**UNITED
        STATES**
 **SECURITIES
        AND EXCHANGE COMMISSION**
 **WASHINGTON,
        D.C. 20549**
 
 **AMENDMENT
        NO. 1 TO**
 **FORM
        10-Q/A**
  **x** **QUARTERLY
        REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE**
 **SECURITIES
        EXCHANGE ACT OF 1934**
  **For
        the quarterly period ended September 30, 2007**
 
 **OR**
 
 **o** **TRANSITION
        REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE**
 **SECURITIES
        EXCHANGE ACT OF 1934**
 
 **Commission
        File Number**
 **000-51981**
  
 **ASIA
        TIME CORPORATION**
 *(Exact
        name of small business issuer as specified in its charter)*
 
 **Delaware**
                *(State
                  or other jurisdiction of incorporation*
                *or
                  organization)*
              
              **20-4062619**
                *(I.R.S.
                  Employer Identification*
                *No.)***Room
                  1601-1604, 16/F., CRE Centre**
                **889
                  Cheung Sha Wan Road,**
                **Kowloon,
                  Hong Kong******
                *(Address
                  of principal executive offices)*
              
              **N/A**
                *(Zip
                  Code)*
 
 **(852)-23100101**
 *(Registrant’s
        telephone number, including area code)*
 
 Indicate
        by check mark whether the registrant (1) has filed all reports required to
        be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
        during the preceding 12 months (or for such shorter period that the
        registrant was required to file such reports), and (2) has been subject to
        such filing requirements for the past 90 days. Yes x No  o
  Indicate
        by check mark whether the registrant is a large accelerated filer, an
        accelerated filer, or a non-accelerated filer. See definition of “accelerated
        filer and large accelerated filer” in Rule 12b-2 of the Exchange
        Act.
 
 Large
        accelerated filer o Accelerated filer o Non-accelerated filer x
  
 Indicate
        by check mark whether the registrant is a shell company (as defined in Rule
        12b-2 of the Exchange Act).  Yes o No x
  There
        were 23,156,629 shares outstanding of registrant’s common stock, par value
        $.0001 per share, as of November 1, 2007.
   
 
 
  **EXPLANATORY
        NOTE**
 
 This
        Amendment No. 1 (this “Amendment”) on Form 10-Q/A, which amends and restates
        items identified below with respect to the Form 10-Q, filed by Asia Time
        Corporation (“we” or the “Company”) with the Securities and Exchange Commission
        (the “SEC”) on November 19, 2007 (the “Original Filing”) is being filed to
        reflect revisions to Financial Statements, Management’s Discussion And Analysis
        Of Financial Condition And Results Of Operation, Risk Factors, and Controls
        and
        Procedures. The Company has revised its financial statements for the three
        months and nine months ended September 30, 2007 and 2006 to reflect various
        adjustments, primarily to account for all fees and costs related to the January
        2007 reverse merger as a charge to operations, to adjust the accounting for
        inventories and cost of sales by accruing for vendor incentives, and to
        recognize stock-based compensation in 2007. As a result of these adjustments,
        various income tax calculations were also revised, which effected net income
        and
        also caused reclassifications to cash flows. The Company has also corrected
        average and actual shares outstanding retroactively (and related earnings
        per
        share calculations) to reflect the January 2007 reverse merger. These
        adjustments are more fully described at Note 21 of the Notes to the Financial
        Statements contained herein.
 
 This
        Form
        10-Q/A only amends information in Item 1 (Financial Statements), Item 1A
        (Risk
        Factors), Item 2 (Management’s Discussion and Analysis of Financial Condition
        and Results of Operation), and Item 4 (Controls and Procedures), and the
        other
        Items as presented in the Original Filing are not being amended but are restated
        without change in this Amendment for ease of reference. As a result of this
        Amendment, the certifications pursuant to Section 302 and Section 906 of
        the
        Sarbanes-Oxley Act of 2002, filed as exhibits to our Original Filing have
        been
        revised, re-executed and re-filed as of the date of this Amendment. Except
        for
        the foregoing amended and restated information, this Amendment continues
        to
        describe conditions as of the date of the Original Filing, and the disclosures
        contained herein have not been updated to reflect events, results or
        developments that have occurred after the Original Filing, or to modify or
        update those disclosures affected by subsequent events. Among other things,
        forward-looking statements made in the Original Filing have not been revised
        to
        reflect events, results or developments that have occurred or facts that
        have
        become known to us after the date of the Original Filing, and such
        forward-looking statements should be read in their historical context. This
        Amendment should be read in conjunction with the Company’s filings made with the
        SEC subsequent to the Original Filing, including any amendments to those
        filings.
 
 
  **ASIA
        TIME CORPORATION.**
 **FORM
        10-Q QUARTERLY REPORT**
 
 **TABLE
        OF CONTENTS**
 
 **Page**PART
                  I - FINANCIAL INFORMATION
              1ITEM
                  1.
              FINANCIAL
                  STATEMENTS
              1Condensed
                  Consolidated Balance Sheets (Unaudited)
              2Condensed
                  Consolidated Statements of Operations (Unaudited)
              4Condensed
                  Consolidated Statements of Cash Flows (Unaudited)
              5Notes
                  to Condensed Consolidated Financial Statements (Unaudited)
              7ITEM
                  2.
              MANAGEMENT’S
                  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                  OPERATION
              45ITEM
                  3.
              QUANTITATIVE
                  AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
              56ITEM
                  4.
              CONTROLS
                  AND PROCEDURES
              57PART
                  II - OTHER INFORMATION
              57ITEM
                  1.
              LEGAL
                  PROCEEDINGS
              57ITEM
                  1A.
              RISK
                  FACTORS
              57ITEM
                  2.
              UNREGISTERED
                  SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
              59ITEM
                  3.
              DEFAULTS
                  UPON SENIOR SECURITIES
              59ITEM
                  4.
              SUBMISSION
                  OF MATTERS TO A VOTE OF SECURITY HOLDERS
              59ITEM
                  5.
              OTHER
                  INFORMATION
              59ITEM
                  6.
              EXHIBITS
              59SIGNATURES
              
              60
 
 
 
 **PART
        I - FINANCIAL INFORMATION**
 
 **ITEM
        1.**  **FINANCIAL
        STATEMENTS**
 
 The
        accompanying unaudited financial statements have been prepared in accordance
        with accounting principles generally accepted in the United States of America
        for interim financial information and with the instructions to Form 10-Q.
        Accordingly, they do not include all of the information and footnotes required
        by generally accepted accounting principles for complete financial statements.
        The accompanying unaudited financial statements reflect all adjustments that,
        in
        the opinion of management, are considered necessary for a fair presentation
        of
        the financial position, results of operations, and cash flows for the periods
        presented. The results of operations for such periods are not necessarily
        indicative of the results expected for the full fiscal year or for any future
        period. The accompanying unaudited financial statements should be read in
        conjunction with the audited financial statements of Asia Time Corporation
        included in the Form 10-K/A for the fiscal year ended December 31, 2006 as
        filed
        with the Securities and Exchange Commission on February 8, 2008.
 
 1
 
 ASIA
        TIME
        CORPORATION
 (Formerly
        SRKP 9, Inc.)
 
 CONDENSED
        CONSOLIDATED BALANCE SHEETS
 (Stated
        in US Dollars)
 
 
 ***As
                  of******September
                  30,***
              
              ***December
                  31,******2007***
              
              ***2006******(Unaudited)******$***
              
              ***$******(restated)***
              
              ***(restated)*****ASSETS**Current
                  Assets:Cash
                  and cash equivalents
              
              
              166,216
              
              
              316,621Restricted
                  cash
              
              
              5,551,704
              
              
              4,523,679Accounts
                  receivable
              
              
              15,482,635
              
              
              8,188,985Prepaid
                  expenses and other receivables - Note 8
              
              
              6,397,568
              
              
              2,101,133Income
                  tax prepayments
              
              
              -
              
              
              767Inventories
                  - Note 9
              
              
              5,961,014
              
              
              6,246,185Prepaid
                  lease payments - Note 11
              
              
              17,193
              
              
              22,958Total
                  Current Assets
              
              
              33,576,330
              
              
              21,400,328Deferred
                  tax assets - Note 6
              
              
              19,536
              
              
              14,042Plant
                  and equipment, net - Note 10
              
              
              719,473
              
              
              890,258Leasehold
                  lands - Note 11
              
              
              882,444
              
              
              895,322Held-to-maturity
                  investments - Note 12
              
              
              300,771
              
              
              301,196Intangible
                  assets - Note 13
              
              
              244,168
              
              
              337,836Restricted
                  cash - non-current
              
              
              256,937
              
              
              257,301**TOTAL
                  ASSETS**
              
              
              35,999,659
              
              
              24,096,283**LIABILITIES
                  AND STOCKHOLDERS’ EQUITY****LIABILITIES**Current
                  Liabilities:Accounts
                  payable
              
              
              1,075,980
              
              
              770,360Other
                  payables and accrued liabilities - Note 14
              
              
              51,491
              
              
              190,358Advance
                  from a related party - Note 15
              
              
              12,268
              
              
              -Income
                  taxes payable
              
              
              2,691,393
              
              
              1,387,571Bank
                  borrowings - Note 16
              
              
              15,196,458
              
              
              13,205,167Total
                  Current Liabilities
              
              
              19,027,590
              
              
              15,553,456Deferred
                  tax liabilities - Note 6
              
              
              37,180
              
              
              31,711**TOTAL
                  LIABILITIES**
              
              
              19,064,770
              
              
              15,585,167**COMMITMENTS
                  AND CONTINGENCIES - Note 19**
 
 
 2
  ASIA
        TIME
        CORPORATION
 (Formerly
        SRKP 9, Inc.)
 
 CONDENSED
        CONSOLIDATED BALANCE SHEETS (continued)
 (Stated
        in US Dollars)
 
 
 
 ***As
                  of******September
                  30,***
              
              ***December
                  31,******2007***
              
              ***2006******(Unaudited)******$***
              
              ***$******(restated)***
              
              ***(restated)*****STOCKHOLDERS’
                  EQUITY**Preferred
                  stock - Note 17Par
                  value: US$0.0001Authorized:
                  10,000,000 sharesIssued
                  and outstanding: 2007 - 2,250,348 shares (2006 - none)
              
              
              225
              
              
              -Common
                  stock - Note 17Par
                  value: US$0.0001Authorized:
                  100,000,000 shares (2006 - 100,000,000 shares)Issued
                  and outstanding: 2007 - 23,156,629 shares (2006 - 19,454,420
                  shares)
              
              
              2,316
              
              
              1,946Additional
                  paid-in capital
              
              
              5,139,880
              
              
              654,298Accumulated
                  other comprehensive income
              
              
              22,112
              
              
              7,470Retained
                  earnings
              
              
              11,770,356
              
              
              7,847,402**TOTAL
                  STOCKHOLDERS’ EQUITY**
              
              
              16,934,889
              
              
              8,511,116**TOTAL
                  LIABILITIES AND STOCKHOLDERS’ EQUITY**
              
              
              35,999,659
              
              
              24,096,283
  
 See
        notes
        to condensed consolidated financial statements.
 
 3
 
 ASIA
        TIME
        CORPORATION
 (Formerly
        SRKP 9, Inc.)
 
 CONDENSED
        CONSOLIDATED STATEMENTS OF OPERATIONS
 (Stated
        in US Dollars)
 
 ***Three
                  months ended September 30,***
              
              ***Nine
                  months ended September 30.******2007***
              
              ***2006***
              
              ***2007***
              
              ***2006******(Unaudited)***
              
              ***(Unaudited)***
              
              ***(Unaudited)***
              
              ***(Unaudited)******$***
              
              ***$***
              
              ***$***
              
              ***$******(restated)***
              
              ***(restated)***
              
              ***(restated)***
              
              ***(restated)***Net
                  sales
              
              
              22,972,645
              
              
              19,647,209
              
              
              64,960,224
              
              
              62,874,395Cost
                  of sales
              
              
              (18,410,524
              )
              
              (17,332,702
              )
              
              (54,829,393
              )
              
              (55,599,295
              )Gross
                  profit
              
              
              4,562,121
              
              
              2,314,507
              
              
              10,130,831
              
              
              7,275,100Other
                  income - Note 4
              
              
              48,425
              
              
              41,724
              
              
              145,203
              
              
              125,504Depreciation
              
              
              (64,635
              )
              
              (83,730
              )
              
              (193,499
              )
              
              (243,096
              )Administrative
                  and other operating
                expenses,
                  including stock-based
                compensation
              
              
              (690,514
              )
              
              (359,472
              )
              
              (3,295,777
              )
              
              (971,717
              )Income
                  from operations
              
              
              3,855,397
              
              
              1,913,029
              
              
              6,786,758
              
              
              6,185,791Fees
                  and costs related to reverse merger - Note 1
              
              
              -
              
              
              -
              
              
              (736,197
              )
              
              -Other
                  income - Note 4
              
              
              39,555
              
              
              55,342
              
              
              117,936
              
              
              165,638Interest
                  expense - Note 5
              
              
              (316,516
              )
              
              (265,872
              )
              
              (830,935
              )
              
              (763,726
              )Income
                  before taxes
              
              
              3,578,436
              
              
              1,702,499
              
              
              5,337,562
              
              
              5,587,703Income
                  taxes - Note 6
              
              
              (697,737
              )
              
              (304,821
              )
              
              (1,414,608
              )
              
              (989,132
              )Net
                  income
              
              
              2,880,699
              
              
              1,397,678
              
              
              3,922,954
              
              
              4,598,571Earnings
                  per common share - Note 3-
                  Basic
              
              $
              0.12
              
              $
              0.07
              
              $
              0.17
              
              $
              0.24-
                  Diluted
              
              $
              0.11
              
              $
              0.07
              
              $
              0.16
              
              $
              0.24Weighted
                  average common shares-
                  Basic
              
              
              23,156,629
              
              
              19,454,420
              
              
              22,844,721
              
              
              19,454,420-
                  Diluted
              
              
              25,406,977
              
              
              19,454,420
              
              
              24,874,262
              
              
              19,454,420
 
 
 See
        notes
        to condensed consolidated financial statements.
  4
  ASIA
        TIME
        CORPORATION
 (Formerly
        SRKP 9, Inc.)
 
 CONDENSED
        CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Stated
        in US Dollars)
 
 ***Nine
                  months ended September 30,******2007***
              
              ***2006******(Unaudited)***
              
              ***(Unaudited)******$***
              
              ***$******(restated)***
              
              ***(restated)*****Cash
                  flows from operating activities**Net
                  income
              
              
              3,922,954
              
              
              4,598,571Adjustments
                  to reconcile net income to net cashprovided
                  by (used in) operating activities:Stock-based
                  compensation
              
              
              1,852,494
              
              
              -Amortization
                  of intangible assets
              
              
              92,884
              
              
              115,965Amortization
                  of leasehold lands
              
              
              17,287
              
              
              17,481Depreciation
              
              
              193,499
              
              
              243,096Loss
                  on disposal of plant and equipment
              
              
              5,406
              
              
              7,725Income
                  taxes
              
              
              1,414,608
              
              
              989,132Changes
                  in operating assets and liabilities:(Increase)
                  decrease in -Accounts
                  receivable
              
              
              (7,281,110
              )
              
              (3,264,603
              )Prepaid
                  expenses and other receivables
              
              
              (4,260,214
              )
              
              (1,118,481
              )Inventories
              
              
              275,517
              
              
              767,389Increase
                  (decrease) in -Accounts
                  payable
              
              
              306,241
              
              
              (279,202
              )Other
                  payables and accrued liabilities
              
              
              (138,142
              )
              
              (37,981
              )Income
                  taxes payable
              
              
              (112,601
              )
              
              (16,055
              )Unearned
                  revenue
              
              
              -
              
              
              (1,595,187
              )Net
                  cash provided by (used in) operating activities
              
              
              (3,711,177
              )
              
              427,850**Cash
                  flows from investing activities**Acquisition
                  of plant and equipment
              
              
              (30,257
              )
              
              (1,164,095
              )Proceeds
                  from disposal of plant and equipment
              
              
              320
              
              
              2,034Net
                  cash used in investing activities
              
              
              (29,937
              )
              
              (1,162,061
              )**Cash
                  flows from financing activities**Proceeds
                  from issuance of Series A convertible preferred stock
              
              
              2,641,683
              
              
              -Proceeds
                  from new short-term bank loans
              
              
              2,816,620
              
              
              33,932Repayment
                  of short-term bank loans
              
              
              (4,029,839
              )
              
              (259,532
              )Net
                  advances under other short-term bank borrowings
              
              
              3,175,698
              
              
              3,925,836Increase
                  in restricted cash
              
              
              (1,031,003
              )
              
              (1,180,479
              )Advances
                  from related parties
              
              
              (20,773
              )
              
              (28,798
              )Decrease
                  in bank overdrafts
              
              
              40,840
              
              
              131,057Dividends
                  paid
              
              
              -
              
              
              (2,445,712
              )Net
                  cash provided by financing activities
              
              
              3,593,226
              
              
              176,304Net
                  decrease in cash and cash equivalents
              
              
              (147,888
              )
              
              (557,907
              )Effect
                  of foreign currency translation on cash and cash
                  equivalents
              
              
              (2,517
              )
              
              (538
              )Cash
                  and cash equivalents - beginning of period
              
              
              316,621
              
              
              778,563Cash
                  and cash equivalents - end of period
              
              
              166,216
              
              
              220,118
 
 5
 
 ASIA
        TIME
        CORPORATION
 (Formerly
        SRKP 9, Inc.)
 
 CONDENSED
        CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
 (Stated
        in US Dollars)
 
 
 ***Nine
                  months ended September 30,******2007***
              
              ***2006******(Unaudited)***
              
              ***(Unaudited)******$***
              
              ***$******(restated)***
              
              ***(restated)***Supplemental
                  disclosures of cash flow information:Cash
                  paid for:Interest
              
              
              830,935
              
              
              763,726Income
                  taxes
              
              
              112,601
              
              
              15,521
 
 
 See
        notes
        to condensed consolidated financial statements.
 
 6
  ASIA
        TIME
        CORPORATION
 (Formerly
        SRKP 9, Inc.)
 
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (restated)
 (Stated
        in US Dollars)
 
 THREE
        MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
 
 
 **1.**
              **Organization
                  and recapitalization**
 
 Asia
        Time
        Corporation (the “Company”) (formerly SRKP 9, Inc.) was incorporated in the
        State of Delaware on January 3, 2006. Effective January 23, 2007, the Company
        changed its name from SRKP 9, Inc. to Asia Time Corporation.
  Recapitalization
 
 The
        Company entered into an Exchange Agreement dated December 15, 2006 (the
“Exchange Agreement”) with Times Manufacture & E-Commerce Corporation
        Limited, a British Virgin Islands corporation (“Times Manufacture”), and Kwong
        Kai Shun, the sole shareholder of Times Manufacture (“Original Shareholder”).
        The closing of the Exchange Agreement occurred on January 23, 2007.
 
 The
        Company effected a 1.371188519-for-one stock reverse split in the course
        of the
        share exchange process such that there were 3,702,209 shares of common stock
        outstanding immediately prior to the closing of the Exchange Agreement. These
        financial statements give retroactive effect to this share split.
 
 At
        the
        closing of the Exchange Agreement, the Company acquired all of the capital
        shares of Times Manufacture from the Original Shareholder, in exchange for
        which
        the Company issued 19,454,420 shares of its Common Stock to the Original
        Shareholder. The 19,454,420 shares of common stock issued to the Original
        Shareholder in conjunction with this transaction have been presented as
        outstanding for all periods presented.
 
 The
        Original Shareholder of Times Manufacture acquired 84% of the Company’s issued
        and outstanding common stock in conjunction with the completion of the Exchange
        Agreement. Therefore, although Times Manufacture became the Company’s
        wholly-owned subsidiary, the transaction was accounted for as a recapitalization
        in the form of a reverse merger of Times Manufacture, whereby Times Manufacture
        was deemed to be the accounting acquirer and was deemed to have retroactively
        adopted the capital structure of SRKP 9, Inc. Since the transaction was
        accounted for as a reverse merger, the accompanying consolidated financial
        statements reflect the historical consolidated financial statements of Times
        Manufacture for all periods presented, and do not include the historical
        financial statements of SRKP 9, Inc. All costs associated with the reverse
        merger transaction were expensed as incurred.
 
 The
        Company agreed to register the 1,999,192 shares of common stock that were
        held
        by certain of the Company’s shareholders immediately prior to the closing of the
        Exchange Agreement. If the Company fails to register 1,999,192 shares due
        to
        failure on the part of the Company, additional shares of its common stock
        shall
        be issued to the respective shareholders in the amount of 0.0333% of their
        respective shares for each calendar day until the registration becomes
        effective. There is no maximum potential consideration to be transferred
        in
        connection with the registration of these shares. The Company agreed to file
        a
        registration statement no later than the tenth day after the end of the six
        month period that immediately follows the filing date of the initial
        registration statement (the "Required Filing Date"). The Company agreed to
        use
        reasonable best efforts to cause such registration statement to become effective
        within 120 days after the Required Filing Date or the actual filing date,
        whichever is earlier, or 150 days after the Required Filing Date or the actual
        filing date, whichever is earlier, if the registration statement is subject
        to a
        full review by the Securities and Exchange Commission. In addition, the Company
        agreed to use its reasonable best efforts to maintain the registration statement
        effective for a period of 24 months at the Company's expense.
 
 7
  ASIA
        TIME
        CORPORATION
 (Formerly
        SRKP 9, Inc.)
 
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (restated)
 (Stated
        in US Dollars)
 
 THREE
        MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
 
 
 **1.**
              **Organization
                  and recapitalization
                  (continued)**
 
 Restatement
 
 The
        Company has revised its financial statements for the three months and nine
        months ended September 30, 2007 and 2006 to reflect various adjustments,
        primarily to account for all fees and costs related to the January 2007 reverse
        merger as a charge to operations, to adjust the accounting for inventories
        and
        cost of sales by accruing for vendor incentives, and to recognize stock-based
        compensation in 2007. As a result of these adjustments, various income tax
        calculations were also revised, which effected net income and also caused
        reclassifications to cash flows. The Company has also corrected average and
        actual shares outstanding retroactively (and related earnings per share
        calculations) to reflect the January 2007 reverse merger. These adjustments
        are
        more fully described at Note 21.
 
 
 **2.**
              **Description
                  of business**
 
 The
        Company and its subsidiaries are engaged in sales to distributors of completed
        watches and watch components.
 
