**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**





**FORM
      10-Q**




**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)*
            
            **N/A**
              *(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.










**ASIA
      TIME CORPORATION.**


**FORM
      10-Q QUARTERLY REPORT**





**TABLE
      OF CONTENTS**





**Page**PART
                I - FINANCIAL INFORMATION
            1ITEM
                1.
            FINANCIAL
                STATEMENTSCondensed
                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
            30ITEM
                3.
            QUANTITATIVE
                AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
            38ITEM
                4.
            CONTROLS
                AND PROCEDURES
            39PART
                II - OTHER INFORMATIONITEM
                1.
            LEGAL
                PROCEEDINGS
            39ITEM
                1A.
            RISK
                FACTORS
            39ITEM
                2.
            UNREGISTERED
                SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
            40ITEM
                3.
            DEFAULTS
                UPON SENIOR SECURITIES
            40ITEM
                4.
            SUBMISSION
                OF MATTERS TO A VOTE OF SECURITY HOLDERS
            40ITEM
                5.
            OTHER
                INFORMATION
            40ITEM
                6.
            EXHIBITS
            40SIGNATURES
            
            41













**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 September 26, 2007.








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)******$***
            
            ***$*****ASSETS**Current
                Assets:Cash
                and cash equivalents
            
            
            166,216
            
            
            316,621Restricted
                cash
            
            
            5,551,704
            
            
            4,523,679Accounts
                receivable, net
            
            
            15,482,635
            
            
            8,188,985Prepaid
                expenses and other receivables – Note 8
            
            
            6,397,568
            
            
            2,101,133Income
                tax prepayments
            
            
            -
            
            
            767Inventories,
                net – Note 9
            
            
            6,520,527
            
            
            6,620,361Prepaid
                lease payments – Note 11
            
            
            17,193
            
            
            22,958Total
                Current Assets
            
            
            34,135,843
            
            
            21,774,504Deferred
                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**
            
            
            36,559,172
            
            
            24,470,459**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
            
            
            2,854,788
            
            
            1,453,051Bank
                borrowings – Note 16
            
            
            15,196,458
            
            
            13,205,167Total
                Current Liabilities
            
            
            19,190,985
            
            
            15,618,936Deferred
                tax liabilities – Note 6
            
            
            37,180
            
            
            31,711**TOTAL
                LIABILITIES**
            
            
            19,228,165
            
            
            15,650,647




**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)******$***
            
            ***$*****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)Issued
                and outstanding: 2007 – 23,156,629 shares (2006 – 19,454,420
                shares)
            
            
            2,316
            
            
            1,946Additional
                paid-in capital
            
            
            3,287,386
            
            
            654,298Accumulated
                other comprehensive income
            
            
            22,112
            
            
            7,470Retained
                earnings
            
            
            14,018,968
            
            
            8,156,098**TOTAL
                STOCKHOLDERS’ EQUITY**
            
            
            17,331,007
            
            
            8,819,812**TOTAL
                LIABILITIES AND STOCKHOLDERS’ EQUITY**
            
            
            36,559,172
            
            
            24,470,459




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***
            
            ***Nine
                months ended******September
                30,***
            
            ***September
                30,***
            
            ***September
                30,***
            
            ***September
                30,******2007***
            
            ***2006***
            
            ***2007***
            
            ***2006******(Unaudited)***
            
            ***(Unaudited)***
            
            ***(Unaudited)***
            
            ***(Unaudited)******$***
            
            ***$***
            
            ***$***
            
            ***$***Net
                sales
            
            
            22,972,645
            
            
            19,647,209
            
            
            64,960,224
            
            
            62,874,395Cost
                of sales
            
            
            (18,099,186
            )
            
            (16,730,052
            )
            
            (54,644,056
            )
            
            (56,510,946
            )Gross
                profit
            
            
            4,873,459
            
            
            2,917,157
            
            
            10,316,168
            
            
            6,363,449Other
                income – Note 4
            
            
            48,425
            
            
            41,724
            
            
            145,203
            
            
            125,504Depreciation
            
            
            (64,635
            )
            
            (83,730
            )
            
            (193,499
            )
            
            (243,096
            )Administrative
                and other operating
              expenses
            
