8888 Acquisition Corporation: Form 10-Q - Filed by newsfilecorp.com

10-Q 1 form10q.htm FORM 10-Q 8888 Acquisition Corporation: Form 10-Q - Filed by newsfilecorp.com

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: March 31, 2011

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________to _____________

Commission File Number: 000-52251

8888 ACQUISITION CORPORATION
(Exact Name of Registrant as Specified in Its Charter)

Nevada	59-2340247
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)

Qingyanglianyu Industrial Area
Jinjiang City, Fujian Province 362200
People’s Republic of China
(Address of principal executive offices, Zip Code)

(86) 0595-82889862
(Registrant’s telephone number, including area code)

_____________________________________________________
(Former name, former address and former fiscal year, if changed since last report)

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 [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes [ ] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

	Large accelerated filer [ ]		Accelerated filer [ ]
	Non-accelerated filer [ ] (Do not check if a smaller reporting company)		Smaller reporting company [ X ]

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

Yes [ ] No [ X ]

The number of shares outstanding of each of the issuer’s classes of common stock, as of May 10, 2011 is as follows:

Class of Securities	Shares Outstanding
Common Stock, $0.0001 par value	33,966,667

8888 ACQUISITION CORPORATION

*Quarterly Report on Form 10-Q*
*Three and Nine Months Ended March 31, 2011*

TABLE OF CONTENTS
PART I	FINANCIAL INFORMATION	1
ITEM 1.	FINANCIAL STATEMENTS.	1
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.	29
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.	40
ITEM 4.	CONTROLS AND PROCEDURES.	40
PART II	OTHER INFORMATION	41
ITEM 1.	LEGAL PROCEEDINGS.	41
ITEM 1A.	RISK FACTORS.	41
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.	41
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES.	41
ITEM 4.	(REMOVED AND RESERVED).	41
ITEM 5.	OTHER INFORMATION.	41
ITEM 6.	EXHIBITS.	41

PART I FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

8888 Acquisition Corporation

Consolidated Financial statements

March 31, 2011 and June 30, 2010

(Stated in US Dollars)

8888 Acquisition Corporation

Contents	Pages

Report of Independent Registered Public Accounting Firm	1
Consolidated Balance Sheets	2 – 3
Consolidated Statements of Income	4
Consolidated Statements of Cash Flows	5
Consolidated Statements of Stockholders’ Equity	6
Notes to Consolidated Financial Statements	7 – 28

iii

REPORT OF REGISTERED INDEPENDENT PUBLIC ACCOUNTING FIRM

To:	The Board of Directors and Stockholders of
	8888 Acquisition Corporation

We have reviewed the accompanying interim consolidated Balance Sheets of 8888 Acquisition Corporation (“the Company”) as of March 31, 2011 and June 30, 2010, and the related statements of income, stockholders’ equity, and cash flows for the three months and nine months periods ended March 31, 2011 and 2010. These interim consolidated financial statements are the responsibility of the Company's management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the accompanying interim consolidated financial statements for them to be in conformity with U.S. generally accepted accounting principles.

San Mateo, California	Samuel H. Wong & Co., LLP
May 3, 2011	Certified Public Accountants

8888 Acquisition Corporation
Consolidated Balance Sheets
As of March 31, 2011 and June 30, 2010
(Stated in US Dollars)

			March 31,		June 30,
	Note		2011		2010
Assets			[unaudited]		[audited]
Current assets
Cash and cash equivalents	2D	$	17,752,590	$	6,513,199
Restricted cash	3		-		517,728
Accounts receivable, net	2E, 4		14,878,630		11,656,785
Inventory	2F, 5		318,993		196,958
Advance to Suppliers			443,448		-
Prepaid expenses and taxes			7,308		1,762
Total current assets			33,400,969		18,886,432
Non-current assets
Plant and equipment, net	2G, 6		5,317,040		5,671,102
Intangible assets, net	2H, 7		3,169,260		3,246,985
Deposits			336,652		42,780
Total non-current assets			8,822,952		8,960,867
Total Assets		$	42,223,921	$	27,847,299
Liabilities and Stockholders’ Equity
Liabilities
Current liabilities
Bank loans	8	$	3,713,794	$	2,787,651
Notes payable	9		-		1,725,759
Accounts payable and accruals	10		5,917,984		5,055,751
Taxes payable	11		1,332,509		1,333,397
Related party payable	12		119,989
Total current liabilities			11,084,276		10,902,558
Total Liabilities		$	11,084,276	$	10,902,558

See Accompanying Notes to the Consolidated Financial Statements and Accountant’s Report

8888 Acquisition Corporation
Consolidated Balance Sheets
As of March 31, 2011 and June 30, 2010
(Stated in US Dollars)
			March 31,		June 30,
	Note		2011		2010
Stockholders’ Equity			[unaudited]		[audited]
Preferred stock, $0.0001 par value, 50,000,000
shares authorized; 0 share issued and
outstanding as of March 31, 2011 and June 30,
2010 respectively		$	-	$	-
Common stock, $0.0001 par value, 100,000,000
shares authorized; 33,966,667 and 31,419,167
shares issued and outstanding as of March 31,
2011 and June 30, 2010 respectively			3,397		3,142
Additional paid-in capital	19		5,197,929		1,279,740
Statutory reserves	2P, 16(C)		750,389		750,389
Retained earnings			24,129,876		14,535,006
Accumulated other comprehensive income			1,058,054		376,464
Total stockholders’ equity			31,139,645		16,944,741
Total Liabilities and Stockholders’ Equity		$	42,223,921	$	27,847,299

See Accompanying Notes to the Consolidated Financial Statements and Accountant’s Report

8888 Acquisition Corporation
Consolidated Statements of Income
For the three months and nine months ended March 31, 2011 and 2010
(Stated in US Dollars)

			Three Months Ended						Nine Months Ended
			March 31,			March 31,			March 31,			March 31,
	Note		2011			2010			2011			2010
Revenue	2R	$	10,432,547		$	4,170,644		$	36,665,296		$	16,728,146
Cost of revenue	2S		6,536,831			2,732,827			22,231,230			10,351,000
Gross profit			3,895,716			1,437,817			14,434,066			6,377,146
Selling expenses			65,828			26,891			286,010			102,758
General and administrative expenses			340,560			164,222			898,401			365,653
Total operating expenses			406,388			191,113			1,184,411			468,411
Operating income			3,489,328			1,246,704			13,249,655			5,908,735
Other income			-			7,853			-			8,835
Other expense			(159,979	)		-			(245,203	)		-
Interest income			16,660			-			32,133			-
Interest expense			(41,308	)		(37,421	)		(149,103	)		(150,898	)
Total other income/(expenses)			(184,627	)		(29,568	)		(362,173	)		(142,063	)
Pre-tax income			3,304,701			1,217,136			12,887,482			5,766,672
Provisions for income tax	2O, 13		865,340			302,450			3,292,612			1,439,840
Net income (loss)		$	2,439,361		$	914,686		$	9,594,870		$	4,326,832
Earnings per share	2T, 20
- Basic		$	0.07		$	0.03		$	0.29		$	0.14
- Diluted		$	0.07		$	0.03		$	0.29		$	0.14
Weighted average shares outstanding
- Basic			33,966,667			31,419,167			32,947,667			31,419,167
- Diluted			33,966,667			31,419,167			32,947,667			31,419,167

See Accompanying Notes to the Consolidated Financial Statements and Accountant’s Report

8888 Acquisition Corporation
Consolidated Statements of Cash Flows
For the three months and nine months ended March 31, 2011 and 2010
(Stated in US Dollars)

