worthless.***




No
      public
      warrant will be exercisable and we will not be obligated to issue ordinary
      shares unless at the time a holder seeks to exercise such warrant, a prospectus
      relating to the ordinary shares issuable upon exercise of the warrant is
      current. We have agreed to use our best efforts to meet these conditions and
      to
      maintain a current prospectus relating to the ordinary shares issuable upon
      exercise of the warrants until the expiration of the warrants. However, we
      cannot assure you that we will be able to do so, and if we do not maintain
      a
      current prospectus related to the ordinary shares issuable upon exercise of
      the
      warrants, holders will be unable to exercise their warrants and we will not
      be
      required to settle any such warrant exercise, whether by net cash settlement
      or
      otherwise. If the prospectus relating to the ordinary shares issuable upon
      the
      exercise of the public warrants is not current, such warrants may have no value,
      the market for such warrants may be limited and such warrants may expire
      worthless. Notwithstanding the foregoing, even if the prospectus relating to
      the
      ordinary shares issuable upon exercise of the warrants is not current, the
      warrants underlying the insider units and the insider warrants may be exercised
      for unregistered ordinary shares.




***An
      investor will only be able to exercise a warrant if the issuance of ordinary
      shares upon such exercise has been registered or qualified or is deemed exempt
      under the securities laws of the state of residence of the holder of the
      warrants, thereby potentially limiting the value of the
      warrants.***




No
      public
      warrants will be exercisable and we will not be obligated to issue ordinary
      shares unless the ordinary shares issuable upon such exercise has been
      registered or qualified or deemed to be exempt under the securities laws of
      the
      state of residence of the holder of the warrants. At the time that the warrants
      become exercisable (following our completion of a business combination), we
      expect to become listed on a national securities exchange, which would provide
      an exemption from registration in every state. Accordingly, we believe holders
      in every state will be able to exercise their warrants as long as our prospectus
      relating to the ordinary shares issuable upon exercise of the warrants is
      current. However, we cannot assure you of this fact. As a result, the public
      warrants may be deprived of any value, the market for such warrants may be
      limited and the holders of such warrants may not be able to exercise their
      warrants if the ordinary shares issuable upon such exercise is not qualified
      or
      exempt from qualification in the jurisdictions in which the holders of such
      warrants reside.









***Since
      we have not yet selected a particular industry or target business with which
      to
      complete a business combination, we are unable to currently ascertain the merits
      or risks of the industry or business in which we may ultimately
      operate.***




We
      may
      consummate a business combination with a company in the PRC in any industry
      we
      choose and are not limited to any particular industry or type of business.
      Accordingly, there is no current basis for you to evaluate the possible merits
      or risks of the particular industry in which we may ultimately operate or the
      target business which we may ultimately acquire. To the extent we complete
      a
      business combination with a financially unstable company or an entity in its
      development stage, we may be affected by numerous risks inherent in the business
      operations of those entities. If we complete a business combination with an
      entity in an industry characterized by a high level of risk, we may be affected
      by the currently unascertainable risks of that industry. Although our management
      will endeavor to evaluate the risks inherent in a particular industry or target
      business, we cannot assure you that we will properly ascertain or assess all
      of
      the significant risk factors. We also cannot assure you that an investment
      in
      our units will not ultimately prove to be less favorable to investors than
      a
      direct investment, if an opportunity were available, in a target
      business.




***We
      may issue shares or debt securities to complete a business combination, which
      would reduce the equity interest of our shareholders and likely cause a change
      in control of our ownership.***




Our
      memorandum and articles of association authorizes the issuance of up to
      25,000,000 ordinary shares, par value $.0001 per share, and 1,000,000 preferred
      shares, par value $.0001 per share. There are currently 3,651,666 authorized
      but
      unissued ordinary shares available for issuance (after appropriate reservation
      for the issuance of the shares upon full exercise of our outstanding warrants
      and the unit purchase option initially granted to EarlyBirdCapital, Inc., the
      representative of the underwriters in the IPO) and all of the 1,000,000
      preferred shares available for issuance. Although we have no commitment as
      of
      the date of this time, we are likely to issue a substantial number of additional
      shares of our common or preferred shares, or a combination of common and
      preferred shares, to complete a business combination. The issuance of additional
      ordinary shares or any number of shares of our preferred shares:




·
            may
                significantly reduce the equity interest of current
                investors;




·
            may
                subordinate the rights of holders of ordinary shares if we issue
                preferred
                shares with rights senior to those afforded to our ordinary
                shares;




·
            will
                likely cause a change in control if a substantial number of our ordinary
                shares are issued, which may affect, among other things, our ability
                to
                use our net operating loss carry forwards, if any, and could result
                in the
                resignation or removal of our present officers and directors;
                and




·
            may
                adversely affect prevailing market prices for our ordinary
                shares.









Similarly,
      if we issue debt securities, it could result in:




·
            default
                and foreclosure on our assets if our operating revenues after a business
                combination are insufficient to repay our debt
                obligations;




·
            acceleration
                of our obligations to repay the indebtedness even if we make all
                principal
                and interest payments when due if we breach certain covenants that
                require
                the maintenance of certain financial ratios or reserves without a
                waiver
                or renegotiation of that covenant;




·
            our
                immediate payment of all principal and accrued interest, if any,
                if the
                debt security is payable on demand;
                and




·
            our
                inability to obtain necessary additional financing if the debt security
                contains covenants restricting our ability to obtain such financing
                while
                the debt security is outstanding.




***Our
      ability to successfully effect a business combination and to be successful
      thereafter will be totally dependent upon the efforts of our key personnel,
      some
      of whom may join us following a business combination.***




Our
      ability to successfully effect a business combination is dependent upon the
      efforts of our key personnel. The role of our key personnel in the target
      business, however, cannot presently be ascertained. Although our key personnel
      such as Beatrice Hom, Michael Hsu and Wing Yip, may remain with the target
      business in senior management or advisory positions following a business
      combination, it is likely that some or all of the management of the target
      business will remain in place. While we intend to closely scrutinize any
      individuals we engage after a business combination, we cannot assure you that
      our assessment of these individuals will prove to be correct. These individuals
      may be unfamiliar with the requirements of operating a public company which
      could cause us to have to expend time and resources helping them become familiar
      with such requirements. This could be expensive and time-consuming and could
      lead to various regulatory issues which may adversely affect our
      operations.




***Our
      key personnel may negotiate employment or consulting agreements with a target
      business in connection with a particular business combination. These agreements
      may provide for them to receive compensation following a business combination
      and as a result, may cause them to have conflicts of interest in determining
      whether a particular business combination is the most advantageous to
      us.***




Our
      key
      personnel will be able to remain with the company after the consummation of
      a
      business combination only if they are able to negotiate employment or consulting
      agreements in connection with the business combination. Such negotiations would
      take place simultaneously with the negotiation of the business combination
      and
      could provide for such individuals to receive compensation in the form of cash
      payments and/or our securities for services they would render to the company
      after the consummation of the business combination. The personal and financial
      interests of such individuals may influence their motivation in identifying
      and
      selecting a target business. However, we believe the ability of such individuals
      to remain with the company after the consummation of a business combination
      will
      not be the determining factor in our decision as to whether or not we will
      proceed with any potential business combination.




***Our
      officers and directors will allocate their time to other businesses thereby
      causing conflicts of interest in their determination as to how much time to
      devote to our affairs. This conflict of interest could have a negative impact
      on
      our ability to consummate a business combination.***




Our
      officers and directors are not required to commit their full time to our
      affairs, which could create a conflict of interest when allocating their time
      between our operations and their other commitments. We do not intend to have
      any
      full time employees prior to the consummation of a business combination. All
      of
      our executive officers are engaged in several other business endeavors and
      are
      not obligated to devote any specific number of hours to our affairs. If our
      officers’ and directors’ other business affairs require them to devote more
      substantial amounts of time to such affairs, it could limit their ability to
      devote time to our affairs and could have a negative impact on our ability
      to
      consummate a business combination. We cannot assure you that these conflicts
      will be resolved in our favor.









***Our
      officers and directors may in the future become affiliated with entities engaged
      in business activities similar to those intended to be conducted by us and
      accordingly, may have conflicts of interest in determining to which entity
      a
      particular business opportunity should be presented. As a result, we may miss
      out on potential business opportunities.***




Our
      officers and directors may in the future become affiliated with entities,
      including other “blank check” companies, engaged in business activities similar
      to those intended to be conducted by us. Additionally, our officers and
      directors may become aware of business opportunities which may be appropriate
      for presentation to us and the other entities to which they may owe fiduciary
      duties. Accordingly, they may have conflicts of interest in determining to
      which
      entity a particular business opportunity should be presented. In order to
      minimize potential conflicts of interest which may arise from multiple corporate
      affiliations, each of our officers and directors has agreed, until the earliest
      of a business combination, our voluntary liquidation or such time as he or
      she
      ceases to be an officer or director, to present to our company for our
      consideration, prior to presentation to any other entity, any suitable business
      opportunity, subject to any pre-existing fiduciary obligations they may have.
      We
      have not established any procedures to ensure that our officers observe these
      requirements. We cannot assure you that these conflicts will be resolved in
      our
      favor. As a result, a potential target business may be presented to another
      entity prior to its presentation to us and we may miss out on a potential
      transaction.




***We
      may not seek an opinion from an unaffiliated third party as to the fair market
      value of the target business we acquire or that the price we are paying for
      the
      business is fair to our shareholders from a financial point of
      view.***




We
      are
      not required to obtain an opinion from an unaffiliated third party that the
      target business we select has a fair market value in excess of at least 80%
      of
      our net assets. We are also not required to obtain an opinion from an
      unaffiliated third party indicating that the price we are paying is fair to
      our
      shareholders from a financial point of view unless the target is affiliated
      with
      our founders or their affiliates. If no opinion is obtained, our shareholders
      will be relying on the judgment of our board of directors, whose collective
      experience in business evaluations for blank check companies like ours is not
      significant.




***All
      of our officers and directors own founder shares and one of them owns insider
      units and insider warrants. These securities will not participate in liquidation
      distributions. Therefore, our officers and directors may present a particular
      target business to us that otherwise would not be attractive so as to avoid
      having their securities become worthless.***




All
      of
      our officers and directors own founder shares and one of them owns insider
      units
      and insider warrants. Such individuals have waived their right to receive
      distributions with respect to their founder shares and the shares included
      within the insider units upon our automatic dissolution and voluntary
      liquidation if we are unable to consummate a business combination. The founder
      shares, as well as the shares included in the insider units and the insider
      warrants purchased by our officers and directors, and any warrants purchased
      by
      our officers or directors in the aftermarket will be worthless if we do not
      consummate a business combination. The personal and financial interests of
      our
      directors and officers may influence their motivation in timely identifying
      and
      selecting a target business and completing a business combination. Consequently,
      our directors’ and officers’ discretion in identifying and selecting a suitable
      target business may result in a conflict of interest when determining whether
      the terms, conditions and timing of a particular business combination are
      appropriate and in our shareholders’ best interest.









***If
      our ordinary shares become subject to the SEC’s penny stock rules,
      broker-dealers may experience difficulty in completing customer transactions
      and
      trading activity in our securities may be adversely
      affected.***




If
      at any
      time we have net tangible assets of $5,000,000 or less and our ordinary shares
      have a market price per share of less than $5.00, transactions in our ordinary
      shares may be subject to the “penny stock” rules promulgated under the
      Securities Exchange Act of 1934. Under these rules, broker-dealers who recommend
      such securities to persons other than institutional accredited investors
      must:




·
            make
                a special written suitability determination for the
                purchaser;




·
            receive
                the purchaser’s written agreement to the transaction prior to
                sale;




·
            provide
                the purchaser with risk disclosure documents which identify certain
                risks
                associated with investing in “penny stocks” and which describe the market
                for these “penny stocks” as well as a purchaser’s legal remedies;
                and




·
            obtain
                a signed and dated acknowledgment from the purchaser demonstrating
                that
                the purchaser has actually received the required risk disclosure
                document
                before a transaction in a “penny stock” can be
                completed.




If
      our
      ordinary shares become subject to these rules, broker-dealers may find it
      difficult to effectuate customer transactions and trading activity in our
      securities may be adversely affected. As a result, the market price of our
      securities may be depressed, and you may find it more difficult to sell our
      securities.




***After
      our business combination, we will be solely dependent on a single business
      and a
      limited number of products or services.***




Our
      business combination must be with a business operating in the PRC with a fair
      market value of at least 80% of our net assets at the time of such acquisition,
      and although this may entail the simultaneous acquisitions of several operating
      businesses at the same time, it is likely that we will not have sufficient
      resources to engage in multiple acquisitions. If we consummate a business
      combination with only a single entity, our lack of diversification may subject
      us to numerous economic, competitive and regulatory developments. Further,
      we
      would not be able to diversify our operations or benefit from the possible
      spreading of risks or offsetting of losses, unlike other entities which may
      have
      the resources to complete several business combinations in different industries
      or different areas of a single industry. Accordingly, the prospects for our
      success may be:




·
            solely
                dependent upon the performance of a single business,
                or




·
            dependent
                upon the development or market acceptance of a single or limited
                number of
                products, processes or services.




Alternatively,
      if our business combination entails the simultaneous acquisitions of several
      operating businesses at the same time from different sellers, we would face
      additional risks, including difficulties and expenses incurred in connection
      with the subsequent integration of the operations and services or products
      of
      the acquired companies into a single operating business. If we are unable to
      adequately address these risks, it could negatively impact our profitability
      and
      results of operations.









***The
      ability of our shareholders to exercise their conversion rights may not allow
      us
      to effectuate the most desirable business combination or optimize our capital
      structure.***




When
      we
      seek shareholder approval of any business combination, we will offer each holder
      of IPO Shares (but not our founders) the right to have his, her or its IPO
      Shares converted to cash if the shareholder votes against the business
      combination and the business combination is approved and completed. Such holder
      must both vote against such business combination and then exercise his, her
      or
      its conversion rights to receive a pro rata portion of the trust account.
      Because we will not know how many shareholders may exercise such conversion
      rights, if our business combination requires us to use substantially all of
      our
      cash to pay the purchase price, we may either need to reserve part of the trust
      account for possible payment upon such conversion, or we may need to arrange
      third party financing to help fund our business combination in case a larger
      percentage of shareholders exercise their conversion rights than we expect.
      Since we have no specific business combination under consideration, we have
      not
      taken any steps to secure third party financing. Therefore, we may not be able
      to consummate a business combination that requires us to use all of the funds
      held in the trust account as part of the purchase price, or we may end up having
      a leverage ratio that is not optimal for our business combination. This may
      limit our ability to effectuate the most attractive business combination
      available to us.




***We
      will proceed with a business combination only if holders of less than 30% of
      the
      IPO Shares exercise their conversion rights.***




We
      will
      proceed with a business combination only if holders owning less than 30% of
      the
      IPO Shares exercise their conversion rights. Accordingly, holders of
      approximately 29.99% of the IPO Shares may exercise their conversion rights
      and
      we could still consummate a proposed business combination. As a result, this
      may
      have the effect of making it more likely that we could consummate a proposed
      business combination even when a significant number of shareholders have voted
      against such transaction.




Our
      business combination may require us to use substantially all of our cash to
      pay
      the purchase price. In such a case, because we will not know how many
      shareholders may exercise such conversion rights, we may need to arrange third
      party financing to help fund our business combination in case a larger
      percentage of shareholders exercise their conversion rights than we expect.
      Additionally, even if our business combination does not require us to use
      substantially all of our cash to pay the purchase price, if a significant number
      of shareholders exercise their conversion rights, we will have less cash
      available to use in furthering our business plans following a business
      combination and may need to arrange third party financing. We have not taken
      any
      steps to secure third party financing for either situation. We cannot assure
      you
      that we will be able to obtain such third party financing on terms favorable
      to
      us or at all.




***We
      may not adequately assess the fair market value of a target business that we
      seek to acquire.***




The
      target business that we acquire, or acquire control of, must have a fair market
      value equal to at least 80% of our net assets at the time of such acquisition.
      We are not required to obtain an opinion from an unaffiliated third party that
      the target business we select has a fair market value in excess of at least
      80%
      of our net assets. The fair market value of the target may be determined by
      our
      board of directors based upon one or more standards generally accepted by the
      financial community (examples of which may include actual and potential sales,
      earnings and cash flow and book value). Accordingly, our board could rely
      heavily upon assumptions about the future growth and financial prospects of
      a
      target business, rather than its historical results of operations. We cannot
      assure you that such assumptions will prove to be correct. Furthermore, we
      are
      not required to obtain an opinion from an unaffiliated third party indicating
      that the price we are paying is fair to our shareholders from a financial point
      of view unless the target is affiliated with our founders. If no opinion is
      obtained, our shareholders will be relying on the judgment of our board of
      directors, whose collective experience in business evaluations for blank check
      companies like ours is not significant.