            
            (490,225
            )
            
            (359,472
            )
            
            (1,443,283
            )
            
            (971,717
            )Income
                from operations
            
            
            4,367,024
            
            
            2,515,679
            
            
            8,824,589
            
            
            5,274,140Fees
                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
            
            
            4,090,063
            
            
            2,305,149
            
            
            7,375,393
            
            
            4,676,052Income
                taxes – Note 6
            
            
            (752,221
            )
            
            (410,284
            )
            
            (1,512,523
            )
            
            (829,593
            )Net
                income
            
            
            3,337,842
            
            
            1,894,865
            
            
            5,862,870
            
            
            3,846,459Earnings
                per common share – Note 3-
                Basic
            
            $
            0.14
            
            $
            0.10
            
            $
            0.26
            
            $
            0.20-
                Diluted
            
            
            0.13
            
            
            0.10
            
            
            0.24
            
            
            0.20Weighted
                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)******$***
            
            ***$*****Cash
                flows from operating activities**Net
                income
            
            
            5,862,870
            
            
            3,846,459Adjustments
                to reconcile net income to net cash flowsprovided
                by (used in) operating activities:Amortization
                of intangible assets
            
            
            92,884
            
            
            115,965Amortization
                of leasehold lands
            
            
            17,287
            
            
            17,481Depreciation
            
            
            193,499
            
            
            243,096Dividend
                income
            
            
            -
            
            
            (4,486
            )Loss
                on disposal of plant and equipment
            
            
            5,406
            
            
            7,725Income
                taxes
            
            
            1,512,523
            
            
            829,593Changes
                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
            )Increase
                (decrease) in -
              Inventories
            
            
            90,180
            
            
            1,679,040Accounts
                payable
            
            
            306,241
            
            
            (279,202
            )Other
                payables and accrued liabilities
            
            
            (138,142
            )
            
            (37,981
            )Income
                taxes payable
            
            
            (112,601
            )
            
            (16,055
            )Unearned
                income
            
            
            -
            
            
            (1,595,187
            )Net
                cash provided by (used in) operating activities
            
            
            (3,711,177
            )
            
            423,364**Cash
                flows from investing activities**Acquisition
                of plant and equipment
            
            
            (30,257
            )
            
            (1,164,095
            )Proceeds
                from disposal of plant and equipment
            
            
            320
            
            
            2,034Dividend
                received
            
            
            -
            
            
            4,486Net
                cash used in investing activities
            
            
            (29,937
            )
            
            (1,157,575
            )**Cash
                flows from financing activities**Proceeds
                from issuance of Series A convertible preferred stock
            
            
            2,641,683
            
            
            -Proceeds
                from new short-term bank borrowings
            
            
            2,816,620
            
            
            33,932Repayment
                of short-term bank borrowings
            
            
            (4,029,839
            )
            
            (259,532
            )Net
                advance under short term bank borrowings
            
            
            3,175,698
            
            
            3,925,836Increase
                in restricted cash
            
            
            (1,031,003
            )
            
            (1,180,479
            )Advances
                to related parties
            
            
            (20,773
            )
            
            (28,798
            )Decrease
                in bank overdrafts
            
            
            40,840
            
            
            131,057Dividends
                paid
            
            
            -
            
            
            (2,445,712
            )Net
                cash flows 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)******$***
            
            ***$***Supplemental
                disclosures for 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


(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 (10) day after the end of
        the six
        (6) 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 one hundred and twenty (120) days after the Required Filing Date or
        the
        actual filing date, whichever is earlier, or one hundred fifty (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 SEC. In addition,
        the
        Company agreed to use its reasonable best efforts to maintain the registration
        statement effective for a period of twenty-four (24) months at the Company’s
        expense.





7


ASIA
      TIME
      CORPORATION


(Formerly
      SRKP 9, Inc.)