 Name
                  of company
              Place
                  and date of incorporation
              Issued
                  and fully paid capital
              Principal
                  activitiesTimes
                  Manufacture & E-Commerce Corporation Ltd.
              British
                  Virgin Islands
                March
                  21, 2002
              US$20,002
                Ordinary
              Investment
                  holdingTimes
                  Manufacturing & E-Commerce Corporation Ltd. (“TMEHK”)
              British
                  Virgin Islands
                January
                  2, 2002
              US$20,000
                Ordinary
              Investment
                  holdingBillion
                  Win International Enterprise Ltd. (“BW”)
              Hong
                  Kong
                March
                  5, 2001
              HK$5,000,000
                Ordinary
              Trading
                  of watch componentsGoldcome
                  Industrial Ltd. (“GI”)
              Hong
                  Kong
                March
                  2, 2001
              HK$10,000
                Ordinary
              Trading
                  of watch componentsCitibond
                  Industrial Ltd. (“CI”)
              Hong
                  Kong
                February
                  28, 2003
              HK$1,000
                Ordinary
              Trading
                  of watch componentsMegamooch
                  International Ltd. (“MI”)
              Hong
                  Kong
                April
                  2, 2001
              HK$100
                Ordinary
              Trading
                  of watches and watch componentsTME
                  Enterprise Ltd.
              British
                  Virgin Islands
                November
                  28, 2003
              US$2
                Ordinary
              Investment
                  holdingCitibond
                  Design Ltd.
              British
                  Virgin Islands
                August
                  1, 2003
              US$2
                Ordinary
              InactiveMegamooch
                  Online Ltd.
              British
                  Virgin Islands
                September
                  6, 2003
              US$2
                Ordinary
              Trading
                  of watches and watch components
 
 8
  ASIA
        TIME
        CORPORATION
 (Formerly
        SRKP 9, Inc.)
 
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (restated)
 (Stated
        in US Dollars)
 
 THREE
        MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
 
 
 **3.**
              **Summary
                  of significant accounting policies**
 
 Consolidation
 
 The
        consolidated financial statements include the accounts of the Company and
        its
        majority owned subsidiaries. Intercompany accounts and transactions have
        been
        eliminated in consolidation.
 
 Basis
        of presentation
 
 The
        accompanying condensed consolidated financial statements of the Company and
        its
        subsidiaries have been prepared in accordance with generally accepted accounting
        principles in the United States of America for interim consolidated financial
        information. Accordingly, they do not include all the information and notes
        necessary for a comprehensive set of consolidated financial
        statements.
 
 In
        the
        opinion of the management of the Company, the accompanying financial statements
        include all adjustments, including those of a normal recurring nature, necessary
        for a fair presentation of the results of operations for the three months
        and
        nine months ended September 30, 2007 and 2006. Results for the interim periods
        presented are not necessarily indicative of the results that might be expected
        for the full fiscal year. These condensed financial statements should be
        read in
        conjunction with the consolidated financial statements of Asia Time Corporation
        and the notes thereto for the years ended December 31, 2006, 2005 and 2004
        as
        filed with Securities and Exchange Commission.
 
 Use
        of
        estimates
 
 In
        preparing financial statements in conformity with accounting principles
        generally accepted in the United States of America, management makes estimates
        and assumptions that affect the reported amounts of assets and liabilities
        and
        disclosures of contingent assets and liabilities at the dates of the financial
        statements, as well as the reported amounts of revenues and expenses during
        the
        reporting periods. These accounts and estimates include, but are not limited
        to,
        the valuation of accounts receivable, inventories, deferred income taxes
        and the
        estimation on useful lives of plant and equipment and intangible assets.
        Actual
        results could differ from those estimates.
  9
  ASIA
        TIME
        CORPORATION
 (Formerly
        SRKP 9, Inc.)
 
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (restated)
 (Stated
        in US Dollars)
 
 THREE
        MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
 
 **3.**
              **Summary
                  of significant accounting policies
                  (continued)**
 
 Concentrations
        of credit risk
 
 Financial
        instruments that potentially subject the Group to significant concentrations
        of
        credit risk consist principally of accounts receivable. The Group extends
        credit
        based on an evaluation of the customer’s financial condition, generally without
        requiring collateral or other security. In order to minimize the credit risk,
        the management of the Group has delegated a team responsibility for
        determination of credit limits, credit approvals and other monitoring procedures
        to ensure that follow-up action is taken to recover overdue debts. Further,
        the
        Group reviews the recoverable amount of each individual trade debt at each
        balance sheet date to ensure that adequate impairment losses are made for
        irrecoverable amounts. In this regard, the directors of the Group consider
        that
        the Group’s credit risk is significantly reduced. Other than set forth below, no
        customers represented 10% or more of the Group’s net sales and accounts
        receivable.
 
 For
        the
        nine months ended September 30, 2007 and 2006, customers representing 10%
        or
        more of the Group’s net sales and their related accounts receivable were as
        follows:
 
 ***Nine
                  months ended September 30,*****2007**
              
              **2006**$
              
              $Customer
                  A
              
              
              -
              
              
              7,656,660Customer
                  B
              
              
              -
              
              
              7,522,227Customer
                  C
              
              
              -
              
              
              7,342,760Net
                  sales
              
              
              -
              
              
              22,521,760Accounts
                  receivable
              
              
              -
              
              
              3,658,548
 
 Restricted
        cash
 
 Deposits
        in banks for securities of bank borrowings that are restricted in use are
        classified as restricted cash.
  10
  ASIA
        TIME
        CORPORATION
 (Formerly
        SRKP 9, Inc.)
 
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (restated)
 (Stated
        in US Dollars)
 
 THREE
        MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
 
 
 **3.**
              **Summary
                  of significant accounting policies
                  (continued)**
 
 Accounts
        receivable
 
 Accounts
        receivable are stated at their original amount less an allowance for doubtful
        accounts, based on a review of outstanding amounts at the period end. An
        allowance for doubtful accounts is also recorded when there is objective
        evidence that the Company will not be able to collect all amounts due according
        to the original terms of the receivables. Uncollectible amounts are written
        off
        when identified. The Company extends unsecured credit to customers in the
        normal
        course of business and believes all accounts receivable in excess of the
        allowances for doubtful receivables are fully collectible. The Company does
        not
        accrue interest on trade accounts receivable.
 
 During
        the nine months ended September 30, 2007 and 2006, the Company had no
        uncollectible accounts receivable and, accordingly, did not record any allowance
        for doubtful accounts.
 
 Inventories
 
 Inventories
        are stated at the lower of cost or market. Cost is determined on a first-in,
        first-out basis and includes only purchase costs. There are no significant
        freight charges, inspection costs and warehousing costs incurred for any
        of the
        periods presented. In assessing the ultimate realization of inventories,
        management makes judgments as to future demand requirements compared to current
        or committed inventory levels. The Company has vendor arrangements on the
        purchase of watch movements providing for price reduction paid in the form
        of
        additional watch movements. The percentage of additional movements to be
        received by the Company from these vendors is estimated and inventory costs
        are
        reduced to reflect the effect of these additional movements on the actual
        cost
        of the items in inventory. During the nine months ended September 30, 2007
        and
        2006, the Company did not make any allowance for slow-moving or defective
        inventories.
 
 Leasehold
        land
 
 Leasehold
        lands, representing upfront payments or land use rights, are recorded at
        their
        acquisition cost and amortized using the straight-line method over the lease
        terms.
  11
  ASIA
        TIME
        CORPORATION
 (Formerly
        SRKP 9, Inc.)
 
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (restated)
 (Stated
        in US Dollars)
 
 THREE
        MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
 
 
 **3.**
              **Summary
                  of significant accounting policies
                  (continued)**
 
 Intangible
        assets
 
 Intangible
        assets with limited useful lives are stated at cost less accumulated
        amortization and accumulated impairment losses.
 
 Amortization
        of intangible assets is provided using the straight-line method over their
        estimated useful lives at the following annual rates:
 
 Trademarks
              
              
              20
              %Websites
              
              
              20
              %
 
 Held-to-maturity
        investments
 
 The
        Company’s policies with respect to investments in debt and equity securities are
        as follows:
 
 Non-derivative
        financial assets with fixed or determinable payments and fixed maturities
        that
        the Company has the positive ability and intention to hold to maturity are
        classified as held-to-maturity securities. Held-to-maturity securities are
        initially recognized in the balance sheet at cost to purchase including
        transaction costs. Subsequently, they are stated in the balance sheet at
        amortized cost using the effective interest method less any identified
        impairment losses.
  Plant
        and equipment
 
 Plant
        and
        equipment are stated at cost less accumulated depreciation. Cost represents
        the
        purchase price of the asset and other costs incurred to bring the asset into
        its
        existing use. Maintenance, repairs and betterments, including replacement
        of
        minor items, are charged to expense; major additions to physical properties
        are
        capitalized.
 
 Depreciation
        of plant and equipment is provided using the straight-line method over their
        estimated useful lives at the following annual rates:
 
 Buildings
              over
                  the unexpired lease termFurniture
                  and fixtures
              20
                  - 25%Office
                  equipment
              25
                  - 33%Machinery
                  and equipment
              25
                  - 33%Moulds
              33%Motor
                  vehicles
              25
                  - 33%
 
 Upon
        sale
        or disposition, the applicable amounts of asset cost and accumulated
        depreciation are removed from the accounts and the net amount less proceeds
        from
        disposal is charged or credited to the statement of operations.
 
  12
  ASIA
        TIME
        CORPORATION
 (Formerly
        SRKP 9, Inc.)
 
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (restated)
 (Stated
        in US Dollars)
 
 THREE
        MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
 
 
 **3.**
              **Summary
                  of significant accounting policies
                  (continued)**
 
 Impairment
        of long-lived assets
 
 Long-lived
        assets are reviewed for impairment whenever events or changes in circumstances
        indicate that the carrying amount of the assets may not be recoverable. The
        Company recognizes impairment of long-lived assets in the event that the
        net
        book values of such assets exceed the future undiscounted cash flows
        attributable to such assets.
 
 No
        impairment of long-lived assets was recognized for any of the periods
        presented.
 
 Revenue
        recognition
 
  Sales
        of
        goods represent the invoiced value of goods, net of sales returns, trade
        discounts and allowances.
  The
        Company recognizes revenue when the goods are delivered and the customer
        takes
        ownership and assumes risk of loss, collection of the relevant receivable
        is
        probable, persuasive evidence of an arrangement exists, and the sales price
        is
        fixed or determinable. The Company provides pre and post sales service to
        its
        customers related to inventory management information in order to facilitate
        and
        manage sales to customers. By providing such services to keep track of
        customers’ inventory levels, the Company can manage and replenish inventory
        levels on a timely basis. The Company’s integration, design and development and
        management services provide customers with watch design assistance, components
        outsourcing or other project support, and are generally completed prior to
        a
        sale and do not continue post-delivery. There is
        no requirement that these services be provided for a sale to take place,
        nor is
        there any objective or reliable evidence of a separate fair value, or if
        no
        longer offered or ceased to be offered would a right of return be
        created for the
        goods sold. The Company believes these services are part of the sales process
        and are not a customer deliverable, and are therefore charged to selling
        expense
        or cost of sales, as appropriate.
  
 Income
        taxes
 
 The
        Group
        uses the asset and liability method of accounting for income taxes pursuant
        to
        Statement of Financial Accounting Standards (“SFAS”) No. 109 “Accounting for
        Income Taxes”. Under the asset and liability method, deferred tax assets and
        liabilities are recognized for the future tax consequences attributable to
        temporary differences between the financial statements carrying amounts of
        existing assets and liabilities and loss carry forwards and their respective
        tax
        bases. Deferred tax assets and liabilities are measured using enacted tax
        rates
        expected to apply to taxable income in the years in which those temporary
        differences are expected to be recovered or settled. Valuation allowances
        are
        established when necessary to reduce deferred tax assets to the amount expected
        to be realized.
  13
  ASIA
        TIME
        CORPORATION
 (Formerly
        SRKP 9, Inc.)
 
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (restated)
 (Stated
        in US Dollars)
 
 THREE
        MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
 
 **3.**
              **Summary
                  of significant accounting policies
                  (continued)**
 
 Earnings
        per share
 
 The
        Company computes earnings per share in accordance with SFAS No. 128, “Earnings
        per Share” (“SFAS 128”), and SEC Staff Accounting Bulletin No. 98 (“SAB 98”).
        SFAS 128 requires companies with complex capital structures to present basic
        and
        diluted earnings per share. Basic earnings per share is measured as net income
        divided by the weighted average common shares outstanding for the period.
        Diluted earnings per share is similar to basic earnings per share but presents
        the dilutive effect on a per share basis of potential common shares (e.g.,
        convertible securities, options, and warrants) as if they had been issued
        at the
        beginning of the periods presented, or date of issuance, if later. Potential
        common shares that have an anti-dilutive effect (i.e., that increase income
        per
        share or decrease loss per share) are excluded from the calculation of diluted
        earnings per share.
 
 The
        Company did not have any potential dilutive common share equivalents during
        the
        three months and nine months ended September 30, 2006. The calculation of
        diluted earnings per share for the three months and nine months ended September
        30, 2007 includes the shares of Series A Convertible Preferred Stock on an
“as
        converted” basis.
 
 The
        following table is a reconciliation of the weighted average common shares
        used
        in the computation of basic and diluted earnings per share for the periods
        presented:
  14
  ASIA
        TIME
        CORPORATION
 (Formerly
        SRKP 9, Inc.)
 
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (restated)
 (Stated
        in US Dollars)
 
 THREE
        MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
 
 **3.**
              **Summary
                  of significant accounting policies
                  (continued)**
 
 Earnings
        per share (continued)
 
 **Three Months Ended September
                    30,****2007**
                
                **2006****Weighted**
                
                
                
                
                
                **Weighted****Net**
                
                **Average**
                
                
                
                **Net**
                
                **Average****Income**
                
                **Shares**
                
                **Per
                    Share**
                
                **Income**
                
                **Shares**
                
                **Per
                    Share**Earnings
                    per share - basicNet
                    income
                
                $
                2,880,699
                
                
                23,156,629
                
                $
                0.12
                
                $
                1,397,678
                
                
                19,454,420
                
                $
                0.07Effect
                    of dilutive securitiesConvertible
                    preferred stock
                
                
                -
                
                
                2,250,348
                
                
                
                
                
                -
                
                
                -Earnings
                    per share - dilutedNet
                    income
                
                $
                2,880,699
                
                
                25,406,977
                
                $
                0.11
                
                $
                1,397,678
                
                
                19,454,420
                
                $
                0.07
 
 **Nine Months Ended September
                    30,****2007**
                
                **2006****Weighted**
                
                
                
                
                
                **Weighted****Net**
                
                **Average**
                
                
                
                **Net**
                
                **Average****Income**
                
                **Shares**
                
                **Per
                    Share**
                
                **Income**
                
                **Shares**
                
                **Per
                    Share**Earnings
                    per share - basicNet
                    income
                
                $
                3,922,954
                
                
                22,844,721
                
                $
                0.17
                
                $
                4,598,571
                
                
                19,454,420
                
                $
                0.24Effect
                    of dilutive securitiesConvertible
                    preferred stock
                
                
                -
                
                
                2,029,541
                
                
                
                
                
                -
                
                
                -Earnings
                    per share - dilutedNet
                    income
                
                $
                3,922,954
                
                
                24,874,262
                
                $
                0.16
                
                $
                4,598,571
                
                
                19,454,420
                
                $
                0.24
  15
  ASIA
        TIME
        CORPORATION
 (Formerly
        SRKP 9, Inc.)
 
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (restated)
 (Stated
        in US Dollars)
 
 THREE
        MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
 
 
 **3.**
              **Summary
                  of significant accounting policies
                  (continued)**
 
 Stock-Based
        Compensation
  Effective
        January 1, 2006, the Company adopted SFAS No. 123 (revised 2004), “Share-Based
        Payment” (“SFAS 123R”), a revision to SFAS No. 123, “Accounting for Stock-Based
        Compensation”. SFAS 123R requires that the Company measure the cost of employee
        services received in exchange for equity awards based on the grant date fair
        value of the awards, with the cost to be recognized as compensation expense
        in
        the Company’s financial statements over the vesting period of the awards.
        Accordingly, the Company recognizes compensation cost for equity-based
        compensation for all new or modified grants issued after December 31, 2005.
        The
        Company did not have equity awards outstanding at December 31,
        2005.
 
 The
        Company accounts for stock option and warrant grants issued and vesting to
        non-employees in accordance with EITF 96-18, “Accounting for Equity Instruments
        that are Issued to Other Than Employees for Acquiring, or in Conjunction
        with
        Selling, Goods or Services”, and EITF 00-18, “Accounting Recognition for Certain
        Transactions involving Equity Instruments Granted to Other Than Employees”,
        whereas the value of the stock compensation is based upon the measurement
        date
        as determined at either (a) the date at which a performance commitment is
        reached or (b) at the date at which the necessary performance to earn the
        equity
        instruments is complete.
 
 The
        Company did not recognize any stock-based compensation during the three months
        or nine months ended September 30, 2006. During the three months and nine
        months
        ended September 30, 2007, the Company recorded $200,289 and $1,852,494,
        respectively, as a charge to operations to recognize the grant date fair
        value
        of stock-based compensation in conjunction with the Escrow Agreement described
        at Note 17.
 
  16
  ASIA
        TIME
        CORPORATION
 (Formerly
        SRKP 9, Inc.)
 
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (restated)
 (Stated
        in US Dollars)
 
 THREE
        MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
 
 
 **3.**
              **Summary
                  of significant accounting policies
                  (continued)**
 
 Recent
        accounting pronouncements
 
 In
        July
        2006, the FASB issued FIN 48, “Accounting for Uncertainty in Income Taxes.” FIN
        48 requires that the Company recognize in its financial statements the impact
        of
        a tax position if that position is more likely than not of being sustained
        on
        audit, based on the technical merits of the position. The provisions of FIN
        48
        are effective as of the beginning of the Company’s 2007 fiscal year, with the
        cumulative effect of the change in accounting principle recorded as an
        adjustment to opening retained earnings, if any. The Company did not have
        any
        material unrecognized tax benefits as of January 1, 2007. The adoption of
        FIN 48
        did not have any impact on the Company’s consolidated financial
        statements.
 
 In
        September 2006, the FASB issued SFAS No. 157 “Fair Value Measurement” (“SFAS
        157”). SFAS 157 defines fair value, establishes a framework for measuring fair
        value, and expands disclosures about fair value measurements. SFAS 157 is
        effective for financial statements issued for fiscal years beginning after
        November 15, 2007, and interim periods within those fiscal years. Earlier
        application is encouraged, provided that the reporting entity has not yet
        issued
        financial statements for that fiscal year, including any financial statements
        for an interim period within that fiscal year. The provisions of this statement
        should be applied prospectively as of the beginning of the fiscal year in
        which
        this statement is initially applied, except in some circumstances where the
        statement shall be applied retrospectively. The Company is currently evaluating
        the effect, if any, of SFAS 157 on its financial statements. Although the
        Company will continue to evaluate the provisions of SFAS 157, the Company
        currently does not believe the adoption of SFAS 157 will have a material
        impact
        on the Company’s consolidated financial statements.
 
 On
        February 15, 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
        Financial Assets and Financial Liabilities - Including an Amendment of SFAS
        No.
        115” (“SFAS 159”). The fair value option established by SFAS 159 permits all
        entities to choose to measure eligible items at fair value at specified election
        dates. A business entity will report unrealized gains and losses on items
        for
        which the fair value option has been elected in earnings (or another performance
        indicator if the business entity does not report earnings) at each subsequent
        reporting date. The fair value option: (a) may be applied instrument by
        instrument, with a few exceptions, such as investments otherwise accounted
        for
        by the equity method; (b) is irrevocable (unless a new election date occurs);
        and (c) is applied only to entire instruments and not to portions of
        instruments. SFAS 159 is effective as of the beginning of an entity’s first
        fiscal year that begins after November 15, 2007. Early adoption is permitted
        as
        of the beginning of the previous fiscal year provided that the entity makes
        that
        choice in the first 120 days of that fiscal year and also elects to apply
        the
        provisions of SFAS 157. The Company has not chosen to early adopt this
        statement. Although the Company will continue to evaluate the provisions
        of SFAS
        159, management currently does not believe the adoption of SFAS 159 will
        have a
        material impact on the Company’s consolidated financial
        statements.
  17
  ASIA
        TIME
        CORPORATION
 (Formerly
        SRKP 9, Inc.)
 