***Because
      of our limited resources and structure, we may not be able to consummate an
      attractive business combination.***




We
      expect
      to encounter intense competition from entities other than blank check companies
      having a business objective similar to ours, including venture capital funds,
      leveraged buyout funds and operating businesses competing for acquisitions.
      Many
      of these entities are well established and have extensive experience in
      identifying and effecting business combinations directly or through affiliates.
      Many of these competitors possess greater technical, human and other resources
      than we do and our financial resources will be relatively limited when
      contrasted with those of many of these competitors. While we believe that there
      are numerous potential target businesses that we could acquire with the net
      proceeds of the IPO, our ability to compete in acquiring certain sizable target
      businesses will be limited by our available financial resources. This inherent
      competitive limitation gives others an advantage in pursuing the acquisition
      of
      certain target businesses. Furthermore, the obligation we have to seek
      shareholder approval of a business combination may delay the consummation of
      a
      transaction. Additionally, our outstanding warrants, and the future dilution
      they potentially represent, may not be viewed favorably by certain target
      businesses. Any of these obligations may place us at a competitive disadvantage
      in successfully negotiating a business combination. Furthermore, our negotiating
      position with any potential target may be harmed as we approach the deadline
      for
      the consummation of a business combination as such target business will know
      that our deadline cannot be extended. Additionally, because of our structure,
      there may be fewer attractive target businesses available to acquire or
      privately held target businesses may not be inclined to enter into a transaction
      with a publicly held blank check company like us.




***Our
      founders, including our officers and directors, control a substantial interest
      in us and thus may influence certain actions requiring a shareholder
      vote.***




Our
      founders (including all of our officers and directors) collectively own 19.1%
      of
      our issued and outstanding ordinary shares. Our board of directors is divided
      into three classes, each of which will generally serve for a term of three
      years
      with only one class of directors being elected in each year. It is unlikely
      that
      there will be an annual meeting of shareholders to elect new directors prior
      to
      the consummation of a business combination, in which case all of the current
      directors will continue in office until at least the consummation of the
      business combination. If there is an annual meeting, as a consequence of our
      “staggered” board of directors, only a minority of the board of directors will
      be considered for election and our founders, because of their ownership
      position, will have considerable influence regarding the outcome. Accordingly,
      our founders will continue to exert control at least until the consummation
      of a
      business combination.




***Our
      outstanding warrants and option may have an adverse effect on the market price
      of our ordinary shares and make it more difficult to effect a business
      combination.***




We
      issued
      warrants to purchase 11,500,000 ordinary shares as part of the units sold in
      the
      IPO (including the over-allotment option), warrants to purchase 210,000 ordinary
      shares as part of the insider units and the insider warrants to purchase
      1,033,334 ordinary shares. We also issued an option to purchase 500,000 units
      to
      the representative of the underwriters which, if exercised, will result in
      the
      issuance of an additional 1,000,000 warrants. To the extent we issue ordinary
      shares to effect a business combination, the potential for the issuance of
      a
      substantial number of additional ordinary shares upon exercise of these warrants
      and option could make us a less attractive acquisition vehicle in the eyes
      of a
      target business. Such securities, when exercised, will increase the number
      of
      issued and outstanding ordinary shares and reduce the value of the shares issued
      to complete the business combination. Accordingly, our warrants and option
      may
      make it more difficult to effectuate a business combination or increase the
      cost
      of acquiring the target business. Additionally, the sale, or even the
      possibility of sale, of the shares underlying the warrants and option could
      have
      an adverse effect on the market price for our securities or on our ability
      to
      obtain future financing. If and to the extent these warrants and option are
      exercised, you may experience dilution to your holdings.









***Our
      management’s ability to require holders of our warrants to exercise such
      warrants on a cashless basis will cause holders to receive fewer ordinary shares
      upon their exercise of the warrants than they would have received had they
      been
      able to exercise their warrants for cash.***




If
      we
      call our warrants for redemption after the redemption criteria (described in
      the
      prospectus for our IPO) have been satisfied, our management will have the option
      to require any holder that wishes to exercise his warrant to do so on a
“cashless basis.” If our management chooses to require holders to exercise their
      warrants on a cashless basis, the number of ordinary shares received by a holder
      upon exercise will be fewer than it would have been had such holder exercised
      his warrant for cash. This will have the effect of reducing the potential
“upside” of the holder’s investment in our company.




***If
      our founders or the purchasers of the insider units exercise their registration
      rights with respect to their founder shares or insider units, insider warrants
      and underlying securities, it may have an adverse effect on the market price
      of
      our ordinary shares and warrants and the existence of these rights may make
      it
      more difficult to effect a business combination.***




Our
      founders are entitled to demand that we register the resale of their initial
      shares at any time commencing three months prior to the date on which their
      shares are released from escrow. Additionally, the purchasers of the insider
      units and insider warrants are entitled to demand that we register the resale
      of
      these securities (and the underlying securities) at any time after we consummate
      a business combination. If such individuals exercise their registration rights
      with respect to all of their securities, then there will be an additional
      1,355,000 ordinary shares and 1,243,334 warrants (plus an additional 1,243,334
      ordinary shares underlying such warrants) eligible for trading in the public
      market. The presence of these additional securities trading in the public market
      may have an adverse effect on the market price of our ordinary shares. In
      addition, the existence of these rights may make it more difficult to effectuate
      a business combination or increase the cost of acquiring the target business,
      as
      the shareholders of the target business may be discouraged from entering into
      a
      business combination with us or will request a higher price for their securities
      because of the potential effect the exercise of such rights may have on the
      trading market for our ordinary shares.




***If
      we are deemed to be an investment company, we may be required to institute
      burdensome compliance requirements and our activities may be restricted, which
      may make it difficult for us to complete a business
      combination.***




A
      company
      that, among other things, is or holds itself out as being engaged primarily,
      or
      proposes to engage primarily, in the business of investing, reinvesting, owning,
      trading or holding certain types of securities would be deemed an investment
      company under the Investment Company Act of 1940. Since we invested the proceeds
      held in the trust fund, it is possible that we could be deemed an investment
      company. Notwithstanding the foregoing, we do not believe that our anticipated
      principal activities will subject us to the Investment Company Act of 1940.
      To
      this end, the proceeds held in trust may be invested by the trustee only in
      United States “government securities” within the meaning of Section 2(a)(16) of
      the Investment Company Act of 1940 having a maturity of 180 days or less or
      in
      money market funds meeting certain conditions under Rule 2a-7 promulgated under
      the Investment Company Act of 1940. By restricting the investment of the
      proceeds to these instruments, we intend to meet the requirements for the
      exemption provided in Rule 3a-1 promulgated under the Investment Company Act
      of
      1940.









If
      we are
      nevertheless deemed to be an investment company under the Investment Company
      Act
      of 1940, we may be subject to certain restrictions that may make it more
      difficult for us to complete a business combination, including:




·
            restrictions
                on the nature of our investments;
                and




·
            restrictions
                on the issuance of securities.




In
      addition, we may have imposed upon us certain burdensome requirements,
      including:




·
            registration
                as an investment company;




·
            adoption
                of a specific form of corporate structure;
                and




·
            reporting,
                record keeping, voting, proxy, compliance policies and procedures
                and
                disclosure requirements and other rules and
                regulations.




Compliance
      with these additional regulatory burdens would require additional expense for
      which we have not allotted.




***Because
      we are incorporated under the laws of the Cayman Islands, you may face
      difficulties in protecting your interests, and your ability to protect your
      rights through the U.S. federal courts may be
      limited.***




We
      are a
      company incorporated under the laws of the Cayman Islands, and, following a
      business combination, substantially all of our assets will be located outside
      the United States, although our trust fund will be located in the United States
      and be governed by United States laws. In addition, certain of our directors
      and
      officers are nationals or residents of jurisdictions other than the United
      States and all or a substantial portion of their assets are located outside
      the
      United States. As a result, it may be difficult for investors to effect service
      of process within the United States upon us or our directors or executive
      officers, or enforce judgments obtained in the United States courts against
      us
      or our directors or officers. Moreover, we have been advised that the PRC does
      not have treaties providing for the reciprocal recognition and enforcement
      of
      judgments of courts with the United States. Further, it is unclear if
      extradition treaties now in effect between the United States and the PRC would
      permit effective enforcement of criminal penalties of the United States federal
      securities laws.




Our
      corporate affairs will be governed by our memorandum and articles of
      association, the Companies Law (as the same may be supplemented or amended
      from
      time to time) or the common law of the Cayman Islands. The rights of
      shareholders to take action against the directors, actions by minority
      shareholders and the fiduciary responsibilities of our directors to us under
      Cayman Islands law are to a large extent governed by the common law of the
      Cayman Islands. The common law of the Cayman Islands is derived in part from
      comparatively limited judicial precedent in the Cayman Islands as well as from
      English common law, the decisions of whose courts are of persuasive authority,
      but are not binding on a court in the Cayman Islands. The rights of our
      shareholders and the fiduciary responsibilities of our directors under Cayman
      Islands law are not as clearly established as they would be under statutes
      or
      judicial precedent in some jurisdictions in the United States. In particular,
      the Cayman Islands has a less developed body of securities laws as compared
      to
      the United States, and some states, such as Delaware, have more fully developed
      and judicially interpreted bodies of corporate law. In addition, Cayman Islands
      companies may not have standing to initiate a shareholder derivative action
      in a
      federal court of the United States.









The
      Cayman Islands courts are also unlikely:




·
            to
                recognize or enforce against us judgments of courts of the United
                States
                based on certain civil liability provisions of U.S. securities laws;
                and




·
            to
                impose liabilities against us, in original actions brought in the
                Cayman
                Islands, based on certain civil liability provisions of U.S. securities
                laws.




There
      is
      no statutory recognition in the Cayman Islands of judgments obtained in the
      United States, although the courts of the Cayman Islands will in certain
      circumstances recognize and enforce a non-penal judgment of a foreign court
      of
      competent jurisdiction without retrial on the merits. The Grand Court of the
      Cayman Islands may stay proceedings if concurrent proceedings are being brought
      elsewhere.




As
      a
      result of all of the above, public shareholders may have more difficulty in
      protecting their interests in the face of actions taken by management, members
      of the board of directors or controlling shareholders than they would as public
      shareholders of a United States company.




**Risks
      Related to Operations in China**




Business
      combinations with companies with operations in China entail special
      considerations and risks. If we are successful in completing a business
      combination with a target business with operations in China, we will be subject
      to, and possibly adversely affected by, the following risks:




***After
      a business combination, substantially all of our assets will likely be located
      in China and substantially all of our revenue will be derived from our
      operations in China. Accordingly, our results of operations and prospects will
      be subject, to a significant extent, to the economic, political and legal
      policies, developments and conditions in China.***




The
      PRC’s
      economic, political and social conditions, as well as government policies,
      could
      affect our business. The PRC economy differs from the economies of most
      developed countries in many respects.




China’s
      GDP has grown consistently since 1978 (National Bureau of Statistics of China).
      However, we cannot assure you that such growth will be sustained in the future.
      If in the future China’s economy experiences a downturn or grows at a slower
      rate than expected, there may be less demand for spending in certain industries.
      A decrease in demand for spending in certain industries could materially and
      adversely affect our ability to find an attractive target business with which
      to
      consummate a business combination and if we effect a business combination,
      the
      ability of that target business to become profitable.




The
      PRC’s
      economic growth has been uneven, both geographically and among various sectors
      of the economy. The PRC government has implemented various measures to encourage
      economic growth and guide the allocation of resources. Some of these measures
      benefit the overall PRC economy, but may have a negative effect on us, depending
      on the industry in which we engage in a business combination. For example,
      our
      financial condition and results of operations may be adversely affected by
      PRC
      government control over capital investments or changes in tax regulations that
      are applicable to a potential target business and a business
      combination.









The
      PRC
      economy has been transitioning from a planned economy to a more market-oriented
      economy. Although in recent years the PRC government has implemented measures
      emphasizing the use of market forces for economic reform, the reduction of
      state
      ownership of productive assets and the establishment of sound corporate
      governance in business enterprises, a substantial portion of productive assets
      in China is still owned by the PRC government. In addition, the PRC government
      continues to play a significant role in regulating industry development by
      imposing industrial policies. It also exercises significant control over PRC
      economic growth through the allocation of resources, controlling payment of
      foreign currency-denominated obligations, setting monetary policy and providing
      preferential treatment to particular industries or companies. We cannot assure
      you that China’s economic, political or legal systems will not develop in a way
      that becomes detrimental to our business, results of operations and
      prospects.




A
      recent
      positive economic change has been the PRC’s entry into the World Trade
      Organization, or WTO, the sole global international organization dealing with
      the rules of trade between nations. It is believed that the PRC’s entry will
      ultimately result in a reduction on tariffs for industrial products, a reduction
      in trade restrictions and an increase in trading with the United States. If
      actions are not taken to rectify these problems, trade relations may be strained
      and this may have a negative impact on China’s economy.




***If
      relations between the United States and the PRC deteriorate, potential target
      businesses or their goods or services could become less
      attractive.***




The
      relationship between the United States and the PRC is subject to sudden
      fluctuation and periodic tension. For instance, the United States recently
      announced its intention to impose new short-term quotas on Chinese clothing
      imports, which may be extended for several years. Such import quotas may
      adversely affect political relations between the two countries and result in
      retaliatory countermeasures by the PRC in industries that may affect our
      ultimate target business. Relations may also be compromised if the U.S. becomes
      a more vocal advocate of Taiwan or proceeds to sell certain military weapons
      and
      technology to Taiwan. Changes in political conditions in the PRC and changes
      in
      the state of Sino-U.S. relations are difficult to predict and could adversely
      affect our operations or cause potential target businesses or their goods and
      services to become less attractive.




***As
      a result of merger and acquisition regulations implemented on September 8,
      2006
      relating to acquisitions of assets and equity interests of Chinese companies
      by
      foreign persons, it is expected that acquisitions will take longer and be
      subject to economic scrutiny by the PRC government authorities such that we
      may
      not be able to complete a transaction.***




On
      September 8, 2006, the Ministry of Commerce, together with several other
      government agencies, promulgated a comprehensive set of regulations governing
      the approval process by which a Chinese company may participate in an
      acquisition of its assets or its equity interests and by which a Chinese company
      may obtain public trading of its securities on a securities exchange outside
      the
      PRC. Although there was a complex series of regulations in place prior to
      September 8, 2006 for approval of Chinese enterprises that were administered
      by
      a combination of provincial and centralized agencies, the new regulations have
      largely centralized and expanded the approval process to the Ministry of
      Commerce (MOFCOM), the State Administration of Industry and Commerce (SAIC),
      the
      State Administration of Foreign Exchange (SAFE) or its branch offices, the
      State
      Asset Supervision and Administration Commission (SASAC), and the China
      Securities Regulatory Commission (CSRC). Depending on the structure of the
      transaction, these regulations will require the Chinese parties to make a series
      of applications and supplemental applications to the aforementioned agencies,
      some of which must be made within strict time limits and depending on approvals
      from one or the other of the aforementioned agencies. The application process
      has been supplemented to require the presentation of economic data concerning
      a
      transaction, including appraisals of the business to be acquired and evaluations
      of the acquirer which will permit the government to assess the economics of
      a
      transaction in addition to the compliance with legal requirements. If obtained,
      approvals will have expiration dates by which a transaction must be completed.
      Also, completed transactions must be reported to MOFCOM and some of the other
      agencies within a short period after closing and be confirmed by such agencies.
      If the completed transactions are not confirmed, it could render the transaction
      legally ineffective even if consummated by the parties. In extreme cases, the
      authorities could suspend or revoke the business license of the Chinese entities
      and cause an unwinding of the transaction. If the transaction was unwound,
      the
      consideration paid to the target business would be returned to us and we would
      then be forced to either attempt to complete a new business combination if
      it
      was prior to June 26, 2009 or we would be required to return any amounts which
      were held in the trust account to our shareholders and dissolve and liquidate.
      It is expected that compliance with the regulations will be more time consuming
      than in the past, will be more costly for the Chinese parties and will permit
      the government much more extensive evaluation and control over the terms of
      the
      transaction. Therefore, acquisitions in China may not be able to be completed
      because the terms of the transaction may not satisfy aspects of the approval
      process and may not be completed, even if approved, if they are not consummated
      within the time permitted by the approvals granted.