NOTES
      TO
      CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)


(Stated
      in US Dollars)





THREE
      MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006








**1.**
            **Organization
                and recapitalization
                (continued)**





Restatement
      with respect to accounting for fees and costs related to reverse
      merger





The
      Company has revised its interim 2007 statement of operations to reflect all
      fees
      and costs related to the reverse merger as charges to operations. In the
      Company’s previously filed financial statements for the interim periods ended
      March 31, 2007 and June 30, 2007, the Company had previously recognized $419,197
      as reverse merger expenses charged to operations. The revised interim 2007
      statement of operations increased that amount by $317,000 to $736,197, primarily
      to include the amounts paid to acquire equity control of the public shell,
      which
      had been previously recorded as a reduction to additional paid-in capital.
      The
      effect of recording this adjustment was to reduce basic and fully diluted
      earnings per share by approximately $0.01 for the nine months ended September
      30, 2007. This adjustment had no effect on basic or diluted earnings per share
      for the three months ended September 30, 3007. The Company is currently in
      the
      process of preparing revised Quarterly Reports on Form 10-Q for the three months
      ended March 31, 2007 and June 30, 2007 to reflect this adjustment.





**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)


(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-month 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 Times Manufacture
      & E-Commerce Corporation Ltd and the notes thereto for the year ended
      December 31, 2006.





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.





Restricted
      cash





Deposits
      in banks for securities of bank borrowings that are restricted in use are
      classified as restricted cash.





9


ASIA
      TIME
      CORPORATION


(Formerly
      SRKP 9, Inc.)





NOTES
      TO
      CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)


(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 reporting period, the Company had no uncollectible accounts receivable
      and,
      accordingly, did not record any allowance for doubtful accounts.





Rebate
      receivable





Rebate
      receivables are recognized as a reduction of cost of sales at fair value, less
      a
      provision for impairment. A provision for impairment of rebate receivables
      is
      established when there is objective evidence that the Company will not be able
      to collect all amounts due according to the original terms of such receivables.
      The amount of the provision is recognized in the statement of operations. No
      provision was required during the periods presented herein.





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’s inventory reserve requirements
      generally increase as the management’s projected demand requirements; decrease
      due to market conditions and product life cycle changes. During the reporting
      period, the Company estimated that no allowance for slow-moving or defective
      inventories was required.





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.





10


ASIA
      TIME
      CORPORATION


(Formerly
      SRKP 9, Inc.)





NOTES
      TO
      CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)


(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.





11




ASIA
      TIME
      CORPORATION


(Formerly
      SRKP 9, Inc.)





NOTES
      TO
      CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)


(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 cashflows attributable
      to such assets.





No
      impairment of long-lived assets was recognized for any of the periods
      presented.





Revenue
      recognition





Revenue
      is recognized according to the terms of the sale arrangement, which is
      customarily when the customer receives title to the goods, generally upon
      delivery. Revenue is recorded on a gross basis, since the Company is responsible
      for fulfillment, including the acceptability of the products ordered by the
      customer. Management believes that adequate controls are in place to ensure
      compliance with sale arrangements, a substantial history of such performance
      has
      been established, and historical returns and allowances have not been
      significant. The Company revenue recognition policy is with respect to the
      following two product categories: watch movements and completed watches. The
      Company’s sales arrangements do not have multiple-deliverable arrangements as
      described in EITF 00-21.





Earnings
      per share





The
      Company computes earnings per share (“EPS’) in accordance with Statement of
      Financial Accounting Standards No. 128, “Earnings per Share” (“SFAS No. 128”),
      and SEC Staff Accounting Bulletin No. 98 (“SAB 98”). SFAS No. 128 requires
      companies with complex capital structures to present basic and diluted EPS.
      Basic EPS is measured as Net Income divided by the weighted average common
      shares outstanding for the period. Diluted EPS is similar to basic EPS 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
      converted at the beginning of the periods presented, or issuance date, if later.
      Potential common shares that have an anti-dilutive effect (i.e., those that
      increase income per share or decrease loss per share) are excluded from the
      calculation of diluted EPS.





12


ASIA
      TIME
      CORPORATION


(Formerly
      SRKP 9, Inc.)





NOTES
      TO
      CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)


(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)





The
      Convertible Preferred stock is included on an “as converted “basis when these
      shares are dilutive.