		Three Months Ended						Nine Months Ended
		March 31,			March 31,			March 31,			March 31,
		2011			2010			2011			2010
Net Income/(loss)	$	2,439,361		$	914,685		$	9,594,870		$	4,326,832
Adjustments to reconcile net income to net cash from operations:
Amortization		23,364			19,223			77,725			58,887
Depreciation		348,502			304,413			1,182,305			915,543
Loss on disposal of fixed asset		156,983			-			225,994			-
Provision for bad debt		-			-			16,190			-
Changes in operating assets and liabilities:
(Increase)/decrease in restricted cash		476,421			(307,232	)		517,728			(300,650	)
(Increase)/decrease in accounts and other receivables		2,059,915			2,275,626			(3,681,483	)		1,479,640
(Increase)/decrease in inventories		(31,290	)		382,172			(122,035	)		989,723
(Increase)/decrease in prepaid expenses		(5,491	)		(5,266	)		(5,544	)		(5,091	)
Increase/(decrease) in accounts payables and accruals		(1,927,391	)		(2,482,231	)		982,221			(1,495,474	)
Increase/(decrease) in taxes payables		(127,216	)		(235,261	)		(888	)		(334,381	)
Net cash provided by operating activities		3,413,158			866,129			8,787,083			5,635,029
Cash flows from investing activities
Proceeds from disposal of fixed assets		15,365			-			39,565			-
Payments for deposits		(300,608	)		(46,482	)		(293,872	)		(46,482	)
Payments for land use rights		-			-			-			-
Payments for purchases of plant and equipment		(229,315	)		(250,849	)		(1,093,802	)		(360,822	)
Net cash provided/(used) in investing activities		(514,558	)		(297,331	)		(1,348,109	)		(407,304	)
Cash flows from financing activities
Proceeds from Issuance of common stock		-			-			3,918,444			-
Proceeds from/(repayments of) notes		(476,421	)		1,024,106			(1,725,759	)		1,002,167
Proceeds from/(repayment of) bank loans		782,671			(748,398	)		926,143			(748,398	)
Repayment of loan to related party		-			-			-			(2,998,303	)
Net cash provided/(used) in financing activities		306,250			275,708			3,118,828			(2,744,534	)
Net Increase of cash and cash equivalents		3,204,850			844,505			10,557,802			2,483,191
Effect of foreign currency translation on cash		142,779			1,355			681,590			2,039
Cash and cash equivalents at beginning of year		14,404,961			4,599,526			6,513,198			2,960,156
Cash and cash equivalents at end of year	$	17,752,590		$	5,445,386		$	17,752,590		$	5,445,386
Supplementary cash flow information:
Interest received	$	16,660		$	-		$	32,133		$	-
Interest paid		(50,404	)		(37,421	)		(149,103	)		(150,898	)
Income tax paid		(1,125,779	)		(802,831	)		(3,305,071	)		(1,951,646	)

See Accompanying Notes to the Consolidated Financial Statements and Accountant’s Report

8888 Acquisition Corporation Consolidated Statements of Stockholders’ Equity For the nine months and twelve months ended March 31, 2011 and June 30, 2010 (Stated in US Dollars)

											Accumulated
	Number				Additional						other
	Of		Common		paid in		statutory		Retained		comprehensive
	Shares		stock		capital		reserve		Earnings		income		Total
Balance at July 1, 2009	31,419,167	$	3,142	$	1,279,740	$	476,862	$	7,894,946	$	308,048	$	9,962,738
Net income	-		-		-		-		6,913,587		-		6,913,587
Appropriations of retained earnings	-		-		-		273,527		(273,527		-		-
Foreign currency translation adjustment	-		-		-		-		-		68,416		68,416
Balance at June 30, 2010	31,419,167	$	3,142	$	1,279,740	$	750,389	$	14,535,006	$	376,464	$	16,944,741
Balance at July 1, 2010	31,419,167	$	3,142	$	1,279,740	$	750,389	$	14,535,006	$	376,464	$	16,944,741
Issuance of common stock in connection with
October financing transaction	2,547,500		255		3,918,189		-		-		-		3,918,444
Net income	-		-		-		-		9,594,870		-		9,594,870
Foreign currency translation adjustment	-		-		-		-		-		681,590		681,590
Balance at March 31, 2011	33,966,667	$	3,397	$	5,197,929	$	750,389	$	24,129,876	$	1,058,054	$	31,139,645

	Comprehensive Income
		March 31,		June 30,		Accumulated
		2011		2010		Total
Net income	$	9,594,870	$	6,913,587	$	16,508,457
Other comprehensive income
Foreign currency translation adjustment		681,590		68,416		750,006
	$	10,276,460	$	6,982,003	$	17,258,463

See Accompanying Notes to the Consolidated Financial Statements and Accountant’s Report

8888 Acquisition Corporation
Notes to Consolidated Financial Statements
As of March 31, 2011 and June 30, 2010
And for the three months and nine months ended March 31, 2011 and 2010
(Stated in US Dollars)

1.	The Company and Principal Business Activities

	A.	Organization and Structure

		8888 Acquisition Corporation (“Company”) was originally incorporated on September 20, 1983 in accordance with the Laws of the State of Florida and, on July 18, 2006, changed its state of incorporation from Florida to Nevada by means of a merger with and into 8888 Acquisition Corporation, a Nevada corporation formed on June 26, 2006 solely for the purpose of effecting the reincorporation. The Certificate of Incorporation and Bylaws of the Nevada Corporation are the Certificate of Incorporation and Bylaws of the surviving corporation. Such Certificate of Incorporation kept the surviving entity’s name of 8888 Acquisition Corporation and modified the Company’s capital structure to allow for the issuance of up to 100,000,000 shares of $0.0001 par value common stock and up to 50,000,000 shares of $0.0001 par value preferred stock. On October 20, 2010, in order to more accurately reflect the Company’s business, the board of directors and majority stockholders of the Company approved an amendment and restatement of the Company’s Articles of Incorporation to, among other things, change the name of the Company from 8888 Acquisition Corporation to Sports Power, Inc. The Company is awaiting approval from the U.S. Securities and Exchange Commission to change its name.

		October 19, 2010, the Company entered into share exchange transaction with Cheng Chang Shoes Industry Company Limited (“Cheng Chang”) and its shareholders whereby the Company issued 31,059,267 shares of its common stock to such shareholders for all of the issued and outstanding stock of Cheng Chang. Accordingly, Cheng Chang became a wholly owned subsidiary of the Company.

		Cheng Chang was incorporated and domiciled under Chapter 32 of the Hong Kong Companies Ordinance on October 14, 1988 under the name Yesway Development Limited. On August 5, 1999, Cheng Chang changed its name to its current name, Cheng Chang Shoes Industry Company Limited. Cheng Chang was incorporated as an investment and general trading company. Cheng Chang conducts its operations through its wholly owned subsidiary, Jinjiang Chengchang Shoes Co., Ltd. (“Jinjiang Chengchang”).

		Jinjiang Chengchang was incorporated and domiciled in the People’s Republic of China (“PRC”) on January 2, 1997.

		The Company’s headquarters and production facilitates are located in Jinjiang City, Fujian, PRC.

		The share exchange transaction has been accounted for as a recapitalization of Cheng Chang where the Company (the legal acquirer) is considered the accounting acquiree and Cheng Chang (the legal acquiree) is considered the accounting acquirer. As a result of this transaction, the Company is deemed to be a continuation of the business of Cheng Chang. Accordingly, the financial data included in the accompanying consolidated financial statements for all periods prior to October 19, 2010 is that of the accounting acquirer, Cheng Chang. The historical stockholders’ equity of the accounting acquirer prior to the share exchange has been retroactively restated as if the share exchange transaction occurred as of the beginning of the first period presented

	B.	Products and Operations

		Jinjiang Chengchang designs, produces, and sells high quality shoe soles and sole components used to manufacture athletic and leisure shoes.

		Jinjiang Chengchang’s current vertically integrated value chain has two links: (1) the production of EVO and (2) the production of shoe soles.

		EVO is a patent pending, proprietary, modified variant of the polymer Ethylene-vinyl acetate (“EVA”), which is widely used in the production of athletic shoe soles, stemming from EVA’s shock absorbent property. In comparison to EVA, EVO is both lighter and more wear-resistant. Jinjiang Chengchang is able to sell EVO directly to other shoe sole manufacturers in the industry, or use the EVO for its own shoe sole production.

		Jinjiang Chengchang’s shoe sole product line includes shoe soles that are made exclusively from EVO, EVA and rubber, or a combination of EVA and rubber. The Company considers the new EVO based products as superior to the older EVA and rubber based products.

2.	Significant Accounting Policies

	A.	Method of accounting

		The Company maintains its general ledger and journals with the accrual method of accounting in accordance to PRC generally accepted accounting principles (“GAAP”). For financial statement reporting purposes, the Company has converted its PRC GAAP financial statements to financial statements that are presented in accordance to generally accepted accounting principles in the United States of America. The conversion of the Company’s financial statements from presentation in accordance with PRC GAAP to US GAAP did not result in any reconciling items on the accompanying financial statements.

		The financial statements and accompanying notes are representations of management.

	B.	Principles of consolidation

		The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant inter-company balances such as due to/due from, investment in subsidiaries, and subsidiaries’ capitalization have been eliminated.

	C.	Use of estimates

		The preparation of the financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates and assumptions are used for, but not limited to: (1) allowance for trade receivables, (2) economic lives of property, plant and equipment, (3) asset impairments, and (4) contingency reserves. Management makes these estimates using the best information available at the time the estimates are made; however actual results could differ materially from those estimates.

	D.	Cash and cash equivalents

		The Company classifies the following instruments as cash and cash equivalents: cash on hand, unrestricted bank deposits, and all highly liquid investments purchased with original maturities of three months or less.