***Because
      the September 8, 2006, PRC merger and acquisition regulations permit the
      government agencies to have scrutiny over the economics of an acquisition
      transaction and require consideration in a transaction to be paid within stated
      time limits, we may not be able to negotiate a transaction that is acceptable
      to
      our shareholders or sufficiently protect their interests in a
      transaction.***




The
      regulations have introduced aspects of economic and substantive analysis of
      the
      target business and the acquirer and the terms of the transaction by MOFCOM
      and
      the other governing agencies through submissions of an appraisal report, an
      evaluation report and the acquisition agreement, all of which form part of
      the
      application for approval, depending on the structure of the transaction. The
      regulations also prohibit a transaction at an acquisition price obviously lower
      than the appraised value of the Chinese business or assets. The regulations
      require that in certain transaction structures, the consideration must be paid
      within strict time periods, generally not in excess of a year. Because the
      Chinese authorities have been unhappy with offshore flips which converted
      domestic companies into foreign investment enterprises (FIEs) in order to take
      advantage of certain benefits, including reduced taxation, in China, the new
      regulations require new foreign sourced capital of not less than 25% of the
      domestic company’s post-acquisition capital in order to obtain FIE treatment.
      Accordingly, if a sufficient amount of foreign capital is not infused into
      the
      domestic company, it will not be eligible to obtain FIE treatment. In asset
      transactions there must be no harm of third parties and the public interest
      in
      the allocation of assets and liabilities being assumed or acquired. These
      aspects of the regulations will limit our ability to negotiate various terms
      of
      the acquisition, including aspects of the initial consideration, contingent
      consideration, holdback provisions, indemnification provisions and provisions
      relating to the assumption and allocation of assets and liabilities. Transaction
      structures involving trusts, nominees and similar entities are prohibited.
      Therefore, we may not be able to negotiate a transaction with terms that will
      satisfy our investors and protect our shareholders interests in an acquisition
      of a Chinese business or assets.









***The
      PRC merger and acquisition regulations of September 8, 2006, have introduced
      industry protection and anti-trust aspects to the acquisition of Chinese
      companies and assets which may limit our ability to effect an
      acquisition.***




Under
      the
      PRC merger and acquisition regulations, acquisitions of Chinese domestic
      companies relating to “important industries” that may affect the national
      economic security or result in the transfer of “actual control” of companies
      having “famous Chinese brand names” or “well established Chinese brand names”
must be reported and approved by the relevant agencies. The merger and
      acquisition regulations also provide for antitrust review requirements for
      certain large transactions or transactions involving large companies and roll-up
      transactions with the same effect in the relevant Chinese market. In addition,
      certain mergers and acquisitions among foreign companies occurring outside
      of
      the PRC could also be subject to antitrust review in China which is similar
      to
      United States anti-trust law concepts. The regulations use various economic
      tests to determine if the transaction has to be reported to MOFCOM which include
      (i) if any of the parties to the transaction has a turnover in the Chinese
      market of more than RMB 1,500,000,000, (ii) if in a transaction outside of
      the
      PRC, any party thereto has assets in the PRC of more than RMB 3,000,000,000,
      (iii) if any of the parties to the transaction, before its consummation, has
      control not less than 20% of the Chinese market, (iv) if any of the parties
      as a
      result of the transaction will control 25% of the Chinese market, (v) the
      foreign investor has acquired 10 or more enterprises in related industries
      in
      the PRC during the last year, or (vi) if in a transaction outside of the PRC
      results in the foreign entities acquiring 15 or more FIEs in related industries
      within the PRC. Exemptions may be sought from the MOFCOM and SAIC on the basis
      that: (i) the transaction will improve market competition, (ii) the transaction
      will restructure unprofitable entities and ensures employment, (iii) the
      transaction will introduce high technologies and increase international
      competitiveness, and (iv) the transaction will improve the environment.
      Notwithstanding the September 8, 2006, regulations, there is a draft
      anti-monopoly law being considered which may replace or supplement the above
      provisions. Any transaction that we contemplate will have to comply with these
      regulations and may require additional approval or abandonment if we are not
      able to satisfy the requirements of the governmental authorities. When we
      evaluate a potential transaction, we will consider the need to comply with
      these
      regulations which may result in our modifying or not pursuing a particular
      transaction.




Although
      the merger and acquisition regulations provide specific requirements and
      procedures, there are many ambiguities which give the regulators great latitude
      in the approval process which will cause uncertainty in our ability to complete
      a transaction on a timely basis.




The
      merger and acquisition regulations set forth many requirements that have to
      be
      followed, but there are still many ambiguities in the meaning of many
      provisions. Although further regulations are anticipated in the future, until
      there has been clarification either by pronouncements, regulation or practice,
      there is some uncertainty in the scope of the regulations. Moreover, the
      ambiguities give the regulators wide latitude in the enforcement of the
      regulations and the transactions to which they may or may not apply. Therefore,
      we cannot predict the extent to which the regulations will apply to a
      transaction, and therefore, there may be uncertainty in whether or not a
      transaction will be completed until the approval process is under way or until
      the preliminary approvals are obtained.




***The
      Ministry of Information Industry (MII) issued regulations that regulate and
      limit ownership and investment in internet and other value-added
      telecommunications businesses in China which may limit the type of businesses
      we
      will be able to acquire.***




On
      July
      13, 2006, the MII issued a notice with the purpose of increasing the regulation
      of foreign investment in and operations of value added telecom services which
      includes internet and telecommunications businesses in China. The regulations
      require Chinese entities to own and control the following: (i) internet domain
      names, (ii) registered trademarks, and (iii) servers and other infrastructure
      equipment used to host and operate web-sites and conduct business. The ownership
      requirements functionally limit foreign direct and indirect ownership and
      control of the intellectual property of these businesses even when attempted
      through various parallel control, licensing, use and management agreements.
      It
      is anticipated that these regulations will be strictly enforced, and the
      government has provided that the new regulations apply retroactively and
      provides for audit procedures. The failure to comply may cause the MII to
      terminate a telecommunications license or otherwise modify existing agreements
      or require the disposition of the assets by the foreign entity. Any anticipated
      foreign investment in such businesses will be subject to prior approval by
      the
      MII, and it is expected that approval for investment may not be easily obtained
      for foreign investment in these businesses unless in strict compliance.
      Therefore, investment by us in this sector may not be actively pursued because
      certain assets may not be acquirable and accounting consolidation may be
      restricted or not permitted as a result of an unfavorable but permitted
      transaction structure.









***If
      the PRC imposes restrictions to reduce inflation, future economic growth in
      the
      PRC could be severely curtailed which could materially and adversely impact
      our
      profitability following a business combination.***




While
      the
      economy of the PRC has experienced rapid growth, this growth has been uneven
      among various sectors of the economy and in different geographical areas of
      the
      country. Rapid economic growth can lead to growth in the supply of money and
      rising inflation. In order to control inflation in the past, the PRC has imposed
      controls on bank credits, limits on loans for fixed assets and restrictions
      on
      state bank lending. Imposition of similar restrictions may lead to a slowing
      of
      economic growth and decrease the interest in the services or products we may
      ultimately offer leading to a material and adverse impact on our
      profitability.




***Any
      devaluation of currencies used in the PRC could negatively impact our target
      business’ results of operations and any appreciation thereof could cause the
      cost of a target business as measured in dollars to
      increase.***




Because
      our objective is to complete a business combination with a target business
      having its primary operating facilities located in the PRC, and because
      substantially all revenues and income following a business combination would
      be
      received in a foreign currency such as Renminbi, the main currency used in
      the
      PRC, the dollar equivalent of our net assets and distributions, if any, would
      be
      adversely affected by reductions in the value of the Renminbi. The value of
      the
      Renminbi fluctuates and is affected by, among other things, changes in the
      PRC’s
      political and economic conditions. To the extent that we need to convert United
      States dollars into Chinese Renminbi for our operations, appreciation of this
      currency against the United States dollar could have a material adverse effect
      on our business, financial condition and results of operations. Conversely,
      if
      we decide to convert our Renminbi into United States dollars for other business
      purposes and the United States dollar appreciates against this currency, the
      United States dollar equivalent of the Renminbi we convert would be reduced.
      The
      conversion of Renminbi into foreign currencies such as the United States dollar
      has been generally based on rates set by the People’s Bank of China, which are
      set daily based on the previous day’s interbank foreign exchange market rates
      and current exchange rates on the world financial markets. Historically, China
      “pegged” its currency to the United States dollar. This meant that each unit of
      Chinese currency had a set ratio for which it could be exchanged for United
      States currency, as opposed to having a floating value like other countries’
currencies. Many countries argued that this system of keeping the Chinese
      currency low when compared to other countries gave Chinese companies an unfair
      price advantage over foreign companies. Due to mounting pressure from other
      countries, the PRC recently reformed its economic policies to establish a
      floating value for its currency. However, China recently adopted a floating
      rate
      with respect to the Renminbi, with a 0.3% fluctuation. As of March 19, 2007,
      the
      exchange rate of the Renminbi was 0.12928 against the United States dollar,
      amounting to approximately an 11% appreciation of the Renminbi. This floating
      exchange rate, and any appreciation of the Renminbi that may result from such
      rate, could cause the cost of a target business as measured in dollars to
      increase. Further, target companies may be adversely affected since the
      competitive advantages that existed as a result of the former policies will
      cease. We cannot assure you that a target business with which we consummate
      a
      business combination will be able to compete effectively with the new policies
      in place.









***Exchange
      controls that exist in the PRC may limit our ability to utilize our cash flow
      effectively following a business combination.***




Following
      a business combination, we will be subject to the PRC’s rules and regulations on
      currency conversion. In the PRC, the State Administration for Foreign Exchange
      (SAFE) regulates the conversion of the Renminbi into foreign currencies.
      Currently, foreign investment enterprises (FIEs) are required to apply to the
      SAFE for “Foreign Exchange Registration Certificates for FIEs.” Following a
      business combination, we will likely be an FIE as a result of our ownership
      structure. With such registration certificates, which need to be renewed
      annually, FIEs are allowed to open foreign currency accounts including a “basic
      account” and “capital account.” Currency conversion within the scope of the
“basic account,” such as remittance of foreign currencies for payment of
      dividends, can be effected without requiring the approval of the SAFE. However,
      conversion of currency in the “capital account,” including capital items such as
      direct investment, loans and securities, still require approval of the SAFE.
      We
      cannot assure you that the PRC regulatory authorities will not impose further
      restrictions on the convertibility of the Renminbi. Any future restrictions
      on
      currency exchanges may limit our ability to use our cash flow for the
      distribution of dividends to our shareholders or to fund operations we may
      have
      outside of the PRC.




***If
      the PRC enacts regulations in our target business’ proposed industry segments
      which forbid or restrict foreign investment, our ability to consummate a
      business combination could be severely impaired.***




Many
      of
      the rules and regulations that companies face in China are not explicitly
      communicated. If new laws or regulations forbid foreign investment in industries
      in which we want to complete a business combination, they could severely limit
      the candidate pool of potential target businesses. Additionally, if the relevant
      Chinese authorities find us or the target business with which we ultimately
      complete a business combination to be in violation of any existing or future
      Chinese laws or regulations, they would have broad discretion in dealing with
      such a violation, including, without limitation:




·
            levying
                fines;




·
            revoking
                our business and other licenses;




·
            requiring
                that we restructure our ownership or operations;
                and




·
            requiring
                that we discontinue any portion or all of our
                business.




***Recent
      regulations relating to offshore investment activities by PRC residents may
      increase the administrative burden we face and create regulatory uncertainties
      that may limit or adversely effect our ability to acquire PRC
      companies.***




Regulations
      were issued on January 24, 2005, on April 8, 2005 and on November 21, 2005,
      by
      the SAFE, that will require approvals from, and registrations with, PRC
      government authorities in connection with direct or indirect offshore investment
      activities by PRC residents and PRC corporate entities; however, there has
      been
      a recent announcement that such regulations may be partially reversed. The
      SAFE
      regulations retroactively require approval and registration of direct or
      indirect investments previously made by PRC residents in offshore companies.
      In
      the event that a PRC shareholder with a direct or indirect stake in an offshore
      parent company fails to obtain the required SAFE approval and make the required
      registration, the PRC subsidiaries of such offshore parent company may be
      prohibited from making distributions of profit to the offshore parent and from
      paying the offshore parent proceeds from any reduction in capital, share
      transfer or liquidation in respect of the PRC subsidiaries. Further, failure
      to
      comply with the various SAFE approval and registration requirements described
      above, as currently drafted, could result in liability under PRC law for foreign
      exchange evasion. More recently, however, new regulations have been drafted
      that
      would partially reverse the policy that requires Chinese companies to obtain
      permission from SAFE to own overseas corporate entities.









As
      a
      result of the lack of implementing rules, the uncertainty as to when the new
      draft regulations will take effect, and uncertainty concerning the
      reconciliation of the new regulations with other approval requirements, it
      remains unclear how these existing regulations, and any future legislation
      concerning offshore or cross-border transactions, will be interpreted, amended
      and implemented by the relevant government authorities. We are committed to
      complying with the relevant rules. As a result of the foregoing, we cannot
      assure you that we or the owners of the target business we intend to acquire,
      as
      the case may be, will be able to complete the necessary approval, filings and
      registrations for a proposed business combination. This may restrict our ability
      to implement our business combination strategy and adversely affect our
      operations.




***Because
      Chinese law will govern almost all of any target business’ material agreements,
      we may not be able to enforce our rights within the PRC or elsewhere, which
      could result in a significant loss of business, business opportunities or
      capital.***




Chinese
      law will govern almost all of our target business’ material agreements, many of
      which may be with Chinese governmental agencies. We cannot assure you that
      the
      target business will be able to enforce any of its material agreements or that
      remedies will be available outside of the PRC. The system of laws and the
      enforcement of existing laws and contracts in the PRC may not be as certain
      in
      implementation and interpretation as in the United States. The Chinese judiciary
      is relatively inexperienced in enforcing corporate and commercial law, leading
      to a higher than usual degree of uncertainty as to the outcome of any
      litigation. The inability to enforce or obtain a remedy under any of our future
      agreements could result in a significant loss of business, business
      opportunities or capital.




***If
      we acquire a target business through contractual arrangements with one or more
      operating businesses in China, such contracts may not be as effective in
      providing operational control as direct ownership of such businesses and may
      be
      difficult to enforce.***




The
      government of the PRC has restricted or limited foreign ownership of certain
      kinds of assets and companies operating in certain industries. The industry
      groups that are restricted are wide ranging, including certain aspects of
      telecommunications, advertising, food production, and heavy equipment
      manufacturers, for example. In addition there can be restrictions on the foreign
      ownership of businesses that are determined from time to time to be in
“important industries” that may affect the national economic security or having
“famous Chinese brand names” or “well established Chinese brand names.” Subject
      to the review requirements of the Ministry of Commerce and other relevant
      agencies as discussed elsewhere for acquisitions of assets and companies in
      the
      PRC and subject to the various percentage ownership limitations that exist
      from
      time to time, acquisitions involving foreign investors and parties in the
      various restricted categories of assets and industries may nonetheless sometimes
      be consummated using contractual arrangements with permitted Chinese parties.
      To
      the extent that such agreements are employed, they may be for control of
      specific assets such as intellectual property or control of blocks of the equity
      ownership interests of a company which may not be subject to the merger and
      acquisition regulations mentioned above since these types of arrangements
      typically do not involve a change of equity ownership in a PRC operating
      company, injure a third party or affect the social public interest. The
      agreements would be designed to provide our company with the economic benefits
      of and control over the subject assets or equity interests similar to the rights
      of full ownership, while leaving the technical ownership in the hands of Chinese
      parties who would be our nominees and, therefore, may exempt the transaction
      from the merger and acquisition regulations, including the application process
      required thereunder. However, since there has been limited implementation
      guidance provided with respect to the merger and acquisition regulations, there
      can be no assurance that the relevant government agency would not apply them
      to
      a business combination effected through contractual arrangements. If such an
      agency determines that such an application should have been made consequences
      may include levying fines, revoking business and other licenses, requiring
      restructure of ownership or operations and requiring discontinuation of any
      portion of all of the acquired business. These agreements likely also would
      provide for increased ownership or full ownership and control by us when and
      if
      permitted under PRC law and regulation. If we choose to effect a business
      combination that employs the use of these types of control arrangements, we
      may
      have difficulty in enforcing our rights. Therefore these contractual
      arrangements may not be as effective in providing us with the same economic
      benefits, accounting consolidation or control over a target business as would
      direct ownership. For example, if the target business or any other entity fails
      to perform its obligations under these contractual arrangements, we may have
      to
      incur substantial costs and expend substantial resources to enforce such
      arrangements, and rely on legal remedies under Chinese law, including seeking
      specific performance or injunctive relief, and claiming damages, which we cannot
      assure will be sufficient to off-set the cost of enforcement and may adversely
      affect the benefits we expect to receive from the business
      combination.