The
      following table is a reconciliation of the weighted average shares used in
      the
      computation of basic and diluted earnings per share for the periods presented
      (amounts in thousands, except per share data):





**Three********Months Ended September
                30,****2007**
            
            **2006****Weighted**
            
            
            
            
            
            **Weighted****Average**
            
            
            
            
            
            **Average****Income**
            
            **Shares**
            
            **Per-Share**
            
            **Income**
            
            **Shares**
            
            **Per-Share**Earnings
                per share - basicNet
                income
            
            $
            3,337,842
            
            
            23,156,629
            
            $
            0.14
            
            $
            1,894,865
            
            
            19,454,420
            
            $
            0.10Effect
                of dilutive securitiesConvertible
                preferred stock
            
            
            -
            
            
            2,250,348
            
            
            
            
            
            -
            
            
            -Earnings
                per share - dilutedNet
                income
            
            $
            3,337,842
            
            
            25,406,977
            
            $
            0.13
            
            $
            1,894,865
            
            
            19,454,420
            
            $
            0.10




**Nine Months Ended September
                  30,****2007**
              
              **2006****Weighted**
              
              
              
              
              
              **Weighted****Average**
              
              
              
              
              
              **Average****Income**
              
              **Shares**
              
              **Per-Share**
              
              **Income**
              
              **Shares**
              
              **Per-Share**Earnings
                  per share - basicNet
                  income
              
              $
              5,862,870
              
              
              22,844,721
              
              $
              0.26
              
              $
              3,846,459
              
              
              19,454,420
              
              $
              0.20Effect
                  of dilutive securitiesConvertible
                  preferred stock
              
              
              -
              
              
              2,029,541
              
              
              
              
              
              -
              
              
              -Earnings
                  per share - dilutedNet
                  income
              
              $
              5,862,870
              
              
              24,874,262
              
              $
              0.24
              
              $
              3,846,459
              
              
              19,454,420
              
              $
              0.20




13


ASIA
      TIME
      CORPORATION


(Formerly
      SRKP 9, Inc.)





NOTES
      TO
      CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)


(Stated
      in US Dollars)





THREE
      MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006




**3.** **Summary
      of significant accounting policies (continued)**





Recent
      adopted accounting pronouncements





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, if any, adoption of FIN 48 did not
      have
      an effect on our results of operations or financial condition. We did not have
      any material unrecognized tax benefits as of January 1, 2007 the
      implementation of FIN 48 had no impact on the Company.





Recent
      accounting pronouncements





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. 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 No.157, management
      currently does not believe the adoption of SFAS No. 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.” 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. The Company has not chosen to early adopt this statement. Although
      the Company will continue to evaluate the provisions of SFAS No.159, management




14




ASIA
      TIME
      CORPORATION


(Formerly
      SRKP 9, Inc.)





NOTES
      TO
      CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)


(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





currently
      does not believe the adoption of SFAS No. 159 will have a material
      impact on the Company’s consolidated financial statements.





**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




15


ASIA
      TIME
      CORPORATION


(Formerly
      SRKP 9, Inc.)





NOTES
      TO
      CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)


(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
            
            
            752,221
            
            
            410,284
            
            
            1,512,523
            
            
            829,593





The
      Company’s subsidiaries operating in Hong Kong are subject to profits tax of
      17.5% on the estimated assessable profits during the periods. The difference
      in
      the periods between the actual effective tax rate and the Hong Kong Statutory
      rate results from minor non-deductable items in the periods ending in 2006
      and
      the three months ended September 30,2007 which result in less than a 1% increase
      to the Company’s effective tax rate. During the nine months ended September 30,
      2007, the tax rate was approximately 21% due to the effect on the tax rate
      of
      non tax deductable fees and costs related to the reverse merger that were
      charged to operations during the period.





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







16







ASIA
      TIME
      CORPORATION


(Formerly
      SRKP 9, Inc.)





NOTES
      TO
      CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)


(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
            
            
            3,337,842
            
            
            1,894,865
            
            
            5,862,870
            
            
            3,846,459Foreign
                currency translation adjustment
            
            
            62,784
            
            
            (13,703
            )
            
            14,642
            
            
            (23,976
            )**Total
                comprehensive income**
            
            
            3,400,626
            
            
            1,881,162
            
            
            5,877,512
            
            
            3,822,483





**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
                
                
                6,520,527
                
                
                4,874,7136,520,527
                
                
                6,620,361





17


ASIA
      TIME
      CORPORATION


(Formerly
      SRKP 9, Inc.)