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (restated)
 (Stated
        in US Dollars)
 
 THREE
        MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
 
 
 
 **4.**
              **Other
                  income**
 
 ***Three
                  months ended***
              
              ***Nine
                  months ended******September
                  30,***
              
              ***September
                  30,***
              
              ***September
                  30,***
              
              ***September
                  30,******2007***
              
              ***2006***
              
              ***2007***
              
              ***2006******(Unaudited)***
              
              ***(Unaudited)***
              
              ***(Unaudited)***
              
              ***(Unaudited)******$***
              
              ***$***
              
              ***$***
              
              ***$****Operating
                  income*License
                  fee of intangible assets
              
              
              32,668
              
              
              41,724
              
              
              97,955
              
              
              125,504Rental
                  income
              
              
              15,757
              
              
              -
              
              
              47,248
              
              
              -48,425
              
              
              41,724
              
              
              145,203
              
              
              125,504*Non-operating
                  income*Bank
                  interest income
              
              
              35,114
              
              
              47,246
              
              
              112,020
              
              
              141,250Net
                  exchange gains
              
              
              600
              
              
              276
              
              
              2,075
              
              
              574Other
                  interest income
              
              
              -
              
              
              7,820
              
              
              -
              
              
              23,787Sundry
              
              
              3,841
              
              
              -
              
              
              3,841
              
              
              2739,555
              
              
              55,342
              
              
              117,936
              
              
              165,63887,980
              
              
              97,066
              
              
              263,139
              
              
              291,142
 
 18
  ASIA
        TIME
        CORPORATION
 (Formerly
        SRKP 9, Inc.)
 
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (restated)
 (Stated
        in US Dollars)
 
 THREE
        MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
 
 
 
 **5.**
              **Interest
                  expense**
 
 ***Three
                  months ended***
              
              ***Nine
                  months ended******September
                  30,***
              
              ***September
                  30,***
              
              ***September
                  30,***
              
              ***September
                  30,******2007***
              
              ***2006***
              
              ***2007***
              
              ***2006******(Unaudited)***
              
              ***(Unaudited)***
              
              ***(Unaudited)***
              
              ***(Unaudited)******$***
              
              ***$***
              
              ***$***
              
              ***$***Interest
                  on bank trust receipts
              
              
              291,499
              
              
              252,359
              
              
              759,539
              
              
              709,661Interest
                  on short-term bank loans
              
              
              10,844
              
              
              2,384
              
              
              27,608
              
              
              10,758Interest
                  on bank overdrafts
              
              
              11,859
              
              
              11,129
              
              
              33,050
              
              
              43,307Interest
                  on other loans
              
              
              2,314
              
              
              -
              
              
              10,738
              
              
              -316,516
              
              
              265,872
              
              
              830,935
              
              
              763,726
 
 
 **6.**
              **Income
                  taxes**
 
 ***Three
                  months ended***
              
              ***Nine
                  months ended******September
                  30,***
              
              ***September
                  30,***
              
              ***September
                  30,***
              
              ***September
                  30,******2007***
              
              ***2006***
              
              ***2007***
              
              ***2006******(Unaudited)***
              
              ***(Unaudited)***
              
              ***(Unaudited)***
              
              ***(Unaudited)******$***
              
              ***$***
              
              ***$***
              
              ***$***Hong
                  Kong profits taxCurrent
                  period
              
              
              697,737
              
              
              304,821
              
              
              1,414,608
              
              
              989,132
 
 The
        Company’s subsidiaries operating in Hong Kong are subject to a tax of 17.5% on
        the estimated assessable profits during the periods. During the three months
        ended September 30, 2007 and 2006, the effective tax rate was 19.5% and 17.9%,
        respectively. During the nine months ended September 30, 2007 and 2006, the
        effective tax rate was 26.5% and 17.7%, respectively. The effective tax rates
        for the three months and nine months ended September 30, 2007 would have
        been
        18.5% and 17.8% if non-deductible stock-based compensation and reverse merger
        costs had been excluded from the calculation.
  19
  ASIA
        TIME
        CORPORATION
 (Formerly
        SRKP 9, Inc.)
 
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (restated)
 (Stated
        in US Dollars)
 
 THREE
        MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
 
 **6.**
              **Income
                  taxes (continued)**
 
 
 Deferred
        tax (assets) liabilities as of September 30, 2007 and December 31, 2006 are
        composed of the following:
 
 ***As
                  of******September
                  30,***
              
              ***December
                  31,******2007***
              
              ***2006******(Unaudited)***
              
              ***(Audited)******$***
              
              ***$***Temporary
                  difference on accelerated taxdepreciation
                  on plant and equipment
              
              
              17,644
              
              
              17,669Deferred
                  tax liabilities, net
              
              
              17,644
              
              
              17,669Recognized
                  in the balance sheet:Net
                  deferred tax assets
              
              
              (19,536
              )
              
              (14,042
              )Net
                  deferred tax liabilities
              
              
              37,180
              
              
              31,71117,644
              
              
              17,669
 
 
 Deferred
        tax assets of the Company relating to the tax effect of the change in valuation
        allowance of the Company have not been accounted for in the financial statements
        for the nine months ended September 30, 2007 and 2006, as management determined
        that it was more likely than not that these tax losses would not be utilized
        in
        the foreseeable future. There was no other significant unprovided deferred
        taxation of the Company at September 30, 2007 or December 31,
        2006.
  20
 
 ASIA
        TIME
        CORPORATION
 (Formerly
        SRKP 9, Inc.)
 
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (restated)
 (Stated
        in US Dollars)
 
 THREE
        MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
 
 **7.**
              **Comprehensive
                  income**
 
 ***Three
                  months ended***
              
              ***Nine
                  months ended******September
                  30,***
              
              ***September
                  30,***
              
              ***September
                  30,***
              
              ***September
                  30,******2007***
              
              ***2006***
              
              ***2007***
              
              ***2006******(Unaudited)***
              
              ***(Unaudited)***
              
              ***(Unaudited)***
              
              ***(Unaudited)******$***
              
              ***$***
              
              ***$***
              
              ***$***Net
                  income
              
              
              2,880,699
              
              
              1,397,678
              
              
              3,922,954
              
              
              4,598,571Foreign
                  currency translation adjustment
              
              
              62,784
              
              
              (13,703
              )
              
              14,642
              
              
              (23,976
              )**Total
                  comprehensive income**
              
              
              2,943,483
              
              
              1,383,975
              
              
              3,937,596
              
              
              4,574,595
 
 **8.**
              **Prepaid
                  expenses and other
                  receivables**
 
 ***As
                  of******September
                  30,***
              
              ***December
                  31,******2007***
              
              ***2006******(Unaudited)***
              
              ***(Audited)******$***
              
              ***$***Rebate
                  receivable
              
              
              2,379,725
              
              
              -Interest
                  receivable
              
              
              -
              
              
              20,218Rental
                  receivable
              
              
              -
              
              
              46,314Other
                  receivable
              
              
              300,617
              
              
              -Purchase
                  deposits paid
              
              
              3,573,480
              
              
              1,530,372Sales
                  proceeds of intangible assets receivable
              
              
              -
              
              
              301,042Other
                  deposits and prepayments
              
              
              143,746
              
              
              203,1876,397,568
              
              
              2,101,133
 
 **9.**
              **Inventories**
 ***As
                    of******September
                    30,***
                
                ***December
                    31,******2007***
                
                ***2006******(Unaudited)***
                
                ***(Audited)******$***
                
                ***$***Completed
                    watches, at cost
                
                
                -
                
                
                1,745,648Watch
                    movements, at cost
                
                
                5,961,014
                
                
                4,500,5375,961,014
                
                
                6,246,185
  21
  ASIA
        TIME
        CORPORATION
 (Formerly
        SRKP 9, Inc.)
 
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (restated)
 
 (Stated
        in US Dollars)
 
 THREE
        MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
 
 **10.**
              **Plant
                  and equipment**
 
 ***As
                  of******September
                  30,***
              
              ***December
                  31,******2007***
              
              ***2006******(Unaudited)***
              
              ***(Audited)******$***
              
              ***$****Cost*Buildings
              
              
              242,007
              
              
              242,350Furniture
                  and fixtures
              
              
              489,780
              
              
              492,866Office
                  equipment
              
              
              58,816
              
              
              145,911Machinery
                  and equipment
              
              
              407,944
              
              
              321,626Moulds
              
              
              384,121
              
              
              384,665Motor
                  vehicles
              
              
              70,455
              
              
              45,9281,653,123
              
              
              1,633,346*Accumulated
                  depreciation*Buildings
              
              
              12,856
              
              
              8,441Furniture
                  and fixtures
              
              
              308,224
              
              
              237,508Office
                  equipment
              
              
              39,951
              
              
              100,612Machinery
                  and equipment
              
              
              224,203
              
              
              93,475Moulds
              
              
              316,232
              
              
              276,936Motor
                  vehicles
              
              
              32,184
              
              
              26,116933,650
              
              
              743,088*Net*Buildings
              
              
              229,151
              
              
              233,909Furniture
                  and fixtures
              
              
              181,556
              
              
              255,358Office
                  equipment
              
              
              18,865
              
              
              45,299Machinery
                  and equipment
              
              
              183,741
              
              
              228,151Moulds
              
              
              67,889
              
              
              107,729Motor
                  vehicles
              
              
              38,271
              
              
              19,812719,473
              
              
              890,258
 
 Depreciation
        expense included in administrative and other operating expenses for the three
        months and nine months ended September 30, 2007 and September 30, 2006 was
        $64,635, $193,499, $83,730 and $243,096, respectively.
 
 As
        at
        September 30, 2007 and December 31, 2006, the carrying amount of buildings
        pledged as security for the Company’s banking facilities amounted to $229,151
        and $233,909, respectively.
 
 22
  ASIA
        TIME
        CORPORATION
 (Formerly
        SRKP 9, Inc.)
 
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (restated)
 (Stated
        in US Dollars)
 
 THREE
        MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
 
 **11.**
              **Leasehold
                  lands**
 ***As
                    of******September
                    30,***
                
                ***December
                    31,******2007***
                
                ***2006******(Unaudited)***
                
                ***(Audited)******$***
                
                ***$****Cost*
                
                
                948,172
                
                
                949,514*Accumulated
                    amortization*
                
                
                (48,535
                )
                
                (31,234
                )*Net*
                
                
                899,637
                
                
                918,280Analyzed
                    for reporting purposes as:Current
                    asset
                
                
                17,193
                
                
                22,958Non-current
                    asset
                
                
                882,444
                
                
                895,322899,637
                
                
                918,280
 
 Amortization
        expense included in administrative and other operating expenses for the three
        months and nine months ended September 30, 2007 and September 30, 2006 were
        $5,765, $17,287, $8,187 and $17,481, respectively.
 
 As
        at
        September 30, 2007 and December 31, 2006, the carrying amount of leasehold
        lands
        pledged as security for the Company’s banking facilities amounted to $899,637
        and $918,280, respectively.
 
 
 **12.**
              **Held-to-maturity
                  investments**
 
 ***As
                  of******September
                  30,***
              
              ***December
                  31,******2007***
              
              ***2006******(Unaudited)***
              
              ***(Audited)******$***
              
              ***$***Hang
                  Seng Capital Guarantee Investment Fund-
                  30,000 units at $10 each, interest rate at 10.5% in 3.75
                  years*Cost*
              
              
              300,771
              
              
              301,196
 
 The
        carrying amount of the held-to-maturity investment approximates its fair
        value
        at September 30, 2007.
 
 As
        at
        September 30, 2007 and December 31, 2006, the carrying amount of the
        held-to-maturity investment pledged as security for the Company’s banking
        facilities amounted to $300,771 and $301,196, respectively.
  23
  ASIA
        TIME
        CORPORATION
 (Formerly
        SRKP 9, Inc.)
 
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (restated)
 (Stated
        in US Dollars)
 
 THREE
        MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
 
 **13.**
              **Intangible
                  assets**
 
 ***As
                  of******September
                  30,***
              
              ***December
                  31,******2007***
              
              ***2006******(Unaudited)***
              
              ***(Audited)******$***
              
              ***$****Cost*Trademarks
              
              
              420,863
              
              
              200,695Websites
              
              
              200,411
              
              
              421,459621,274
              
              
              622,154*Accumulated
                  amortization*Trademarks
              
              
              234,814
              
              
              112,389Websites
              
              
              142,292
              
              
              171,929377,106
              
              
              284,318*Net*Trademarks
              
              
              186,048
              
              
              88,306Websites
              
              
              58,119
              
              
              249,530244,168
              
              
              337,836
 
 Amortization
        expense included in administrative and other operating expenses for the three
        months and nine months ended September 30, 2007 and September 30, 2006 were
        $30,977, $92,884, $38,552  and
        $115,965, respectively.
 
 
 **14.**
              **Other
                  payables and accrued
                  liabilities**
 
 ***As
                  of******September
                  30,***
              
              ***December
                  31,******2007***
              
              ***2006******(Unaudited)***
              
              ***(Audited)******$***
              
              ***$***Accrued
                  expenses
              
              
              42,498
              
              
              181,352Sales
                  deposits received
              
              
              8,993
              
              
              9,00651,491
              
              
              190,358
 
  24
  ASIA
        TIME
        CORPORATION
 (Formerly
        SRKP 9, Inc.)
 
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (restated)
 (Stated
        in US Dollars)
 
 THREE
        MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
 
 **15.**
              **Advance
                  from a related****party**
 
 Advance
        from a related party for working capital is as follows:
 
 ***As
                  of******September
                  30,***
              
              ***December
                  31,******2007***
              
              ***2006******(Unaudited)***
              
              ***(Audited)******$***
              
              ***$***Advance
                  from a director
              
              
              12,268
              
              
              -
 
 The
        advance is interest-free, unsecured and has no fixed repayment
        terms.
 
 
 **16.**
              **Bank
                  borrowings**
 ***As
                    of******September
                    30,***
                
                ***December
                    31,******2007***
                
                ***2006******(Unaudited)***
                
                ***(Audited)******$***
                
                ***$***Secured:Bank
                    overdrafts repayable on demand
                
                
                591,908
                
                
                551,714Repayable
                    within one yearShort-term
                    bank loans
                
                
                283,956
                
                
                1,469,866Other
                    bank borrowings
                
                
                14,320,594
                
                
                11,183,58715,196,458
                
                
                13,205,167
 
 As
        of
        September 30, 2007, the above banking borrowings were secured by the
        following:
 
 (a)
              first
                  fixed legal charge over leasehold land and buildings with carrying
                  amounts
                  of $1,128,788 (notes 10 and 11);
 
 (b)
              charge
                  over bank deposits of $5,808,641;
 
 (c)
              charge
                  over held-to-maturity investments of $300,711 (note
                  12);
 
 (d)
              personal
                  guarantee executed by a director of the Company;
                  and
 
 (e)
              other
                  financial covenant.
 
 The
        bank
        borrowings require one of the Company’s subsidiaries to maintain a minimum net
        worth of $3,854,060. The Company’s subsidiary was in compliance with this
        requirement at September 30, 2007.
 
  25
  ASIA
        TIME
        CORPORATION
 (Formerly
        SRKP 9, Inc.)
 
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (restated)
 (Stated
        in US Dollars)
 
 THREE
        MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
 
 
 **17.**
              **Common
                  stock and convertible preferred
                  stock**
  A
        reconciliation of certain of the equity accounts of SRKP 9, Inc. and Times
        Manufacture as a result of the January 2007 reverse merger is as
        follows:
 
 **Series
                  A Convertible Preferred Stock**
              
              **Common
                  Stock**
              
              **Additional****($0.0001
                  Par Value)**
              
              **($0.0001
                  Par Value)**
              
              **Paid-In****Shares**
              
              **Amount**
              
              **Shares**
              
              **Amount**
              
              **Capital****Balances,
                  December 31, 2006**
              
              **0**
              
              **$**
              **0**
              
              
              **19,454,420**
              
              **$**
              **1,946**
              
              **$**
              **654,298**Jan.
                  23, 2007
              
              
              Shares
                  issued to SRKP 9 founders:Originally
                  issued on Jan. 3, 2006;
                deemed
                  issued on Jan. 23, 2007 for
                reverse
                  merger purposes
              
              
              -
              
              
              -
              
              
              2,700,000
              
              
              270
              
              
              (270
              )Issued
                  in connection with
                1.371188519-
                  for-1 retroactive stocksplit
              
              
              
              
              
              
              
              
              1,002,209
              
              
              100
              
              
              (100
              )Jan.
                  23, 2007
              
              
              Adjustment
                  to SRKP 9 accounts to
                reflect
                  reverse merger
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (7,999
              )Jan.
                  23, 2007
              
              
              Gross
                  proceeds from shares sold in offering
                -
                  initial closing
              
              
              1,749,028
              
              
              175
              
              
              -
              
              
              -
              
              
              2,256,071Jan.
                  23, 2007
              
              
              Offering
                  costs - initial closing (9% of gross)
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (203,062
              )Jan.23,2007
              
              
              Stock-based
                  compensation
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              1,852,494Feb.
                  9,2007
              
              
              Gross
                  proceeds from shares sold in offering
                -
                  final closing
              
              
              501,320
              
              
              50
              
              
              -
              
              
              -
              
              
              646,651Feb.
                  9,2007
              
              
              Offering
                  costs - initial closing
                (9%
                  of gross)
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (58,203
              )**Balances,
                  September 30, 2007**
              
              **2,250,348**
              
              **$**
              **225**
              
              
              **23,156,629**
              
              **$**
              **2,316**
              
              **$**
              **5,139,880**
   26
  
 ASIA
        TIME
        CORPORATION
 (Formerly
        SRKP 9, Inc.)
 
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (restated)
 (Stated
        in US Dollars)
 
 THREE
        MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
 
 
 **17.**
              **Common
                  stock and convertible preferred stock****(continued)**
 
 The
        Company conducted a private placement (“Private Placement”) pursuant to
        subscription agreements (the “Subscription Agreement”) entered into by the
        Company and certain investors. Pursuant to the Private Placement, the Company
        sold an aggregate of 2,250,348 shares of Series A Convertible Preferred Stock
        (“Series A Preferred Stock”) at $1.29 per share for aggregate gross proceeds of
        $2,902,947.
 
 At
        the
        initial closing of the Private Placement on January 23, 2007, the Company
        sold
        an aggregate of 1,749,028 shares of Series A Preferred Stock. At the second
        and
        final closing of the Private Placement on February 9, 2007, the Company sold
        an
        aggregate of 501,320 shares of Series A Preferred Stock.
 
 The
        shares of the Company’s Series A Preferred Stock are convertible into shares of
        common stock at a conversion price equal to the share purchase price, subject
        to
        adjustments. Accordingly, each share of Series A Preferred Stock is initially
        convertible into one share of common stock.
 
 If
        the
        Company at any time prior to the first trading day on which the common stock
        is
        quoted on the American Stock Exchange, the Nasdaq Capital Market, the Nasdaq
        Global Market or the New York Stock Exchange (each a “Trading Market”) sells or
        issues any shares of common stock in one or a series of transactions at an
        effective price less than such conversion price where the aggregate gross
        proceeds to the Company are at least $1,000,000, then the aforementioned
        conversion price shall be reduced to such effective price. Each share of
        Series A Convertible Preferred Stock shall automatically convert into
        shares of common stock if (i) the closing price of the common stock on the
        Trading Market for any 10 consecutive trading day period exceeds $3.00 per
        share, (ii) the shares of common stock underlying the Series A
        Convertible Preferred Stock are subject to an effective registration statement,
        and (iii) the daily trading volume of the common stock on a Trading Market
        exceeds 25,000 shares per day for 10 out of 20 prior trading days.
 
 The
        Company agreed to file a registration statement covering the common stock
        underlying the Series A Convertible Preferred Stock sold in the Private
        Placement within 30 days of the closing of the Share Exchange pursuant to
        the
        Subscription Agreement with each investor. The Company agreed to a penalty
        provision with respect to its obligation to register the Series A Convertible
        Preferred Stock. If the Company fails to register the Series A Convertible
        Preferred Stock due to failure on the part of the Company, the Company will
        pay
        to the holders of Series A Convertible Preferred Stock a cash payment equal
        to
        0.0333% of the purchase price of their respective shares for each business
        day
        of the failure. There is no maximum potential consideration to be transferred.
        The Company is required to file the registration statement no later than
        30 days
        after the consummation of the Private Placement and agreed to use reasonable
        best efforts to cause such Registration Statement to become effective within
        150
        days after the closing of the Private Placement, or 180 days if the Registration
        Statement is subject to a full review by the SEC. The Company is also required
        to use its reasonable best effort to maintain the Registration Statement
        effective for a period of 24 months at the Company's expense.
 
  27
  ASIA
        TIME
        CORPORATION
 (Formerly
        SRKP 9, Inc.)
 
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (restated)
 (Stated
        in US Dollars)
 
 THREE
        MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
 
 
 **17.**
              **Common
                  stock and convertible preferred stock****(continued)**
 
 The
        investors in the Private Placement also entered into a lock-up agreement
        pursuant to which they agreed not to sell their shares until our common stock
        begins to be listed or quoted on the New York Stock Exchange, American Stock
        Exchange, NASDAQ Global Market, NASDAQ Capital Market or the OTC Bulletin
        Board,
        after which their shares will automatically be released from the lock up
        every
        30 days on a pro rata over a nine month period beginning on the date that
        is 30
        days after listing or quotation of the shares.
 
 In
        connection with the Private Placement, in January and February 2007, Kwong
        Kai
        Shun, the Company's Chairman of the Board, Chief Executive Officer and Chief
        Financial Officer, entered into an agreement (the “Escrow Agreement”) with the
        investors in the Private Placement pursuant to which Mr. Kwong agreed to
        place
        2,326,000 shares of his common stock in escrow for possible distribution
        to the
        investors (the "Escrow Shares"). Pursuant to the Escrow Agreement, if the
        Company's net income for 2006 or 2007 (subject to specified adjustments)
        as set
        forth in its filings with the SEC is less than $6,300,000 or $7,700,000,
        respectively, a portion, if not all, of the Escrow Shares will be transferred
        to
        the investors based upon the Company's actual net income, if any, for such
        fiscal years. In addition, Mr. Kwong has agreed to purchase all of the shares
        of
        Series A Preferred Stock then held by such investors at a per share purchase
        price of $1.29 if the Company's common stock fails to be listed or quoted
        for
        trading on the American Stock Exchange, the Nasdaq Capital Market, the Nasdaq
        Global Market or the New York Stock Exchange on or before June 30, 2007,
        which
        has been subsequently extended to March 31, 2008. The number of shares that
        Mr.
        Kwong will distribute to shareholders will be determined by the number of
        shares
        of common stock that have not been sold by the investors, multiplied by the
        shortfall in a valuation agreed upon by the parties. The agreed upon shortfall
        in valuation is calculated using the $1.29 purchase price per share of the
        common stock, the actual amount of net income for either 2006 or 2007 (subject
        to specified adjustments) and a price earnings ratio set at 5 for 2006 and
        4 for
        2007. In no circumstances will Mr. Kwong be required to distribute in excess
        of
        2,326,000 shares. In the event that Mr. Kwong transfers any shares to investors,
        it is anticipated that the transfer will be effected under an exemption from
        registration pursuant to the Securities Act of 1933, as amended.
 
 The
        Company has accounted for the Escrow Shares as the equivalent of a
        performance-based compensatory stock plan between the Company and Mr. Kwong.
        Accordingly, the Company determined the fair value of the stock-based
        compensation related to the Escrow Shares by employing a binomial tree model,
        which is commonly used to value performance-based equity compensation packages.
        The valuation model used a volatility factor of 57%, a risk-free interest
        rate
        of 5.7%, and weekly steps to incorporate various possible scenarios for net
        income and common stock price. The probability at each quarter-end represents
        the probability of achieving the annual 2006 and 2007 net income targets
        specified in the Escrow Agreement. This quarterly probability is a time-weighted
        average of the implicit probabilities of achieving each net income target.
        The
        probabilities are calculated using multi-period scenario analyses through
        a
        backward induction tree, which generated an aggregate fair value for the
        Escrow
        Shares of $2,433,650. The inputs to the valuation mode were based on actual
        quarterly net income and estimates made by the Company that the required
        annual
        net income would be equaled or exceeded.
  28
  ASIA
        TIME
        CORPORATION
 (Formerly
        SRKP 9, Inc.)
 