	E.	Accounts receivable

		Accounts receivable are disclosed at gross invoice amounts less management’s estimate for doubtful accounts. Management regularly reviews outstanding accounts and provides an allowance for doubtful accounts. Management’s allowance for doubtful accounts was 0.5% of gross accounts receivables.

		We classify our customers into four tiers: (A) well-known companies in the international or domestic sportswear market, which also have had established business relationships with the Company for a long time; (B) median sized companies with good reputations; (C) small sized companies in the local market; and (D) occasional customers with limited transactions. We grant them credit terms of 120 days, 90 days, 60 days and 30 days, respectively. Currently, the Company seldom trades with tier (D) customers. We understand and expect our days sales outstanding to vary from period to period within a given range. Based on the credit terms we grant to our four tiers of customers respectively, we expect our days sales outstanding not to exceed 120 days by any large margin.

		In regards to the Company’s allowance for doubtful accounts, we keep one general reserve, the amount of which equals 0.5% of gross account receivables. We have no specific reserve, as we believe adequate provisions for doubtful accounts have been provided through our general reserve. When estimating the allowance for doubtful accounts, we take into consideration: 1) our track record of payment collection, which shows zero experience of any material delinquent accounts that were uncollectible and that we have not written off material balance; 2) the enhanced measures we currently take to minimize failure of collection, which include having internal staff call for payment, filing legal pledge, collecting agent to collect the outstanding balance, etc. Since our collection period of receivables has never exceeded one year, based on past experience, we believe collection becomes improbable once they exceed the threshold of one year. Thus we will write off receivables against allowance for doubtful accounts once they are older than one year.

	F.	Inventories

		Inventories consisting of finished goods, work in progress, and raw materials are stated at the lower of cost or market value. Finished goods are comprised of direct materials, direct labor, and an appropriate proportion of overhead. Periodic evaluation is made by management to identify if inventories needed to be written down because of damage or spoilage. Cost is determined on a weighted average basis and includes all expenditures incurred in bringing the goods to the point of sale and putting them in a saleable condition.

	G.	Plant and equipment

		Plant and equipment are carried at cost less accumulated depreciation. Depreciation is provided over their estimated useful lives, using the straight-line method. Estimated useful lives of the plant and equipment are as follows:-

Buildings	20 years
Manufacturing equipment	5 - 10 years
Motor vehicles	5 years
Office equipment	5 years

		The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the statement of income. The cost of maintenance and repairs is charged to income as incurred, whereas significant renewals and betterments are capitalized.

	H.	Intangible assets

		The Company individually tracks and accounts for each intangible asset. Each intangible asset is carried at its original acquisition cost less accumulated amortization. The Company provides amortization for each intangible asset using the straight line method over its estimated useful life.

	I.	Accounting for impairment of long lived Assets

		The Company has adopted Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS 144”), ASC 360-10-35. The Company evaluates its long lived assets for impairment when indicators of impairment are present or annually, whichever occurs sooner. In the event that there are indications of impairment, the Company will record a loss to statements of income equal to the difference between the carrying value and the fair value of the long lived asset. The Company typically, but not exclusively uses the expected future discounted flows method to determine fair value of long lived asset subject to impairment. The fair value of long lived assets that held for disposition will include the cost of disposal.

		The Company’s long-lived assets are grouped by their presentation on the consolidated balance sheets, and further segregated by their operating and asset type. Long-lived assets subject to impairment include buildings, equipment, vehicles, software licenses, and land-use-rights. The Company makes its determinations based on various factors that impact those assets.

		At March 31, 2011 and June 30, 2010, the Company assessed its buildings, equipment, vehicles, software licenses, and land-use-rights for production and has concluded its long-lived assets have not experienced any impairment losses because the Company’s long lived assets have enabled the Company to experience significant profit growth during the nine months and twelve months ended March 31, 2011 and June 30, 2010.

	M.	Shipping and handling

		All shipping and handling costs are charged to selling expenses as incurred. All the outward freight costs are paid by the Company, and inward freight charges are paid by the vendors and suppliers. Sales revenue does not include any shipping or handling fees.

	N.	Advertising expenses

		The Company expenses advertising costs as incurred.

	O.	Income taxes

		The Company uses the accrual method of accounting to determine income taxes for the year. The Company has implemented FASB ASC 740 Accounting for Income Taxes. Income tax liabilities computed according to the United States, People’s Republic of China (PRC), and Hong Kong tax laws provide for the tax effects of transactions reported in the financial statements and consists of taxes currently due, plus deferred taxes, related primarily to differences arising from the recognition of expenses related to the depreciation of plant and equipment, amortization of intangible assets, and provisions for doubtful accounts between financial and tax reporting. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will be either taxable or deductible when the assets and liabilities are recovered or settled. Deferred taxes also are recognized for operating losses that are available to offset future income taxes.

		A valuation allowance is recognized for deferred tax assets if it is more likely than not, that the deferred tax assets will either expire before the Company is able to realize that tax benefit, or that future realization is uncertain.

	P.	Statutory reserves

		Statutory reserves are referring to the amount appropriated from the net income in accordance with laws or regulations, which can be used to recover losses and increase capital, as approved, and are to be used to expand production or operations.

	Q.	Foreign currency translation

The accompanying financial statements are presented in United States dollars. The functional currency of the Company is the Renminbi (RMB). The financial statements are translated into United States dollars from RMB at year-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.

*Exchange Rates*	3/31/2011	6/30/2010	12/31/2009
Year end RMB : US$ exchange rate	6.5701	6.8086	6.8372
Average yearly RMB : US$ exchange rate	6.6796	6.8347	6.8386

		The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into US Dollar at the rates used in translation.

	R.	Revenue recognition

		In accordance to FASB ASC 605-10, the Company recognizes revenue upon issuance of invoices to customers. The issuance of invoices is concurrent with the shipment of goods to customers, which generally coincides with the transfer of risks and rewards of ownership, and the title has passed.

The Company typically has written contracts with both new customers and existing customers. Contracts between the Company and its customers indicate a fixed price, delivery date, and the type of goods. The products are fully functional upon shipment and the Company is not obliged to provide any further services to be entitled to payment by its customers. The Company allows two-week period for post-delivery refund if quality problem condition exists. Upon such, the Company will reduce the sale revenue. However, the Company has not experienced any significant return of products and, as such, has not prepared an allowance for returns. Inventory credit, rebates, discounts and volume incentive policies are not applicable to the Company’s sales transactions. Collectability is reasonably assured upon issuance of invoices. The invoice value includes sales value and output value added taxes (“VAT”), which are immediately payable to the PRC government upon issuance.

Customer payments received prior to completion of the above criteria are carried as unearned revenue.

	S.	Cost of revenue

		The Company’s cost of revenue is comprised of raw materials, factory workers’ salaries and related benefits, maintenance supplies, and allocated overhead such as depreciation and utilities.

	T.	Earnings per share

		The Company computes earnings per share (“EPS”) in accordance with FASB ASC 260 “Earnings per share”. SFAS No. 128 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as the income or loss available to common shareholders 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., contingent shares, 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.

	U.	Comprehensive income

		Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. The Company presents components of comprehensive income with equal prominence to other financial statements. The Company’s current component of other comprehensive income is the foreign currency translation adjustment.

	V.	Commitments and contingencies

		Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

	W.	Subsequent events

		The Company evaluates subsequent events that have occurred after the consolidated balance sheet date but before the consolidated financial statements are issued. There are two types of subsequent events: (1) recognized, or those that provide additional evidence with respect to conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements, and (2) non-recognized, or those that provide evidence with respect to conditions that did not exist at the date of the balance sheet but arose subsequent to that date. The Company has evaluated subsequent events, and based on this evaluation, the Company identified a non-recognized subsequent event that would require disclosure to the consolidated financial statements.

	X.	Recent accounting pronouncements

		No New Pronouncement issued since FASB issued in October 2009 ASU No. 2009-13 “Revenue Recognition (Topic 605) that management adopted on January 1, 2011.


3.	Restricted Cash

	Restricted cash represents interest bearing deposits placed with banks to secure and settle notes payable upon maturity.