NOTES
      TO
      CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)





(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.





18


ASIA
      TIME
      CORPORATION


(Formerly
      SRKP 9, Inc.)





NOTES
      TO
      CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)


(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 are
      $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 investments approximate its fair value
      at September 30, 2007.





As
      at
      September 30, 2007 and December 31, 2006, the carrying amount of
      held-to-maturity investments pledged as security for the Company’s banking
      facilities amounted to $300,771 and $301,196, respectively.




19




ASIA
      TIME
      CORPORATION


(Formerly
      SRKP 9, Inc.)





NOTES
      TO
      CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)


(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 are
      $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




20


ASIA
      TIME
      CORPORATION


(Formerly
      SRKP 9, Inc.)





NOTES
      TO
      CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)


(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.




21




ASIA
      TIME
      CORPORATION


(Formerly
      SRKP 9, Inc.)





NOTES
      TO
      CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)


(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 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**
            
            **Total****Balances,
                December 31, 2006**
            
            **0**
            
            **$**
            **0**
            
            
            **19,454,420**
            
            **$**
            **1,946**
            
            **$**
            **654,298**
            
            **$**
            **656,244**Jan
                23, 2007
            
            
            Shares
                issued to SRKP 9 founders at inception:*Originally
                issued on*Jan
                23, 2007*Deemed
                issued on*Jan
                23, 2007*for reverse merger purposes*
            
            2,700,000
            
            
            270
            
            
            (270
            )
            
            0*Issued
                in connection with 1.371188519 - for -1 retroactive**stock
                split*
            
            1,002,209
            
            
            100
            
            
            (100
            )
            
            0Jan
                23, 2007
            
            
            Adjustment
                toSRKP
                9 accounts to
              reflect
                reverse merger
            
            
            
            
            
            
            
            
            
            
            
            (7,999
            )
            
            (7,999
            )Jan
                23, 2007
            
            
            Gross
                proceeds from shares sold in
              offering –
                initial closing
            
            
            1,749,028
            
            
            175
            
            
            
            
            
            
            
            
            2,256,071
            
            
            2,256,246Jan
                23, 2007
            
            
            Offering
                costs – initial closing
              (9%
                of gross)
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (203,062
            )
            
            (203,062
            )Feb
                9, 2007
            
            
            Gross
                proceeds from shares sold inoffering –
                final closing
            
            
            501,320
            
            
            50
            
            
            
            
            
            
            
            
            646,651
            
            
            646,701Feb
                9, 2007
            
            
            Offering
                costs – initial closing
              (9%
                of gross)
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (58,203
            )
            
            (58,203
            )**Balances,
                September 30, 2007**
            
            **2,250,348**
            
            **$**
            **225**
            
            
            **23,156,629**
            
            **$**
            **2,316**
            
            **$**
            **3,287,386**
            
            **$**
            **3,289,927**




22





ASIA
      TIME
      CORPORATION


(Formerly
      SRKP 9, Inc.)





NOTES
      TO
      CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)


(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 an 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.





Each
      share of the Company’s Series A Preferred Stock is convertible into shares of
      common stock at a conversion price equal to the share purchase price, subject
      to
      adjustments.





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 $1.0 million, 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 thirty days after the consummation of
      the
      Private Placement and agreed to use reasonable best efforts to cause such
      Registration Statement to become effective within one hundred and fifty (150)
      days after the closing of the Private Placement, or one hundred eighty (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 twenty-four (24) months at
      the
      Company’s expense.