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (restated)
 (Stated
        in US Dollars)
 
 THREE
        MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
 
 
 **17.**
              **Common
                  stock and convertible preferred stock****(continued)**
 
 
 As
        the
        performance conditions under this compensatory stock plan relate to the
        attainment of specific defined net income milestones for both 2006 and 2007,
        the
        Company has determined that the appropriate period over which to recognize
        the
        charge to operations for the aggregate fair value of this compensatory stock
        plan of $2,433,650 is the 11-month period from February 2007 through December
        2007, which is the period of vesting (which is equivalent to the period of
        benefit), since this is the period in which the Escrow Shares are subject
        to the
        Escrow  Agreement.
 
 The
        Company has allocated the $2,433,650 based on the quarterly weighted average
        of
        the implicit probabilities of achieving each net income target as
        follows:
 
 Three
                  Months Ended
              
              Cumulative
                  Probability Factor at Quarter-End
              
              Amount
                  Charged to OperationsMarch
                  31, 2007
              
              
              66.22
              %
              $
              1,611,563June
                  30, 2007
              
              
              67.89
              %
              
              40,642September
                  30, 2007
              
              
              76.12
              %
              
              200,289Total
                  through September 30, 2007
              
              
              
              
              $
              1,852,494
 
 
 Approximately
        66% of the aggregate fair value of $2,433,650 was charged to operations during
        the three months ended March 31, 2007 because at March 31, 2007 it appeared
        probable (but not certain) that the Company would meet or exceed the required
        net income for 2006, and net income for the three months ended March 31,
        2007
        was within expectations. For the three months ended June 30, 2007, net income
        was below the expected growth rate and annualized quarterly net income was
        below
        the amount required to reach the 2007 required net income, as a result of
        which
        the probability factor at June 30, 2007 increased only slightly. For the
        three
        months ended September 30, 2007, net income had recovered to expected growth
        rates, as a result of which the probability factor at September 30, 2007
        had
        increased to approximately 76% that the Company would reach the 2007 required
        income.
 
 The
        Company met the 2006 net income requirement of $6,300,000. However, at September
        30, 2007, it was still possible that the 2007 net income requirement would
        not
        be met. As the Company closes 2007 and completes its audit, the final expense
        related to this matter for 2007 will be determined and recorded. Based on
        2007
        final net income (as defined), the Escrow Shares will either be partially
        or
        fully returned to Mr. Kwong or partially or fully distributed to the investors
        in the Private Placement when the results for 2007 are known.
  29
  ASIA
        TIME
        CORPORATION
 (Formerly
        SRKP 9, Inc.)
 
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (restated)
 (Stated
        in US Dollars)
 
 THREE
        MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
 
 
 **17.**
              **Common
                  stock and convertible preferred stock****(continued)**
 
 If
        the
        Company pays a stock dividend on the shares of common stock, subdivide
        outstanding shares of common stock into a larger number of shares, combine,
        through a reverse stock split, outstanding shares of the common stock into
        a
        smaller number of shares or issues, in the event of a reclassification of
        shares
        of the common stock, any shares of capital stock, then the conversion price
        of
        the Series A Preferred Stock will be adjusted as follows: the conversion
        price
        will be multiplied by a fraction, of which (i) the numerator will be the
        number
        of shares of common stock outstanding immediately before one of the events
        described above and (ii) the denominator will be the number of shares of
        common
        stock outstanding immediately after such event.
 
 Holder
        of
        the Series A Convertible Preferred Stock have the right to one vote per share
        of
        common stock issuable upon conversion of the shares underlying any shares
        of
        Preferred Stock outstanding as of the record date for purposes of determining
        which holders have the right to vote with respect to any matters brought
        to a
        vote before the Company’s holders of common stock.
 
 In
        the
        event of any liquidation, dissolution, or winding up of the Company, the
        holders
        of the Series A Convertible Preferred Stock are entitled to receive in
        preference to the holders of common stock an amount per share of $1.29 plus
        any
        accrued but unpaid dividends. If the Company’s assets are insufficient to pay
        the above amounts in full, then all of the Company’s assets will be ratably
        distributed among the holders of the Series A Convertible Preferred Stock
        in
        accordance with the respective amounts that would be payable on such shares
        if
        all amounts payable were paid in full.
 
 There
        are
        no additional specific dividend rights or redemption rights of holders of
        the
        Series A Convertible Preferred Stock.
 
 If
        the
        Company redeems or acquired any shares of the Series A Convertible Preferred
        Stock are converted, those shares will resume the status of authorized but
        unissued shares of preferred stock and will no longer be designated as Series
        A
        Convertible Preferred Stock.
 
 As
        long
        as any shares of Series A Convertible Preferred Stock are outstanding, the
        Company cannot alter or adversely change the powers, preference or rights
        given
        to the Series A Convertible Preferred Stock holders, without the affirmative
        vote of those holders.
   30
  ASIA
        TIME
        CORPORATION
 (Formerly
        SRKP 9, Inc.)
 
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (restated)
 (Stated
        in US Dollars)
 
 THREE
        MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
 
 
 **18.**
              **Pension
                  plans**
 
 The
        Company participates in a defined contribution pension scheme under the
        Mandatory Provident Fund Schemes Ordinance “MPF Scheme” for all its eligible
        employees in Hong Kong.
 
 The
        MPF
        Scheme is available to all employees aged 18 to 64 with at least 60 days
        of
        service in the employment in Hong Kong. Contributions are made by the Company’s
        subsidiary operating in Hong Kong at 5% of the participants’ relevant income
        with a ceiling of HK$20,000. The participants are entitled to 100% of the
        Company’s contributions together with accrued returns irrespective of their
        length of service with the Company, but the benefits are required by law
        to be
        preserved until the retirement age of 65. The only obligation of the Company
        with respect to MPF Scheme is to make the required contributions under the
        plan.
 
 The
        assets of the schemes are controlled by trustees and held separately from
        those
        of the Company. Total pension cost was $20,074, $32,597, $13,627 and $22,619
        for
        the three months and nine months ended September 30, 2007 and 2006,
        respectively.
 
 
 **19.**
              **Commitments
                  and contingencies**
 
 Operating
        leases commitments
 
 The
        Company leases office premises under various non-cancelable operating lease
        agreements that expire at various dates through years 2007 to 2008,  with
        an
        option to renew the lease. All leases are on a fixed repayment basis. None
        of
        the leases includes contingent rentals. Minimum future commitments under
        these
        agreements payable as of September 30, 2007 are as follows:-
 
 Period
                  ending September 30,2008
              
              $
              79,6362009
              
              
              12,759$
              92,395
 
 Rental
        expenses for the three months and nine months ended September 30, 2007 and
        2006
        were $16,142, $66,444, $7,225 and $57,527, respectively.
  31
  ASIA
        TIME
        CORPORATION
 (Formerly
        SRKP 9, Inc.)
 
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (restated)
 (Stated
        in US Dollars)
 
 THREE
        MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
 
 **20.**
              **Segment
                  Information**
 
 For
        management purposes, the Company is currently organized into two principal
        activities - sale of watch movements (components) and sale of completed watches.
        These principal activities are the basis on which the Company reports its
        primary segment information.
 
 **Three
                  months ended**
                **September
                  30, 2007**
              
              **Watch
                  Movements**
              
              **Completed
                  Watches**
              
              **Total***$*
              
              *$*
              
              *$*Sales
              
              
              18,366,450
              
              
              4,606,195
              
              
              22,972,645Cost
                  of sales
              
              
              (15,947,637
              )
              
              (2,462,887
              )
              
              (18,410,524
              )Segment
                  result
              
              
              2,418,813
              
              
              2,143,308
              
              
              4,562,121**Three
                  months ended**
                **September
                  30, 2006**
              
              
              **Watch
                  Movements**
              
              
              **Completed
                  Watches**
              
              
              **Total***$*
              
              
              *$*
              
              
              *$*Sales
              
              
              17,340,582
              
              
              2,306,627
              
              
              19,647,209Cost
                  of sales
              
              
              (16,094,160
              )
              
              (1,238,542
              )
              
              (17,332,702
              )Segment
                  result
              
              
              1,246,422
              
              
              1,068,085
              
              
              2,314,507
 
 
 **Nine
                  months ended**
                **September
                  30, 2007**
              
              **Watch
                  Movements**
              
              **Completed
                  Watches**
              
              **Total***$*
              
              *$*
              
              *$*Sales
              
              
              56,600,993
              
              
              8,359,231
              
              
              64,960,224Cost
                  of sales
              
              
              (50,356,664
              )
              
              (4,472,729
              )
              
              (54,829,393
              )Segment
                  result
              
              
              6,244,329
              
              
              3,886,502
              
              
              10,130,831**Nine
                  months ended**
                **September
                  30, 2006**
              
              
              **Watch
                  Movements**
              
              
              **Completed
                  Watches**
              
              
              **Total***$*
              
              
              *$*
              
              
              *$*Sales
              
              
              55,217,795
              
              
              7,656,600
              
              
              62,874,395Cost
                  of sales
              
              
              (51,577,493
              )
              
              (4,021,802
              )
              
              (55,599,295
              )Segment
                  result
              
              
              3,640,302
              
              
              3,634,798
              
              
              7,275,100
 
  32
  ASIA
        TIME
        CORPORATION
 (Formerly
        SRKP 9, Inc.)
 
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (restated)
 (Stated
        in US Dollars)
 
 THREE
        MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
 
 
 **20.**
              **Segment
                  Information (continued)**
 
 The
        Company’s operations are conducted primarily in Hong Kong and China, and the
        Company’s sales, gross profit and total assets attributable to other
        geographical areas are less than **** 10%
        of
        the Company’s corresponding consolidated totals for the three months and nine
        months ended September 30, 2007 and 2006. Consequently, no segment information
        by geographical areas is presented.
 
 **21.**
              **Restatement******
 
 The
        Company has restated its financial statements for the three months and nine
        months ended September 30, 2007 and 2006 to correct various accounting errors
        and/or disclosure omissions.
 
 The
        restated financial statements include adjustments to account for all fees
        and
        costs related to the January 2007 reverse merger (see Note 1) as a charge
        to
        operations, to account for inventories by adjusting watch movement costing
        for
        the effects of vendor incentives from an as received basis to an accrual
        basis,
        as the Company was able to estimate the value of the incentives as inventory
        is
        purchased, and to recognize stock-based compensation cost related to the
        Escrow  Agreement
        (see Note 17). As a result of these adjustments, various income tax calculations
        were also revised, which effected net income and also caused reclassifications
        to cash flows. The Company has also corrected average and actual shares
        outstanding retroactively (and related earnings per share calculations) to
        reflect the January 2007 reverse merger (see Note 1). The Company also made
        various changes to footnote disclosures relating to these
        revisions.
 
 Below
        are
        summaries of the financial statement line items that were affected by the
        restatements described above.
   33
  ASIA
        TIME
        CORPORATION
 (Formerly
        SRKP 9, Inc.)
 
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (restated)
 (Stated
        in US Dollars)
 
 THREE
        MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
 
 **21.**
              **Restatement****(continued)**
 
 **Statement
        of Operations**
 **Nine
        months ended September 30, 2007 (Unaudited)**
 
 ***2007***
              
              ***2007***
              
              ***2007******(As
                  originally***
              
              ***(Restated)***
              
              ***(Effect
                  of******reported)***
              
              
              
              ***adjustments)******$***
              
              ***$***
              
              ***$***Net
                  sales
              
              
              64,960,224
              
              
              64,960,224
              
              
              -Cost
                  of sales
              
              
              (54,644,056
              )
              
              (54,829,393
              )
              
              (185,337
              )Gross
                  profit
              
              
              10,316,168
              
              
              10,130,831
              
              
              (185,337
              )Other
                  income
              
              
              145,203
              
              
              145,203
              
              
              -Depreciation
              
              
              (193,499
              )
              
              (193,499
              )
              
              -Administrative
                  and other operating
                expenses,
                  including stock-based
                compensation
              
              
              (1,443,283
              )
              
              (3,295,777
              )
              
              (1,852,494
              )Income
                  from operations
              
              
              8,824,589
              
              
              6,786,758
              
              
              (2,037,831
              )Fees
                  and costs related to reverse merger
              
              
              (736,197
              )
              
              (736,197
              )
              
              -Other
                  income
              
              
              117,936
              
              
              117,936
              
              
              -Interest
                  expense
              
              
              (830,935
              )
              
              (830,935
              )
              
              -Income
                  before taxes
              
              
              7,375,393
              
              
              5,337,562
              
              
              (2,037,831
              )Income
                  taxes
              
              
              (1,512,523
              )
              
              (1,414,608
              )
              
              97,915Net
                  income
              
              
              5,862,870
              
              
              3,922,954
              
              
              (1,939,916
              )Earnings
                  per common share-
                  Basic
              
              
              0.26
              
              
              0.17
              
              
              (0.09
              )-
                  Diluted
              
              
              0.24
              
              
              0.16
              
              
              (0.08
              )Weighted
                  average common shares-
                  Basic
              
              
              22,844,721
              
              
              22,844,721
              
              
              --
                  Diluted
              
              
              24,874,262
              
              
              24,874,262
              
              
              -
 
  34
  ASIA
        TIME
        CORPORATION
 (Formerly
        SRKP 9, Inc.)
 
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (restated)
 (Stated
        in US Dollars)
 
 THREE
        MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
 
 **21.**
              **Restatement
                  (continued)******
 
 **Statement
        of Operations**
 **Nine
        months ended September 30, 2006 (Unaudited)**
 
 ***2006***
              
              ***2006***
              
              ***2006******(As
                  originally***
              
              ***(Restated)***
              
              ***(Effect
                  of******reported)***
              
              
              
              ***adjustments)******$***
              
              ***$***
              
              ***$***Net
                  sales
              
              
              62,874,395
              
              
              62,874,395
              
              
              -Cost
                  of sales
              
              
              (56,510,946
              )
              
              (55,599,295
              )
              
              911,651Gross
                  profit
              
              
              6,363,449
              
              
              7,275,100
              
              
              911,651Other
                  income
              
              
              125,504
              
              
              125,504
              
              
              -Depreciation
              
              
              (243,096
              )
              
              (243,096
              )
              
              -Administrative
                  and other operating expenses, including stock-based compensation
              
              
              (971,717
              )
              
              (971,717
              )
              
              -Income
                  from operations
              
              
              5,274,140
              
              
              6,185,791
              
              
              911,651Fees
                  and costs related to reverse merger
              
              
              -
              
              
              -
              
              
              -Other
                  income
              
              
              165,638
              
              
              165,638
              
              
              -Interest
                  expense
              
              
              (763,726
              )
              
              (763,726
              )
              
              -Income
                  before taxes
              
              
              4,676,052
              
              
              5,587,703
              
              
              911,651Income
                  taxes
              
              
              (829,593
              )
              
              (989,132
              
              
              (159,539
              )Net
                  income
              
              
              3,846,459
              
              
              4,598,571
              
              
              752,112Earnings
                  per common share-
                  Basic and Diluted
              
              
              0.20
              
              
              0.24
              
              
              0.04Weighted
                  average common shares-
                  Basic and Diluted
              
              
              19,454,420
              
              
              19,454,420
              
              
              -
 
  35
  ASIA
        TIME
        CORPORATION
 (Formerly
        SRKP 9, Inc.)
 
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (restated)
 (Stated
        in US Dollars)
 
 THREE
        MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
 
 **21.**
              **Restatement
                  (continued)**
 
 **Statement
        of Operations**
 **Three
        months ended September 30, 2007 (Unaudited)**
 
 ***2007***
              
              ***2007***
              
              ***2007******(As
                  originally***
              
              ***(Restated)***
              
              ***(Effect
                  of******reported)***
              
              
              
              ***adjustments)******$***
              
              ***$***
              
              ***$***Net
                  sales
              
              
              22,972,645
              
              
              22,972,645
              
              
              -Cost
                  of sales
              
              
              (18,099,186
              )
              
              (18,410,524
              )
              
              (311,338
              )Gross
                  profit
              
              
              4,873,459
              
              
              4,562,121
              
              
              (311,338
              )Other
                  income
              
              
              48,425
              
              
              48,425
              
              
              -Depreciation
              
              
              (64,635
              )
              
              (64,635
              )
              
              -Administrative
                  and other operating
                expenses,
                  including stock-based
                compensation
              
              
              (490,225
              )
              
              (690,514
              )
              
              (200,289
              )Income
                  from operations
              
              
              4,367,024
              
              
              3,855,397
              
              
              (511,627
              )Fees
                  and costs related to reverse merger
              
              
              -
              
              
              -
              
              
              -Other
                  income
              
              
              39,555
              
              
              39,555
              
              
              -Interest
                  expense
              
              
              (316,516
              )
              
              (316,516
              )
              
              -Income
                  before taxes
              
              
              4,090,063
              
              
              3,578,436
              
              
              (511,627
              )Income
                  taxes
              
              
              (752,221
              )
              
              (697,737
              )
              
              54,484Net
                  income
              
              
              3,337,842
              
              
              2,880,699
              
              
              (457,143
              )Earnings
                  per common share-
                  Basic
              
              
              0.14
              
              
              0.12
              
              
              (0.02
              )-
                  Diluted
              
              
              0.13
              
              
              0.11
              
              
              (0.02
              )Weighted
                  average common shares-
                  Basic
              
              
              23,156,629
              
              
              23,156,629
              
              
              --
                  Diluted
              
              
              25,406,977
              
              
              25,406,977
              
              
              -
 
  36
  ASIA
        TIME
        CORPORATION
 (Formerly
        SRKP 9, Inc.)
 
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (restated)
 (Stated
        in US Dollars)
 
 THREE
        MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
 
 **21.**
              **Restatement
                  (continued)**
 
 **Statement
        of Operations**
 **Three
        months ended September 30, 2006 (Unaudited)**
 
 ***2006***
              
              ***2006***
              
              ***2006******(As
                  originally***
              
              ***(Restated)***
              
              ***(Effect
                  of******reported)***
              
              
              
              ***adjustments)******$***
              
              ***$***
              
              ***$***Net
                  sales
              
              
              19,647,209
              
              
              19,647,209
              
              
              -Cost
                  of sales
              
              
              (16,730,052
              )
              
              (17,332,702
              )
              
              (602,650
              )Gross
                  profit
              
              
              2,917,157
              
              
              2,314,507
              
              
              (602,650
              )Other
                  income
              
              
              41,724
              
              
              41,724
              
              
              -Depreciation
              
              
              (83,730
              )
              
              (83,730
              )
              
              -Administrative
                  and other operatingexpenses
              
              
              (359,472
              )
              
              (359,472
              )
              
              -Income
                  from operations
              
              
              2,515,679
              
              
              1,913,029
              
              
              (602,650
              )Fees
                  and costs related to reverse merger
              
              
              -
              
              
              -
              
              
              -Other
                  income
              
              
              55,342
              
              
              55,342
              
              
              -Interest
                  expense
              
              
              (265,872
              )
              
              (265,872
              )
              
              -Income
                  before taxes
              
              
              2,305,149
              
              
              1,702,499
              
              
              (602,650
              )Income
                  taxes
              
              
              (410,284
              )
              
              (304,821
              )
              
              105,463Net
                  income
              
              
              1,894,865
              
              
              1,397,678
              
              
              (497,187
              )Earnings
                  per common share-
                  Basic and diluted
              
              
              0.10
              
              
              0.07
              
              
              (0.03
              )Weighted
                  average common shares-
                  Basic and diluted
              
              
              19,454,420
              
              
              19,454,420
              
              
              -
  37
  ASIA
        TIME
        CORPORATION
 (Formerly
        SRKP 9, Inc.)
 
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (restated)
 (Stated
        in US Dollars)
 
 THREE
        MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
 
 **21.**
              **Restatement
                  (continued)**
 
 **Consolidated
        Balance Sheet**
 **September
        30, 2007 (Unaudited)**
 
 ***2007***
              
              ***2007***
              
              ***2007******(As
                  originally***
              
              ***(Restated)***
              
              ***(Effect
                  of******reported******)***
              
              
              
              ***adjustments******)******$***
              
              ***$***
              
              ***$*****ASSETS**Current
                  Assets:Cash
                  and cash equivalents
              
              
              166,216
              
              
              166,216
              
              
              -Restricted
                  cash
              
              
              5,551,704
              
              
              5,551,704
              
              
              -Accounts
                  receivable
              
              
              15,482,635
              
              
              15,482,635
              
              
              -Prepaid
                  expenses and other receivables
              
              
              6,397,568
              
              
              6,397,568
              
              
              -Income
                  tax prepayments
              
              
              -
              
              
              -
              
              
              -Inventories
              
              
              6,520,527
              
              
              5,961,014
              
              
              (559,513
              )Prepaid
                  lease payments
              
              
              17,193
              
              
              17,193
              
              
              -Total
                  Current Assets
              
              
              34,135,843
              
              
              33,576,330
              
              
              (559,513
              )Deferred
                  tax assets
              
              
              19,536
              
              
              19,536
              
              
              -Plant
                  and equipment, net
              
              
              719,473
              
              
              719,473
              
              
              -Leasehold
                  lands
              
              
              882,444
              
              
              882,444
              
              
              -Held-to-maturity
                  investments
              
              
              300,771
              
              
              300,771
              
              
              -Intangible
                  assets
              
              
              244,168
              
              
              244,168
              
              
              -Restricted
                  cash - non-current
              
              
              256,937
              
              
              256,937
              
              
              -**TOTAL
                  ASSETS**
              
              
              36,559,172
              
              
              35,999,659
              
              
              (559,513
              )**LIABILITIES
                  AND STOCKHOLDERS’ EQUITY****LIABILITIES**Current
                  Liabilities:Accounts
                  payable
              
              
              1,075,980
              
              
              1,075,980
              
              
              -Other
                  payables and accrued liabilities
              
              
              51,491
              
              
              51,491
              
              
              -Advance
                  from a related party
              
              
              12,268
              
              
              12,268
              
              
              -Income
                  taxes payable
              
              
              2,854,788
              
              
              2,691,393
              
              
              (163,395
              )Bank
                  borrowings
              
              
              15,196,458
              
              
              15,196,458
              
              
              -Total
                  Current Liabilities
              
              
              19,190,985
              
              
              19,027,590
              
              
              (163,395
              )Deferred
                  tax liabilities
              
              
              37,180
              
              
              37,180
              
              
              -**TOTAL
                  LIABILITIES**
              
              
              19,228,165
              
              
              19,064,770
              
              
              (163,395
              )**COMMITMENTS
                  AND CONTINGENCIES**
  38
  ASIA
        TIME
        CORPORATION
 (Formerly
        SRKP 9, Inc.)
 