4.	Accounts Receivable

	Accounts receivable at March 31, 2011 and June 30, 2010 consisted of the following: -


		March 31,			June 30,
		2011			2010
Accounts receivable	$	14,953,397		$	11,715,362
Less: Allowance for doubtful accounts		(74,767	)		(58,577	)
Accounts receivable, net	$	14,878,630		$	11,656,785

		March 31,			June 30,
		2011			2010
Accounts receivable for sales	$	12,780,681		$	10,013,130
Accounts receivable for VAT		2,172,716			1,702,232
Accounts receivable, net	$	14,953,397		$	11,715,362

		March 31,			June 30,
		2011			2010
Beginning balance	$	58,577		$	32,856
Allowance provided		16,190			25,721
Charged against allowance		-			-
Reversals		-			-
Ending balance	$	74,767		$	58,577

Accounts receivable aging analysis:-
At

March 31, 2011:-		Sales		VAT		Total
1-30 Days	$	4,854,926	$	825,338	$	5,680,264
30-60 Days		1,949,092		331,346		2,280,438
61-90 Days		3,626,274		616,466		4,242,740
91-120 Days		2,350,389		399,566		2,749,955
121-365 Days		-		-		-
Over 365 Days		-		-		-
Total	$	12,780,681	$	2,172,716	$	14,953,397

At
June 30, 2010:-		Sales		VAT		Total
1-30 Days	$	4,547,033	$	772,996	$	5,320,029
30-60 Days		3,401,677		578,285		3,979,962
61-90 Days		1,092,761		185,769		1,278,530
91-120 Days		971,659		165,182		1,136,841
121-365 Days		-		-		-
Over 365 Days		-		-		-
Total	$	10,013,130	$	1,702,232	$	11,715,362

The Company believes it has provided adequate provisions for doubtful accounts. Doubtful allowance accounts at March 31, 2011 and June 30, 2010 were 0.5% of gross account receivables. In a situation, the Company uses all its efforts, such as having internal staff call for payment, filing legal pledges, or even hiring collecting agents to collect the outstanding balance, but the collection is no longer probable. The Company will write off the balance against the allowance for doubtful accounts. In the event that previously written off receivables are collected, the Company will re-establish the allowance of bad debt.

From the inception of business, the Company has not experienced any material delinquent accounts that were uncollectible, and has not written off material balance against the allowance for doubtful accounts.

5.	Inventories


		March 31,		June 30,
		2011		2010
Raw materials	$	239,184	$	28,149
Work in progress		79,687		105,057
Finished goods		122		63,752
	$	318,993	$	196,958

8888 Acquisition Corporation
Notes to Consolidated Financial Statements
As of March 31, 2011 and June 30, 2010
And for the three months and nine months ended March 31, 2011 and 2010
(Stated in US Dollars)

6.	Plant and Equipment

	Plant and equipment consisted of the following at March 31, 2011 and June 30, 2010:-

	At				Accumulated
	March 31, 2011:-		Cost		Depreciation			Net
	Buildings	$	2,429,621	$	(553,575	)	$	1,876,046
	Manufacturing equipment		7,847,463		(4,564,039	)		3,283,424
	Office equipment		69,860		(41,498	)		28,362
	Vehicles		167,293		(38,085	)		129,208
		$	10,514,237	$	(5,197,197	)	$	5,317,040

	At				Accumulated
	June 30, 2010:-		Cost		Depreciation			Net
	Buildings	$	2,344,513	$	(455,057	)	$	1,889,456
	Manufacturing equipment		8,108,363		(4,413,073	)		3,695,290
	Office equipment		66,267		(36,856	)		29,411
	Vehicles		83,885		(26,940	)		56,945
		$	10,603,028	$	(4,931,926	)	$	5,671,102

	Depreciation expenses were $1,182,305 and $1,252,308 for the nine months and twelve months ended March 31, 2011 and June 30, 2010 respectively.


7.	Intangible Assets

	At				Accumulated
	March 31, 2011:-		Cost		Amortization			Net
	Land use rights	$	3,732,933	$	(563,757	)	$	3,169,176
	Software licenses		1,248		(1,164	)		84
		$	3,734,181	$	(564,921	)	$	3,169,260

	At				Accumulated
	June 30, 2010:-		Cost		Amortization			Net
	Land use rights	$	3,732,933	$	(486,322	)	$	3,246,611
	Software licenses		1,248		(874	)		374
		$	3,734,181	$	(487,196	)	$	3,246,985

Land-use-rights represent the right to use and develop land in accordance to zoning laws granted by the local PRC government less accumulated amortization. Under PRC law, the company is permitted to sell, transfer, or mortgage its land-use-rights. Amortization expenses were $77,725 and $79,998 for the nine months and twelve months ended March 31, 2011 and June 30, 2010 respectively.

8888 Acquisition Corporation
Notes to Consolidated Financial Statements
As of March 31, 2011 and June 30, 2010
And for the three months and nine months ended March 31, 2011 and 2010
(Stated in US Dollars)

8.	Bank Loans

March 31, 2011:-

Note

Interest Rate

Maturity

Amount

Industrial & Commercial Bank of China - Jinjiang Branch

5.810%

12/17/2011

761,024

Industrial & Commercial Bank of China - Jinjiang Branch

6.060%

01/30/2012

304,409

China Construction Bank - Jinjiang Branch

5.310%

06/17/2011

228,307

China Construction Bank - Jinjiang Branch

5.310%

06/17/2011

304,409

Industrial & Commercial Bank of China - Jinjiang Branch

5.310%

08/05/2011

745,803

China Construction Bank - Jinjiang Branch

5.310%

10/08/2011

152,205

Industrial & Commercial Bank of China - Jinjiang Branch

5.560%

10/28/2011

456,614

China Construction Bank - Jinjiang Branch

6.116%

11/02/2011

654,480

China Construction Bank - Jinjiang Branch

5.560%

11/10/2011

106,543

3,713,794

June 30, 2010:-

Note

Interest Rate

Maturity

Amount

China Construction Bank - Jinjiang Branch

6.372%

01/13/2011

73,437

China Construction Bank - Jinjiang Branch

6.372%

01/20/2011

102,811

China Construction Bank - Jinjiang Branch

5.310%

06/17/2011

293,746

China Construction Bank - Jinjiang Branch

6.372%

01/11/2011

631,554

China Construction Bank - Jinjiang Branch

5.310%

06/17/2011

220,310

Industrial & Commercial Bank of China - Jinjiang Branch

5.841%

01/03/2011

734,365

Industrial & Commercial Bank of China - Jinjiang Branch

5.841%

02/08/2011

290,809

Industrial & Commercial Bank of China - Jinjiang Branch

5.841%

11/08/2010

440,619

2,787,651

The loans detailed above are securitized as follows:-


	A.	Guaranteed by the former shareholders of Jinjiang Chengchang, Mr. Zhuang Guoqing and Ms. Ding Quanying, and Jinjiang Chendai Ailibao Shoe and Apparel Co., Ltd.

	B.	Guaranteed by the former shareholders of Jinjiang Chengchang, Mr. Zhuang Guoqing and Ms. Ding Quanying. The bank also securitizes the loans with the Company’s land use rights.

	C.	Guaranteed by the former shareholders of Jinjiang Chengchang, Mr. Zhuang Guoqing and Ms. Ding Quanying, and Fujian Yifeng Shoe and Apparel Co., Ltd.

	D.	The bank securitizes the loans with the Company’s land used rights.

	E.	Guaranteed by Fujian Yifeng Shoe and Apparel Co., Ltd.

		There were no restrictive covenants such as minimum bank balance, net income target, or level of working capital requirement applied on the company’s bank loan.

9.	Notes Payable

As detailed below, at March 31, 2011 and June 30, 2010, there were $0 and $ 1,725,759 of notes issued by financial institutions, on behalf of the Company, to the Company’s vendors as payment for products delivered and services rendered to the Company. These notes are short term financial instruments with maturities of less than one year. They do not have any stated interest rate. The Company does not calculate imputed interest rate on the notes because of the short term nature of these instruments. The Company is obligated to settle the amounts owed with the issuing financial institution when they mature. These notes are collateralized by the Company’s restricted cash, which represents compensating balances held at banks to partially secure banking facilities in the form of notes payable. The imposed restrictions dictate that the restricted cash cannot be withdrawn when there are outstanding notes payable, and the restricted cash is only allowed to be used to settle bank indebtedness. Restricted cash deposited as compensating balance is interest bearing.

There were no restrictive covenants such as minimum bank balance, net income target, or level of working capital requirement applied on the company’s notes payable.