Moreover,
      we expect that the contractual arrangements upon which we would be relying
      would
      be governed by Chinese law and would be the only basis of providing resolution
      of disputes which may arise through either arbitration or litigation in China.
      Accordingly, these contracts would be interpreted in accordance with Chinese
      law
      and any disputes would be resolved in accordance with Chinese legal procedures.
      Uncertainties in the Chinese legal system could limit our ability to enforce
      these contractual arrangements. In the event we are unable to enforce these
      contractual arrangements, we may not be able to exert the effective level of
      control or receive the full economic benefits of full direct ownership over
      the
      target business.




***If
      our management following a business combination is unfamiliar with United States
      securities laws, they may have to expend time and resources becoming familiar
      with such laws which could lead to various regulatory
      issues.***




Following
      a business combination, our management will likely resign from their positions
      as officers of the company and the management of the target business at the
      time
      of the business combination will remain in place. We cannot assure you that
      management of the target business will be familiar with United States securities
      laws. If new management is unfamiliar with our laws, they may have to expend
      time and resources becoming familiar with such laws. This could be expensive
      and
      time-consuming and could lead to various regulatory issues which may adversely
      affect our operations.




***Because
      any target business with which we attempt to complete a business combination
      may
      be required to provide our shareholders with financial statements prepared
      in
      accordance with and reconciled to United States generally accepted accounting
      principles, prospective target businesses may be
      limited.***




In
      accordance with requirements of United States Federal securities laws, in order
      to seek shareholder approval of a business combination, a proposed target
      business may be required to have certain financial statements which are prepared
      in accordance with, or which can be reconciled to, U.S. generally accepted
      accounting principles and audited in accordance with U.S. generally accepted
      auditing standards. To the extent that a proposed target business does not
      have
      financial statements which have been prepared with, or which can be reconciled
      to, U.S. generally accepted accounting principles and audited in accordance
      with
      U.S. generally accepted auditing standards, we may not be able to complete
      a
      business combination with that proposed target business. These financial
      statement requirements may limit the pool of potential target businesses with
      which we may complete a business combination. Furthermore, to the extent that
      we
      seek to acquire a target business that does not have financial statements
      prepared in accordance with United States generally accepted accounting
      principles, it could make it more difficult for our management to analyze such
      target business and determine whether it has a fair market value in excess
      of
      80% of our net assets. It could also delay our preparation of our proxy
      statement that we will send to shareholders relating to the proposed business
      combination with such a target business, thereby making it more difficult for
      us
      to consummate such a business combination.









***If
      certain exemptions within the PRC regarding withholding taxes are removed,
      we
      may be required to deduct Chinese corporate withholding taxes from dividends
      we
      may pay to our shareholders following a business
      combination.***




According
      to the PRC’s applicable income tax laws, regulations, notices and decisions
      related to foreign investment enterprises and their investors (the “Applicable
      Foreign Enterprises Tax Law”), income such as dividends and profits distribution
      from the PRC derived from a foreign enterprise which has no establishment in
      the
      PRC is subject to a 20% withholding tax, unless the relevant income is
      specifically exempted from tax under the Applicable Foreign Enterprises Tax
      Law.
      Currently, profits derived by a shareholder, such as through dividends, from
      a
      foreign-invested enterprise (an “FIE”) is exempted. However, if the foregoing
      exemption is removed in the future following a business combination, we may
      be
      required to deduct certain amounts from dividends we may pay to our shareholders
      to pay corporate withholding taxes.




***After
      we consummate a business combination, our operating company in China will be
      subject to restrictions on dividend payments.***




After
      we
      consummate a business combination, we will rely on dividends and other
      distributions from our operating company to provide us with cash flow and to
      meet our other obligations. Current regulations in China would permit our
      operating company in China to pay dividends to us only out of its accumulated
      distributable profits, if any, determined in accordance with Chinese accounting
      standards and regulations. In addition, our operating company in China will
      be
      required to set aside at least 10% (up to an aggregate amount equal to half
      of
      its registered capital) of its accumulated profits each year. Such reserve
      account may not be distributed as cash dividends. In addition, if our operating
      company in China incurs debt on its own behalf in the future, the instruments
      governing the debt may restrict its ability to pay dividends or make other
      payments to us.




***If
      any dividend is declared in the future and paid in a foreign currency, you
      may
      be taxed on a larger amount in U.S. dollars than the U.S. dollar amount that
      you
      will actually ultimately receive.***




If
      you
      are a U.S. holder, you will be taxed on the U.S. dollar value of your dividends
      at the time you receive them, even if you actually receive a smaller amount
      of
      U.S. dollars when the payment is in fact converted into U.S. dollars.
      Specifically, if a dividend is declared and paid in a foreign currency, the
      amount of the dividend distribution that you must include in your income as
      a
      U.S. holder will be the U.S. dollar value of the payments made in the foreign
      currency, determined at the conversion rate of the foreign currency to the
      U.S.
      dollar on the date the dividend distribution is includible in your income,
      regardless of whether the payment is in fact converted into U.S. dollars. Thus,
      if the value of the foreign currency decreases before you actually convert
      the
      currency into U.S. dollars, you will be taxed on a larger amount in U.S. dollars
      than the U.S. dollar amount that you will actually ultimately
      receive.









***We
      may become a passive foreign investment company, which could result in adverse
      U.S. federal income tax consequences to U.S.
      investors.***




If
      we are
      determined to be a passive foreign investment company, known as a “PFIC,” U.S.
      Holders (as defined in the prospectus for our IPO in the section captioned
      “Taxation—United States Federal Income Taxation”) could be subject to adverse
      United States federal income tax consequences. Specifically, if we are
      determined to be a PFIC for any taxable year, each U.S. Holder may be subject
      to
      increased U.S. federal income tax and may be subject to additional reporting
      requirements. In general, we will be classified as a PFIC for any taxable year
      in which either (1) at least 75% of our gross income is passive income or (2)
      at
      least 50% of the value (determined on the basis of a quarterly average) of
      our
      assets is attributable to assets that produce or are held for the production
      of
      passive income. For purposes of these tests, cash, including working capital,
      and investments are considered assets that produce or are held for the
      production of passive income. We cannot assure you that we will not be a PFIC
      in
      the current or any future year. We urge U.S. investors to consult their own
      tax
      advisors regarding the possible application of the PFIC rules.




***The
      legal authorities in China are in the process of evaluating heretofore tax
      and
      fee benefits provided to foreign investors and companies to encourage
      development within the country such that these benefits may be lessened or
      removed with the consequence that expenses may rise impacting margins and net
      income.***




The
      legal
      authorities are evaluating tax and fee benefits that have been available to
      foreign investors and companies operating in China and tax holidays for new
      enterprises. It is anticipated, in the near term, there are going to be changes
      that substantially reduce or eliminate many, if not all, the tax and other
      governmental fee advantages that heretofore have been available to foreign
      entities and newly created entities whether or not such new entities are
      foreign. The goal is to institute greater equalization of tax and government
      fee
      treatment of all corporate and similar entities in China. China is being
      encouraged to create this more equal treatment because of its WTO obligations
      and public opinion within China. There may be phase-ins of various taxes and
      fees for entities that currently benefit from either no or lower tax rates
      and
      fees compared to wholly Chinese companies and entities, but there can be no
      assurance of this. Even if there are phase-in periods, the length of such
      periods is not known. Overall, it is expected that the cost of operating in
      China will increase for those companies and entities that have had various
      tax
      and fee advantages in the past. As a result, any target business we might
      acquire in China that has had or expects to have benefits from some forms of
      preferential tax and fee rates may have increased costs which may have an
      adverse impact on operating margins and net income.




**ITEM
      2. DESCRIPTION OF PROPERTY**




We
      maintain our principal executive offices at 70 Cao Bao Rd., Building C, Suite
      1302, Shanghai China. The cost for this space is included in the $7,500
      per-month fee Voxa, Inc., an affiliate of Beatrice Hom, our chief operating
      officer, chief financial officer and director, will charge us for general and
      administrative services. We believe that the fee charged by Voxa, Inc. is at
      least as favorable as we could have obtained from an unaffiliated person. We
      consider our current office space, combined with the other office space
      otherwise available to our executive officers, adequate for our current
      operations.




**ITEM
      3. LEGAL PROCEEDINGS**




None.









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




No
      matter
      was submitted to a vote of our security holders during the fourth quarter of
      the
      fiscal year ended December 31, 2007.




**PART
      II**




**ITEM
      5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS**




**Market
      Information**




Our
      units, ordinary shares and warrants trade on the OTC Bulletin Board under the
      symbols CADUF, CADQF and CADWF, respectively. The following table sets forth
      the
      range of high and low sales prices for the units, ordinary shares and warrants
      for the periods indicated since the units commenced public trading on June
      26,
      2007, and since the ordinary shares and warrants commenced public trading on
      July 10, 2007.




Units
            
            Ordinary
                Shares
            
            WarrantsHigh
            
            Low
            
            High
            
            Low
            
            High
            
            Low2008:First
                Quarter*
            
            
            7.60
            
            
            7.50
            
            
            5.61
            
            
            5.45
            
            
            0.95
            
            
            0.722007:Fourth
                Quarter
            
            
            8.25
            
            
            7.20
            
            
            5.98
            
            
            5.54
            
            
            1.25
            
            
            0.95Third
                Quarter
            
            
            7.59
            
            
            6.00
            
            
            5.40
            
            
            5.32
            
            
            0.90
            
            
            0.60Second
                Quarter




*
      Through
      March 30, 2008.




**Holders**




As
      of
      March 30, 2008, there were 3 holders of record of our units, 8 holders of record
      of our ordinary shares and 3 holders of record of our warrants.




**Dividends**




We
      have
      not paid any cash dividends on our ordinary shares to date and do not intend
      to
      pay cash dividends prior to the completion of a business combination. The
      payment of cash dividends in the future will be contingent upon our revenues
      and
      earnings, if any, capital requirements and general financial condition
      subsequent to completion of a business combination. The payment of any dividends
      subsequent to a business combination will be within the discretion of our then
      board of directors. It is the present intention of our board of directors to
      retain all earnings, if any, for use in our business operations and,
      accordingly, our board does not anticipate declaring any dividends in the
      foreseeable future.




**Recent
      Sales of Unregistered Securities and Use of Proceeds**




In
      January 2007, we sold the following ordinary shares without registration under
      the Securities Act of 1933, as amended:




Name
            
            Number
                of Shares
            
            Relationship
                to UsBeatrice
                Hom
            
            601,100
            
            Chief
                Operating Officer, Chief Financial Officer and DirectorWing
                Yip
            
            202,000
            
            Secretary
                and DirectorMichael
                Hsu
            
            107,800
            
            Chief
                Executive Officer and DirectorVincent
                Shen
            
            107,800
            
            DirectorFrancois
                Shih
            
            90,200
            
            Special
                AdvisorLi
                Wen Shi
            
            80,400
            
            Chairman
                of the BoardXiong
                Yin
            
            60,700
            
            Director









Such
      shares were issued in connection with our organization pursuant to the exemption
      from registration contained in Section 4(2) of the Securities Act as they were
      sold to sophisticated, wealthy individuals or entities. The shares issued to
      the
      individuals and entities above were sold at a purchase price of approximately
      $0.02 per share (an aggregate of $25,000).




In
      March
      2007, Beatrice Hom transferred (i) 106,000 ordinary shares to Wing Yip, (ii)
      11,000 ordinary shares to Michael Hsu, (iii) 300 ordinary shares to Xiong Yin,
      (iv) 48,000 ordinary shares to Li Wen Shi and (v) 35,000 ordinary shares to
      Vincent Shen. All of the transfers were made at $0.02 per share.




Simultaneously
      with the consummation of the IPO, we consummated the private sale of 105,000
      insider units at a price of $6.00 per insider unit and 1,033,334 insider
      warrants at a price of $0.60 per insider warrant, generating total proceeds
      of
      $1,250,000. The insider units and insider warrants were purchased by Beatrice
      Hom and Francois Shih.




**Initial
      Public Offering**




On
      June
      26, 2007, we closed our IPO of 5,000,000 units with each unit consisting of
      one
      ordinary share and two warrants, each to purchase one ordinary share at an
      exercise price of $5.00 per share. On July 2, 2007, we consummated the closing
      of an additional 750,000 units which were subject to the over-allotment option.
      The units from the IPO (including the over-allotment option) were sold at an
      offering price of $6.00 per unit, generating total gross proceeds of
      $34,500,000. EarlyBirdCapital, Inc. acted as representative of the underwriters.
      The securities sold in the IPO were registered under the Securities Act of
      1933
      on a registration statement on Form S-1 (No. 333-140516). The Securities and
      Exchange Commission declared the registration statement effective on June 18,
      2007.




We
      paid a
      total of $2,233,956 in underwriting discounts and commissions (after deferring
      $345,000) and for costs and expenses related to the offering. After deducting
      the underwriting discounts and commissions and the offering expenses, the total
      net proceeds to us from the offering were $32,266,000, of which $32,123,000
      was
      deposited into the trust account and the remaining proceeds of $143,000 became
      available to be used to provide for business, legal and accounting due diligence
      on prospective business combinations and continuing general and administrative
      expenses. In addition, all of the proceeds from the private sale of the units
      and warrants were deposited into the trust fund, for a total of $33,372,500
      held
      in trust (or approximately $5.80 per share sold in the offering). The net
      proceeds deposited into the trust fund remain on deposit in the trust fund
      and
      have earned $811,877 in interest through December 31, 2007.




**ITEM
      6. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION**




The
      following discussion should be read in conjunction with the Company’s
      Consolidated Financial Statements and footnotes thereto contained in this
      report.




**Forward
      Looking Statements**




The
      statements discussed in this Report include forward looking statements that
      involve risks and uncertainties detailed from time to time in the Company’s
      reports filed with the Securities and Exchange Commission.









**Plan
      of Operations**




We
      were
      formed on January 8, 2007 to serve as a vehicle to acquire, through a stock
      exchange, asset acquisition or other similar business combination, an operating
      business, or control of such operating business through contractual
      arrangements, that has its principal operations located in the People’s Republic
      of China. We intend to utilize cash derived from the proceeds of our recently
      completed public offering, our capital stock, debt or a combination of cash,
      capital stock and debt, in effecting a business combination.




For
      the
      period from January 8, 2007 (inception) to December 31, 2007, we had net income
      of $544,065 derived from interest income of $814,854, offset by $270,789 for
      travel and other expenses.




We
      consummated our IPO on June 26, 2007. On July 2, 2007, we consummated the
      closing of an additional 750,000 units that were subject to the over-allotment
      option. Gross proceeds from our IPO (including from our private placement of
      units and warrants) were $35,750,000. We paid a total of $2,233,956 in
      underwriting discounts and commissions (after deferring $345,000) and for costs
      and expenses related to the offering. After deducting the underwriting discounts
      and commissions and the offering expenses, the total net proceeds to us from
      the
      offering were approximately $32,266,000, of which $32,123,000 was deposited
      into
      the trust account. In addition, all of the proceeds from the private sale of
      the
      units and warrants were deposited into the trust fund, for a total of
      $33,372,500 held in trust (or approximately $5.80 per share sold in the
      offering). The remaining proceeds are available to be used by us to provide
      for
      business, legal and accounting due diligence on prospective acquisitions, tax
      payments and continuing general and administrative expenses. The net proceeds
      deposited into the trust fund remain on deposit in the trust fund and have
      earned $814,854 in interest through December 31, 2007.




We
      intend
      to use substantially all of the net proceeds of the IPO to acquire a target
      business, including identifying and evaluating prospective acquisition
      candidates, selecting the target business, and structuring, negotiating and
      consummating the business combination. To the extent that our capital stock
      is
      used in whole or in part as consideration to effect a business combination,
      the
      proceeds held in the trust fund as well as any other net proceeds not expended
      will be used to finance the operations of the target business.