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (restated)
 (Stated
        in US Dollars)
 
 THREE
        MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
 
 **21.**
              **Restatement
                  (continued)**
 
 **Consolidated
        Balance Sheet (Continued)**
 **September
        30, 2007 (Unaudited)**
 
 ***2007***
              
              ***2007***
              
              ***2007******(As
                  originally***
              
              ***(Restated)***
              
              ***(Effect
                  of******reported******)***
              
              
              
              ***adjustments******)******$***
              
              ***$***
              
              ***$*****STOCKHOLDERS’
                  EQUITY**Preferred
                  stockPar
                  value:US$0.0001Authorized:
                  10,000,000 sharesIssued
                  and outstanding: 2007 - 2,250,348 shares
              
              
              225
              
              
              225
              
              
              -Common
                  stockPar
                  value:US$0.0001Authorized:
                  100,000,000 sharesIssued
                  and outstanding: 2007 - 23,156,629 shares
              
              
              2,316
              
              
              2,316
              
              
              -Additional
                  paid-in capital
              
              
              3,287,386
              
              
              5,139,880
              
              
              1,852,494Accumulated
                  other comprehensive income
              
              
              22,112
              
              
              22,112
              
              
              -Retained
                  earnings
              
              
              14,018,968
              
              
              11,770,356
              
              
              (2,248,612
              )**TOTAL
                  STOCKHOLDERS’ EQUITY**
              
              
              17,331,007
              
              
              16,934,889
              
              
              (396,118
              )**TOTAL
                  LIABILITIES AND STOCKHOLDERS’ EQUITY**
              
              
              36,559,172
              
              
              35,999,659
              
              
              (559,513
              )
 
  39
  ASIA
        TIME
        CORPORATION
 (Formerly
        SRKP 9, Inc.)
 
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (restated)
 (Stated
        in US Dollars)
 
 THREE
        MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
 
 **21.**
              **Restatement
                  (continued)**
 
 **Statements
        of Cash Flows**
 **Nine
        months ended September 30, 2007 (Unaudited)**
 
 ***2007***
              
              ***2007***
              
              ***2007******(As
                  originally***
              
              ***(Restated)***
              
              ***(Effect
                  of******reported)***
              
              
              
              ***Adjustments)*****Cash
                  flows from operating activities**Net
                  income
              
              
              5,862,870
              
              
              3,922,954
              
              
              (1,939,916
              )Adjustments
                  to reconcile net income to net cashused
                  in operating activities:Stock-based
                  compensation
              
              
              -
              
              
              1,852,494
              
              
              1,852,494Amortization
                  of intangible assets
              
              
              92,884
              
              
              92,884
              
              
              -Amortization
                  of leasehold lands
              
              
              17,287
              
              
              17,287
              
              
              -Depreciation
              
              
              193,499
              
              
              193,499
              
              
              -Loss
                  on disposal of plant and equipment
              
              
              5,406
              
              
              5,406
              
              
              -Income
                  taxes
              
              
              1,512,523
              
              
              1,414,608
              
              
              (97,915
              )Changes
                  in operating assets and liabilities:(Increase)
                  decrease in -Accounts
                  receivable
              
              
              (7,281,110
              )
              
              (7,281,110
              )
              
              -Prepaid
                  expenses and other receivables
              
              
              (4,260,214
              )
              
              (4,260,214
              )
              
              -Inventories
              
              
              90,180
              
              
              275,517
              
              
              185,337Increase
                  (decrease) in -Accounts
                  payable
              
              
              306,241
              
              
              306,241
              
              
              -Other
                  payables and accrued liabilities
              
              
              (138,142
              )
              
              (138,142
              )
              
              -Income
                  taxes payable
              
              
              (112,601
              )
              
              (112,601
              )
              
              -Net
                  cash used in operating activities
              
              
              (3,711,177
              )
              
              (3,711,177
              )
              
              -**Cash
                  flows from investing activities**Acquisition
                  of plant and equipment
              
              
              (30,257
              )
              
              (30,257
              )
              
              -Proceeds
                  from disposal of plant and equipment
              
              
              320
              
              
              320
              
              
              -Net
                  cash used in investing activities
              
              
              (29,937
              )
              
              (29,937
              )
              
              -**Cash
                  flows from financing activities**Proceeds
                  from issuance of Series A convertible preferred stock
              
              
              2,641,683
              
              
              2,641,683
              
              
              -Proceeds
                  from new short-term bank loans
              
              
              2,816,620
              
              
              2,816,620
              
              
              -Repayment
                  of short-term bank loans
              
              
              (4,029,839
              )
              
              (4,029,839
              )
              
              -Net
                  advances under other short-term bank borrowings
              
              
              3,175,698
              
              
              3,175,698
              
              
              -Increase
                  in restricted cash
              
              
              (1,031,003
              )
              
              (1,031,003
              )
              
              -Advances
                  from related parties
              
              
              (20,773
              )
              
              (20,773
              )
              
              -Decrease
                  in bank overdrafts
              
              
              40,840
              
              
              40,840
              
              
              -Net
                  cash provided by financing activities
              
              
              3,593,226
              
              
              3,593,226
              
              
              -Net
                  decrease in cash and cash equivalents
              
              
              (147,888
              )
              
              (147,888
              )
              
              -Effect
                  of foreign currency translation on cash and cash
                  equivalents
              
              
              (2,517
              )
              
              (2,517
              )
              
              -Cash
                  and cash equivalents - beginning of period
              
              
              316,621
              
              
              316,621
              
              
              -Cash
                  and cash equivalents - end of period
              
              
              166,216
              
              
              166,216
              
              
              -
 
 40
  ASIA
        TIME
        CORPORATION
 (Formerly
        SRKP 9, Inc.)
 
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (restated)
 (Stated
        in US Dollars)
 
 THREE
        MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
 
 **21.**
              **Restatement
                  (continued)**
 
 **Statement
        of Cash Flows**
 **Nine
        months ended September 30, 2006 (Unaudited)**
 
 ***2006***
              
              ***2006***
              
              ***2006******(As
                  originally***
              
              ***(Restated)***
              
              ***(Effect
                  of******reported)***
              
              
              
              ***adjustments)*****Cash
                  flows from operating activities**Net
                  income
              
              
              3,846,459
              
              
              4,598,571
              
              
              752,112Adjustments
                  to reconcile net income to net cashprovided
                  by operating activities:Amortization
                  of intangible assets
              
              
              115,965
              
              
              115,965
              
              
              -Amortization
                  of leasehold lands
              
              
              17,481
              
              
              17,481
              
              
              -Depreciation
              
              
              243,096
              
              
              243,096
              
              
              -Dividend
                  income
              
              
              (4,486
              )
              
              -
              
              A
              4,486Loss
                  on disposal of plant and equipment
              
              
              7,725
              
              
              7,725
              
              
              -Income
                  taxes
              
              
              829,593
              
              
              989,132
              
              
              159,539Changes
                  in operating assets and liabilities:(Increase)
                  decrease in -Accounts
                  receivable
              
              
              (3,264,603
              )
              
              (3,264,603
              )
              
              -Prepaid
                  expenses and other receivables
              
              
              (1,118,481
              )
              
              (1,118,481
              )
              
              -Inventories
              
              
              1,679,040
              
              
              767,389
              
              
              (911,651
              )Increase
                  (decrease) in -Accounts
                  payable
              
              
              (279,202
              )
              
              (279,202
              )
              
              -Other
                  payables and accrued liabilities
              
              
              (37,981
              )
              
              (37,981
              )
              
              -Income
                  taxes payable
              
              
              (16,055
              )
              
              (16,055
              )
              
              -Unearned
                  revenue
              
              
              (1,595,187
              )
              
              (1,595,187
              )
              
              -Net
                  cash provided by operating activities
              
              
              423,364
              
              
              427,850
              
              
              4,486**Cash
                  flows from investing activities**Acquisition
                  of plant and equipment
              
              
              (1,164,095
              )
              
              (1,164,095
              )
              
              -Proceeds
                  from disposal of plant and equipment
              
              
              2,034
              
              
              2,034
              
              
              -Dividend
                  received
              
              
              4,486
              
              
              -
              
              A
              (4,486
              )Net
                  cash used in investing activities
              
              
              (1,157,575
              )
              
              (1,162,061
              )
              
              (4,486
              )**Cash
                  flows from financing activities**Proceeds
                  from new short-term bank loans
              
              
              33,932
              
              
              33,932
              
              
              -Repayment
                  of short-term bank loans
              
              
              (259,532
              )
              
              (259,532
              )
              
              -Net
                  advances under other short term bank borrowings
              
              
              3,925,836
              
              
              3,925,836
              
              
              -Increase
                  in restricted cash
              
              
              (1,180,479
              )
              
              (1,180,479
              )
              
              -Advances
                  from related parties
              
              
              (28,798
              )
              
              (28,798
              )
              
              -Decrease
                  in bank overdrafts
              
              
              131,057
              
              
              131,057
              
              
              -Dividends
                  paid
              
              
              (2,445,712
              )
              
              (2,445,712
              )
              
              -Net
                  cash provided by financing activities
              
              
              176,304
              
              
              176,304
              
              
              -Net
                  decrease in cash and cash equivalents
              
              
              (557,907
              )
              
              (557,907
              )
              
              -Effect
                  of foreign currency translation on cash and cash
                  equivalents
              
              
              (538
              )
              
              (538
              )
              
              -Cash
                  and cash equivalents - beginning of period
              
              
              778,563
              
              
              778,563
              
              
              -Cash
                  and cash equivalents - end of period
              
              
              220,118
              
              
              220,118
              
              
              -
 *___*
 *A
        -
        to eliminate non-cash activity related to dividends.*
 
 41
 
 ASIA
        TIME
        CORPORATION
 (Formerly
        SRKP 9, Inc.)
 
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (restated)
 (Stated
        in US Dollars)
 
 THREE
        MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
 
 
 **22.**
              **Subsequent
                  Events**
 
 **Bond
        and Warrant Transaction**
 
 On
        November 13, 2007, the Company closed a financing transaction under Regulation
        S
        with ABN AMRO Bank N.V. (the “Subscriber”) issuing (i) US$8,000,000 Variable
        Rate Convertible Bonds due 2012 (the “Bonds”) and (ii) warrants to purchase
        600,000 shares of common stock of the Company expiring 2010 (the “Warrants”).
        The financing transaction was completed in accordance with a subscription
        agreement entered into by the Company and the Subscriber dated October 31,
        2007.
 
 US
        $8,000,000 Variable Rate Convertible Bonds
 
 The
        Bonds
        were issued further to a trust deed between the Company and The Bank of New
        York, London Branch, dated November 13, 2007 (the “Trust Deed”) and are
        represented by the global certificate in the form as set forth in the Trust
        Deed. The Bonds are subject to a paying and conversion agency agreement between
        the Company, The Bank of New York, and The Bank of New York, London Branch.
        The
        Bonds were subscribed at a price equal to 97% of their principal amount,
        which
        is the issue price of 100% less a 3% commission to the Subscriber. The Terms
        and
        Conditions of the Bonds (the “Terms”) contained in the Trust Deed, set forth,
        among other things, the following terms:
 
 ●
              The
                  Bonds bear cash interest from November 13, 2007 at the rate of
                  6% per
                  annum for the first year after November 13, 2007 and 3% per annum
                  thereafter, of the principal amount of the
                  Bonds.
 
 
 ●
              Each
                  Bond is convertible at the option of the holder at any time on
                  and after
                  365 days after the date the Company’s shares of common stock commence
                  trading on the American Stock Exchange or any alternative stock
                  exchange
                  (the “Listing Date”) into shares of common stock of the Company at an
                  initial per share conversion price (“Conversion Price”) equal to the price
                  per share at which shares are sold in the Company’s proposed initial
                  public offering on the American Stock Exchange (“AMEX”) with minimum gross
                  proceeds of US$2,000,000. If no initial public offering has occurred
                  prior
                  to conversion, the Conversion Price will be US$2.00, subject to
                  adjustment
                  according to the Terms of the Bonds. No Bonds may be converted
                  after the
                  close of business on November 13, 2012, or if such Bond is called
                  for
                  redemption before the maturity date, then up to the close of business
                  on a
                  date no later than seven business days prior to the date fixed
                  for
                  redemption thereof.
  42
  ASIA
        TIME
        CORPORATION
 (Formerly
        SRKP 9, Inc.)
 
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (restated)
 (Stated
        in US Dollars)
 
 THREE
        MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
 
 **22.**
              **Subsequent
                  Events (continued)**
 
 
 ●
              The
                  number of shares of the Company’s common stock to be issued on conversion
                  of the Bonds will be determined by dividing the principal amount
                  of each
                  Bond to be converted by the Conversion Price in effect at the conversion
                  date. The Conversion Price is subject to adjustment in certain
                  events,
                  including the Company’s issuance of additional shares of common stock or
                  rights to purchase common stock at a per share or per share exercise
                  or
                  conversion price, respectively, at less than the applicable Conversion
                  Price of the Bonds. If for the period of 20 consecutive trading
                  days
                  immediately prior to November 13, 2009 or September 29, 2012, the
                  Conversion Price for the Bonds is higher than the average closing
                  price
                  for the shares, then the Conversion Price will be reset to such
                  average
                  closing price; provided that, the conversion price will not be
                  reset lower
                  than 70% of the then existing conversion price. In addition, the
                  Trust
                  Deed provides that the Conversion Price of the Bonds cannot be
                  adjusted to
                  lower than $0.25 per share of common stock (as adjusted for stock
                  splits,
                  stock dividends, spin-offs, rights offerings, recapitalizations
                  and
                  similar events).
 
 ●
              If
                  on or before November 13, 2008, (i) the Company common stock is
                  not listed
                  on AMEX or the New York Stock Exchange or NASDAQ or (ii) the Bonds,
                  Warrants, and shares underlying the Bonds and Warrants are not
                  registered
                  with the Securities and Exchange Commission (the “SEC”), the holder of the
                  Bonds can require the Company to redeem the Bonds at 106.09% of
                  their
                  principal amount. Also, at any time after November 13, 2010, the
                  holders
                  of the Bonds can require the Company to redeem the Bonds at 126.51%
                  of
                  their principal amount. The Company is required to redeem any outstanding
                  Bonds at 150.87% of its principal amount on November 13,
                  2012.
 
 
 Warrants
        to Purchase 600,000 Shares of Common Stock
 
 The
        Warrants, which are evidenced by a warrant instrument entered into by and
        between the Company and the Subscriber, dated November 13, 2007 (the “Warrant
        Instrument”), are subject to the terms of a warrant agency agreement by and
        among the Company, The Bank of New York and The Bank of New York, London
        Branch,
        dated November 13, 2007 (the “Warrant Agency Agreement”).
 
 Pursuant
        to the terms
        and conditions of the Warrant Instrument and Warrant Agency Agreement, the
        Warrants are exercisable at $0.0001 per share and terminate on November
        13 ,
        2010.
        The Company has agreed to list the shares underlying the Warrants on AMEX,
        or
        any alternative stock exchange by November
        13 ,
        2008.
        In addition, the Company has agreed to register the shares of common stock
        underlying the Warrants with the SEC on or prior to November 13, 2008 and
        will
        keep the registration effective until 30 days after the Warrants terminate.
 
 Registration
        Rights
 
 On
        November 13, 2007, the Company and the Subscriber also entered into a
        registration rights agreement pursuant to which the Company agreed to register
        the Bonds and Warrants, and the shares of common stock underlying the Bonds
        and
        Warrants (the “Registrable Securities”). The Company agreed to prepare and file
        with the SEC, no later than 90 days after the Listing Date, a Registration
        Statement on Form S-1 (the “Registration Statement”) to register the Registrable
        Securities and, as promptly as possible, and in any event no later than 365
        days
        after the Listing Date, cause that Registration Statement, as amended, to
        become
        effective. In addition, the Company agreed to list all Registrable Securities
        covered by the Registration Statement on each securities exchange on which
        similar securities issued by the Company are then listed. The registration
        rights agreement does not provide for liquidated or specified damages in
        the
        event the Company does not timely register the Registrable Securities.
  43
  ASIA
        TIME
        CORPORATION
 (Formerly
        SRKP 9, Inc.)
 
 NOTES
        TO
        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (restated)
 (Stated
        in US Dollars)
 
 THREE
        MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
 
 **22.**
              **Subsequent
                  Events (continued)**
 
 
 Accounting
        for Bonds and Warrants
 
 At
        November 13, 2007, the date of issuance, the Company determined the fair
        value
        of the Bonds to be zero, net of discounts for the fair value of the Warrants
        and
        the beneficial conversion feature aggregating $7,760,000, which were determined
        using the relative fair value method in accordance with APB 14 and EITF 98-5.
        The Warrants and the beneficial conversion feature were valued at $1,652,701
        and
        $6,107,299, respectively, with the fair value of the Warrants calculated
        using
        the Black-Scholes valuation model with a stock price fair value of $3.50
        per
        share (the mid-point of the pending initial public offering) and the fair
        value
        of the beneficial conversion feature calculated using a conversion price
        of
        $2.00 per share (which is the Bond conversion price called for if the Company
        does not complete an initial public offering) and a fair value of $3.50 per
        share. The total amount allocated to the beneficial conversion feature is
        limited to the face value of the Bond, net of the Warrant fair value. The
        Bond
        discounts related to the Warrants and the beneficial conversion feature will
        be
        included in additional paid-in capital. The discounts will be recorded as
        interest expense over the five-year term of the Bonds using the interest
        method.
        The value of the Warrants and beneficial conversion feature are subject to
        adjustment based on the actual public offering price when the Company completes
        such an offering. There will be very significant adjustments to the
        aforementioned discounts if the actual initial public offering price is $3.50
        per share, as the actual number of shares issuable upon conversion of the
        Bonds
        will decrease from 4,000,000 shares to 2,285,714 shares, and the beneficial
        conversion feature will decrease accordingly. The Company will recalculate
        these
        amounts after its initial public offering based on the public offering price
        and
        will make any appropriate adjustments.
 
 As
        indicated above, the Company will redeem each unconverted Bond at 150.87%
        of its
        principal amount on November 13, 2012 (the maturity date). Based on this
        commitment, the Company has determined the total redemption premium to be
        $4,069,600, which is in addition to the original face value of the Bonds
        of
        $8,000,000. This redemption premium will be amortized to interest expense
        over
        the term of the Bonds by the interest method.
 
 **January
        2008 Investor Relations Agreement**
 
 On
        January 16, 2008, the Company entered into a consulting agreement with Public
        Equity Group Inc. (“PEG”) Pursuant to the agreement, PEG will provide the
        Company with business consulting and investor relations services, oversee
        of all
        of the Company’s investor public relations and other related service providers,
        and monitor the Company’s investor relations meetings with brokerage firms and
        brokers to develop support for the Company’s stock and generate research
        coverage, in addition to strategic advice and other customary investor relations
        services. The agreement has a term of one year unless terminated earlier
        pursuant to 60-days prior written notice. The Company will issue 200,000
        shares
        of its common stock to PEG as consideration under the agreement when the
        Company’s registration statement is declared effective by the Securities and
        Exchange Commission. During the three months ending March 31, 2008, the Company
        expects to recognize a one-time charge to administrative and other operating
        expenses with respect to the issuance of the 200,000 shares of common stock
        of
        approximately $700,000, based on an estimate of $3.50 per share, the mid-range
        offering price of the initial public offering. The per share amount could
        vary
        based on the actual initial public offering price.
 
 44
  **ITEM
        2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
        OPERATION**
 
 *The
        following discussion should be read in conjunction with our consolidated
        financial statements and related notes included elsewhere in this quarterly
        report. This report contains forward-looking statements. The words
“anticipated,” “believe,” “expect, “plan,” “intend,” “seek,” “estimate,”
“project,” “could,” “may,” and similar expressions are intended to identify
        forward-looking statements. These statements include, among others, information
        regarding future operations, future capital expenditures, and future net
        cash
        flow. Such statements reflect our management’s current views with respect to
        future events and financial performance and involve risks and uncertainties,
        including, without limitation, general economic and business conditions,
        changes
        in foreign, political, social, and economic conditions, regulatory initiatives
        and compliance with governmental regulations, the ability to achieve further
        market penetration and additional customers, and various other matters, many
        of
        which are beyond our control. Should one or more of these risks or uncertainties
        occur, or should underlying assumptions prove to be incorrect, actual results
        may vary materially and adversely from those anticipated, believed, estimated
        or
        otherwise indicated. Consequently, all of the forward-looking statements
        made in
        this quarterly report are qualified by these cautionary statements and there
        can
        be no assurance of the actual results or developments.*
 
 **Overview**
 
 We
        are a
        distributor of watch movements components used in the manufacture and assembly
        of watches to a wide variety of timepiece manufacturers. There are two
        categories of watch movements, quartz and mechanical. The main parts of an
        analog quartz watch movement are the battery; the oscillator, a piece of
        quartz
        that vibrates in response to the electric current; the integrated circuit,
        which
        divides the oscillations into seconds; the stepping motor, which drives the
        gear
        train; and the gear train itself, which makes the watch’s hands move. A digital
        watch movement has the same timing components as an analog quartz movement
        but
        has no stepping motor or gear train. To a lesser extent we also distribute
        complete analog-quartz and automatic watches with pricing between $20.00
        to
        $50.00. Manufacturing for these watches is currently outsourced to third
        party
        factories in China.
 
 Our
        core
        customer base consists primarily of large wholesalers, online retailers and
        small and medium-sized watch manufacturers that produce watches primarily
        for
        sale to customers in Hong Kong and China. To a lesser extent, we design watches
        for manufacturers and exporters of watches and manufacture and distribute
        complete watches primarily to online retailers and internet
        marketers.
 
 We
        are
        mainly engaged in watch movement distribution business in Hong Kong and China
        which accounted for approximately 87% of our revenue for the nine months
        ended
        September 30, 2007. We have distribution centers and strategically located
        sales
        offices throughout Hong Kong and the People’s Republic of China (“China” or
“PRC”). We distribute more than 350 products from over 30 vendors, including
        such market leaders as Citizen Group, Seiko Corporation and ETA SA Manufacture
        Horlogere Suisse, to a base of over 300 customers primarily through our direct
        sales force. As a part and included in our sale of watch movements, we provide
        a
        variety of value-added services, including automated inventory management
        services, integration, design and development, management, and support
        services.
 