At
June 30, 2010:-			Restricted Cash
Financial Institution	Maturity		Collateralized		Amount
The Industrial & Commercial Bank of China - Jinjiang Branch	08/06/2010	$	66,093	$	220,310
China Construction Bank - Jinjiang Branch	12/07/2010		83,718		279,059
The Industrial & Commercial Bank of China - Jinjiang Branch	08/06/2010		4,406		14,687
The Industrial & Commercial Bank of China - Jinjiang Branch	08/06/2010		154,216		514,056
China Construction Bank - Jinjiang Branch	09/24/2010		72,702		242,341
China Construction Bank - Jinjiang Branch	09/26/2010		30,843		102,811
China Construction Bank - Jinjiang Branch	12/07/2010		13,219		44,062
China Construction Bank - Jinjiang Branch	12/25/2010		8,813		29,375
The Industrial & Commercial Bank of China - Jinjiang Branch	08/06/2010		35,249		117,498
China Construction Bank - Jinjiang Branch	12/07/2010		26,437		88,124
China Construction Bank - Jinjiang Branch	12/25/2010		13,219		44,062
China Construction Bank - Jinjiang Branch	12/25/2010		8,813		29,374
		$	517,728	$	1,725,759

10.	Accounts Payable and Accruals

	Description		March 31,		June 30,
			2011		2010
	Payables related to purchases of production	$	5,418,079	$	4,586,251
	Wage payable		323,302		312,358
	Miscellaneous payables and accrued expenses		176,603		157,142
		$	5,917,984	$	5,055,751

11.	Taxes payable


Description		March 31,		June 30,
		2010		2010
Income tax payable	$	863,467	$	875,926
VAT payable		420,213		430,236
Personal income tax withholding		16,939		24,916
Other taxes payable		31,890		2,319
	$	1,332,509	$	1,333,397

Our revenue does not include output VAT. For the purchase of raw materials, we are bearing 17% input VAT, which is exclusive from the cost. For the sale of products, we are liable to pay 17% output VAT. However, the input VAT can be used to off-set the output VAT. The VAT liabilities were $420,213 and $430,236 as of March 31, 2011 and June 30, 2010 respectably. The following tabulation represents the calculation of VAT liabilities for the nine months and twelve months ended March 31, 2011 and June 30, 2010:-

			March 31,			June 30,
			2011			2010
VAT liabilities at beginning of periods	(1)	$	430,236		$	262,356
Current periods output VAT:-
Sales revenue			36,665,296			26,324,824
Output VAT percentage			17%			17%
	(2)		6,233,100			4,475,220
Current periods input VAT:-
For purchase of raw materials			(2,947,305	)		(1,393,433	)
For purchase of plant and equipment			(103,938	)		(73,149	)
For water and electricity payments			(178,292	)		(150,695	)
For other miscellaneous items			(27,066	)		(225,706	)
	(3)		(3,256,601	)		(1,842,983	)
VAT paid during the periods	(4)		(3,087,686	)		(2,482,645	)
Impact of foreign currency translation	(5)		101,164			18,288
VAT liabilities at ending of periods	(1) +(2)+(3)+(4)+(5)	$	420,213		$	430,236


12.	Related party payable

Due to Chinese regulations which restrict currency exchange, Mr. Zhuang paid professional service fee in aboard on behalf of the Company. The payment $119,989 owed to Mr. Zhuang was recorded as related party payable as of March 31, 2011. This payable was interest free. The Company expected to remit Mr. Zhuang during the last quarter of 2011.

13.	Income Taxes

In respect of the Company and its subsidiaries domiciled and operated in United States, Hong Kong and the People’s Republic of China, the taxation of these entities are summarized below:

Entities	Countries of Domicile	Income Tax Rate
8888 Acquisition Corporation	United States	34.00%
Cheng Chang HK	Hong Kong	16.50%
Jinjiang Chengchang	PRC	25%

Since the Company is primarily a holding company without any business activities in United States, the Company did not incur any tax for the nine months ended March 31, 2011 and 2010.

The following tabulation presents the income tax and deferred tax of the Company and its individual subsidiaries:-

		Nine months ended			Nine months ended
		March 31,			March 31,
Description		2011			2010
Income (loss) before taxes:-
US Federal	$	(3,813	)	$	-
State		-			-
HK		(186,408	)		(127	)
PRC		13,077,703			5,766,799
Total income before taxes		12,887,482			5,766,672
Provision for taxes:-
Current:
U.S. Federal		-			-
State		-			-
HK		-			-
PRC		3,292,612			1,439,840
		3,292,612			1,439,840
Deferred:
U.S. Federal		-			-
State		-			-
HK		-			-
PRC		-			-
Valuation allowance		-			-
Total provision for taxes	$	3,292,612		$	1,439,840
Effective tax rate		25.55%			24.97%

The differences between the U.S. federal statutory income tax rates and the Company’s effective tax rate for the nine months ended March 31, 2011 and 2010 are shown in the following table:-

	Nine months ended	Nine months ended
	March 31,	March 31,
	2011	2010
U.S. federal statutory income tax rate	34.00%	34.00%
Lower rates in PRC, net	(9.00%)	(9.00%)
Accruals in foreign jurisdictions	0.55%	(0.03%)
Effective tax rate	25.55%	24.97%

14.	Risks

	A.	Credit risk

		Since the Company’s inception, the age of account receivables have been less than one year indicating that the Company is subject to minimal risk borne from credit extended to customers.

	B.	Interest risk

		The company subject to the interest rate risk when their short term loans become due and require refinancing.

	C.	Concentration of demand risk

		The Company’s top ten customers accounted for 79.04% and 74.59% of its revenue for the nine months ended March 31, 2011 and 2010, respectively. During those same periods, 2 and 2 individual customers each accounted for greater than 10% of the Company’s revenues, respectively.

	D.	Concentration of supply risk

		The Company’s top ten vendors accounted for 66.12% and 72.56% of its cost for the nine months ended March 31, 2011 and 2010, respectively. During those same periods, 1 and 3 individual vendor each accounted for greater than 10% of the Company’s cost, respectively.

	E.	Economic and political risks

		The Company’s operations are conducted in the PRC. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by changes in the political, economic, and legal environments in the PRC.

		The Company’s operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things.

	F.	Environmental risks

		The Company has procured environmental licenses required by the PRC government. The Company has both a water treatment facility for water used in its production process and secure transportation to remove waste off site. In the event of an accident, the Company has purchased insurance to cover potential damage to employees, equipment, and local environment.

	G.	Inflation Risk

		Management monitors changes in prices levels. Historically inflation has not materially impacted the company’s financial statements; however, significant increases in the price of raw materials and labor that cannot be passed on the Company’s customers could adversely impact the Company’s results of operations.


15.	Financial Instruments

The Company adopted ASC 820-10, Fair Value Measurements and Disclosures, which defines fair value, establishes a framework for using fair value to measure assets and liabilities, and expands disclosures about fair value measurements.

ASC 820-10 includes a fair value hierarchy that is intended to increase the consistency and comparability in fair value measurements and related disclosures. The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity’s pricing an asset or liability based upon their own market assumptions. The fair value hierarchy consists of the following three levels:

Level 1–inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2–observable inputs other than level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3–instrument valuations are obtained without observable market values and require a high-level of judgment to determine the fair value.

The Company’s financial instruments consist mainly of cash, restricted cash, and debt obligations. Based on the borrowing rates currently available to the Company for loans and similar terms and average maturities, the fair value of debt obligations also approximates its carrying value due to the short-term nature of the instruments. While the Company believes its valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

The following tables present the Company’s financial assets and liabilities at fair value in accordance to ASC 820-10:

		Quoted in		Significant
		Active Markets		Other		Significant
		for Identical		Observable		Unobservable
At		Assets		Inputs		Inputs
March 31, 2011:-		(Level 1)		(Level 2)		(Level 3)		Total
Financial assets:
Cash	$	17,752,591	$	-	$	-	$	17,752,591
Restricted cash		-		-		-		-
Total financial assets		17,752,591		-		-		17,752,591
Financial liabilities:
Notes payable 6		-		-		-		-
Total financial liabilities	$	-	$	-	$	-	$	-

		Quoted in		Significant
		Active Markets		Other		Significant
		for Identical		Observable		Unobservable
At		Assets		Inputs		Inputs
June 30, 2010:-		(Level 1)		(Level 2)		(Level 3)		Total
Financial assets:
Cash	$	6,513,199	$	-	$	-	$	6,513,199
Restricted cash		517,728		-		-		517,728
Total financial assets		7,030,927		-		-		7,030,927
Financial liabilities:
Notes payable		1,725,759		-		-		1,725,759
Total financial liabilities	$	1,725,759	$	-	$	-	$	1,725,759

In January 2008, the Company adopted SFAS 159, the Fair Value Option for Financial Assets and Financial Liabilities, now known as the provisions of Accounting Standards Codification subtopic 825-10 (formerly SFAS 159), Fair Value Option for Financial Assets and Financial Liabilities, and have elected not to measure any of our current eligible financial assets or liabilities at fair value. SFAS 159 was issued to allow entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, SFAS 159 specifies that unrealized gains and losses for that instrument shall be reported in earnings at each subsequent reporting date. SFAS 159 is effective January 1, 2008. We did not elect the fair value option for our financial assets and liabilities existing on January 1, 2008, and did not elect the fair value option for any financial assets or liabilities transacted during the nine months ended March 31, 2011.