We
      believe we will have sufficient available funds outside of the trust fund to
      operate through June 26, 2009, assuming that a business combination is not
      consummated during that time. There can be released to us, from time to time,
      interest earned on the funds held in the trust account, up to an aggregate
      of
      $1,050,000, to fund expenses related to investigating and selecting a target
      business, income and other taxes and our other working capital requirements.
      From June 26, 2007 through June 26, 2009, we anticipate that we will incur
      approximately $240,000 of expenses for legal, accounting and other third-party
      expenses attendant to the due diligence investigations, structuring and
      negotiating of a business combination, $180,000 for the administrative fee
      payable to Voxa, Inc., $100,000 of expenses for the due diligence and
      investigation of a target business by our founders, $100,000 of expenses in
      legal and accounting fees relating to our SEC reporting obligations and $580,000
      for general working capital that will be used for miscellaneous expenses, taxes
      and reserves and director and officer liability insurance premiums. Through
      December 31, 2007, we have transferred $200,000 of interest earned on the trust
      funds for working capital purposes. We do not believe we will need to raise
      additional funds following the IPO in order to meet the expenditures required
      for operating our business. However, we may need to raise additional funds
      through a private offering of debt or equity securities if such funds are
      required to consummate a business combination that is presented to us, although
      we have not entered into any such arrangement and have no current intention
      of
      doing so.









Commencing
      on June 18, 2007 and ending upon the acquisition of a target business or our
      liquidation, we began incurring a fee from Voxa, Inc., an affiliate of Beatrice
      Hom, our chief operating officer, chief financial officer and a member of our
      board of directors, of $7,500 per month for providing us with office space
      and
      certain general and administrative services. Additionally, on January 9, 2007,
      Beatrice Hom, Wing Yip, our secretary and a member of our board of directors,
      Vincent Shen and Xiong Yin, both members of our board of directors, advanced
      an
      aggregate of $100,000 to us for payment of offering expenses on our behalf.
      This
      loan was repaid following our initial public offering from the proceeds of
      the
      offering.




**Off-Balance
      Sheet Arrangements**




Options
      and warrants issued in conjunction with our IPO are equity linked derivatives
      and accordingly represent off-balance sheet arrangements. The options and
      warrants meet the scope exception in paragraph 11(a) of Financial Accounting
      Standard (FAS) 133 and are accordingly not accounted for as derivatives for
      purposes of FAS 133, but instead are accounted for as equity. See Footnote
      __ to
      the financial statements for more information.




**ITEM
      7. FINANCIAL STATEMENTS**




This
      information appears following Item 14 of this Report and is incorporated herein
      by reference.




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




None.




**ITEM
      8A. CONTROL AND PROCEDURES**




Disclosure
      controls and procedures are controls and other procedures that are designed
      to
      ensure that information required to be disclosed in company reports filed or
      submitted under the Securities Exchange Act of 1934 (the “Exchange Act”) is
      recorded, processed, summarized and reported, within the time periods specified
      in the Securities and Exchange Commission’s rules and forms. Disclosure controls
      and procedures include, without limitation, controls and procedures designed
      to
      ensure that information required to be disclosed in company reports filed or
      submitted under the Exchange Act is accumulated and communicated to management,
      including our chief executive officer and chief financial officer, as
      appropriate to allow timely decisions regarding required
      disclosure.




As
      required by Rules 13a-15 and 15d-15 under the Exchange Act, our chief
      executive officer and chief financial officer carried out an evaluation of
      the
      effectiveness of the design and operation of our disclosure controls and
      procedures as of December 31, 2007. Based upon their evaluation, they concluded
      that our disclosure controls and procedures were effective.




**Management's
      Report on Internal Control Over Financial Reporting**




Our
      internal control over financial reporting is a process designed by, or under
      the
      supervision of, our chief executive officer and chief financial officer and
      effected by our board of directors, management and other personnel, to provide
      reasonable assurance regarding the reliability of our financial reporting and
      the preparation of our financial statements for external purposes in accordance
      with generally accepted accounting principles. Internal control over financial
      reporting includes policies and procedures that pertain to the maintenance
      of
      records that in reasonable detail accurately and fairly reflect the transactions
      and dispositions of our assets; provide reasonable assurance that transactions
      are recorded as necessary to permit preparation of our financial statements
      in
      accordance with generally accepted accounting principles, and that our receipts
      and expenditures are being made only in accordance with the authorization of
      our
      board of directors and management; and provide reasonable assurance regarding
      prevention or timely detection of unauthorized acquisition, use or disposition
      of our assets that could have a material effect on our financial
      statements.









This
      annual report does not include a report of management’s assessment regarding
      internal control over financial reporting or an attestation report of the
      company’s registered public accounting firm due to a transition period
      established by rules of the Securities and Exchange Commission for newly public
      companies.




**Changes
      in Internal Control Over Financial Reporting**




During
      the most recently completed fiscal quarter, there has been no change in our
      internal control over financial reporting that has materially affected, or
      is
      reasonably likely to materially affect, our internal control over financial
      reporting.




**Limitations
      on the effectiveness of controls**




A
      control
      system, no matter how well conceived and operated, can provide only reasonable,
      not absolute, assurance that the objectives of the control system are met.
      Because of the inherent limitations in all control systems, no evaluation of
      controls can provide absolute assurance that all control issues and instances
      of
      fraud, if any, within a company have been detected. Our disclosure controls
      and
      procedures are designed to provide reasonable assurance of achieving its
      objectives. Our Principal Executive and Principal Financial and Accounting
      Officer concluded that our disclosure controls and procedures are effective
      at
      that reasonable assurance level.




**ITEM
      8B. OTHER INFORMATION**




None.




**PART
      III**




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





**Directors
      and Executive Officers**




Our
      current directors and executive officers are as follows:




Name
            
            Age
            
            PositionLi
                Wen Shi
            
            69
            
            Chairman
                of the BoardMichael
                Hsu
            
            48
            
            Chief
                Executive Officer and DirectorBeatrice
                Hom
            
            46
            
            Chief
                Operating Officer, Chief Financial Officer and DirectorWing
                Yip
            
            39
            
            Secretary
                and DirectorXiong
                Yin
            
            49
            
            DirectorVincent
                Shen
            
            44
            
            Director









***Li
      Wen Shi*** has been
      our chairman of the board since our inception. Since February 1983, he has
      served as vice minister of the Shanghai Ministry of Construction. From April
      1998 to October 2003, Mr. Shi was a representative of the 9th National Congress
      of the People’s Republic of China, a representative of the National Convention
      of the 14th Communist Party of China, vice president and committee member for
      the China Construction Industry Association and legal representative and vice
      director for the Shanghai Construction Industry Association. From July 2000
      to
      July 2002, Mr. Shi was chairman of Hong Kong Construction (Holdings) Limited,
      a
      Hong Kong listed construction and real estate company. From January 1994 to
      January 2003, Mr. Shi was the founder, general manager, director and chief
      executive officer of the Shanghai Construction Group (SCG), a construction
      and
      real estate company. At SCG, Mr. Shi was responsible for the city planning,
      permitting and construction of 95% of the construction projects in Shanghai,
      with more then 300 companies under his management. Further, while at SCG, Mr.
      Shi supervised landmark construction and infrastructure projects in Shanghai
      including the Jinmao Building, the Oriental Pearl TV Tower, key bridges linking
      Shanghai Huangpu River and major city subways. Outside of Shanghai, SCG has
      also
      constructed key projects in other parts of China including the Guangzhou Bridge,
      Guangzhou TV Tower and the Beijing National Theatre. Mr. Shi remains as a senior
      advisor to the Shanghai Construction Company, a Shanghai listed company. From
      February 1986 to December1993, Mr. Shi was the chief minister for both Shanghai
      Construction Bureau and the Shanghai Construction Management Bureau, two of
      the
      most powerful government entities in Shanghai. In 2001, Mr. Shi authored and
      published “The History Of Construction In China” and authored “China
      Construction Quality and Knowledge” in which the title was inscribed by former
      Chinese President Jiang Zemin and the preface of the book was written by current
      Chinese premier Wen Jiabao. Mr. Shi received a Bachelor of Civil Engineering
      with a concentration in project management and construction techniques from
      Nanjing Institute of Technology (now Southeast University) in Nanjing,
      China.




***Michael
      Hsu*** has been
      our chief executive officer and a member of our board of directors since our
      inception. Since April 2004, Mr. Hsu has been the chief executive officer of
      eWings Technologies, Inc., a worldwide provider of products and technology
      for
      Speech / Data / Voice convergent applications. Since June 1995, Mr. Hsu has
      also
      been the founder and president of Sky Capital Partners, Inc., an investment
      management and advisory services firm managing three funds principally focused
      on investments in Greater China. From May 1989 to June 1995, Mr. Hsu was the
      founder and executive vice president of First Taiwan Investment Banking Group,
      a
      private investment firm where he was responsible for equity investments,
      corporate finance and securities underwriting. From June 1988 to May 1989,
      Mr.
      Hsu was an Associate Director at Baring Research Ltd., a subsidiary of Baring
      Securities Ltd. marketing Euro convertible bonds, mutual funds and stock market
      research. From September 1987 to June 1988, Mr. Hsu served as an Assistant
      Vice
      President at Ta Yeh Securities Investment Consulting Co., Ltd; a private
      investment banking firm, managing mutual fund sales and stock market research.
      From August 1984 to September 1987, Mr. Hsu was a Manager in the Investment
      Division of China Development Corporation (CDC), the first and largest
      investment institution in Taiwan. Mr. Hsu received a B.S. in Industrial
      Engineering from Tung Hai University in Taiwan and an M.S. in Management Science
      from the Institute of Management Science at National Chiao Tung University
      in
      Taiwan.




***Beatrice
      Hom*** has been
      our chief operating officer, chief financial officer and a member of our board
      of directors since our inception. Since May 2006, Ms. Hom has been the founding
      member and vice chairperson of Shanghai Yangtze Assets Exchange, a joint venture
      with YUD Group and Shanghai United Assets Exchange Co. Ltd. providing an
      internet platform to facilitate merger and acquisition activities. In September
      1999, Ms. Hom founded Voxa, Inc., a California enterprise software and systems
      integration company and has been the president of Voxa since such date. From
      February 1998 to September 1999, Ms. Hom served as vice president of Lehman
      Brothers Inc. in its private equity division. From May 1996 to February 1998,
      Ms. Hom served as senior vice president of SG Cowen & Co. From February 1994
      to May 1996, Ms. Hom served as a vice president in the private equity division
      of Van Kasper & Company, later acquired by First Security Corporation. From
      June 1992 to February 1994, Ms. Hom served as a vice president at Gruntal &
Co., LLC. Ms. Hom received a B.S. in finance and accounting from San Francisco
      State University.









***Wing
      Yip*** has been
      our secretary and a member of our board of directors since our inception. Since
      November 1999, Mr. Yip has been the co-founder and chief investment officer
      of
      DVA Global (and China VCMC), previously a majority owned investment subsidiary
      of the Jardine Matheson Group, an Asian-based conglomerate with business
      interests in the fields of engineering and construction, transport services,
      motor trading, property, retailing, restaurants, hotels, financial services
      and
      insurance broking. From November 1998 to November 1999, Mr. Yip served as a
      practice director and a financial services leader in the electronic commerce
      and
      businesses, financial services and emerging technologies industry groups for
      the
      Gartner Group, an IT research and consulting firm. From May 1997 to November
      1998, Mr. Yip was the founder of Killary Software Systems, a mainframe software
      company. From September 1991 to May 1997, Mr. Yip was the chief quantitative
      analyst and North Asia portfolio analyst at Montgomery Asset Management, a
      mutual fund company, specializing in proprietary global investment models
      targeting Taiwan, Korea and China. Mr. Yip received a B.S. with honors in
      Engineering Systems from the Massachusetts Institute of Technology and has
      completed graduate courses in Finance at the Sloan School of Management. Mr
      Yip
      is a member of the MIT chapters of the Chi Epsilon Honor Society and the Tau
      Beta Pi Honor Society.




***Xiong
      Yin*** has been
      a member of our board of directors since our inception. Mr. Yin has been a
      partner at Tian Yuan Law Firm, a law firm in Beijing China since April 2003.
      From January 2000 to March 2003, Mr. Yin was an associate at Harden & Wells,
      a law firm in Beijing. From May 1994 to December 1999, Mr. Yin was an associate
      at Baker & McKenzie, a law firm in Chicago, representing U.S. clients in
      China and Chinese clients in the U.S. Mr. Yin is a member of the State Bar
      of
      Illinois and also admitted in China. Mr. Yin received a J.D. from the Illinois
      Institute of Technology College of Law in 1998, a Bachelor of Law degree from
      Beijing University in 1984, a Master of Law degree from Beijing University
      in
      1987, a Ph.D. in international law from Beijing University in 1989 and an LL.M.
      degree from Harvard Law School in 1994. Mr. Yin has taught International Law
      in
      the Department of Law at Beijing University.




***Vincent
      Shen*** has been
      a member of our board of directors since our inception. Mr. Shen has been the
      managing director of investment banking and the co-head of China investment
      banking at CLSA Equity Capital Market Limited, a private investment banking
      firm
      focused on the Asia-Pacific markets and majority owned by France’s Credit
      Agricole, since March 2006. From July 2005 to February 2006, Mr. Shen was
      managing director of New Faith Capital Limited, a private equity and merger
      and
      acquisition firm. From April 2004 to May 2005, Mr. Shen was a director and
      deputy head of China investment banking at Credit Suisse First Boston (Hong
      Kong) Limited. From April 2000 to March 2004, he was managing director of BOC
      International, a private investment banking firm. From April 1997 to December
      1997, Mr. Shen was an Associate Director in Corporate Finance at BZW Asia
      Limited, which was renamed Barclays Capital, an investment banking firm. From
      1994 to March 1997, Mr. Shen was a vice president in Corporate Finance at
      Peregrine Capital Limited, an investment banking firm. From January 1998 to
      March 2000, he was deputy general manager of the investment banking department
      of China International Capital Corporation, a private investment banking firm.
      Mr. Shen received a B.A. from the Beijing Foreign Languages Institute in 1984,
      a
      Master of International Law from Beijing University Law School in 1987 and
      an
      M.B.A. from Ecole Nationale d’ Administration in Paris in 1991.









Our
      board
      of directors is divided into three classes with only one class of directors
      being elected in each year and each class serving a three-year term. The term
      of
      office of the first class of directors, consisting of Xiong Yin and Vincent
      Shen, will expire at our first annual meeting of shareholders. The term of
      office of the second class of directors, consisting of Wing Yip and Li Wen
      Shi,
      will expire at the second annual meeting. The term of the third class of
      directors, consisting of Michael Hsu and Beatrice Hom, will expire at the third
      annual meeting.




**Special
      Advisors**




We
      may
      seek guidance and advice from the following special advisors. We have no formal
      arrangements or agreements with these advisors to provide services to us. These
      special advisors will simply provide advice, introductions to potential targets,
      and assistance to us, at our request, only if they are able to do so.
      Nevertheless, we believe with their business background and extensive contacts,
      they will be helpful to our search for a target business and our consummation
      of
      a business combination.




***Francois
      Shih*** has been
      the president and chief executive officer of Sharpland Investments Ltd, a
      private equity firm making investments in China, since 1980. Mr. Shih has been
      invited to serve as economic advisor to a variety of provinces in China
      including Shadong and Guizhou as well as the Tianjin Municipal Government,the
      Guiyang Municipal Government and the Jinan Municipal Government. He was also
      invited by the Prince of Wales to participate in the Business Leaders Forum,
      a
      group formed to promote world-wide social welfare, education, medical care,
      training and development and agricultural techniques, to be a council member.
      Mr. Shih was appointed by President Jimmy Carter as a council member of the
      International Advisory Council of The Friendship Force. In 1996, Senator Max
      Cleland named Mr. Shih as an honorable citizen of the State of
      Georgia.