 **Recent
        Events**
 
 ***January
        2007 Private Placement***
 
 On
        January 23, 2007, concurrently with the close of the Share Exchange, we
        conducted an initial closing of a private placement transaction pursuant
        to
        which we sold an aggregate of 1,749,028 shares of Series A Convertible Preferred
        Stock at $1.29 per share. On February 9, 2007, we conducted a second and
        final
        closing of the private placement pursuant to which we sold 501,320 shares
        of
        Series A Convertible Preferred Stock at $1.29 per share. Accordingly, a total
        of
        2,250,348 shares of Series A Convertible Preferred Stock were sold in the
        private placement for an aggregate gross proceeds of $2,902,946 (the “Private
        Placement”). WestPark Capital, Inc. (“WestPark”) acted as the placement agent
        for the Private Placement. For its services as placement agent, WestPark
        received an aggregate fee of approximately $261,265, which consisted of a
        commission equal to 9.0% of the gross proceeds from the financing. After
        commissions and expenses, we received net proceeds of approximately $2.3
        million
        in the Private Placement.
 
 In
        connection with the Private Placement, Kwong Kai Shun, our Chairman of the
        Board, Chief Executive Officer and Chief Financial Officer, entered into
        an
        agreement (the “Escrow Agreement”) with the investors pursuant to which he
        agreed to purchase all of the shares of Series A Preferred Stock then held
        by
        such investors at a per share purchase price of $1.29 if our common stock
        fails
        to be listed or quoted for trading on the American Stock Exchange, the Nasdaq
        Capital Market, the Nasdaq Global Market or the New York Stock Exchange on
        or
        before June 30, 2007, which has been subsequently extended to March 31, 2008.
        In
        addition, Mr. Kwong agreed to place 2,326,000 shares of his common stock
        in
        escrow for possible distribution to the investors (the "Escrow Shares").
        Pursuant to the Escrow Agreement, if our net income for 2006 or 2007, subject
        to
        specified adjustments, as set forth in our filings with the SEC is less than
        $6.3 million or $7.7 million, respectively, a portion, if not all, of the
        Escrow
        Shares will be transferred to the investors based upon our actual net income,
        if
        any, for such fiscal years. We have accounted for the Escrow Shares as the
        equivalent of a performance-based compensatory stock plan between Mr. Kwong
        and
        us. Accordingly, for the three months and nine months ended September 30,
        2007,
        we recorded a charge to operations of $200,289 and $1,852,494, respectively,
        to
        recognize the grant date fair value of stock-based compensation in conjunction
        with the Escrow Shares, and during the three months ended December 31, 2007,
        we
        expect to recognize a final charge to operations of $581,156 with respect
        to the
        Escrow Shares.
 
 45
 ***November
        2007 Issuance of Bonds and Bond Warrants***
 
 On
        November 13, 2007, we closed a financing transaction under Regulation S with
        ABN
        AMRO Bank N.V. (the “Subscriber”) issuing (i) US $8,000,000 Variable Rate
        Convertible Bonds due 2012 (the “Bonds”) and (ii) warrants to purchase 600,000
        shares of our common stock expiring 2010 (the “Warrants”). The financing
        transaction was completed in accordance with a subscription agreement entered
        into by us and the Subscriber dated October 31, 2007.
 
 US
        $8,000,000 Variable Rate Convertible Bonds
 
 The
        Bonds
        were issued further to a trust deed between us and The Bank of New York,
        London
        Branch, dated November 13, 2007 (the “Trust Deed”) and are represented by the
        global certificate in the form as set forth in the Trust Deed. The Bonds
        are
        subject to a paying and conversion agency agreement between us, The Bank
        of New
        York, and The Bank of New York, London Branch. The Bonds were subscribed
        at a
        price equal to 97% of their principal amount, which is the issue price of
        100%
        less a 3% commission to the Subscriber. The Terms and Conditions of the Bonds
        (the “Terms”) contained in the Trust Deed, set forth, among other things, the
        following terms:
 
 ·
            *Interest.*The Bonds bear cash interest from November 13, 2007 at the rate of
                6% per
                annum for the first year after November 13, 2007 and 3% per annum
                thereafter, of the principal amount of the
                Bonds. 
 ·
            *Conversion.*Each Bond is convertible at the option of the holder at any time
                on and
                after 365 days after the date our shares of common stock commence
                trading
                on the American Stock Exchange or any alternative stock exchange
                (the
                “Listing Date”) into shares of our common stock at an initial per share
                conversion price (“Conversion Price”) equal to the price per share at
                which shares are sold in our proposed initial public offering on
                the
                American Stock Exchange (“AMEX”) with minimum gross proceeds of
                US$2,000,000. If no initial public offering has occurred prior to
                conversion, the Conversion Price will be US$2.00, subject to adjustment
                according to the Terms of the Bonds. No Bonds may be converted after
                the
                close of business on November 13, 2012, or if such Bond is called
                for
                redemption before the maturity date, then up to the close of business
                on a
                date no later than seven business days prior to the date fixed for
                redemption thereof. 
 ·
            *Conversion
                Price Adjustments.*The number of shares of our common stock to be issued on conversion
                of the
                Bonds will be determined by dividing the principal amount of each
                Bond to
                be converted by the Conversion Price in effect at the conversion
                date. The
                Conversion Price is subject to adjustment in certain events, including
                our
                issuance of additional shares of common stock or rights to purchase
                common
                stock at a per share or per share exercise or conversion price,
                respectively, at less than the applicable Conversion Price of the
                Bonds.
                If for the period of 20 consecutive trading days immediately prior
                to
                November 13, 2009 or September 29, 2012, the Conversion Price for
                the
                Bonds is higher than the average closing price for our shares, then
                the
                Conversion Price will be reset to such average closing price; provided
                that, the Conversion Price will not be reset lower than 70% of the
                then
                existing Conversion Price. In addition, the Trust Deed provides that
                the
                Conversion Price of the Bonds cannot be adjusted to lower than $0.25
                per
                share of common stock (as adjusted for stock splits, stock dividends,
                spin-offs, rights offerings, recapitalizations and similar
                events).  ·
            *Mandatory
                Redemptions.*If
                on or before November 13, 2008, (i) our common stock is not listed
                on AMEX
                or the New York Stock Exchange or NASDAQ or (ii) the Bonds, Warrants,
                and
                shares underlying the Bonds and Warrants are not registered with
                the
                Securities and Exchange Commission (the “SEC”), the holder of the Bonds
                can require us to redeem the Bonds at 106.09% of their principal
                amount.
                Also, at any time after November 13, 2010, the holders of the Bonds
                can
                require us to redeem the Bonds at 126.51% of their principal amount.
                We
                are required to redeem any outstanding Bonds at 150.87% of its principal
                amount on November 13, 2012.  Warrants
        to Purchase 600,000 Shares of Common Stock
 
 The
        Warrants, which are evidenced by a warrant instrument entered into by and
        between us and the Subscriber, dated November 13, 2007 (the “Warrant
        Instrument”), are subject to the terms of a warrant agency agreement by and
        among us, The Bank of New York and The Bank of New York, London Branch, dated
        November 13, 2007 (the “Warrant Agency Agreement”).
 
 46
 Pursuant
        to the terms
        and conditions of the Warrant Instrument and Warrant Agency Agreement, the
        Warrants are exercisable at $0.0001 per share and terminate on November
        13 ,
        2010.
        We have agreed to list the shares underlying the Warrants on AMEX, or any
        alternative stock exchange by November
        13 ,
        2008.
        In addition, we have agreed to register the shares of common stock underlying
        the Warrants with the SEC on or prior to November 13, 2008 and will keep
        the
        registration effective until 30 days after the Warrants terminate.
 
 Registration
        Rights for Bonds, Warrants, and Underlying Shares
 
 On
        November 13, 2007, we and the Subscriber also entered into a registration
        rights
        agreement pursuant to which we agreed to register the Bonds and Warrants,
        and
        the shares of common stock underlying the Bonds and Warrants (the “Registrable
        Securities”). We agreed to prepare and file with the SEC, no later than 90 days
        after t he
        Listing Date ,
        a
        Registration Statement on Form S-1 (the “Registration Statement”) to register
        the Registrable Securities and, as promptly as possible, and in any event
        no
        later than 365 days after the Listing Date, cause that Registration Statement,
        as amended, to become effective. In addition, we agreed to list all Registrable
        Securities covered by the Registration Statement on each securities exchange
        on
        which similar securities issued by us are then listed. The registration rights
        agreement does not provide for liquidated or specified damages in the event
        we
        do not timely register the Registrable Securities.
 
 Accounting
        for the Bond and Warrant Transaction
 
 The
        terms
        of Bonds include conversion features allowing the holders to convert the
        Bonds
        into shares of our common stock. Certain of those conversion features that
        allow
        for the reduction in conversion price upon the occurrence of stated events
        constitute a “beneficial conversion feature” for accounting purposes. In
        addition, we may be required to repurchase the Bonds at the request of the
        holders if certain events occur or do not occur, as set forth in the Bond
        trust
        deed. Upon the occurrence of any of the events that trigger a mandatory
        redemption, as described above, and we are requested by the holders to
        repurchase all or a portion of the Bonds, we will be required to pay cash
        to
        redeem all or a portion of the Bonds.
 
 The
        accounting treatment related to the beneficial conversion and mandatory
        redemption features of the Bonds and the value of the Bond Warrants will
        have an
        adverse impact on our results of operations for the term of the Bonds. The
        application of Generally Accepted Accounting Principles will require us to
        allocate $6,107,299 to the beneficial conversion feature of the Bonds and
        $1,652,701 to the Bonds Warrants, which will be reflected in our financial
        statements as an interest discount. Also,
        we
        have determined that the total redemption premium associated with the mandatory
        redemption feature of the Bonds is $4,069,600. All of the aforementioned
        amounts
        associated with the beneficial conversion and mandatory redemption feature
        of
        the Bonds and the value of the Bond Warrants are being amortized as additional
        interest expense over the term of the Bonds. This accounting will result
        in an
        increase in interest expense in all reporting periods during the term of
        the
        Bonds, and, as a result, reduce our net income accordingly.
 
 In
        addition, if we are required to redeem all or any portion of the Bonds, this
        may
        have a material adverse effect on our liquidity and cash resources, and may
        impair our ability to continue to operate. If we are required to repurchase
        all
        or a portion of the Bonds and do not have sufficient cash to make the
        repurchase, we may be required to obtain third party financing to do so,
        and
        there can be no assurances that we will be able to secure financing in a
        timely
        manner and on favorable terms, which could have a material adverse effect
        on our
        financial performance, results of operations and stock price.
 
 ***January
        2008 Investor Relations Agreement***
 
 In
        addition, on January 16, 2008, we entered into a consulting agreement with
        Public Equity Group Inc. Pursuant to the agreement, Public Equity Group will
        provide us with business consulting and investor relation services, oversee
        of
        all of our investor public relation and related service providers, and monitor
        our investor relation meetings with brokerage firms and brokers to develop
        support for our stock and research coverage, in addition to strategic advice
        and
        other customary investor relation services. The agreement has a term of one
        year, unless terminated earlier with 60-days prior written notice. As
        consideration for entering in the agreement and compensation for Public Equity
        Group’s services under the agreement, we will issue 200,000 shares of our common
        stock to Public Equity Group Inc. if and when our registration statement,
        of
        which this prospectus is a part, is declared effective by the Securities
        and
        Exchange Commission. In connection with anticipated issuance of 200,000 shares
        of common stock, we expect to recognize a one-time charge to operations in
        the
        first quarter of 2008 in an amount equal to approximately $700,000, which
        is
        derived from valuing each share at $3.50, the mid-range offering price of
        the
        public offering that we intend to conduct in February 2008.
 
 **Corporate
        Structure**
 
 We
        were
        incorporated in the State of Delaware on January 3, 2006. We were originally
        organized as a “blank check” shell company to investigate and acquire a target
        company or business seeking the perceived advantages of being a publicly
        held
        corporation. On January 23, 2007, we closed a share exchange transaction
        (“Share
        Exchange”) pursuant to which we (i) issued 19,454,420 shares of our common stock
        to acquire 100% equity ownership of Times Manufacture & E-Commerce
        Corporation Limited, a British Virgin Islands corporation (“Times Manufacture”),
        which has eight wholly-owned subsidiaries, (ii) assumed the operations of
        Times
        Manufacture and its subsidiaries, and (iii) changed our name from SRKP 9,
        Inc.
        to Asia Time Corporation. Times Manufacture also paid an aggregate of $350,000
        to the stockholders of SRKP 9, Inc. Times Manufacture was founded in January
        2002 and is based in Hong Kong.
 
 47
 In
        2005,
        we re-aligned the structure and business functions of our subsidiaries to
        clearly define the scopes our business objectives in order to strengthen
        our
        ability to effectively conduct our business operations. Billion Win
        International Enterprise Limited, or Billion Win, is our central sourcing
        component. Billion Win, which is held indirectly through Times Manufacture,
        procures and imports watch movements and distributes them to suppliers, volume
        users in China, and two of our subsidiaries, Goldcome Industrial Limited,
        or
        Goldcome, and Citibond Industrial Limited, or Citibond. Goldcome mainly focuses
        it distributions to wholesalers and large manufacturers and Citibond focuses
        on
        distributions to small to medium size manufacturers. Megamooch International
        Limited is a complete watch distributor and exporter targeting overseas buyers.
        Another two subsidiaries, TME Enterprise Ltd. and Citibond Design Ltd., are
        responsible for complete watch design for manufacturers and exporters and
        handles large volume watch movement transactions between buyers and sellers
        solely on a commission basis. Megamooch Online Ltd. operations are focused
        on
        complete watch marketing and distribution, with manufacturing being outsourced,
        and it concentrates on overseas markets.
 
 **Watch
        Movement Segment**
 
 Presently,
        Hong Kong does not generally have watch movement manufacturing. Watch movements
        are largely imported from Japan and Switzerland. The revenue for the watch
        movement segment of our business for the nine months ended September 30,
        2007
        was $56.6 million, with a gross profit $6.2 million, a 2.5% and 71.5% increase,
        respectively, as compared to $55.2 million in revenue and $3.6 million in
        gross
        profit for the nine months ended September 30, 2006. The gross profit margin
        increased to 11.0% for the nine months ended September 30, 2007 from 6.6%
        for
        the same period in 2006, primarily due to more diversified products being
        promoted to customers and higher selling prices as a result of extended credit
        terms to our customers. We provide a wide product spectrum of products carrying
        major brands as well as middle-low end China movements. We believe carrying
        a
        wide product spectrum enables us to provide a convenient one-stop provider
        for
        our customers, which may result in higher sales per customer. We began to
        target
        small to medium manufacturers in mid-2005 and our customer base has expanded
        to
        more than 300 watch manufacturers. In addition, we have extended our credit
        period from an average to 30 days to 60 days to major customers that have
        maintained a history of timely settlement of receivables. We believe that
        this
        extension lead to an increase of purchase orders from those customers. We
        review
        the credit status of each customer and periodically adjust the credit period
        to
        specific customers in an attempt to maximize business with each customer
        without
        suffering significant credit risk.
 
 **Complete
        Watch Segment**
 
 Revenue
        of our complete watch segment was $8.4 million for the nine months ended
        September 30, 2007, a 9.2% increase compared to the same period in 2006 in
        which
        revenue was $7.7 million. This segment contributed approximately 12.9% of
        our
        revenue for the nine months ended September 30, 2007, as compared to 12.2%
        of
        revenue for the period ended September 30, 2006. Our main market positioning
        in
        China is on the middle-class adult, daily, sporty and classy
        design.
  ***Critical
        Accounting Policies and Estimates***
 
 Financial
        Reporting Release No. 60 recommends that all companies include a discussion
        of
        critical accounting policies used in the preparation of their financial
        statements. The Securities and Exchange Commission (“SEC”) defines critical
        accounting policies as those that are, in management's view, most important
        to
        the portrayal of our financial condition and results of operations and those
        that require significant judgments and estimates.
 
 The
        preparation of these consolidated financial statements requires our management
        to make estimates and assumptions that affect the reported amounts of assets,
        liabilities, revenues and expenses, as well as the disclosure of contingent
        assets and liabilities at the date of our financial statements. We base our
        estimates on historical experience, actuarial valuations and various other
        factors that we believe to be reasonable under the circumstances, the results
        of
        which form the basis for making judgments about the carrying value of assets
        and
        liabilities that are not readily apparent from other sources. Some of those
        judgments can be subjective and complex and, consequently, actual results
        may
        differ from these estimates under different assumptions or conditions. While
        for
        any given estimate or assumption made by our management there may be other
        estimates or assumptions that are reasonable, we believe that, given the
        current
        facts and circumstances, it is unlikely that applying any such other reasonable
        estimate or assumption would materially impact the financial statements.
        The
        accounting principles we utilized in preparing our consolidated financial
        statements conform in all material respects to generally accepted accounting
        principles in the United States of America.
 
 48
 *Impairment
        of long-lived assets*
 
 The
        long-lived assets held and used by us are reviewed for impairment whenever
        events or changes in circumstances indicate that the carrying amount of assets
        may not be recoverable. It is reasonably possible that these assets could
        become
        impaired as a result of technology or other industry changes. Determination
        of
        recoverability of assets to be held and used is by comparing the carrying
        amount
        of an asset to future net undiscounted cash flows to be generated by the
        assets.
 
 If
        such
        assets are considered to be impaired, the impairment to be recognized is
        measured by the amount by which the carrying amount of the assets exceeds
        the
        fair value of the assets. Assets to be disposed of are reported at the lower
        of
        the carrying amount of fair value less costs to sell.
 
 *Inventories*
 
 Inventories
        are stated at the lower of cost or market. Cost is determined on a first-in,
        first-out basis and includes only purchase costs. There are no significant
        freight charges, inspection costs and warehousing costs incurred for any
        of the
        periods presented. In assessing the ultimate realization of inventories,
        management makes judgments as to future demand requirements compared to current
        or committed inventory levels. We have vendor arrangements on the purchase
        of
        watch movements providing for price reduction paid in the form of additional
        watch movements. The percentage of additional movements to be received by
        us
        from these vendors is estimated and inventory costs are reduced to reflect
        the
        effect of these additional movements on the actual cost of the items in
        inventory. During the nine months ended September 30, 2007 and 2006, we did
        not
        make any allowance for slow-moving or defective inventories.
 
 We
        evaluate our inventories for excess, obsolescence or other factors rendering
        inventories as unsellable at normal gross profit margins. Write-downs are
        recorded so that inventories reflect the approximate market value and take
        into
        account our contractual provisions with our suppliers governing price
        protections and stock rotations. Due to the large number of transactions
        and
        complexity of managing the process around price protections and stock rotations,
        estimates are made regarding the valuation of inventory at market
        value.
 
 In
        addition, assumptions about future demand, market conditions and decisions
        to
        discontinue certain product lines can impact the decision to write-down
        inventories. If assumptions about future demand change and/or actual market
        conditions are different than those projected by management, additional
        write-downs of inventories may be required. In any case, actual results may
        be
        different than those estimated.
 
 *Trade
        receivables*
 
 Trade
        and
        other receivables are recognized initially at fair value and subsequently
        measured at amortized cost using the effective interest method, less provision
        for impairment. A provision for impairment of trade and other receivables
        is
        established when there is objective evidence that we will not be able to
        collect
        all amounts due according to the original terms of receivables. The amount
        of
        the provision is the difference between the asset’s carrying amount and the
        present value of estimated future cash flows, discounted at the effective
        interest rate. The amount of the provision is recognized in the income
        statement.
 
 *Foreign
        currency translation*
 
 Our
        consolidated financial statements are presented in United States dollars.
        Our
        functional currency is the Hong Kong Dollar (HKD). Our consolidated financial
        statements are translated into United States dollars from HKD at period-end
        exchange rates as to assets and liabilities and average exchange rates as
        to
        revenues and expenses. Capital accounts are translated at their historical
        exchange rates when the capital transactions occurred.
 
 *Revenue
        recognition*
 
 Sales
        of
        goods represent the invoiced value of goods, net of sales returns, trade
        discounts and allowances. We recognize revenue when the goods are delivered
        and
        the customer takes ownership and assumes risk of loss, collection of the
        relevant receivable is probable, persuasive evidence of an arrangement exists,
        and the sales price is fixed or determinable. We provide pre- and post- sales
        service to our customers related to inventory management information in order
        to
        facilitate and manage sales to customers. Our integration, design and
        development and management services provide customers with watch design
        assistance, components outsourcing or other project support, and are generally
        completed prior to a sale and do not continue post-delivery. There is no
        requirement that these services be provided for a sale to take place, nor
        is
        there any objective or reliable evidence of a separate fair value, or if
        no
        longer offered or ceased to be offered would a right of return be created
        for
        the goods sold. We believe these services are part of the sales process and
        are
        not a customer deliverable, and are therefore charged to selling expense
        or cost
        of sales, as appropriate.
 
 49
 *Deferred
        income tax*
 
 Deferred
        income tax is provided in full, using the liability method, on temporary
        differences arising between the tax bases of assets and liabilities and their
        carrying amounts in the consolidated financial statements. However, if the
        deferred income tax arises from initial recognition of an asset or liability
        in
        a transaction other than a business combination that at the time of the
        transaction affects neither accounting nor taxable profit or loss, it is
        not
        accounted for. Deferred income tax is determined using tax rates (and laws)
        that
        have been enacted or substantially enacted by the balance sheet date and
        are
        expected to apply when the related deferred income tax assets is realized
        or the
        deferred income tax liability is settled.
 
 *Stock-based
        compensation*
 
 Effective
        January 1, 2006, we adopted SFAS No. 123 (revised 2004), “Share-Based Payment”
(“SFAS 123R”), a revision to SFAS No. 123, “Accounting for Stock-Based
        Compensation”. SFAS 123R requires that we measure the cost of employee services
        received in exchange for equity awards based on the grant date fair value
        of the
        awards, with the cost to be recognized as compensation expense in our financial
        statements over the vesting period of the awards. Accordingly, we recognize
        compensation cost for equity-based compensation for all new or modified grants
        issued after December 31, 2005. We account for stock option and warrant grants
        issued and vesting to non-employees in accordance with EITF 96-18, “Accounting
        for Equity Instruments that are Issued to Other Than Employees for Acquiring,
        or
        in Conjunction with Selling, Goods or Services”, and EITF 00-18, “Accounting
        Recognition for Certain Transactions involving Equity Instruments Granted
        to
        Other Than Employees”, whereas the value of the stock compensation is based upon
        the measurement date as determined at either (a) the date at which a performance
        commitment is reached or (b) at the date at which the necessary performance
        to
        earn the equity instruments is complete.
 