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, Kwong Kai Shun, the Company’s Chairman of
        the Board, Chief Executive Officer and Chief Financial Officer, entered into
        an
        agreement with the investors in the Private Placement pursuant to which Mr.
        Kwong agreed to place 2,326,000 shares of his company common stock in escrow
        for
        possible distribution to the investors (the “Escrow Shares”). Pursuant to the
        agreement, if the Company’s annual net income for 2006 or 2007 as set forth in
        its 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 the Company’s actual net income, if any, for such
        fiscal years. In addition, Mr. Kwong has agreed to purchase all 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, a date that was
        subsequently extended. The number of shares Mr. Kwong will distribute to
        shareholders will be determined by the number 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 and a price earning ratio set at 5 for 2006
        and 4
        for 2007. In no circumstances will the shares distributed by Mr. Kwong exceed
        2,326,000. Each shareholder will receive a pro rata amount of shares based
        on
        the number of the shares that they hold at the time of distribution. In the
        event that Mr. Kwong transfers 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.


23


ASIA
      TIME
      CORPORATION


(Formerly
      SRKP 9, Inc.)





NOTES
      TO
      CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)


(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.








24


ASIA
      TIME
      CORPORATION


(Formerly
      SRKP 9, Inc.)





NOTES
      TO
      CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)


(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
            
            
            12,75992,395





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.





25


ASIA
      TIME
      CORPORATION


(Formerly
      SRKP 9, Inc.)





NOTES
      TO
      CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)


(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**
            
            **Watch**
            
            **Completed****September
                30, 2007**
            
            **Movements**
            
            **Watches**
            
            **Total*****$***
            
            ***$***
            
            ***$***Sales
            
            
            18,366,450
            
            
            4,606,195
            
            
            22,972,645Cost
                of sales
            
            
            (15,636,299
            )
            
            (2,462,887
            )
            
            (18,099,186
            )Segment
                result
            
            
            2,730,151
            
            
            2,143,308
            
            
            4,873,459




**Three
                  months ended**
              
              **Watch**
              
              **Completed****September
                  30, 2006**
              
              **Movements**
              ****
              **Watches**
              ****
              **Total**
              ********
              ***$***
              
              ***$***
              
              ***$***Sales
              
              
              17,340,582
              
              
              2,306,627
              
              
              19,647,209Cost
                  of sales
              
              
              (15,491,510
              )
              
              (1,238,542
              )
              
              (16,730,052
              )Segment
                  result
              
              
              1,849,072
              
              
              1,068,085
              
              
              2,917,157




**Nine
                months ended**
            
            **Watch**
            
            **Completed****September
                30, 2007**
            
            **Movements**
            
            **Watches**
            
            **Total*****$***
            
            ***$***
            
            ***$***Sales
            
            
            56,600,993
            
            
            8,359,231
            
            
            64,960,224Cost
                of sales
            
            
            (50,171,327
            )
            
            (4,472,729
            )
            
            (54,644,056
            )Segment
                result
            
            
            6,429,666
            
            
            3,886,502
            
            
            10,316,168




**Nine
              months ended**
            
            **Watch**
            
            **Completed****September
                30, 2006**
            
            **Movements**
            
            **Watches**
            
            **Total*****$***
            **
            ***$***
            **
            ***$***Sales
            
            
            55,217,795
            
            
            7,656,600
            
            
            62,874,395Cost
                of sales
            
            
            (52,489,144
            )
            
            (4,021,802
            )
            
            (56,510,946
            )Segment
                result
            
            
            2,728,651
            
            
            3,634,798
            
            
            6,363,449




26




ASIA
      TIME
      CORPORATION


(Formerly
      SRKP 9, Inc.)





NOTES
      TO
      CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)


(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.** **Subsequent
      Events**





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. T he
      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.





27


ASIA
      TIME
      CORPORATION


(Formerly
      SRKP 9, Inc.)





NOTES
      TO
      CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)


(Stated
      in US Dollars)





THREE
      MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006




**21.**
            **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 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, 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.




28




ASIA
      TIME
      CORPORATION


(Formerly
      SRKP 9, Inc.)





NOTES
      TO
      CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)


(Stated
      in US Dollars)





THREE
      MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006


**21.**
              **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 $4,214,240 net of discounts for the Warrants and conversion
      feature values. The Warrants and the beneficial conversion feature were valued
      at$1,892,880 and $1,652,880, respectively, which were determined for the
      Warrants using under the Black-Scholes valuation method using the relative
      fair
      value method and for the beneficial conversion feature using a price of $3.50
      per share based on the mid-point of the expected public offering price . The
      value of the Warrants and beneficial conversion feature are subject to
      adjustment based on the actual public offering price when the Company completes
      its offering. These amounts will be included in additional paid in capital
      respectively in accordance with guidance of APB 14 and EITF No. 98-5.
      Accordingly, the Bond discount will be recorded as interest expense, using
      the
      interest method over the 5 years term of the debt.