***David
      Wu*** is the
      managing director and a co-founder of DVA Global. At DVA, Mr. Wu is responsible
      for general management, deal structuring, and transactions execution. Before
      founding DVA, he headed Netscape’s International Netcenter division in Asia and
      oversaw the company’s efforts in developing online and interactive partnerships
      throughout China, Korea, Japan, Latin America, and Canada, playing a leading
      role in forming strategic partnerships and maintaining business relationships
      with numerous online companies, including Chinadotcom and StarMedia Network.
      Prior to Netscape, Mr. Wu was a director of business development at American
      Express Company in New York City and was also a senior manager within the
      Strategic Planning Group of American Express. From 1990 to 1993, he was a
      business analyst at McKinsey & Co., a management consulting firm, where he
      served on numerous consulting engagements advising Fortune 100 companies on
      strategic and operational issues. Mr. Wu received a B.S. from the Massachusetts
      Institute of Technology and an M.B.A. from The Wharton School at the University
      of Pennsylvania.




***Yangtze
      River United Economic Development (Group) Co., Ltd.*** (“YUD
      Group”) is a Shanghai listed investment company that is not affiliated with any
      governmental agency engaged in multi-regional investment and development across
      Yangtze River regions and other regions. One of its main purposes is to promote
      the common development of various cities within the Yangtze River economic
      belt.
      Currently, the YUD Group owns over 30 investment enterprises in the logistics,
      service, high-tech manufacturing, real estate and various other industries.
      Fang
      Qin Yu, YUD Group’s Director, general manager and vice president of investment,
      will be our liaison with YUD Group. We will not be investing alongside YUD
      Group
      in an entity.




These
      individuals and entities will play a key role in identifying and evaluating
      prospective acquisition candidates, selecting the target business, and
      structuring, negotiating and consummating its acquisition. We believe that
      the
      skills and expertise of these individuals, their collective access to
      acquisition opportunities and ideas, their contacts, and their transactional
      expertise should enable them to successfully identify and effect an
      acquisition.









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




Section
      16(a) of the Securities Exchange Act of 1934 requires our officers, directors
      and persons who own more than ten percent of a registered class of our equity
      securities to file reports of ownership and changes in ownership with the
      Securities and Exchange Commission. Officers, directors and ten percent
      stockholders are required by regulation to furnish us with copies of all Section
      16(a) forms they file. Based solely on copies of such forms received or written
      representations from certain reporting persons that no Form 5s were required
      for
      those persons, we believe that, during the fiscal year ended December 31, 2007,
      all filing requirements applicable to our officers, directors and greater than
      ten percent beneficial owners were complied with.




**Code
      of Ethics**




In
      June
      2007, our board of directors adopted a code of ethics that applies to our
      directors, officers and employees as well as those of our subsidiaries. Requests
      for copies of our code of ethics should be sent in writing to China Discovery
      Acquisition Corp., 70 Cao Bao Rd., Building C, Suite 1302, Shanghai
      China.




**Nominations
      to the Board of Directors**




There
      have been no material changes to the procedures by which security holders may
      recommend nominees to our board of directors.




**ITEM
      10. EXECUTIVE COMPENSATION**




No
      executive officer has received any cash compensation for services rendered
      to
      us. Commencing on June 18, 2007 through the acquisition of a target business
      or
      our liquidation, we will pay Voxa, Inc., an affiliate of Beatrice Hom, a fee
      of
      $7,500 per month for providing us with office space and certain office and
      secretarial services. However, this arrangement is solely for our benefit and
      is
      not intended to provide our officers and directors compensation in lieu of
      a
      salary. Other than the $7,500 per month administrative fee, no compensation
      of
      any kind, including finders, consulting or other similar fees, will be paid
      to
      any of our founders, including our directors, or any of their respective
      affiliates, prior to, or for any services they render in order to effectuate,
      the consummation of a business combination. However, such individuals will
      be
      reimbursed for any out-of-pocket expenses incurred in connection with activities
      on our behalf such as identifying potential target businesses and performing
      due
      diligence on suitable business combinations. There is no limit on the amount
      of
      these out-of-pocket expenses and there will be no review of the reasonableness
      of the expenses by anyone other than our board of directors, which includes
      persons who may seek reimbursement, or a court of competent jurisdiction if
      such
      reimbursement is challenged. Because of the foregoing, we will generally not
      have the benefit of independent directors examining the propriety of expenses
      incurred on our behalf and subject to reimbursement.




**Compensation
      Discussion and Analysis**




Overall,
      following our initial business combination, we will seek to provide total
      compensation packages that are competitive in terms of potential value to our
      executives, and which are tailored to the unique characteristics and needs
      of
      our company within our industry in order to create an executive compensation
      program that will adequately reward our executives for their roles in creating
      value for our shareholders. We intend to be competitive with other similarly
      situated companies in our industry following completion of our initial business
      combination. The compensation decisions regarding our executives will be based
      on our need to attract individuals with the skills necessary for us to achieve
      our business plan, to reward those individuals fairly over time, and to retain
      those individuals who continue to perform at or above our expectations.









It
      is
      likely that our executives’ compensation will have three primary components -
      salary, cash incentive bonus and stock-based awards. We will view the three
      components of executive compensation as related but distinct. We do not believe
      that significant compensation derived from one component of compensation should
      negate or reduce compensation from other components. We anticipate determining
      the appropriate level for each compensation component based in part, but not
      exclusively, on our view of internal equity and consistency, individual
      performance and other information deemed relevant and timely. We have not
      adopted any formal or informal policies or guidelines for allocating
      compensation between long-term and currently paid out compensation, between
      cash
      and non-cash compensation, or among different forms of compensation.




We
      may
      utilize the services of third parties from time to time in connection with
      the
      hiring and compensation awarded to executive employees. This could include
      subscriptions to executive compensation surveys and other databases.




**Benchmarking
      of Cash and Equity Compensation**




We
      believe it is important when making compensation-related decisions to be
      informed as to current practices of similarly situated publicly held companies.
      We expect to stay apprised of the cash and equity compensation practices of
      publicly held companies in the industry we operate in following our initial
      business combination through the review of such companies’ public reports and
      through other resources. It is expected that any companies chosen for inclusion
      in any benchmarking group would have business characteristics comparable to
      our
      company, including revenues, financial growth metrics, stage of development,
      employee headcount and market capitalization. While benchmarking may not always
      be appropriate as a stand-alone tool for setting compensation due to the aspects
      of our post-acquisition business and objectives that may be unique to us, we
      generally believe that gathering this information will be an important part
      of
      our compensation-related decision-making process.




**Compensation
      Components**




*Base
      Salary* .
      Generally, we anticipate setting executive base salaries at levels comparable
      with those of executives in similar positions and with similar responsibilities
      at comparable companies. We will seek to maintain base salary amounts at or
      near
      the industry norms while avoiding paying amounts in excess of what we believe
      is
      necessary to motivate executives to meet corporate goals. It is anticipated
      base
      salaries will generally be reviewed annually, subject to terms of employment
      agreements, and that we will seek to adjust base salary amounts to realign
      such
      salaries with industry norms after taking into account individual
      responsibilities, performance and experience.




*Annual
      Bonuses.* **** We
      may
      design and utilize cash incentive bonuses for executives to focus them on
      achieving key operational and financial objectives within a yearly time horizon.
      We **** will
      structure cash incentive bonus compensation so that it is taxable to our
      employees at the time it becomes available to them. At this time, it is not
      anticipated that any executive officer’s annual cash compensation will exceed $1
      million, and we have accordingly not made any plans to qualify for any
      compensation deductions under Section 162(m) of the Internal Revenue Code.




*Equity
      Awards.* **** We
      may
      also use stock options and other stock-based awards to reward long-term
      performance. We believe that providing a meaningful portion of our executives’
total compensation package in stock options and other stock-based awards will
      align the incentives of our executives with the interests of our shareholders
      and with our long-term success.









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




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




The
      following table sets forth information regarding the beneficial ownership of
      our
      ordinary shares as of March 30, 2008 by:




·
            each
                person known by us to be the beneficial owner of more than 5% of
                our
                outstanding ordinary shares;




·
            each
                of our officers and directors; and




·
            all
                our officers and directors as a
                group.




Unless
      otherwise indicated, we believe that all persons named in the table have sole
      voting and investment power with respect to all ordinary shares beneficially
      owned by them.




Name
                and Address of Beneficial Holder (1)
            
            Amount
                of Beneficial Ownership
            
            Percentage
                of Outstanding Ordinary SharesPrivate
                Equity Management Group LLC
            
            
            700,000
            (2)
            
            9.9
            %Craig
                Samuels
            
            
            540,500
            (3)
            
            7.6
            %Beatrice
                Hom
            
            
            473,500
            (4)
            
            6.7
            %Wing
                Yip
            
            
            308,000
            
            
            4.3
            %Vincent
                Shen
            
            
            142,800
            
            
            2.0
            %Michael
                Hsu
            
            
            118,800
            
            
            1.7
            %Li
                Wen Shi
            
            
            128,400
            
            
            *Xiong
                Yin
            
            
            62,800
            
            
            *All
                directors and executive officers as a group (six
                individuals)
            
            
            1,355,000
            (5)
            
            19.1
            %





*
      Less
      than 1%.




(1)
            Unless
                otherwise indicated, the business address of each of the individuals
                is 70
                Cao Bao Rd., Building C, Suite 1302, Shanghai
                China.









(2)
            Does
                not include 1,400,000 ordinary shares issuable upon exercise of warrants
                held by Private Equity Management Group LLC (“PEMG”) which are not
                exercisable and will not become exercisable within the next 60 days.
                The
                business address of PEMG is One Park Plaza, Suite 550, Irvine, California
                92614. The foregoing information was derived from a Schedule 13D
                filed on
                January 31, 2008.




(3)
            Does
                not include 1,100,000 ordinary shares issuable upon exercise of warrants
                held by Mr. Samuels which are not exercisable and will not become
                exercisable within the next 60 days. The business address of Mr.
                Samuels
                is 13990 Rancho Dorado Bend, San Diego, California 92130. The foregoing
                information was derived from a Schedule 13G filed on August 7, 2007,
                as
                amended on January 30, 2008, covering the warrants, and a Schedule
                13G
                filed on October 25, 2007, as amended on January 30, 2008, covering
                the
                ordinary shares.




(4)
            Does
                not include 1,094,134 ordinary shares issuable upon exercise of warrants
                held by Ms. Hom which are not exercisable and will not become exercisable
                within the next 60 days.




(5)
            Does
                not include 1,243,334 ordinary shares issuable upon exercise of warrants
                held our officers and directors which are not exercisable and will
                not
                become exercisable within the next 60
                days.




All
      of
      the founder shares have been placed in escrow with Continental Stock Transfer
      & Trust Company, as escrow agent, until one year after the consummation of a
      business combination. The founder shares may be released from escrow earlier
      than this date if, within the first year after we consummate a business
      combination, we consummate a subsequent liquidation, merger, stock exchange
      or
      other similar transaction which results in all of our shareholders having the
      right to exchange their ordinary shares for cash, securities or other property.
      Additionally, if holders of more than 20% of the IPO Shares vote against a
      proposed business combination and seek to exercise their conversion rights
      and
      such business combination is consummated, our founders have agreed to forfeit
      and return to us for cancellation a number of shares so that the founders will
      collectively own no more than 23.8% of our outstanding ordinary shares upon
      consummation of such business combination (without giving effect to any shares
      included within the insider units or that may be issued in the business
      combination). During the escrow period, the holders of these shares will not
      be
      able to sell or transfer their securities except (i) to relatives and trusts
      for
      estate planning purposes or (ii) by private sales made at or prior to the
      consummation of a business combination at prices no greater than the price
      at
      which the shares were originally purchased, in each case where the transferee
      agrees to the terms of the escrow agreement, but will retain all other rights
      as
      our shareholders, including, without limitation, the right to vote their
      ordinary shares and the right to receive cash dividends, if declared. If
      dividends are declared and payable in ordinary shares, such dividends will
      also
      be placed in escrow. If we are unable to effect a business combination and
      liquidate, none of our founders will receive any portion of the liquidation
      proceeds with respect to their initial shares.




Beatrice
      Hom, Michael Hsu and Wing Yip are our “promoters” as that term is defined under
      the Federal securities laws.




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




**Certain
      Relationships and Related Transactions**




In
      January 2007, we issued 1,250,000 ordinary shares to the individuals set forth
      below for $25,000 in cash, at a purchase price of $0.02 per share, as
      follows:




Name
            
            Number
                of Shares
            
            Relationship
                to UsBeatrice
                Hom
            
            601,100
            
            Chief
                Operating Officer, Chief Financial Officer and DirectorWing
                Yip
            
            202,000
            
            Secretary
                and DirectorMichael
                Hsu
            
            107,800
            
            Chief
                Executive Officer and DirectorVincent
                Shen
            
            107,800
            
            DirectorFrancois
                Shih
            
            90,200
            
            Special
                AdvisorLi
                Wen Shi
            
            80,400
            
            Chairman
                of the BoardXiong
                Yin
            
            60,700
            
            Director









In
      March
      2007, Beatrice Hom transferred (i) 106,000 ordinary shares to Wing Yip, (ii)
      11,000 ordinary shares to Michael Hsu, (iii) 300 ordinary shares to Xiong Yin,
      (iv) 48,000 ordinary shares to Li Wen Shi and (v) 35,000 ordinary shares to
      Vincent Shen. All of the transfers were made at $0.02 per share.




The
      holders of the majority of these shares will be entitled to demand that we
      register these shares pursuant to an agreement signed on June 18, 2007. The
      holders of the majority of these shares may elect to exercise these registration
      rights at any time commencing three months prior to the date on which these
      ordinary shares are released from escrow. In addition, these shareholders have
      certain “piggy-back” registration rights with respect to registration statements
      filed subsequent to our consummation of a business combination. We will bear
      the
      expenses incurred in connection with the filing of any such registration
      statements.




Beatrice
      Hom and Francois Shih purchased an aggregate of 105,000 insider units at $6.00
      per unit and 1,033,334 insider warrants at $0.60 per warrant (for an aggregate
      purchase price of $1,250,000) from us. These purchases took place on a private
      placement basis simultaneously with the consummation of the IPO. The insider
      units and insider warrants are identical to the units (and underlying warrants)
      offered in our IPO except that if we call the warrants for redemption, the
      warrants underlying the insider units and insider warrants may be exercisable
      on
      a cashless basis at the holder’s option (except in the case of a forced cashless
      exercise upon our redemption of the warrants) so long as such warrants are
      held
      by these purchasers or their affiliates. Additionally, the purchasers have
      agreed that the insider units and underlying securities and the insider warrants
      will not be sold or transferred by them until after we have completed a business
      combination. The holders of the majority of these insider units and insider
      warrants (or underlying securities) will be entitled to demand that we register
      these securities pursuant to an agreement signed on June 18, 2007. The holders
      of the majority of these securities may elect to exercise these registration
      rights with respect to such securities at any time after we consummate a
      business combination. In addition, these holders have certain “piggy-back”
registration rights with respect to registration statements filed subsequent
      to
      such date. We will bear the expenses incurred in connection with the filing
      of
      any such registration statements.




Voxa,
      Inc., an affiliate of Beatrice Hom, has agreed that, commencing on June 18,
      2007
      through the acquisition of a target business or our liquidation, it will make
      available to us a small amount of office space and certain office and
      secretarial services, as we may require from time to time. We have agreed to
      pay
      Voxa, Inc. $7,500 per month for these services. Beatrice Hom is the president
      and owner of Voxa, Inc. As a result, she will benefit from the transaction
      to
      the extent of her interest in Voxa, Inc. However, this arrangement is solely
      for
      our benefit and is not intended to provide our officers and directors
      compensation in lieu of a salary. We believe that the fee charged by Voxa,
      Inc.
      is at least as favorable as we could have obtained from an unaffiliated person.
      However, as our directors may not be deemed “independent,” we did not have the
      benefit of disinterested directors approving this transaction.









Prior
      to
      our IPO, Beatrice Hom, Wing Yip, Vincent Shen and Xiong Yin loaned us an
      aggregate of $100,000 to cover expenses related to the IPO. The loans were
      repaid without interest from the proceeds of our IPO not being placed in
      trust.




We
      will
      reimburse our founders or their affiliates for any reasonable out-of-pocket
      business expenses incurred by them in connection with certain activities on
      our
      behalf such as identifying and investigating possible target businesses and
      business combinations. There is no limit on the amount of out-of-pocket expenses
      reimbursable by us, which will be reviewed only by our board or a court of
      competent jurisdiction if such reimbursement is challenged.




Other
      than the $7,500 per-month administrative fee and reimbursable out-of-pocket
      expenses payable to our officers and directors, no compensation or fees of
      any
      kind, including finder’s fees, consulting fees or other similar compensation,
      will be paid to any of our founders or to any of their respective affiliates
      prior to or with respect to the business combination (regardless of the type
      of
      transaction that it is).