 We
        did
        not recognize any stock-based compensation during the three months or nine
        months ended September 30, 2006. During the three months and nine months
        ended
        September 30, 2007, we recorded $200,289 and $1,852,494, respectively, as
        a
        charge to operations to recognize the grant date fair value of stock-based
        compensation in conjunction with the Escrow Agreement, as described above,
        and
        during the three months ended December 31, 2007, we expect to recognize a
        final
        charge to operations of $581,156 with respect to the Escrow
        Agreement.
 
 **Results
        of Operations**
 
 The
        following table sets forth certain items in our statement of operations as
        a
        percentage of net sales for the periods shown:
 
 **Three
                  months ended September 30,**
              
              **Nine
                  months ended September 30,****2007**
              
              **2006**
              
              **2007**
              
              **2006**Net
                  sales
              
              
              100.0
              %
              
              100.0
              %
              
              100.0
              %
              
              100.0
              %Cost
                  of sales
              
              
              80.1
              %
              
              88.2
              %
              
              84.4
              %
              
              88.4
              %Gross
                  profit
              
              
              19.9
              %
              
              11.8
              %
              
              15.6
              %
              
              11.6
              %Other
                  income - Note 4
              
              
              0.2
              %
              
              0.2
              %
              
              0.2
              %
              
              0.2
              %Depreciation
              
              
              0.3
              %
              
              0.4
              %
              
              0.3
              %
              
              0.4
              %Administrative
                  and other operating
                expenses,
                  including stock-based
                compensation
              
              
              3.0
              %
              
              1.8
              %
              
              5.1
              %
              
              1.5
              %Income
                  from operations
              
              
              16.8
              %
              
              9.8
              %
              
              10.4
              %
              
              9.9
              %Fees
                  and costs related to reverse merger
              
              
              -
              
              
              -
              
              
              1.1
              %
              
              -Other
                  income - Note 4
              
              
              0.2
              %
              
              0.3
              %
              
              0.2
              %
              
              0.3
              %Interest
                  expenses - Note 5
              
              
              1.4
              %
              
              1.4
              %
              
              1.3
              %
              
              1.2
              %Income
                  before taxes
              
              
              15.6
              %
              
              8.7
              %
              
              8.2
              %
              
              9.0
              %Income
                  taxes - Note 6
              
              
              3.0
              %
              
              1.6
              %
              
              2.2
              %
              
              1.6
              %Net
                  income
              
              
              12.6
              %
              
              7.1
              %
              
              6.0
              %
              
              7.4
              %
 
 ***Comparison
        of the three months ended September 30, 2007 with the three months ended
        September 30, 2006***
 
 Net
        sales
        for the three months ended September 30, 2007 was $23.0 million as compared
        to
        $19.6 million for the comparable period in 2006, an increase of $3.3 million,
        or
        16.9%. This increase was primarily due to an increase in the sales of both
        completed watches and watch movements. Net sales of movements was $18.4 million
        for the three months ended September 30, 2007, accounting for approximately
        79.9% of our total sales for the period, an increase of 5.9% as compared
        to
        $17.3 million for the comparable period in 2006. The increase was primarily
        attributable to an increase in volume of movements, which increased from
        24.4
        million pieces to 26.1 million pieces in the comparable three-month period
        in
        2006 and 2007, respectively. The increase in the volume of movements was
        primarily due to the increase in sale of high-end items. Sales of completed
        watches for the three months ended September 30, 2007, was $4.6 million as
        compared to $2.3 million for the comparable period in 2006, an increase of
        99.7%. The increase was due to an increase in sales volume from 0.26 million
        pieces to 0.54 million pieces in the comparable periods in 2007 and 2006,
        respectively. The increase in volume of completed watches was primarily due
        to
        our new product launch from during the third quarter.
 
 50
 Cost
        of
        sales for the three months ended September 30, 2007 was $18.4 million, or
        80.1%
        of net sales, as compared to $17.3 million, or 88.2% of net sales, for the
        same
        period in 2006. The decrease in cost of sales as a percentage of net sales
        was
        largely attributable to the improved economies of scale and an increase in
        rebate receivables resulting from an increase of sales in the third quarter
        of
        2007.
 
 Gross
        profit for the three months ended September 30, 2007 was $4.6 million, or
        19.9%
        of net sales, compared to $2.3 million, or 11.8% of net sales for the same
        period in 2006. The increase in our gross profit margin was primarily
        attributable to the increase in sales of higher-margin products as a result
        of
        diversification of products, a reduction in cost of sales due to the impact
        of
        rebate receivables, and improved economies of scale. Gross profit margins
        are
        usually a factor of product mix and demand for product. The gross profit
        margin
        of watch movements increased from 7.2% for the three months ended September
        30,
        2006 as compared to 13.2% of net sales for same period in 2007. The gross
        profit
        margin for completed watches for the three months ended September 30, 2007,
        which was 46.5% of net sales, as compared to 46.3% of net sales for the
        comparable period in 2006, as the product mix had no significant
        change.
 
 Other
        income from operations was $48,425, or 0.2% of net sales for the three months
        ended September 30, 2007, as compared to $41,724, or 0.2% of net sales for
        the
        three months ended September 30, 2006. The slight increase was primarily
        due to
        an increase in rental income, which was $15,757 for the three months ended
        September 30, 2007, partially offset by a decrease in income received from
        the
        license fees of intangible assets, which was $32,668 for the three months
        ended
        September 30, 2007, as compared to $41,724 for the same period in
        2006.
 
 Administrative
        and other operating expenses were $690,514, or 3.0% of net sales, for the
        three
        months ended September 30, 2007, as compared to $359,472, or 1.8% of net
        sales,
        for the comparable period in 2006. The increase in amount and as a percentage
        of
        net sales was primarily due to the recognition of $200,289 of stock-based
        compensation during the three months ended September 30, 2007 related to
        the
        Escrow Shares provided by our CEO, Kwong Kai Shun, which are subject to the
        achievement of defined annual net income for 2006 and 2007 pursuant to the
        Private Placement agreement entered into with our investors. We met the 2006
        net
        income requirement. We expect to recognize a final charge to operations for
        stock-based compensation related to the Escrow Shares of $581,156 at December
        31, 2007. The increase was also attributable to the increase in professional
        fees related to reporting requirements as a public company and additional
        employees and upgraded staff benefits in the comparable period in 2007.
        Management considers these expenses as a percentage of net sales to be a
        key
        performance indicator in managing our business.
 
 Other
        income from non-operating activities was $39,555, or 0.2% of net sales, for
        the
        three months ended September 30, 2007, as compared to $55,342, or 0.3% of
        net
        sales, for the three months ended September 30, 2006. The decrease was primarily
        due to a decrease in bank interest income, which was $35,114 for the three
        months ended September 30, 2007, as compared to $47,246 for the same period
        in
        2006 and a lack of other interest income in the comparable period in
        2007.
 
 Interest
        expense for the three months ended September 30, 2007 was $316,516, or 1.4%
        of
        net sales, as compared to $265,872, or 1.4% of net sales, in 2006, which
        was
        consistent in the comparable period.
 
 Income
        taxes for the three months ended September 30, 2007 were $697,737, or 3.0%
        of
        net sales, as compared to $304,821, or 1.6% of net sales for the three months
        ended September 30, 2006. The increase in income taxes is primarily due to
        an
        increase in the operating margin to 16.5% for the three months ended September
        30, 2007 compared to an operating margin of 8.7% for the three months ended
        September 30, 2006.
 
 Net
        income for the three months ended September 30, 2007 (net of the charge for
        stock-based compensation of $200,289) was $2.9 million, or 12.6% of net sales,
        as compared to $1.4 million, or 7.1% of net sales for the comparable period
        in
        2006.
 
 ***Comparison
        of the nine months ended September 30, 2007 with the nine months ended
        September 30, 2006***
 
 Net
        sales
        for the nine months ended September 30, 2007 was $65.0 million as compared
        to
        $62.9 million for the comparable period in 2006, an increase of $2.1 million,
        or
        3.3%. This increase was primarily due to an increase in sales of completed
        watches. Net sales of movements was $56.6 million for the nine months ended
        September 30, 2007, accounting for approximately 87.1% of our total sales
        for
        the period, an increase of 2.5% as compared to $55.2 million for the comparable
        period in 2006. The slight increase was primarily attributable to an increase
        in
        selling price, partially offset by a decrease in sales volume in the third
        quarter of 2007. The sales volume of movements decreased from 77.3 million
        pieces to 72.7 million pieces in the comparable nine month periods in 2006
        and
        2007, respectively. The decrease in the sales volume of movements is primarily
        due to the decrease in low-end items. Sales of completed watches for the
        nine
        months ended September 30, 2007, was $8.4 million as compared to $7.7 million
        for the comparable period in 2006, an increase of 9.2%. The increase was
        due to
        the increase in sales volume from 0.96 million pieces to 0.83 million pieces
        in
        the comparable periods in 2007 and 2006, respectively.
 
 51
 Cost
        of
        sales for the nine months ended September 30, 2007 was $54.8 million, or
        84.4%
        of net sales, as compared to $55.6 million, or 88.4% of net sales, for the
        same
        period in 2006. The slight decrease in cost of sales as a percentage of net
        sales was largely attributable to the improved economies of scale.
 
 Gross
        profit for the nine months ended September 30, 2007 was $10.1 million, or
        15.6%
        of net sales, compared to $7.3 million, or 11.6% of net sales for the same
        period in 2006. The increase in our gross profit margin was primarily
        attributable to the increase in sales of higher-margin products as a result
        of
        diversification of products, a reduction in cost of sales due to rebate
        receivables, and improved economies of scale. Gross profit margins are usually
        a
        factor of product mix and demand for product. The gross profit of watch
        movements as a percentage of net sales had increased from 6.6% for the nine
        months ended September 30, 2006 as compared to 11.0% of net sales for same
        period in 2007. The increase in gross profit margin was primarily due to
        an
        increase in sales of higher-margin items. There was a slight decrease of
        gross
        profit for completed watches for the nine months ended September 30, 2007,
        which
        was 46.5% of net sales as compared to 47.5% of net sales for the comparable
        period in 2006 as the product mix had no significant change.
 
 Other
        income from operations was $145,203, or 0.2% of net sales for the nine months
        ended September 30, 2007, as compared to $125,504, or 0.2% of net sales for
        the
        same period in 2006. The increase was primarily due to an increase in rental
        income, which was $47,248 for the nine months ended September 30, 2007,
        partially offset by a decrease in income received from the license fees of
        intangible assets, which was $97,955 for the nine months ended September
        30,
        2007 comparable to $125,504 for the nine months ended September 30,
        2006.
 
 Administrative
        and other operating expenses were $3.3 million, or 5.1% of net sales, for
        the
        nine months ended September 30, 2007, as compared to $971,717, or 1.5% of
        net
        sales, for the comparable period in 2006. The increase in amount and as a
        percentage of net sales was primarily due to the recognition of $1,852,494
        of
        stock-based compensation during the three months ended September 30, 2007
        related to the Escrow Shares provided by our CEO, Kwong Kai Shun, which are
        subject to the achievement of defined annual net income for 2006 and 2007
        pursuant to the Private Placement agreement entered into with our investors.
        We
        met the 2006 net income requirement. We expect to recognize a final charge
        to
        operations for stock-based compensation related to the Escrow Shares of $581,156
        at December 31, 2007. The increase was also attributable to the increase
        in
        professional fees related to reporting requirements as a public company and
        additional employees and upgraded staff benefits in the comparable period
        in
        2007. Management considers these expenses as a percentage of net sales to
        be a
        key performance indicator in managing our business.
 
 Fees
        and
        costs related to the reverse merger for the nine months ended September 30,
        2007
        were $736,197, which included the shell cost $317,000 paid to the shareholders
        of SRKP 9, Inc., the shell company. There were no such expenses in the same
        period in 2006.
 
 Other
        income from non-operating activities was $117,936, or 0.2% of net sales,
        for the
        nine months ended September 30, 2007, as compared to $165,638, or 0.3% of
        net
        sales, for the nine months ended September 30, 2006. The decrease was primarily
        due to a decrease in bank interest income, which was $112,020 for the nine
        months ended September 30, 2007, and $141,250 for the same period in 2006
        and a
        lack of other interest income in the comparable period in 2007.
 
 Interest
        expense for the nine months ended September 30, 2007 was $830,935, or 1.3%
        of
        net sales, as compared to $763,726, or 1.2% of net sales, in 2006 which was
        consistent in the comparable period.
 
 Income
        taxes for the nine months ended September 30, 2007 were $1.4 million, or
        2.2% of
        net sales, as compared to $1.0 million for the nine months ended September
        30,
        2006, or 1.6% of net sales. The increase in income taxes is primarily due
        to an
        increase in the operating margin to 11.1% for the nine months ended September
        30, 2007 compared to an operating margin of 9.0% for the nine months ended
        September 30, 2006.
 
 Net
        income for the nine months ended September 30, 2007 (net of the charge for
        stock-based compensation of $1,852,494 and fees and costs related to the
        reverse
        merger of $736,197) was $3.9 million, or 6.0% of net sales, as compared to
        $4.6
        million, or 7.4% of net sales for the comparable period in 2006.
 
 **Off-Balance
        Sheet Arrangements**
 
 52
 Other
        than the Escrow Agreement and Escrow Shares, as described above, we do not
        have
        any off-balance sheet debt, nor do we have any transactions, arrangements
        or
        relationships with any special purpose entities.
 
 **Contractual
        Obligations**
 
 Other
        than those commitments and obligations being entered into in the normal course
        of business, we do not have any additional, material capital commitments
        and
        obligations due to other parties.
 
 **Inflation
        and Seasonality**
 
 Inflation
        and seasonality have not had a significant impact on our operations during
        the
        last two fiscal years.
 
 **New
        Accounting Pronouncements**
 
 In
        February 2006, the FASB issued SFAS No. 155, Accounting for Certain Hybrid
        Financial Instruments, which amends SFAS No. 133, Accounting for Derivative
        Instruments and Hedging Activities (“SFAS No. 155”), and SFAS No. 140,
        Accounting for Transfers and Servicing of Financial Assets and Extinguishments
        of Liabilities. SFAS No. 155 simplifies the accounting for certain derivatives
        embedded in other financial instruments by allowing them to be accounted
        for as
        a whole if the holder elects to account for the whole instrument on a fair
        value
        basis. SFAS No. 155 also clarifies and amends certain other provisions of
        SFAS
        No. 133 and SFAS No. 140. SFAS No. 155 is effective for all financial
        instruments acquired, issued or subject to a remeasurement event occurring
        in
        fiscal years beginning after September 15, 2006. Earlier adoption is permitted,
        provided we have not yet issued financial statements, including for interim
        periods, for that fiscal year. We do not believe the adoption of SFAS No.
        155
        will have a material impact on our consolidated financial position or results
        of
        operations.
  The
        FASB
        released SFAS No. 156, “Accounting for Servicing of Financial Assets,” to
        simplify accounting for separately recognized servicing assets and servicing
        liabilities. SFAS No. 156 amends SFAS No. 140, “Accounting for Transfers and
        Servicing of Financial Assets and Extinguishments of Liabilities.” SFAS No. 156
        permits an entity to choose either the amortization method or the fair value
        measurement method for measuring each class of separately recognized servicing
        assets and servicing liabilities after they have been initially measured
        at fair
        value. SFAS No. 156 applies to all separately recognized servicing assets
        and
        liabilities acquired or issued after the beginning of an entity’s fiscal year
        that begins after September 15, 2006. SFAS No. 156 will be effective for
        us as
        of December 31, 2006, the beginning of our 2007 fiscal year. We do not believe
        the adoption of SFAS No. 156 will have a material impact on our consolidated
        financial position or results of operations.
 
 In
        July
        2006, the FASB issued FIN 48 “Accounting for Uncertainty in Income Taxes.” This
        interpretation requires that we recognize in our financial statements, the
        impact of a tax position, if that position is more likely than not of being
        sustained on audit, based on the technical merits of the position. The
        provisions of FIN 48 are effective as of the beginning of our 2007 fiscal
        year,
        with the cumulative effect of the change in accounting principle recorded
        as an
        adjustment to opening retained earnings. We are currently evaluating the
        effect
        of FIN 48 on our financial statements and do not believe the adoption of
        FIN No.
        48 will have a material impact on our consolidated financial position or
        results
        of operations.
 
 In
        September 2006, the FASB issued SFAS No. 157 “Fair Value Measurement” (“SFAS
        157”). SFAS 157 defines fair value, establishes a framework for measuring fair
        value, and expands disclosures about fair value measurements. This Statement
        shall be effective for financial statements issued for fiscal years beginning
        after November 15, 2007, and interim periods within those fiscal years. Earlier
        application is encouraged, provided that the reporting entity has not yet
        issued
        financial statements for that fiscal year, including any financial statements
        for an interim period within that fiscal year. The provisions of this statement
        should be applied prospectively as of the beginning of the fiscal year in
        which
        this Statement is initially applied, except in some circumstances where the
        statement shall be applied retrospectively. We are currently evaluating the
        effect, if any, of SFAS 157 on our financial statements. Although we will
        continue to evaluate the provisions of SFAS No. 157, management currently
        does not believe the adoption of SFAS No. 157 will have a material
        impact on our consolidated financial statements.
 
 The
        FASB
        released SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and
        Other Postretirement Plans: an amendment of FASB Statements No. 87, 88, 106,
        and
        132(R),” which requires an employer to recognize the over funded or under funded
        status of defined benefit and other postretirement plans as an asset or
        liability in its statement of financial position and to recognize changes
        in
        that funded status in the year in which the changes occur through an adjustment
        to comprehensive income. This statement also requires an employer to measure
        the
        funded status of a plan as of the date of its year-end statement of financial
        position, with limited exceptions. We are required to initially recognize
        the
        funded status of our defined benefit and other postretirement plans as of
        December 31, 2006, and to provide the required disclosures in our 2006 annual
        report on Form 10-KSB. The adoption of SFAS No. 158 has no material effect
        on
        our financial statements.
 
 53
 On
        February 15, 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
        Financial Assets and Financial Liabilities - Including an Amendment of SFAS
        No.
        115.” The fair value option established by SFAS No. 159 permits all entities to
        choose to measure eligible items at fair value at specified election dates.
        A
        business entity will report unrealized gains and losses on items for which
        the
        fair value option has been elected in earnings (or another performance indicator
        if the business entity does not report earnings) at each subsequent reporting
        date. The fair value option: (a) may be applied instrument by instrument,
        with a
        few exceptions, such as investments otherwise accounted for by the equity
        method; (b) is irrevocable (unless a new election date occurs); and (c) is
        applied only to entire instruments and not to portions of instruments. SFAS
        No.
        159 is effective as of the beginning of an entity’s first fiscal year that
        begins after November 15, 2007. Early adoption is permitted as of the beginning
        of the previous fiscal year provided that the entity makes that choice in
        the
        first 120 days of that fiscal year and also elects to apply the provisions
        of
        SFAS. No.157. We have chosen not to adopt this statement early. Although
        we will
        continue to evaluate the provisions of SFAS No. 159, management currently
        does not believe the adoption of SFAS No. 159 will have a material
        impact on our consolidated financial statements.
 
 **Liquidity
        and Capital Resources**
 
 To
        provide liquidity and flexibility in funding our operations, we borrow amounts
        under bank facilities and other external sources of financing. As of September
        30, 2007 we had general banking facilities amounted to $15.2 million for
        overdraft, letter of credit, trust receipt, invoice financing and export
        loans
        granted by nine banks. The amount increased by $2.0 million compared to $13.2
        million as at September 30, 2006. Interest on the facilities ranged from
        minus
        2.0 to 0.75% over the Bank’s Best Lending Rate of Hong Kong (Prime Rate) or Hong
        Kong Inter Bank Offered Rate (HIBOR). These banking facilities were secured
        by
        the leasehold properties, time deposits and held-to maturity investments
        of the
        group and personal guarantees executed by our Chairman of the
        Board.
 
 On
        January 23, 2007, concurrently with the close of the Share Exchange, we
        conducted an initial closing of a private placement transaction pursuant
        to
        which we sold an aggregate of 1,749,028 shares of Series A Convertible Preferred
        Stock at $1.29 per share. On February 9, 2007, we conducted a second and
        final
        closing of the private placement pursuant to which we sold 501,320 shares
        of
        Series A Convertible Preferred Stock at $1.29 per share. Accordingly, a total
        of
        2,250,348 shares of Series A Convertible Preferred Stock were sold in the
        private placement for an aggregate gross proceeds of $2,902,946 (the “Private
        Placement”). Of the gross proceeds, $50,000 is represented by a subscription
        receivable from one investor. WestPark Capital, Inc. (“WestPark”) acted as the
        placement agent for the Private Placement. For its services as placement
        agent,
        WestPark received an aggregate fee of approximately $261,265, which consisted
        of
        a commission equal to 9.0% of the gross proceeds from the financing. After
        commissions and expenses, we received net proceeds of approximately $2.3
        million
        in the Private Placement.
 
 Pursuant
        to Subscription Agreements entered into with the investors in the Private
        Placement, each share of the Series A Convertible Preferred Stock is convertible
        into shares of common stock at a conversion price equal to the per share
        purchase price. However, if we, at any time prior to the first trading day
        on
        which our common stock is quoted on the American Stock Exchange, Nasdaq Capital
        Market, Nasdaq Global Market or New York Stock Exchange (each a “Trading
        Market”) sell or issue any shares of common stock in one or a series of
        transactions at an effective price less than such conversion price where
        the
        aggregate gross proceeds to us are at least $1.0 million, then the
        aforementioned conversion price shall be reduced to such effective price.
        Each
        share of the Series A Convertible Preferred Stock shall automatically convert
        into shares of common stock if (i) the closing price of our common stock
        on the
        Trading Market for any 10 consecutive trading day period exceeds $3.00 per
        share, (ii) the shares of common stock underlying the Series A Convertible
        Preferred Stock are subject to an effective registration statement, and (iii)
        the daily trading volume of the common stock on a Trading Market exceeds
        25,000
        shares per day for 10 out of 20 prior trading days. Upon liquidation, the
        holders of the Series A Convertible Preferred Stock shall receive $1.29 per
        share of the Series A Convertible Preferred Stock then held prior to any
        other
        distribution or payment made to holders of the common stock.
 