As
      indicated above, the Company will redeem each 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 $4,069,680, which
      is
      an 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.





29


**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 90% of our revenue for the year ended December
      31, 2006 and 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. To enhance our ability
      to
      distribute watch movements we provide a variety of value-added services,
      including automated inventory management services; integration, design and
      development, management, and extended and post-sale support
      services.





**Recent
      Events**





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 common our 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.




30





·
            *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”).





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





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.





31





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 required us to allocate
      $1,652,880 to the beneficial conversion feature of the Bonds and $1,892,880
      to
      the Bonds Warrants, which have been 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 $4,069,680.
      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.





**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.





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 $6.4 million, a 2.5% and 135.3% increase,
      respectively, as compared to $55.2 million in revenue and $2.7 million in gross
      profit for the nine months ended September 30, 2006. The gross profit margin
      increased to 11.4% for the nine months ended September 30, 2007 from 4.9% 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.




32




**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.





***Accounting
      for the 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***





Our
      inventories are stated at the lower of cost and net realizable value. Cost
      is
      determined using the first-in, first-out (FIFO) method. It excludes borrowing
      costs. Net realizable value is the estimated selling price in the ordinary
      course of business, less applicable variable selling expenses.





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.




33




***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***




Revenue
      is recognized according to the terms of the sale arrangement, which is
      customarily when the customer receives title to the goods, generally upon
      delivery. Revenue is recorded on a gross basis, since we are responsible for
      fulfillment, including the acceptability of the products ordered by the
      customer. Management believes that adequate controls are in place to ensure
      compliance with sale arrangements, a substantial history of such performance
      has
      been established, and historical returns and allowances have not been
      significant. Our revenue recognition policy is with respect to the following
      two
      product categories:  watch movements and completed watches. Our sales
      arrangements do not have multiple-deliverable arrangements as described in
      EITF
      00-21.





***Deferred
      income tax***




We
      account for income tax using an asset and liability approach and allow for
      recognition of deferred tax benefits in future years. Under the asset and
      liability approach, deferred taxes are provided for the net tax effects of
      temporary differences between the carrying amounts of assets and liabilities
      for
      financial reporting purposes and the amounts used for income tax purposes.
      A
      valuation allowance is provided for deferred tax assets if it is more likely
      than not these items will either expire before we are able to realize its
      benefits, or that future realization is uncertain.




**Recent
        accounting pronouncements**
 
 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 its 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.
 
 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 not chosen to early adopt this statement. 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.


34


**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
            
            
            78.8
            %
            
            85.1
            %
            
            84.1
            %
            
            89.9
            %Gross
                profit
            
            
            21.2
            %
            
            14.9
            %
            
            15.9
            %
            
            10.1
            %Other
                income
            
            
            0.2
            %
            
            0.2
            %
            
            0.2
            %
            
            0.2
            %Depreciation
            
            
            0.3
            %
            
            0.4
            %
            
            0.3
            %
            
            0.4
            %Administrative
                and other operation expenses
            
            
            2.1
            %
            
            1.8
            %
            
            2.2
            %
            
            1.6
            %Income
                from operations
            
            
            19.0
            %
            
            12.9
            %
            
            13.6
            %
            
            8.3
            %Fees
                and costs related to reverse merger
            
            
            -
            
            
            -
            
            
            1.1
            %
            
            -Other
                income
            
            
            0.2
            %
            
            0.3
            %
            
            0.2
            %
            
            0.3
            %Interest
                expense
            
            
            1.4
            %
            
            1.4
            %
            
            1.3
            %
            
            1.2
            %Income
                before taxes
            
            
            17.8
            %
            
            11.8
            %
            
            11.4
            %
            
            7.4
            %Income
                taxation
            
            
            3.3
            %
            
            2.1
            %
            
            2.3
            %
            
            1.3
            %Net
                income
            
            
            14.5
            %
            
            9.7
            %
            
            9.1
            %
            
            6.1
            %





***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
      $19.7 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.