16.	Commitments

	A.	Operating lease commitment from related party

		The Company leases a facility from the Company’s Chief Executive Officer and shareholder, Mr. Guoqing Zhuang as a dormitory for its employees. The impact to the Company’s results of operations, in the form of rent expense, for the nine months ended March 31, 2011 and 2010, were $19,582 and $15,795 respectively. The Company’s lease contract with the related party calls for an operating lease commitment as follow:

		For the twelve months ending June 30:-

Fiscal Years		Commitments
2011	$	1,656
2012		21,238
2013		21,238
2014		21,238
2015		21,238
2016		21,238
2017		21,238
2018		21,238
2019		21,238
	$	171,560

	B.	Operating lease commitment from external party

		Starting from April 1, 2011, the Company leases a plant from Jinjiang Huahong Textile Co., Ltd. (“Huahong Textile”) to expand its production capacity. The lease contract with Huahong Texitle will expire on March 31, 2016, and calls for a non-cancellable operating lease commitment as follow:

		For the twelve months ended June 30:-

Fiscal Years		Commitments
2011	$	292,598
2012		1,170,393
2013		1,170,393
2014		1,170,393
2015		1,170,393
2016		877,795
	$	5,851,965

Statutory reserve commitment

In accordance with PRC laws, statutory reserve refers to the appropriation from net income, to the account statutory reserve, to be used for future company development, recovery of losses, and increase of capital, as approved, to expand production or operations. Under the applicable PRC laws, a PRC enterprise operating at a profit must appropriate, on an annual basis, an amount equal to 10% of its profit until the reserve reaches 50% of its registered capital. On October 22, 2010, the Company increased Jinjiang Cheng Chang’s registered capital from $1,480,828 to $4,063,667 by remitting the private placement proceeds (refer to Note 18). For each year ended June 30, Jin Jiang Cheng Chang will continue to appropriate 10% of its operation net income to fund the statutory reserve account until it reaches the 50% cap. The Company’s future fund commitment requirements were provided below:-

		3/31/2011			6/30/2010
PRC subsidiaries registered capital
- Jinjiang Cheng Chang	$	4,063,667		$	1,480,828
Statutory reserve ceiling based on 50% of PRC registered capital		2,031,834			740,414
Less: Retained earnings appropriated to statutory reserve		(750,389	)		(750,389	)
Impact of foreign currency translation		-			9,975
Reserve commitment outstanding	$	1,281,445		$	-

17.	Operating Segments

The Company reports its primary segment information based on its principal operating activities. For management purposes, the Company is currently organized into four major operating divisions and reporting segments based on product line: (1) Ethylene-vinyl acetate (“EVA”) soles, (ii) EVO soles, or ethylene vinyl acetate outsoles, an outgrowth of our EVA product line, (3) Rubber (“RB”) soles, and (4) EVO compound pellets. All our products are mainly used for athletic and leisure shoes.

Prior to May 2010, the Company’s revenue was generated from two products: (1) the EVA soles and (2) RB soles. As a result, we had two reporting segments in fiscal year 2009: (1) EVA soles and (2) RB soles. In May 2010, the Company launched two new products EVO soles and EVO compound pellets which contributed approximately 9% and 4% of the Company’s total revenue for the fiscal year ended June 30, 2010, respectively. As management believes EVO soles and EVO compound pellets will be its main products in the future, the Company added EVO soles and EVO compound pellets as two new reporting segments starting from the fiscal year ended June 30, 2010.

The Company’s operations are located in the PRC. All revenue is from customers in the PRC. All of the Company’s assets are located in the PRC. Sales of soles and pellets are carried out in the PRC. Accordingly, no analysis of the Company’s sales and assets by geographical market is presented. No other measures of segment profit or loss and assets have been provided or reviewed by the company’s chief operating decision maker.

Below is a presentation of the Company’s financial position and results of operations for its operating segments as of March 31, 2011 and June 30, 2010, and for the nine months ended March 31, 2011 and 2010. EVO soles and EVO compound pellet reporting columns have been added into 2010 financial statements for comparable purpose:-

8888 Acquisition Corporation
Notes to Consolidated Financial Statements
As of March 31, 2011 and June 30, 2010
And for the three months and nine months ended March 31, 2011 and 2010
(Stated in US Dollars)
Results of Operations
For the Nine Months Ended
March 31, 2011
											EVO
		EVA			RB			EVO			Compound
		Sole			Sole			Sole			Pellet			Others			Total
Sales	$	9,347,825		$	2,494,865		$	18,424,125		$	6,240,735		$	157,746		$	36,665,296
Cost of Sales		5,678,462			1,552,151			11,041,504			3,739,949			219,164			22,231,230
Gross Profit		3,669,363			942,714			7,382,621			2,500,786			(61,418	)		14,434,066
Operating Expense		301,096			77,356			605,793			205,206			(5,040	)		1,184,411
Operating (Loss)/Profit		3,368,267			865,358			6,776,828			2,295,580			(56,378	)		13,249,655
Other Income (Expense)		(92,070	)		(23,654	)		(185,241	)		(62,749	)		1,541			(362,173	)
Earnings before Tax		3,276,197			841,704			6,591,587			2,232,831			(54,837	)		12,887,482
(Income Tax Expense)		837,033			215,046			1,684,079			570,464			(14,010	)		3,292,612
Net Income	$	2,439,164		$	626,658		$	4,907,508		$	1,662,367		$	(40,827	)	$	9,594,870

Results of Operations
For the Nine Months Ended
March 31, 2010
											EVO
		EVA			RB			EVO			Compound			Others			Total
		Sole			Sole			Sole			Pellet
Sales	$	10,790,980		$	5,636,072		$	-		$	-		$	301,094		$	16,728,146
Cost of Sales		6,579,208			3,574,008			-			-			197,784			10,351,000
Gross Profit		4,211,772			2,062,064			-			-			103,310			6,377,146
Operating Expense		309,361			151,462			-			-			7,588			468,411
Operating (Loss)/Profit		3,902,411			1,910,602			-			-			95,722			5,908,735
Other Income (Expense)		(93,825	)		(45,936	)		-			-			(2,302	)		(142,063	)
Earnings before Tax		3,808,586			1,864,666			-			-			93,420			5,766,672
(Income Tax Expense)		950,940			465,575			-			-			23,325			1,439,840
Net Income	$	2,857,646		$	1,399,091		$	-		$	-		$	70,095		$	4,326,832

8888 Acquisition Corporation
Notes to Consolidated Financial Statements
As of March 31, 2011 and June 30, 2010
And for the three months and nine months ended March 31, 2011 and 2010
(Stated in US Dollars)

Financial Position
As of March 31, 2011
								EVO
		EVA		RB		EVO		Compound
		Sole		Sole		Sole		Pellet		Others			Total
Current Assets	$	8,491,044	$	2,181,476	$	17,083,662	$	5,786,913	$	(142,126	)	$	33,400,969
Non-Current Assets		2,242,931		576,242		4,512,693		1,528,628		(37,542	)		8,822,952
Total Assets		10,733,975		2,757,718		21,596,355		7,315,541		(179,668	)		42,223,921
Current Liabilities		2,817,794		723,933		5,669,297		1,920,415		(47,163	)		11,084,276
Total Liabilities		2,817,794		723,933		5,669,297		1,920,415		(47,163	)		11,084,276
Net Assets		7,916,181		2,033,785		15,927,058		5,395,126		(132,505	)		31,139,645
Total Liabilities
& Net Assets	$	10,733,975	$	2,757,718	$	21,596,355	$	7,315,541	$	(179,668	)	$	42,223,921

Financial Position
As of June 30, 2010
								EVO
		EVA		RB		EVO		Compound		Others			Total
		Sole		Sole		Sole		Pellet
Current Assets	$	15,101,651	$	3,731,308	$	-	$	-	$	53,473		$	18,886,432
Non-current Assets		7,165,138		1,770,358		-		-		25,371			8,960,867
Total Assets		22,266,789		5,501,666		-		-		78,844			27,847,299
Current Liabilities		8,717,720		2,153,970		-		-		30,868			10,902,558
Total Liabilities		8,717,720		2,153,970		-		-		30,868			10,902,558
Net Assets		13,549,069		3,347,696		-		-		47,976			16,944,741
Total Liabilities
& Net Assets	$	22,266,789	$	5,501,667	$	-	$	-	$	78,843		$	27,847,299

19.	Financing Transaction

On October 19, 2010, the Company entered into a Securities Purchase Agreement with an accredited investor pursuant to which the Company issued to the investor 2,547,500 shares of its common stock for gross proceeds of $4,504,505, or $1.768 per share. Among the $4,504,505 gross proceeds, $400,000 was used to purchase 8888 Acquisition Corporation (legal acquirer, accounting acquiree), and $186,061 was paid to legal firms for professional services. The Company received $3,918,444 net proceeds.