 We
        agreed
        to file, and did file, a registration statement covering the common stock
        underlying the Series A Convertible Preferred Stock sold in the Private
        Placement within 30 days of the closing of the Share Exchange pursuant to
        the
        subscription agreement with each investor.
 
 On
        November 13, 2007, we completed a financing transaction pursuant to which
        we
        issued $8,000,000 Variable Rate Convertible Bonds that will be due in 2012.
        The
        Bonds were subscribed at a price equal to 97% of their principal amount,
        which
        is the issue price of 100% less a 3% commission to the Subscriber of the
        Bonds.
        The Bonds bear cash interest at the rate of 6% per annum for the first year
        after November 13, 2007 and 3% per annum thereafter, of the principal amount
        of
        the Bonds. Each Bond is convertible at the option of the holder at any time
        on
        and after a date that is 365 days after the date that our shares of common
        stock
        commence trading on the AMEX at an initial conversion price equal to the
        price
        per share at which shares are sold in our proposed initial public offering
        on
        AMEX with minimum gross proceeds of $2,000,000. If no initial public offering
        occurs prior to conversion, the conversion price per share will be $2.00,
        subject to adjustment in accordance with the terms and conditions of the
        Bonds.
        The conversion price is subject to adjustment in certain events, including
        our
        issuance of additional shares of common stock or rights to purchase common
        stock
        at a per share or per share exercise or conversion price, respectively, at
        less
        than the applicable per share conversion price of the Bonds. If for the period
        of 20 consecutive trading days immediately prior to November 13, 2009 or
        September 29, 2012, the conversion price for the Bonds is higher than the
        average closing price for the shares, then the conversion price will be reset
        to
        such average closing price; *provided
        that* ,
        the
        conversion price will not be reset lower than 70% of the then existing
        conversion price. In addition, the Trust Deed provides that the conversion
        price
        of the Bonds cannot be adjusted to lower than $0.25 per share of common stock
        (as adjusted for stock splits, stock dividends, spin-offs, rights offerings,
        recapitalizations and similar events) except in certain instances. In connection
        with the issuance of the Bonds, we also issued to the Subscriber warrants
        to
        purchase 600,000 shares of our common stock. The warrants were subscribed
        at a
        price of $0.0001 per warrant, are exercisable at $0.0001 per share, and
        terminate on November 13, 2010.
 
 54
 For
        the
        nine months ended September 30, 2007, net cash used by operating activities
        was
        approximately $3.7 million, as compared to net cash provided by operating
        activities of $423,364 for the comparable period in 2006. The increase in
        net
        cash used by operating activities was primarily attributable to an increase
        in
        accounts receivable of $7.3 million, an increase in prepaid expenses and
        other
        receivables of $4.3 million, partially offset by the decrease in inventories
        of
        $275,517 and an adjustment related to stock-based compensation to our CEO,
        Kwong
        Kai Shun of $1.9 million. The increase in accounts receivable was due to
        extended aging. The increase in prepaid expenses and other receivables was
        attributable to an increase in rebate receivables of $2.4 million and the
        deposit for a potential acquisition of plant facilities, but no acquisition
        has
        been completed as of the date of this report. The decrease in inventories
        was
        due to the decrease in inventories of completed watches. The increase in
        net
        income is due to the improved profit margin of movements segment as a result
        of
        improved economies of scale and increased selling price.
 
 Net
        cash
        used in investing activities was $29,937 for the nine months ended September
        30,
        2007, compared to $1.2 million in the comparable period in 2006. The decrease
        in
        net cash used was primarily due to the decrease in expenditures for acquiring
        plant and equipment and no significant investment was made during the nine
        months ended September 30, 2007.
 
 Net
        cash
        provided by financing activities was $3.6 million for the nine months ended
        September 30, 2007 and $176,304 for the comparable period in 2006. The increase
        in net cash provided by financing activities for the nine months ended September
        30, 2007 was primarily attributable to the issuance of equity securities
        in a
        private placement in the amount of $2.6 million and an increase in net advances
        under short term bank borrowings of $3.2 million, partially offset by a
        repayment of short term bank loans of $4.0 million, and a lack of dividend
        payment for the nine months ended September 30, 2007.
 
 For
        the
        nine months ended September 30, 2007 and the same period in 2006, our average
        inventory turnover was approximately 30 days and 26 days, respectively. The
        average days outstanding of our accounts receivable for the nine months ended
        September 30, 2007 was 50 days, as compared to 28 days for the same period
        in
        2006. The increase in the average days outstanding of our accounts receivable
        was due to the change in our credit policy. Since January 2007, we have extended
        our credit terms from 30 days to 60 day to customers who have a good credit
        history in order to improve our profit margin and competitiveness. Inventory
        turnover and average days outstanding are key operating measures that management
        relies on to monitor our business.
 
 For
        fiscal year 2006, 2005 and 2004, our inventory turnover was 10.8, 10.8 and
        13.2
        times, respectively. During 2004, our stock level was kept at a relatively
        low
        level to improve cash flow however, we also risked stock shortage. In 2005
        and
        2006 we increased our stock level and, thus, the turnover ratio to a more
        optimal level of 10.8. We expect the turnover ratio will further decrease
        in
        2007 as the order delivery cycle time of our supplies has shortened, possibly
        allowing us to keep a lower stock level with a decreased risk of stock
        shortages. The average days outstanding of our accounts receivable at December
        31, 2006 were 29 days, as compared to 24 days and 10.8 days at December 31,
        2005
        and 2004. The increase in accounts receivable was due to the change in credit
        policy since 2005 where credit terms of up to 30 days were given to customers
        who had good credit history in order to improve our profit margin and
        competitiveness.
 
 55
 In
        an
        attempt to reduce our reliance on third-party watch movement manufacturers,
        we
        have plans to manufacture our own brands of quartz movements and mechanical
        movements in-house. To manufacture our own brands of quartz and mechanical
        movements in-house, we would need to acquire watch movement facilities in
        China
        and invest in new equipment and research and development. We expect that
        up to
        $5.5 million will be required to obtain the equipment and facilities to
        manufacture branded proprietary watch movements. Our plan to acquire
        manufacturing facilities and equipment to manufacture our own brand of quartz
        and mechanical movements in-house will not take place until after the completion
        of our initial public offering, the proceeds of which will give us a portion
        of
        the required capital. We will be required to raise the appropriate amount
        of
        capital needed for our future operations from future equity sales or through
        debt financings. Failure to obtain funding when needed may force us to delay,
        reduce, or eliminate our plans to manufacture our own watch movement parts.
        We
        may not be able to obtain additional financial resources when necessary or
        on
        terms favorable to us, if at all, and any available additional financing
        may not
        be adequate. Moreover, new equity securities issued in financings, including
        any
        shares of Series A Convertible Preferred Stock or any new series of preferred
        stock authorized by our Board of Directors, may have greater rights, preferences
        or privileges than our existing common stock. To the extent stock is issued
        or
        options and warrants are exercised, holders of our common stock will experience
        further dilution.
 
 Based
        on
        our current plans, we believe that cash on hand, cash flow from operations
        and
        funds available under our bank facilities will be sufficient to fund our
        capital
        needs for the next 12 months. However, our ability to maintain sufficient
        liquidity depends partially on our ability to achieve anticipated levels
        of
        revenue, while continuing to control costs. If we did not have sufficient
        available cash, we would have to seek additional debt or equity financing
        through other external sources, which may not be available on acceptable
        terms,
        or at all. Failure to maintain financing arrangements on acceptable terms
        would
        have a material adverse effect on our business, results of operations and
        financial condition.
 
 **ITEM
        3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET
        RISK**
 
 *Credit
        Risk.* **** We
        are
        exposed to credit risk from our cash at bank, fixed deposits and contract
        receivables. The credit risk on cash at bank and fixed deposits is limited
        because the counterparts are recognized financial institutions. Contract
        receivables are subject to credit evaluations. As we are getting more new
        customers and offering credit terms, financial efficiency, we believe that
        cash
        flow and controlling bad debt and late payment become more and more important.
        We carry out thorough research through public filing records available on
        our
        new customers, coupled with the employment of business intelligence information
        provider, before extending any credit to new customers. Different levels
        of
        credit periods and credit limits are granted to different customers according
        to
        their size, financial position, business position and payment history, among
        other factors, in order to offer the right credit terms to our customers
        to
        enhance competitiveness yet manage the risk. We have not recorded bad debt
        since
        inception.
 
 *Foreign
        Currency Risk.* **** The
        functional currency of our company is the Hong Kong Dollar (HKD). In the
        future,
        we expect Renminbi (RMB) also to be a functional currency. Substantially
        all of
        our operations are conducted in the PRC. Our sales and purchases are conducted
        within the PRC in HKD and in the future will include RMB. Conversion of RMB
        into
        foreign currencies is regulated by the People’s Bank of China through a unified
        floating exchange rate system. Although the PRC government has stated its
        intention to support the value of the RMB, there can be no assurance that
        such
        exchange rate will not again become volatile or that the RMB will not devalue
        significantly against the U.S. Dollar. Exchange rate fluctuations may adversely
        affect the value, in U.S. Dollar terms, of our net assets and income derived
        from its operations in the PRC. In addition, the RMB is not freely convertible
        into foreign currency and all foreign exchange transactions must take place
        through authorized institutions.
  *Country
        Risk.* **** The
        substantial portion of our business, assets and operations are located and
        conducted in Hong Kong and China. While these economies have experienced
        significant growth in the past twenty years, growth has been uneven, both
        geographically and among various sectors of the economy. The Chinese government
        has implemented various measures to encourage economic growth and guide the
        allocation of resources. Some of these measures benefit the overall economy
        of
        Hong Kong and China, but may also have a negative effect on us. For example,
        our
        operating results and financial condition may be adversely affected by
        government control over capital investments or changes in tax regulations
        applicable to us. If there are any changes in any policies by the Chinese
        government and our business is negatively affected as a result, then our
        financial results, including our ability to generate revenues and profits,
        will
        also be negatively affected.
 
 56
 **ITEM
        4.  CONTROLS AND PROCEDURES**
 
 *(a)
        Evaluation of disclosure controls and procedures*
 
 As
        of
        September 30, 2007, our sole executive officer, who is our Chief Executive
        Officer (CEO) and our Chief Financial Officer (CFO), performed an evaluation
        of
        the effectiveness of and the operation of our disclosure controls and procedures
        as defined in Rule
        13a-15 (e)
        or Rule
        15d-15 (e)
        under
        the Exchange Act. Based on that evaluation, our CEO/CFO concluded that our
        disclosure controls and procedure as of September 30, 2007 had significant
        deficiencies that caused our controls and procedures to be ineffective. These
        deficiencies consisted of inadequate staffing and supervision that could
        lead to
        the untimely identification and resolution of accounting and disclosure matters
        and failure to perform timely and effective reviews. In addition, there are
        deficiencies in the recording and classification of accounting transactions
        and
        a lack of personnel with expertise in US generally accepted accounting
        principles and US Securities and Exchange Commission rules and
        regulations.
 
 We
        are in
        the process of improving our controls and procedures in an effort to remediate
        these deficiencies through improving supervision, education, and training
        of our
        accounting staff. We have hired two third-party financial consultants to
        review
        and analyze our financial statements and assist us improve our reporting
        of
        financial information. Our management and Board of Directors, with assistance
        from outside financial consultants, conducted a review and analysis of our
        accounting treatment for (i) our inventory by adjusting watch movement costing
        for the effects of vendor incentives from an as received basis to an accrual
        basis, (ii) the share exchange transaction that we conducted in January 2007,
        (iii) stock-based compensation related to an escrow agreement that our CEO/CFO
        entered into with investors in our January 2007 private placement. Based
        on the
        review, we concluded that we misapplied accounting principles generally accepted
        in the United States of America and we restated our financial statements
        for the
        periods over the past two years.
 
 Management
        intends to seek additional qualified in house accounting personnel, such
        as a
        chief financial officer, or third-party accounting personnel to ensure that
        management will have adequate resources in order to attain complete reporting
        of
        financial information disclosures in a timely matter. We believe that the
        remedial steps that we take will address the conditions identified by our
        CEO/CFO as significant deficiencies in our disclosure controls and procedures.
        Additional effort is needed to fully remedy these deficiencies and we are
        continuing our efforts to improve and strengthen our control processes and
        procedures. We
        also intend to engage outside consultants to assist us in assessing and
        improving our internal controls and procedures. We
        believe that the remedial steps that we take will address the conditions
        identified by our CEO/CFO as significant deficiencies in our disclosure controls
        and procedures. We will continue to monitor the effectiveness of these new
        internal policies. Our CEO/CFO believes that there are no material inaccuracies,
        or omissions of material facts necessary to make the statements not misleading
        in light of the circumstances in which they were made, in this Form
        10-QSB.
  *(b)
        Changes in internal control over financial reporting*
  There
        have been no changes in our internal control over financial reporting identified
        in connection with the evaluation required by Rule 13a-15(d) or Rule 15d-15(d)
        under the Exchange Act that occurred during the quarter ended September 30,
        2007
        that have materially affected, or are reasonably likely to materially affect,
        our internal control over financial reporting.
 
 
 **PART
        II-OTHER INFORMATION**
 
 **ITEM
        1.**  **LEGAL
        PROCEEDINGS**
 
 We
        are
        not currently a party to any material legal proceedings.
 
 **ITEM
        1A. RISK FACTORS**
 
 Other
        than the risk factors below, there have been no material changes from the
        risk
        factors disclosed in the “Risk Factors” section of our annual report on Form
        10-K/A for the year ended December 31, 2006.
 
 **We
        recently completed a placement of convertible bonds that included a beneficial
        conversion feature and are mandatorily redeemable and 600,000 warrants
        exercisable at $0.0001 per share. The features of the bonds and the value
        of the
        warrants will have the effect of reducing our reported operating results
        during
        the term of the bonds.**
 
 In
        November 2007, we issued $8,000,000 Variable Rate Convertible Bonds due in
        2012,
        or the Bonds. The terms of Bonds include conversion features allowing the
        holders to convert the Bonds into shares of our common stock. Certain of
        those
        conversion features that allow for the reduction in conversion price upon
        the
        occurrence of stated events constitute a “beneficial conversion feature” for
        accounting purposes. In addition, we may be required to repurchase the Bonds
        at
        the request of the holders if certain events occur or do not occur, as set
        forth
        in the Trust Deed. If our common stock ceases to be listed on AMEX or there
        is a
        change of control of the company as defined in the Trust Deed, each holder
        will
        have the right to require us to redeem all or part of that holder’s Bonds. If on
        or before November 13, 2008, the Bonds, Bond Warrants, and shares underlying
        the
        Bonds and Bond Warrants are not registered with the SEC, then holders of
        the
        Bonds can require us to redeem the Bonds at 106.09% of the principal amount
        of
        the Bonds. In addition, at any time after November 13, 2010, each holder
        can
        require us to redeem the Bonds at 126.51% of the principal amount of the
        Bonds
        and we are required to redeem any outstanding Bonds at 150.87% of its principal
        amount on November 13, 2012. If a triggering event occurs and we are requested
        by the holders to repurchase all or a portion of the Bonds, we will be required
        to pay cash to redeem all or a portion of the Bonds. Finally, in connection
        with
        the issuance of the Bonds, we issued the holder of the Bonds the Bond Warrants
        exercisable at a per share exercise price of $0.0001.
 
 57
 The
        accounting treatment related to the beneficial conversion and mandatory
        redemption features of the Bonds and the value of the Bond Warrants will
        have an
        adverse impact on our results of operations for the term of the Bonds. The
        application of Generally Accepted Accounting Principles will require us to
        allocate $6,107,299 to the beneficial conversion feature of the Bonds and
        $1,652,701 to the Bonds Warrants, which will be reflected in our financial
        statements as an interest discount. In addition, we have determined that
        the
        total redemption premium associated with the mandatory redemption feature
        of the
        Bonds is $4,069,600. All of the aforementioned amounts associated with the
        beneficial conversion and mandatory redemption feature of the Bonds and the
        value of the Bond Warrants will be amortized as additional interest expense
        over
        the term of the Bonds. This accounting will result in an increase in interest
        expense in all reporting periods during the term of the Bonds, and, as a
        result,
        reduce our net income accordingly.
 
 **Mandatory
        redemption of the Bonds could have a material adverse effect on our liquidity
        and cash resources.**
 
 If
        we are
        required to redeem all or any portion of the Bonds, this may have a material
        adverse effect on our liquidity and cash resources, and may impair our ability
        to continue to operate. If we are required to repurchase all or a portion
        of the
        Bonds and do not have sufficient cash to make the repurchase, we may be required
        to obtain third party financing to do so, and there can be no assurances
        that we
        will be able to secure financing in a timely manner and on favorable terms,
        which could have a material adverse effect on our financial performance,
        results
        of operations and stock price. Furthermore, additional equity financing may
        be
        dilutive to the holders of our common stock, and debt financing, if available,
        may involve restrictive covenants, and strategic relationships, if necessary
        to
        raise additional funds, and may require that we relinquish valuable
        rights.
 
 **We
        will incur an expense charge of approximately $700,000 in the first quarter
        of
        2008 in connection with 200,000 shares of common stock that we intend to
        issue
        for investor relation services.**
 
 On
        January 16, 2008, we entered into an investor relations agreement with Public
        Equity Group Inc. pursuant to which we agreed to issue 200,000 shares of
        our
        common stock to Public Equity Group Inc. if and when our registration statement,
        of which this prospectus is a part, is declared effective by the Securities
        and
        Exchange Commission. Upon the issuance of 200,000 shares of common stock,
        we
        expect to recognize a one-time charge to operations in the first quarter
        of 2008
        in an amount equal to approximately $700,000, which is derived from valuing
        each
        share at $3.50, the mid-range offering price of the public offering that
        we
        intend to conduct in February 2008. The expense will have a negative effect
        on
        our results of operations for 2008 and we may not realize a benefit from
        services provided under the agreement that is comparable to such negative
        effect. As a result, our operations may suffer and our stock price may
        decline.
 
 **We
        face risks related to our recent accounting restatements in December 2007
        and
        February 2008.**
 
 In
        December 2007 and February 2008, we determined that we had accounting
        inaccuracies in previously reported financial statements and decided to restate
        our financial statements for the years ended December 31, 2006, 2005, and
        2004,
        the three months ended March 31, 2007, the three months and six months ended
        June 30, 2007, and the three months and nine months September 30, 2007. The
        restatements for the foregoing periods related to the correction of errors
        with
        respect to the accounting for inventory by adjusting watch movement costing
        for
        the effects of vendor incentives from an as received basis to an accrual
        basis,
        as we were able to estimate the value of the incentives as inventory is
        purchased, the accounting for fees and costs related to the January 2007
        reverse
        merger as a charge to operations, and the recognition of stock-based
        compensation cost related to the Escrow Shares. As a result of these
        adjustments, various income tax calculations were also revised, which effected
        net income and also caused reclassifications to cash flows. We also corrected
        average and actual shares outstanding retroactively (and related earnings
        per
        share calculations) to reflect the January 2007 reverse merger. We also made
        various changes to footnote disclosures relating to these revisions. It is
        possible that such restatement of our financial statements could lead to
        litigation claims and/or regulatory proceedings against us. The defense of
        any
        such claims or proceedings may cause the diversion of management's attention
        and
        resources, and we may be required to pay damages if any such claims or
        proceedings are not resolved in our favor.
 
 58
 **In
        connection with Mr. Kwong’s agreement to release, under certain conditions, up
        to 2,326,000 shares of his common stock in our company to investors in our
        January 2007 Private Placement, we will record a compensation charge of
        approximately $2.4 million for 2007.**
 
 In
        connection with the Private Placement, Kwong Kai Shun, our Chairman of the
        Board, Chief Executive Officer and Chief Financial Officer, entered into
        an
        agreement (the “Escrow Agreement”) with the investors in the Private Placement
        pursuant to which Mr. Kwong agreed to place 2,326,000 shares of his common
        stock
        in escrow for possible distribution to the investors (the "Escrow Shares").
        Pursuant to the Escrow Agreement, if our net income for 2006 or 2007, subject
        to
        specified adjustments, is less than $6.3 million or $7.7 million, respectively,
        a portion, if not all, of the Escrow Shares will be transferred to the investors
        based upon our actual net income, if any, for such fiscal years. We have
        accounted for the Escrow Shares as the equivalent of a performance-based
        compensatory stock plan between Mr. Kwong and us. Accordingly, during the
        nine
        months ended September 30, 2007, we recorded a charge to operations of
        $1,852,494 to recognize the grant date fair value of stock-based compensation
        in
        conjunction with the Escrow Shares, and during the three months ended December
        31, 2007, we will recognize a final charge to operations of $581,156 with
        respect to the Escrow Shares. The expense will have a negative effect on
        our
        results of operations for 2007 and cause our net income to be reduced by
        $2.4
        million for the year. We may not realize a benefit from services provided
        under
        the agreement that is comparable to such negative effect. As a result, our
        operations may suffer and our stock price may decline.
 
 
 **ITEM
        2.**  **UNREGISTERED
        SALES OF EQUITY SECURITIES AND USE OF PROCEEDS**
 
 None.
 
 **ITEM
        3.**  **DEFAULTS
        UPON SENIOR SECURITIES**
 
 None.
 
 **ITEM
        4.**  **SUBMISSION
        OF MATTERS TO A VOTE OF SECURITY HOLDERS**
 
 None.
 
 **ITEM
        5.**  **OTHER
        INFORMATION**
 
 None.
 
 **ITEM
        6.**  **EXHIBITS**
  (a)
        Exhibits
 
 31.1
              Certification
                  of Principal Executive Officer and Principal Financial and Accounting
                  Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of
                  200232.1
              Certification
                  of Principal Executive Officer and Principal Financial and Accounting
                  Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
 *
        This
        exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities
        Exchange Act of 1934 or otherwise subject to the liabilities of that section,
        nor shall it be deemed incorporated by reference in any filing under the
        Securities Act of 1933 or the Securities Exchange Act of 1934, whether made
        before or after the date hereof and irrespective of any general incorporation
        language in any filings.
 
  59
  
 **SIGNATURES**
 
 In
        accordance with the requirements of the Exchange Act, the registrant has
        duly
        caused this report to be signed on its behalf by the undersigned, thereunto
        duly
        authorized.
 
 **ASIA
                  TIME CORPORATION**
                (Registrant)February
                  8, 2008
              By:
              /s/ Kwong
                  Kai ShunKwong
                  Kai ShunChief
                  Executive Officer, Chief Financial Officer and Chairman of the
                  Board
  60