Cost
      of
      sales for the three months ended September 30, 2007 was $18.1 million, or 78.8%
      of net sales, as compared to $16.7 million, or 85.1% 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 of $1.0 million for the three months ended September 30,
      2007. The increase in rebate receivables was primarily due to the increase
      of
      sales in the third quarter of 2007.





Gross
      profit for the three months ended September 30, 2007 was $4.9 million, or 21.2%
      of net sales, compared to $2.9 million, or 14.9% 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 decrease in costs due to rebate receivables
      in
      the three months ended September 30, 2007, 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 10.7% for the three
      months ended September 30, 2006 as compared to 14.9% 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.





Administrative
      and other operating expenses were $490,225, or 2.1% 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 increased professional fees related to reporting
      requirements as a public company and additional employees and upgraded staff
      benefits. Management considers these expenses as a percentage of net sales
      to be
      a key performance indicator in managing our business.




35




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.





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 $752,221, or 3.3%
      of
      net sales, as compared to $410,284 for the three months ended September 30,
      2006, or 2.1% of net sales. The increase in income taxes is primarily due to
      an
      increase in the operating margin to 17.8% for the three months ended September
      30, 2007 compared to an operating margin of 11.8% for the three months ended
      September 30, 2006.





Net
      income for the three months ended September 30, 2007 was $3.3 million, or 14.5%
      of net sales, as compared to $1.9 million, or 9.6% of the 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.





Cost
      of
      sales for the nine months ended September 30, 2007 was $54.6 million, or 84.1%
      of net sales, as compared to $56.5 million, or 89.9% 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 $10.3 million, or 15.9%
      of net sales, compared to $6.4 million, or 10.12% 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 decrease in costs due to rebate receivables
      in
      the nine months ended September 30, 2007, 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
      4.9% for the nine months ended September 30, 2006 as compared to 11.4% 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.





Administrative
      and other operating expenses were $1.4 million, or 2.2% of net sales, for the
      nine months ended September 30, 2007, as compared to $971,717, or 1.6% of net
      sales, for the comparable period in 2006. The increase in amount and as a
      percentage of net sales was due to the increase in professional fees related
      to
      reporting requirements as a public company and additional employees and upgraded
      staff benefits. Management considers these expenses as a percentage of net
      sales
      to be a key performance indicator in managing our business.




36




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 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.





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 $1.5 million, or 2.3%
      of
      net sales, as compared to $829,593 for the nine months ended September 30,
      2006,
      or 1.3% of net sales. The increase in income taxes is primarily due to an
      increase in the operating margin to 11.4% for the nine months ended September
      30, 2007 compared to an operating margin of 7.4% for the nine months ended
      September 30, 2006.





Net
      income for the nine months ended September 30, 2007 was $5.9 million, or 9.1%
      of
      net sales, as compared to $3.8 million, or 6.1% of net sales for the comparable
      period in 2006.





**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.





On
      November 12, 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.




37




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
      $90,180 and an increase in net income of $5.9 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 33 days and 28 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.





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.




38




*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.





**ITEM
      4.  CONTROLS AND PROCEDURES**





*(a)
      Evaluation of disclosure controls and procedures*




As
      of
      September 30, 2007, our management, with the participation of our Chief
      Executive Officer, or “CEO,” and Chief Financial Officer, or “CFO,” performed an
      evaluation of the effectiveness and the operation of our disclosure controls
      and
      procedures as defined in Rules 13a-15(e) or 15d-15(e) under the Securities
      Exchange Act of 1934, as amended, or the “Exchange Act.” Based on that
      evaluation, the CEO and CFO concluded that our disclosure controls and
      procedures were effective as of September 30, 2007.




*(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 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.




39




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 $1,652,880, to the beneficial conversion feature of the Bonds and
      $1,892,880 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 $4,069,680. 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.





**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.




40





**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)November
                19, 2007
            By:
            /s/ Kwong
                Kai ShunKwong
                Kai ShunChief
                Executive Officer, Chief Financial Officer and Chairman
              of
                the Board








41