Under the Securities Purchase Agreement, 8888 Acquisition agreed to file a registration statement to register the shares of its common stock issued to the investor within 45 days after the closing of the agreement. The Securities Purchase Agreement does not call for liquidated damages in the event of tardiness in filing or effectiveness of the S-1. On March 22, 2011, 8888 Acquisition entered into a waiver and extension letter with the investor pursuant to which the filing deadline for the registration statement has been extended until twenty days after 8888 Acquisition has been informed by the SEC that the SEC has completed its review of the Form 8K and has no further comments. In accordance with FASB ASC 825-20-50-1, Disclosure for Registration Payment Arrangements, the Company must disclose how it accounts for liquidated damages, and any related settlement alternatives. As indicated above, the agreement does not call for liquidated damages to be paid by 8888 Acquisition, therefore, the Company has not accrued any liabilities of liquidated damages in the Company’s financial statements as of March 31, 2011.

In connection with the Securities Purchase Agreement, the Company’s Chairman and CEO Mr. Zhuang entered into a Make Good Escrow Agreement, whereby Mr. Zhuang pledged to several other parties, including the investor, 7,492,154 shares of common stock owned by him in support of the Company’s obligation to satisfy a pre-established after tax net income level at $6.9 million for the six months ended December 31, 2010. All or a portion of the shares pledged pursuant to the Make Good Escrow Agreement will be transferred to the beneficiaries of the make good arrangement if the Company does not satisfy the after tax net income threshold. The shares will be returned to Mr. Zhuang if the threshold is met.

If any shares pledged by Mr. Zhuang are transferred to the investor pursuant to the make good escrow agreement, 8888 Acquisition also agreed to register those shares within 45 days after such shares are issuable to the investor. In addition, 8888 Acquisition granted the investor a piggyback registration right within one year after the closing. The Securities Purchase Agreement contains customary representations and warranties about 8888 Acquisition’s business operations, capital structure and financial condition, among other things, and obligates 8888 Acquisition to fulfill certain covenants, such as the aforementioned share registration obligation. The Company believes it has satisfied the after tax net income $6.9 million criteria. The investors will release 7,492,154 shares held in the escrow back to Mr. Zhuang.

The following total capitalization table depicts an analysis of total capitalization for the issuance of preferred stock, common stock, and the related additional paid in capital at March 31, 2011:-

	Preferred Stock		Common Stock
	Number of Shares		Number of Shares				Additional Paid	% of Equity
Name of Shareholders	outstanding	Capital	outstanding		Capital		in Capital	Holdings
Management/Insider	-	-	26,489,754		$ 2,649		$ 1,279,740	77.99%
Minority Investor	-	-	4,929,413		493		-	14.51%
Private Placement	-	-	2,547,500		255		3,918,189	7.50%
	-	-	33,966,667	$	3,397	$	5,197,929	100.00%

8888 Acquisition Corporation Notes to Consolidated Financial Statements As of March 31, 2011 and June 30, 2010 And for the three months and nine months ended March 31, 2011 and 2010 (Stated in US Dollars)
20. Earnings per Share
		Three Months Ended				Nine Months Ended
		March 31,		March 31,		March 31,		March 31,
		2011		2010		2011		2010
Net Income	$	2,439,361	$	914,685	$	9,594,870		4,326,832
Income available to Common Stockholders		2,439,361		914,685		9,594,870		4,326,832
Original Shares of Common Stock		31,419,167		31,419,167		31,419,167		31,419,167
New Issuance of Common Stock		2,547,500		-		1,528,500		-
Basic Weighted Average Shares Outstanding		33,966,667		31,419,167		32,947,667		31,419,167
Addition to Common Stock from conversion of
Preferred Stock		-		-		-		-
Addition to Common Stock from exercise of
Warrant		-		-		-		-
Diluted Weighted Average Shares Outstanding		33,966,667		31,419,167		32,947,667		31,419,167
Earnings Per Share
- Basic	$	0.07	$	0.03		0.29	$	0.14
- Diluted	$	0.07	$	0.03		0.29	$	0.14
Weighted Average Shares Outstanding
- Basic		33,966,667		31,419,167		32,947,667		31,419,167
- Diluted		33,966,667		31,419,167		32,947,667		31,419,167

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Special Note Regarding Forward Looking Statements

In addition to historical information, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We use words such as “believe,” “expect,” “anticipate,” “project,” “target,” “plan,” “optimistic,” “intend,” “aim,” “will” or similar expressions which are intended to identify forward-looking statements. Such statements include, among others, those concerning market and industry segment growth and demand and acceptance of new and existing products; any projections of sales, earnings, revenue, margins or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements regarding future economic conditions or performance; as well as all assumptions, expectations, predictions, intentions or beliefs about future events. You are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, including those identified in the section captioned “Risk Factors” in our Current Report on Form 8-K filed October 25, 2010, as amended, and the subsequent filings with the SEC, as well as assumptions, which, if they were to ever materialize or prove incorrect, could cause the results of the Company to differ materially from those expressed or implied by such forward-looking statements.

Readers are urged to carefully review and consider the various disclosures made by us in this report and our other filings with the SEC. These reports attempt to advise interested parties of the risks and factors that may affect our business, financial condition and results of operations and prospects. The forward-looking statements made in this report speak only as of the date hereof and we disclaim any obligation, except as required by law, to provide updates, revisions or amendments to any forward-looking statements to reflect changes in our expectations or future events.

Use of Terms

Except as otherwise indicated by the context and for the purposes of this report only, references in this report to:

“we,” “us,” “our,” or “the Company” are to combined business of 8888 Acquisition Corporation, a Nevada corporation, and its consolidated subsidiaries, Chengchang HK and Jinjiang Chengchang;
“Chengchang HK” are to Cheng Chang Shoes Industry Company Limited, a Hong Kong limited company and our direct, wholly-owned subsidiary;
“Jinjiang Chengchang” are to Jinjiang Chengchang Shoes Co., Ltd., a PRC limited company and the wholly- owned subsidiary of Chengchang HK;
“Hong Kong” are to the Hong Kong Special Administrative Region of the People’s Republic of China;
“PRC,” “China,” and “Chinese,” are to the People’s Republic of China;
“SEC” are to the Securities and Exchange Commission;
“Securities Act” are to the Securities Act of 1933, as amended;
“Exchange Act” are to the Securities Exchange Act of 1934, as amended;
“Renminbi” and “RMB” are to the legal currency of China; and
“U.S. dollars,” “dollars” and “$” are to the legal currency of the United States.

Overview of our Business

Through our indirect Chinese subsidiary, Jinjiang Chengchang, we design, produce and sell high quality shoe soles and sole components used to manufacture athletic and leisure shoes.

Since 1996, we have been a vertically integrated manufacturer of athletic and leisure shoes. In recent years, we shifted our strategic focus to concentrate on developing and producing specialized shoe soles.

In our manufacturing operations, we process basic chemicals and other raw materials to make our sole products. Currently, we categorize our sole products into three primary product lines: (i) EVA, or ethylene vinyl acetate, sole products which are made from a viscous and elastic foam material containing tiny bubbles for shock absorption and cushioning abilities; (ii) RB, or synthetic rubber, sole products processed mainly from polybutadiene rubber, which is highly resistant to wear and abrasion and used mostly commonly in the production of outsoles; and (iii) EVO, or ethylene vinyl acetate outsole, products which are an outgrowth of our EVA product line that is designed to be more abrasive resistance and lighter and softer than our EVA product line. In 2010, we also started to supply our EVO compound pellets to local sole producers which lack the technical and manufacturing capability to manufacture high quality, high performance soles on their own.

We sell our products to footwear manufacturers that are based primarily in China. Our customers use our sole products as components in the athletic and leisure shoes that they sell to end consumers, athletic wear companies and global shoe distributors. As of March 31, 2011, we had approximately 32 customers which include a number of well-known companies in China’s athletic wear market, such as 361º, Erke, Xtep and Qiaodan, as well as Taiwan Ching Lu Footwear, which is an OEM footwear company and a supplier to Adidas in Asia. An “OEM” is an “original equipment manufacturer” which typically purchases customized products or product components which are then re-branded and resold under its own brand.

Our manufacturing facilities in China are located in Jinjiang, Fujian Province, which has a high concentration of footwear industry participants. Most of our customers are also either headquartered or have significant operations in the greater Jinjiang area, which reduces our logistic costs and provides us with an excellent marketing channel and better in person communication with our customers.