All
      ongoing and future transactions between us and any of our officers and directors
      or their respective affiliates, including loans by our officers and directors,
      will be on terms believed by us to be no less favorable to us than are available
      from unaffiliated third parties. Such transactions or loans, including any
      forgiveness of loans, will require prior approval by a majority of our
      uninterested “independent” directors (to the extent we have any) or the members
      of our board who do not have an interest in the transaction, in either case
      who
      had access, at our expense, to our attorneys or independent legal counsel.
      We
      will not enter into any such transaction unless our disinterested “independent”
directors (or, if there are no “independent” directors, our disinterested
      directors) determine that the terms of such transaction are no less favorable
      to
      us than those that would be available to us with respect to such a transaction
      from unaffiliated third parties.




**Related
      party policy**





Our
      Code
      of Ethics requires us to avoid, wherever possible, all related party
      transactions that could result in actual or potential conflicts of interest,
      except under guidelines approved by the board of directors (or the audit
      committee). Related-party transactions are defined as transactions in which
      (1)
      the aggregate amount involved will or may be expected to exceed $120,000 in
      any
      calendar year, (2) we or any of our subsidiaries is a participant, and (3)
      any
      (a) executive officer, director or nominee for election as a director, (b)
      greater than 5 percent beneficial owner of our common stock, or (c) immediate
      family member, of the persons referred to in clauses (a) and (b), has or will
      have a direct or indirect material interest (other than solely as a result
      of
      being a director or a less than 10 percent beneficial owner of another entity).
      A conflict of interest situation can arise when a person takes actions or has
      interests that may make it difficult to perform his or her work objectively
      and
      effectively. Conflicts of interest may also arise if a person, or a member
      of
      his or her family, receives improper personal benefits as a result of his or
      her
      position. While we have agreed not to consummate a business combination with
      an
      entity which is affiliated with any of our officers, directors or founders,
      we
      are not prohibited from entering into other related-party transactions.





Our
      board
      of directors is responsible for reviewing and approving related-party
      transactions to the extent we enter into such transactions. The board of
      directors will consider all relevant factors when determining whether to approve
      a related party transaction, including whether the related party transaction
      is
      on terms no less favorable than terms generally available to an unaffiliated
      third-party under the same or similar circumstances and the extent of the
      related party’s interest in the transaction. No director may participate in the
      approval of any transaction in which he is a related party, but that director
      is
      required to provide the other members of the board of directors with all
      material information concerning the transaction. Additionally, we require each
      of our directors and executive officers to complete a directors’ and officers’
questionnaire that elicits information about related party transactions. These
      procedures are intended to determine whether any such related party transaction
      impairs the independence of a director or presents a conflict of interest on
      the
      part of a director, employee or officer.









**Director
      Independence**




Currently, only
      Xiong Yin and Vincent Shen would be considered “independent” as that term
      is commonly used. In connection with a proposed business combination, we
      anticipate applying to have our securities listed on a national securities
      exchange. At that time, we will adhere to the rules of whatever exchange we
      seek
      to have our securities listed on.




**ITEM
      13. EXHIBITS**




(a)
      The
      following Exhibits are filed as part of this report.





Exhibit
                No.
            
            Description3.1
            
            Memorandum
                and Articles of Association.*4.1
            
            Specimen
                Unit Certificate.*4.2
            
            Specimen
                Ordinary Share Certificate.*4.3
            
            Specimen
                Warrant Certificate.*4.4
            
            Form
                of Unit Purchase Option to be granted to
                Representative.*4.5
            
            Form
                of Warrant Agreement between Continental Stock Transfer & Trust
                Company and the Registrant.*10.1
            
            Letter
                Agreement among the Registrant, EarlyBirdCapital, Inc. and Beatrice
                Hom.*10.2
            
            Letter
                Agreement among the Registrant, EarlyBirdCapital, Inc. and Wing
                Yip.*10.3
            
            Letter
                Agreement among the Registrant, EarlyBirdCapital, Inc. and Michael
                Hsu.*10.4
            
            Letter
                Agreement among the Registrant, EarlyBirdCapital, Inc. and Francois
                Shih.*10.5
            
            Letter
                Agreement among the Registrant, EarlyBirdCapital, Inc. and Li Wen
                Shi.*10.6
            
            Letter
                Agreement among the Registrant, EarlyBirdCapital, Inc. and Xiong
                Yin.*10.7
            
            Letter
                Agreement among the Registrant, EarlyBirdCapital, Inc. and Vincent
                Shen.*10.8
            
            Form
                of Investment Management Trust Agreement between Continental Stock
                Transfer & Trust Company and the Registrant.*10.9
            
            Form
                of Stock Escrow Agreement between the Registrant, Continental Stock
                Transfer & Trust Company and the Initial
                Shareholders.*









10.10
            
            Form
                of Letter Agreement between Voxa, Inc. and Registrant regarding
                administrative support.*10.11
            
            Form
                of Promissory Note, dated as of January 9, 2007, issued to each of
                Beatrice Hom, Wing Yip and Xiong Yin.*10.12
            
            Form
                of Registration Rights Agreement among the Registrant and the Initial
                Shareholders.*10.13
            
            Form
                of Subscription Agreement among the Registrant, EarlyBirdCapital,
                Inc.,
                Graubard Miller and each of Beatrice Hom and Francois
                Shih.*31.1
            
            Certification
                of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
                Act of 2002.31.2
            
            Certification
                of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
                Act of 2002.32
            
            Certification
                of Chief Executive Officer and Chief Financial Officer pursuant to
                Section
                906 of the Sarbanes-Oxley Act of 2002.*
            
            Incorporated
                by reference to the Registrant’s Registration Statement on Form S-1 (SEC
                File No. 333-140516).




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




The
      firm
      of UHY LLP acts as our principal accountant. The following is a summary of
      fees
      paid to our principal accountant for services rendered.




**Audit
      Fees**




During
      the year ended December 31, 2007, we paid our principal accountant $25,000
      for
      the services they performed in connection with our Registration Statement on
      Form S-1 related to our initial public offering, including the financial
      statements included in the Current Report on Form 8-K filed with the Securities
      and Exchange Commission on June 29, 2007, and $2,700 in connection with the
      review of our two Quarterly Reports on Form 10-QSB. The fee for the audit of
      the
      financial statements included in this Annual Report on Form 10-KSB for the
      fiscal year ended December 31, 2007 is approximately $15,000. The aggregate
      of
      such fees is $47,700.


Through
        April 11, 2008, UHY had a continuing relationship with UHY Advisors, Inc.
        ("Advisors") from which it leased auditing staff who were full time, permanent
        employees of Advisors and through which UHY's partners provide non-audit
        services.  UHY has only a few full time employees.  Therefore, few, if
        any, of the audit services performed were provided by permanent full-time
        employees of UHY.  UHY manages and supervises the audit services and audit
        staff, and is exclusively responsible for the opinion rendered in connection
        with its examination.


**Audit-Related
      Fees**




During
      2007, our principal accountant did not render assurance and related services
      reasonably related to the performance of the audit or review of financial
      statements.




**Tax
      Fees**




During
      2007, our principal accountant did not render services to us for tax compliance,
      tax advice and tax planning.









**All
      Other Fees**




During
      2007, there were no fees billed for products and services provided by the
      principal accountant other than those set forth above.




**Audit
      Committee Approval**




As
      we do
      not have an audit committee, the audit committee did not pre-approve any
      accounting-related or tax services. However, our board of directors has approved
      the services described above.







**SIGNATURES**





Pursuant
      to the requirements of the Section 13 or 15 or 15(d) of the Securities Exchange
      Act of 1934, the registrant has duly caused this report to be signed on its
      behalf by the undersigned, thereunto duly authorized on the 11 th day of
      April, 2008.




**CHINA
              DISCOVERY ACQUISITION CORP.**By:
            /s/
              Michael HsuMichael
              HsuChief
                Executive Officer
              (Principal Executive
                Officer)




In
      accordance with the Securities Exchange Act of 1934, this report has been signed
      below by the following persons on behalf of the registrant and in the capacities
      and on the dates indicated.





Name
            
            Title
            
            Date/s/
                Li Wen Shi
              Li
                Wen Shi
            
            Chairman
                of the Board
            
            April
                11, 2008/s/
                Michael Hsu
              Michael
                Hsu
            
            Chief
                Executive Officer and Director
              (Principal
                Executive Officer)
            
            April
                11, 2008/s/
                Beatrice Hom
              Beatrice
                Hom
            
            Chief
                Operating Officer, Chief Financial Officer and Director
              (Principal
                Accounting and Financial Officer)
            
            April
                11, 2008/s/
                Wing Yip
              Wing
                Yip
            
            Director
            
            April
                11, 2008/s/
                Vincent Shen
              Vincent
                Shen
            
            Director
            
            April
                11, 2008/s/
                Xiong Yin
              Xiong
                Yin
            
            Director
            
            April
                11, 2008








**China
        Discovery Acquisition Corp.**
 
 **INDEX
        TO FINANCIAL STATEMENTS**
 
 
 PageReport
                  of Independent Registered Public Accounting Firm
              F-1Financial
                  Statements:Balance
                  Sheet as of December 31, 2007
              F-2Statement
                  of Operations for the period fromJanuary
                  8, 2007 (inception) to December 31, 2007
              F-3Statement
                  of Stockholders’ Equity for the period fromJanuary
                  8, 2007 (inception) to December 31, 2007
              F-4Statement
                  of Cash Flows for the period fromJanuary
                  8, 2007 (inception) to December 31, 2007
              F-5Notes
                  to Financial Statements
              F-6


**REPORT
        OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**
   To
        the
        Board of Directors and Shareholders of
 China
        Discovery Acquisition Corp.
   We
        have
        audited the accompanying balance sheet of China Discovery Acquisition Corp.
        as
        of December 31, 2007, and the related statements of operations and changes
        in
        stockholders' equity and cash flows for the period from January 8, 2007
        (inception) through December 31, 2007. These financial statements are the
        responsibility of the Company’s management. Our responsibility is to express an
        opinion on these financial statements based on our audit.
  We
        conducted our audit in accordance with the auditing standards of the Public
        Company Accounting Oversight Board (United States). Those standards require
        that
        we plan and perform the audit to obtain reasonable assurance about whether
        the
        financial statements are free of material misstatement. The Company is not
        required to have, nor were we engaged to perform, an audit of its internal
        control over financial reporting. Our audit includes 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 controls 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
        financial statement presentation. We believe that our audit provides a
        reasonable basis for our opinion.
  In
        our
        opinion, the financial statements referred to above present fairly, in all
        material respects, the financial position of China Discovery Acquisition
        Corp. as of December 31, 2007 and the results of its operations and its
        cash flows for the period from January 8, 2007 (inception) through December
        31,
        2007 in conformity with accounting principles generally accepted in the United
        States of America.
   /s/
        UHY
        LLP
   Albany,
        New York
  April
        11,
        2008
  F-1




**China
      Discovery Acquisition Corporation**


(A
      Corporation in the Development Stage)


Balance
      Sheet





December
                31,
              2007**ASSETS****CURRENT
                ASSETS**Cash
            
            $
            100,832Cash
                and cash equivalents held in Trust Account
            
            
            33,876,887Interest
                receivable
            
            
            107,490Total
                Assets
            
            $
            34,085,209**LIABILITIES
                AND STOCKHOLDERS’ EQUITY****CURRENT
                LIABILITIES**Deferred
                underwriter’s fees
            
            $
            345,000Total
                current liabilities
            
            
            345,000Ordinary
                Shares, subject to possible conversion, 1,724,425 sharesat
                conversion value
            
            
            10,008,413**COMMITMENTS
                AND CONTINGENCY****STOCKHOLDERS’
                EQUITY**Preferred
                shares, $.0001 par valueAuthorized
                1,000,000 shares; none issuedOrdinary
                shares, $.0001 par valueAuthorized
                25,000,000 sharesIssued
                and outstanding 7,105,000 shares (which includes 1,724,425
                sharessubject
                to possible conversion)
            
            
            711Additional
                paid-in capital
            
            
            23,187,020Retained
                earnings accumulated during the developmentstage
            
            
            544,065Total
                stockholders' equity
            
            
            23,731,796**Total
                liabilities and stockholders’ equity**
            
            $
            34,085,209


See
        notes
        to financial statements


F-2


**China
      Discovery Acquisition Corporation**


(A
      Corporation in the Development Stage)


Statement
      of Operations





Period
                fromJanuary
                8, 2007 (inception) toDecember
                31, 2007Formation
                costs
            
            $
            4,501Operating
                expenses
            
            
            266,288Operating
                loss
            
            
            (270,789
            )Other
                income:Investment
                income
            
            
            814,854Net
                income for period
            
            
            544,065Net
                income attributable to common shareholders
            
            
            544,065Weighted
                average shares outstanding
            
            
            4,144,500Net income
                per share, basic and diluted
            
            $
            0.13


See
        notes
        to financial statements


F-3




**China
      Discovery Acquisition Corporation**


(A
      Corporation in the Development Stage)


Statement
      of Stockholders’ Equity


Additional
              
              Earnings
                  accumulated
                  during
                    theOrdinary
                  Shares
              
              Paid-In
              
              developmentShares
              
              Amount
              
              Capital
              
              stage
              
              TotalOrdinary
                  shares issued January 8, 2007 at $.0200 per share
              
              
              1,250,000
              
              $
              125
              
              $
              24,875
              
              
              
              
              $
              25,000Sale
                  of 5,750,000 units at $6.00 per unit through a public offering,
                  net of
                  underwriter’s discount and offering expenses (1,724,425 shares subject to
                  possible conversion)
              
              
              5,750,000
              
              
              575
              
              
              31,920,469
              
              
              
              
              
              31,921,044Proceeds
                  from issuance of underwriter’s options
              
              
              
              
              
              
              
              
              100
              
              
              
              
              
              100Proceeds
                  subject to possible conversion of 1,724,425 shares
              
              
              
              
              
              
              
              
              (10,008,413
              )
              
              
              
              
              (10,008,413
              )Proceeds
                  from private placement of insider units and warrants
              
              
              105,000
              
              
              11
              
              
              1,249,989
              
              
              
              
              
              1,250,000Net
                  income for the period ended December 31, 2007
              
              
              
              
              
              
              
              
              
              
              
              544,065
              
              
              544,065Balance,
                  December 31, 2007
              
              
              7,105,000
              
              $
              711
              
              $
              23,187,020
              
              $
              544,065
              
              $
              23,731,796


See
        notes
        to financial statements


F-4


**China
      Discovery Acquisition Corporation**


(A
      Corporation in the Development Stage)


Statement
      of Cash Flow





January
                  8, 2007(inception) toDecember
                31, 2007**CASH
                FLOWS FROM OPERATING ACTIVITIES**Net
                income
            
            $
            544,065Adjustments
                to reconcile net income for the period to net cash used in operating
                activities:Changes
                in operating assets and liabilities:Interest
                earned on trust fund
            
            
            (704,387
            )Interest
                receivable
            
            
            (107,490
            )Net
                cash used in operating activities
            
            
            (267,812
            )**CASH
                FLOWS FROM INVESTING ACTIVITIES**Deposits
                to Trust Account
            
            
            (33,372,500
            )Withdrawals
                from Trust Account
            
            
            200,000Net
                cash used in investing activities
            
            
            (33,172,500
            )**CASH
                FLOWS FROM FINANCING ACTIVITIES**Gross
                proceeds from initial public offering
            
            
            34,500,000Proceeds
                from underwriters’ purchase option
            
            
            100Proceeds
                from sale of ordinary shares to founding stockholders
            
            
            25,000Proceeds
                from private placement to founding stockholders
            
            
            1,250,000Payment
                of costs of initial public offering
            
            
            (2,233,956
            )Proceeds
                from stockholder notes payable
            
            
            100,000Repayment
                of stockholder notes payable
            
            
            (100,000
            )Net
                cash provided by financing activities
            
            
            33,541,144NET
                INCREASE (DECREASE) IN CASH
            
            
            100,832CASH
                AT BEGINNING OF PERIOD
            
            
            0CASH
                AT END OF PERIOD
            
            $
            100,832SUPPLEMENTAL
                SCHEDULE OF NON-CASH FINANCING ACTIVITIESAccrual
                of deferred underwriting discount & commission
            
            $
            345,000Fair
                value of underwriter purchase option included in offering
                costs
            
            $
            1,054,114


See
        notes
        to financial statements


F-5


**China
      Discovery Acquisition Corporation**


(A
      Corporation in the Development Stage)


Notes
      to
      Financial Statements




**1.
                Organization and Business Operations**
            
            China
                Discovery Acquisition Corp. (the “Company”) was incorporated in the Cayman
                Islands on January 8, 2007 as a blank check company whose objective
                is to
                acquire, through a stock exchange, asset acquisition or other similar
                business combination, an operating business, or control of such operating
                business through contractual arrangements, that has its principal
                operations located in the People’s Republic of China.
              
              All
                activity from January 8, 2007 (inception) through June 21, 2007 relates
                to
                the Company’s formation and initial public offering described below. The
                Company has selected December 31 as its fiscal
                year-end.




F-6




The
                registration statement for the Company’s initial public offering
                (“Offering”) was declared effective June 18, 2007. The Company consummated
                the offering on June 26, 2007 (Note 2). The Company’s management has broad
                discretion with respect to the specific application of the net proceeds
                of
                this Offering, although substantially all of the net proceeds of
                this
                Offering are intended to be generally applied toward consummating
                the
                acquisition, through a stock exchange, asset acquisition or other
                similar
                business combination, of an operating business, or the acquisition
                of
                control of such operating business through contractual arrangements,
                that
                has its principal operations located in the People’s Republic of China
                (“Business Combination”). However, there is no assurance that the Company
                will be able to successfully effect a Business Combination. Upon
                the
                closing of the Offering, including the over-allotment option, an
                amount of
                $33,372,500 of the net proceeds was deposited in an interest-bearing
                trust
                account (“Trust Account”) until the earlier of (i) the consummation of a
                Business Combination or (ii) liquidation of the Company. There can
                be
                released to the Company, from time to time, interest earned on the
                funds
                held in trust up to an aggregate of $1,050,000. Under the agreement
                governing the Trust Account, funds will only be invested in United
                States
                “government securities” within the meaning of Section 2(a)(16) of the
                Investment Company Act of 1940 with a maturity of 180 days or less
                or in
                money market funds meeting certain conditions under Rule 2a-7 promulgated
                under the Investment Company Act of 1940. The remaining net proceeds
                (not
                held in the Trust Account) may be used to pay for business, legal
                and
                accounting due diligence on prospective acquisitions and continuing
                general and administrative expenses.
              
              The
                Company, after signing a definitive agreement for the acquisition
                of a
                target business, will submit such transaction for stockholder approval.
                In
                the event that stockholders owning 30% or more of the shares sold
                in the
                Offering vote against the Business Combination and exercise their
                conversion rights described below, the Business Combination will
                not be
                consummated.
              
              All
                of the Company’s stockholders prior to the Offering, including all of the
                officers and directors of the Company (“Initial Stockholders”), have
                agreed to vote their 1,250,000 founding shares of common stock in
                accordance with the vote of the majority in interest of all other
                stockholders of the Company (“Public Stockholders”) with respect to any
                Business Combination. After consummation of a Business Combination,
                these
                voting safeguards will no longer be applicable.




F-7




With
                respect to a Business Combination which is approved and consummated,
                any
                Public Stockholder who voted against the Business Combination may
                demand
                that the Company convert his shares. The per share conversion price
                will
                equal the amount in the Trust Account, calculated as of two business
                days
                prior to the consummation of the proposed Business Combination, divided
                by
                the number of shares of common stock held by Public Stockholders
                at the
                consummation of the Offering. Accordingly, Public Stockholders holding
                29.99% of the aggregate number of shares owned by all Public Stockholders
                may seek conversion of their shares in the event of a Business
                Combination. Such Public Stockholders are entitled to receive their
                per
                share interest in the Trust Account computed without regard to the
                shares
                held by Initial Stockholders. Accordingly, a portion of the net proceeds
                from the offering (29.99% of the amount held in the Trust Account)
                has
                been classified as common stock subject to possible conversion in
                the
                accompanying balance sheet.
              
              The
                Company’s Memorandum and Articles of Association provides that the Company
                will continue in existence only until June 26, 2009. If the Company
                has
                not completed a Business Combination by such date, its corporate
                existence
                will cease and it will dissolve and liquidate for the purposes of
                winding
                up its affairs. In the event of liquidation, it is likely that the
                per
                share value of the residual assets remaining available for distribution
                (including Trust Fund assets) will be less than the initial public
                offering price per share in the Offering (assuming no value is attributed
                to the Warrants contained in the Units to be offered in the Offering
                discussed in Note 2).
              
              ***Concentration
                of Credit Risk***
              
              The
                Company maintains cash in bank deposit accounts which, at times,
                exceed
                federally insured limits. The company has not experienced any losses
                on
                these accounts.
              
              ***Investment
                Held in Trust***
              
              The
                Trust Account at December 31, 2007 is comprised of Money Market
                Treasury Obligations Fund consisting of tax exempt securities with
                short term maturities. Such securities generate current income which
                is
                exempt from federal income tax.




F-8




***Loss
                Per Share***
              
              Basic
                income per share is computed by dividing net loss by the weighted-average
                number of shares of ordinary shares outstanding during the
                period.
              Basic
                  earnings per share is computed by dividing income available to
                  common
                  shareholders by the weighted average ordinary shares outstanding
                  during
                  the period. Calculation of the weighted average ordinary shares
                  outstanding during the period is based on 1,250,000 initial shares
                  outstanding throughout the period from January 8, 2007 (inception)
                  to June
                  26, 2007, 6,675,000 ordinary shares outstanding after the effective
                  date
                  of the offering and the exercise of the underwriters purchase option
                  and
                  7,105,000 ordinary shares after the closing of the over-allotment
                  option.
                
                Diluted
                  earnings per share reflects the potential dilution that could occur
                  if
                  securities or other contracts to issue ordinary shares were exercised
                  or
                  converted into ordinary shares or resulted in the issuance of ordinary
                  shares that then shared in the earning of the Company. As the
                  warrants issued in the public offering are not yet exercisable, basic
                  and diluted earnings per share were the same during
                  2007.
              
              ***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 at the date of the financial statements
                and the reported amounts of expenses during the reporting period.
                Actual
                results could differ from those estimates.
              
              ***Effect
                of Recent Accounting Pronouncements***
              
              SFAS
                  141R, Business Combinations
                
                In
                  December 2007, the FASB issued Statement of Financial Accounting
                  Standards
                  No. 141 (revised 2007), ‘‘Business Combinations’’
                  (‘‘FAS 141R’’). FAS 141R replaces Statement of Financial
                  Accounting Standards No. 141, ‘‘Business Combinations’’
                  (‘‘FAS 141’’), although it retains the fundamental requirement in
                  FAS 141 that the acquisition method of accounting be used for all
                  business combinations. FAS 141R establishes principles and
                  requirements for how the acquirer in a business combination
                  (a) recognizes and measures the assets acquired, liabilities assumed
                  and any noncontrolling (‘‘minority’’) interest in the acquiree,
                  (b) recognizes and measures the goodwill acquired in a business
                  combination or a gain from a bargain purchase and (c) determines what
                  information to disclose regarding the business combination. FAS 141R
                  applies prospectively to business combinations for which the acquisition
                  date is on or after the beginning of the Company’s 2009 fiscal year. The
                  Company is currently assessing the potential effect of FAS 141R on
                  its financial statements.
                
                SFAS
                  160, Noncontrolling Interests in Consolidated Financial
                  Statements
                
                In December
                  2007, the FASB issued Statement of Financial Accounting Standards
                  No. 160, ‘‘Noncontrolling (‘‘minority’’) Interests in Consolidated
                  Financial Statements’’ (‘‘FAS 160’’). FAS 160 establishes
                  accounting and reporting standards for the noncontrolling (‘‘minority’’)
                  interest in a subsidiary, commonly referred to as minority interest.
                  Among
                  other matters, FAS 160 requires (a) the noncontrolling
                  (‘‘minority’’) interest be reported within equity in the balance sheet and
                  (b) the amount of consolidated net income attributable to the parent
                  and to the noncontrolling (‘‘minority’’) interest to be clearly presented
                  in the statement of income. FAS 160 is effective for the Company’s
                  2009 fiscal year. FAS 160 is to be applied prospectively, except for
                  the presentation and disclosure requirements, which shall be applied
                  retrospectively for all periods presented. The Company is currently
                  assessing the potential effect of FAS 160 on its financial
                  statements.
              
              Management
                does not believe that any other recently issued, but not yet effective,
                accounting standards if currently adopted would have a material effect
                on
                the accompanying financial
                statements.




F-9




**2.
                Initial Public Offering**
            
            On
                June 26, 2007, the Company sold 5,000,000 units (“Units”) in the Offering.
                On July 2, 2007, the Company consummated the closing of an additional
                750,000 Units which were subject to the over-allotment option.****Each
                Unit consists of one ordinary share, $.0001 par value, and two warrants
                (“Warrants”). Each Warrant entitles the holder to purchase from the
                Company one ordinary share at an exercise price of $5.00 commencing
                the
                later of the completion of a Business Combination or June 18, 2008
                and
                expiring June 17, 2011. The Warrants will be redeemable, at the Company’s
                option, with the prior consent of EarlyBirdCapital, Inc., the
                representative of the underwriters in the Offering (“Representative”), at
                a price of $.01 per Warrant upon 30 days’ notice after the Warrants become
                exercisable, only in the event that the last sale price of the common
                stock is at least $8.50 per share for any 20 trading days within
                a 30
                trading day period ending on the third day prior to the date on which
                notice of redemption is given. If the Company redeems the Warrants
                as
                described above, management will have the option to require any holder
                that wishes to exercise his Warrant to do so on a “cashless basis.” In
                such event, the holder would pay the exercise price by surrendering
                his
                Warrants for that number of ordinary shares equal to the quotient
                obtained
                by dividing (x) the product of the number of ordinary shares underlying
                the Warrants, multiplied by the difference between the exercise price
                of
                the Warrants and the “fair market value” (defined below) by (y) the fair
                market value. The “fair market value” shall mean the average reported last
                sale price of the ordinary shares for the 10 trading days ending
                on the
                third trading day prior to the date on which the notice of redemption
                is
                sent to holders of Warrants. In accordance with the warrant agreement
                relating to the Warrants to be sold and issued in the Offering, the
                Company is only required to use its best efforts to maintain the
                effectiveness of the registration statement covering the Warrants.
                The
                Company will not be obligated to deliver securities, and there are
                no
                contractual penalties for failure to deliver securities, if a registration
                statement is not effective at the time of exercise. Additionally,
                in the
                event that a registration is not effective at the time of exercise,
                the
                holder of such Warrant shall not be entitled to exercise such Warrant
                and
                in no event (whether in the case of a registration statement not
                being
                effective or otherwise) will the Company be required to net cash
                settle
                the warrant exercise. Consequently, the Warrants may expire unexercised
                and unredeemed.


The
                Company paid the underwriters in the Offering an underwriting discount
                of
                5.5% of the gross proceeds of the Offering and a non-accountable
                expense
                allowance of 0.5% of the gross proceeds of the Offering. However,
                the
                underwriters agreed that 1% of the underwriting discount would be
                deferred
                and would not be paid unless and until the Company consummated a
                Business
                Combination. In connection with this Offering, the Company also issued
                an
                option (“Option”), for $100, to the Representative to purchase 500,000
                Units at an exercise price of $6.60 per Unit. The Company accounted
                for
                the fair value of the Option, inclusive of the receipt of the $100
                cash
                payment, as an expense of the Offering resulting in a charge directly
                to
                stockholders’ equity. The Company estimated that the fair value of the
                Option was approximately $1,054,114 ($2.11 per Unit) using a Black-Scholes
                option-pricing model. The fair value of the Option granted to the
                Representative was estimated as of the date of grant using the following
                assumptions: (1) expected volatility of 35.03%, (2) risk-free interest
                rate of 4.54% and (3) expected life of 5 years. The Option may be
                exercised for cash or on a "cashless" basis, at the holder's option
                (except in the case of a forced cashless exercise upon the Company’s
                redemption of the Warrants, as described above), such that the holder
                may
                use the appreciated value of the Option (the difference between the
                exercise prices of the Option and the underlying Warrants and the
                market
                price of the Units and underlying securities) to exercise the option
                without the payment of any cash. The Company will have no obligation
                to
                net cash settle the exercise of the unit purchase option or the Warrants
                underlying the unit purchase option. The holder of the unit purchase
                option will not be entitled to exercise the unit purchase option
                or the
                Warrants underlying the unit purchase option unless a registration
                statement covering the securities underlying the unit purchase option
                is
                effective or an exemption from registration is available. If the
                holder is
                unable to exercise the unit purchase option or underlying Warrants,
                the
                unit purchase option or Warrants, as applicable, will expire
                worthless.




F-10




**3.
                Note Payable, Stockholder**
            
            The
                Company issued unsecured promissory notes in aggregate amount of
                $100,000
                to certain officers. The notes were non interest bearing and were
                repaid
                from the net proceeds of the Offering.**4.
                Commitments and Contingency**
            
            The
                Company occupies office space provided by an affiliate of the Company’s
                chief operating officer. Such affiliate has agreed that, until the
                Company
                consummates a Business Combination, it will make such office space,
                as
                well as certain office and secretarial services, available to the
                Company,
                as may be required by the Company from time to time. The Company
                has
                agreed to pay such affiliate $7,500 per month for such services commencing
                on the effective date of the Offering. The Company paid $52,500 under
                this
                arrangement during 2007.
              
              Pursuant
                to letter agreements dated as of October 12, 2006 with the Company
                and the
                underwriter, the Initial Stockholders have waived their right to
                receive
                distributions with respect to their founding shares upon the Company’s
                liquidation.
              
              The
                Company’s directors and certain special advisors and theirmembers
                purchased 105,000 Units (“Insider Units”) at $6.00 per Unit and 1,033,334
                Warrants (“Insider Warrants”) at $0.60 per Unit (for an aggregate purchase
                price of $1,250,000) privately from the Company. These purchases
                took
                place simultaneously with the consummation of the Offering. All of
                the
                proceeds received from these purchases were placed in the Trust Account.
                The Insider Units and Insider Warrants are identical to the Units
                sold in
                the Offering (and the Warrants underlying such Units) except that
                if the
                Company calls the Warrants for redemption, the Insider Warrants may
                be
                exercisable on a “cashless basis,” at the holder’s option (except in the
                case of a forced cashless exercise upon the Company’s redemption of the
                Warrants, as described above), so long as such securities are held
                by such
                purchasers or their affiliates. Furthermore, the purchasers have
                agreed
                that the Insider Warrants will not be sold or transferred by them
                until
                after the Company has completed a Business
                Combination.




F-11




The
                Initial Stockholders and the holders of the Insider Units and Insider
                Warrants (or underlying securities) will be entitled to registration
                rights with respect to their founding shares, Insider Units or Insider
                Warrants (or underlying securities) pursuant to an agreement signed
                prior
                the Offering. The holders of the majority of the founding shares
                are
                entitled to demand that the Company register these shares at any
                time
                commencing three months prior to the first anniversary of the consummation
                of a Business Combination. The holders of the Insider Units and Insider
                Warrants (or underlying securities) are entitled to demand that the
                Company register these securities at any time after the Company
                consummates a Business Combination. In addition, the Initial Stockholders
                and holders of the Insider Units and Insider Warrants (or underlying
                securities) have certain “piggy-back” registration rights on registration
                statements filed after the Company’s consummation of a Business
                Combination.
              
              The
                Representative has been engaged by the Company to act as the Company’s
                non-exclusive investment banker in connection with a proposed Business
                Combination. For assisting the Company in structuring and negotiating
                the
                terms of a Business Combination, the Company will pay the Representative
                a
                cash transaction fee equal to 1% of the total consideration paid
                in
                connection with the Business Combination, with a maximum fee to be
                paid of
                $300,000. Additionally, the Company has agreed to pay the fees and
                issue
                the securities to the underwriters in the Offering as described in
                Note 2
                above.**5.
                Preferred Stock**
            
            The
                Company is authorized to issue 1,000,000 shares of preferred stock
                with
                such designations, voting and other rights and preferences as may
                be
                determined from time to time by the Board of Directors.
              The
                agreement with the underwriters prohibits the Company, prior to a
                Business
                Combination, from issuing preferred stock which participates in the
                proceeds of the Trust Account or which votes as a class with the
                Common
                Stock on a Business Combination.





F-12