Third Fiscal Quarter Financial Performance Highlights

The following are some financial highlights for our third fiscal quarter:

Revenue: Revenue increased $6.3 million, or 150.1%, to $10.4 million for the three months ended March 31, 2011, from $4.1 million for the same period in 2010.
Gross Profit and Gross Margin: Gross profit increased $2.5 million, or 170.9%, to $3.9 million for the three months ended March 31, 2011, from $1.4 million for the same period in 2010. Gross margin was 37.3% for the three months ended March 31, 2011 as compared to 34.5% for the same period last year.
Net income: Net income increased $1.5 million, or 166.7%, to $2.4 million for the three months ended March 31, 2011, from $914,686 for the same period in 2010.
Fully diluted net income per share: Fully diluted net income per share was $0.07 for the three months ended March 31, 2011, as compared to $0.03 for the same period in 2010, despite an increase of approximately 2.5 million shares outstanding.

Business Segment Information

Our business operations can be categorized into four segments based on the type of products we manufacture and sell, specifically (i) EVA soles, (ii) RB soles, (iii) EVO soles, and (iv) EVO compound pellets.

For the nine months ended March 31, 2011, our sales from EVA soles was $9.3 million, our sales from RB soles was $2.5 million, our sales from EVO soles was $18.4 million, and our sales from EVO compound pellets was $6.2 million.

We manufacture and sell our products using largely the same facilities, personnel and other resources in Jinjiang Chengchang. Additional information regarding our operating segments can be found at Note 17 to our unaudited consolidated financial statements included elsewhere in this report.

Results of Operations

Comparison of Three Months Ended March 31, 2011 and March 31, 2010

The following table sets forth key components of our results of operations during the three months ended March 31, 2011 and 2010, both in dollars and as a percentage of our net revenue.

		Three Months Ended					Three Months Ended
(Unaudited)		March 31, 2011					March 31, 2010
				Percent of					Percent of
		Amount		Revenue			Amount		Revenue
Revenue	$	10,432,547		100.0%		$	4,170,644		100.0%
Cost of revenue		6,536,831		62.7%			2,732,827		65.5%
Gross profit		3,895,716		37.3%			1,437,817		34.5%
Selling expenses		65,828		0.6%			26,891		0.6%
General and administrative expenses		340,560		3.3%			164,222		3.9%
Total operating expenses		406,388		3.9%			191,113		4.6%
Operating income		3,489,328		33.5%			1,246,704		29.9%
Other income/(expense)		(159,979	)	(1.5%	)		7,853		0.2%
Interest income		16,660		0.2%			-		-
Interest expense		(41,308	)	(0.4%	)		(37,421	)	(0.9%	)
Total other income/(expenses)		(184,627	)	(1.8%	)		(29,568	)	(0.7%	)
Pre-tax income		3,304,701		31.7%			1,217,136		29.2%
Provisions for income tax		865,340		8.3%			302,450		7.3%
Net income	$	2,439,361		23.4%		$	914,686		21.9%

Revenue. Our revenue is generated from the sale of our athletic and leisure shoe sole products. Our revenue increased to $10.4 million for the three months ended March 31, 2011 from $4.2 million for the same period last year, representing an increase of $6.2 million, or 150.1% . This significant increase is largely attributable to revenue generated from sales of our EVO sole and EVO compound pellet products. We launched our new EVO sole products in May 2010 which we believe were well received by the market and contributed approximately $5.3 million in revenue in the three months ended March 31, 2011. In addition, we also commenced supplying EVO compound pellets to other local sole makers in 2010. This new line of business contributed approximately $2.3 million in revenue in the three months ended March 31, 2011.

The following tables show the different segments comprising our total revenue:
		Three Months Ended
(Unaudited)		March 31,			Change
		2011		2010	(%)
EVA soles	$	2,126,635	$	2,254,364	(5.7%	)
RB soles		696,856		1,724,774	(59.6%	)
EVO soles		5,334,451		-	-
EVO compound pellets		2,255,713		-	-
Other		18,892		191,506	(90.1%	)
Total revenue	$	10,432,547	$	4,170,644	150.1%

Total revenue from our EVA segment decreased to $2.1 million for the three months ended March 31, 2011 from $2.3 million for the same period last year, representing a decrease of $127,729, or 5.7%, mainly because we made a strategic decision to focus on our newly launched EVO products and have accordingly reduced our production capacity on the traditional EVA product segment. Total revenue from the RB segment declined by 59.6% to $696,856 for the three months ended March 31, 2011 as compared to $1.7 million for the same period last year as a result of decreased demands from our RB product customers.

Cost of revenue. Our cost of revenue includes the direct costs of raw materials, labor and overhead. Our cost of revenue increased approximately $3.8 million, or 139.2%, to $6.5 million for the three months ended March 31, 2011 as compared to approximately $2.7 million for the same period last year. As a percentage of revenue, cost of revenue declined to 62.7% for the three months ended March 31, 2011 as compared to 65.5% for the same period in 2010 mainly due to increased sales of our EVO products, which offered higher gross margins than the traditional EVA and RB products. The dollar increase in cost of revenue resulted primarily from the increased production costs associated with the overall increase in the volume of products sold.

The following tables show the different segments comprising our total cost of revenue:

(Unaudited)		Three Months Ended
		March 31,
		2011		2010
EVA soles	$	1,332,129	$	1,452,382
RB soles		430,810		1,097,134
EVO soles		3,273,493		-
EVO compound pellets		1,369,820		-
Other		130,579		183,311
Total cost of revenue	$	6,536,831	$	2,732,827

Total costs of revenue for our EVA segment decreased by 8.3% from $1.5 million during the three months ended March 31, 2010 to $1.3 million for the same period in 2011 as a result of lower sales volume in this segment in this quarter. Total costs of revenue for the RB products were down by 60.7% to $430,810 from $1.1 million for the same period last year due to lower production costs associated with the overall reduction in the volume of RB products sold.

Gross profit and gross margin. Our gross profit was approximately $3.9 million for the three months ended March 31, 2011, as compared to approximately $1.4 million for the same period last year, representing an increase of approximately $2.5 million, or 170.9% . Gross profit as a percentage of net revenue, or gross margin, increased to 37.3% for the three months ended March 31, 2011 as compared to 34.5% in the same quarter last year. The increase in gross margin was mainly attributed to our newly launched EVO sole and EVO compound pellet products, which had higher gross margins than our EVA and RB products.

Gross margins for the EVA and RB segments were approximately 37.4% and 38.2% for the three months ended March 31, 2011 as compared to 35.6% and 36.4% for the same period last year, respectively, primarily due to lower overhead costs allocated to such segments benefiting from the economics of scale generated by the increase in overall production volume. Gross margins for our new EVO soles and EVO compound pellets were approximately 38.6% and 39.3% for the three months ended March 31, 2011, respectively.

Selling expenses. Our selling expenses consist primarily of compensation and benefits to our sales and marketing staff, sales commissions, advertising costs, business travel and transportation costs and other sales related costs. Our selling expenses were $65,828 for the three months ended March 31, 2011 as compared to $26,891 for the same period last year, representing an increase of $38,937, or 144.8%, mostly as a result of higher sales volume and increased bonus payments. As a percentage of revenue, selling expenses remained stable at 0.6% for three months ended March 31, 2011 over the same period last year.

General and administrative expenses. Our general and administrative expenses consist of the cost of compensation and benefits for general management and administrative staff, social welfare benefits, amortization and depreciation, rental costs, research and development costs, and other miscellaneous administrative costs. Our general and administrative expenses increased by $176,338, or 107.4%, to $340,560 for the three months ended March 31, 2011 from $164,222 in the same period in 2010, primarily due to higher costs incurred associated with being a public company. However, as a percentage of revenue, general and administrative expenses decreased to 3.3% for three months ended March 31, 2011 from 3.9% for the three months ended March 31, 2010, as revenue growth outpaced the increase of general and administrative costs.

Interest income. Interest income was $16,660 for the three months ended March 31, 2011 as compared to a negligible amount for the same period last year, due to higher cash balances in interest bearing deposit accounts during the three months ended March 31, 2011.

Interest expense. Interest expense was $41,308 for the three months ended March 31, 2011 as compared to $37,421 for the same period last year, representing a slight increase of $3,887 or 10.4% . The increase was largely because we had more short-term borrowings during the three months ended March 31, 2011 as compared to the same period in 2010.

Pre-tax income. Our pre-tax income increased by approximately $2.1 million, or 171.5%, to $3.3 million for the three months ended March 31, 2011 from $1.2 million for the same period in 2010, due to the factors described above.

Provision for income taxes. Our provision for income taxes was approximately $865,340 for the three months ended March 31, 2011, as compared to approximately $302,450 for the same period last year. The increase was mainly due to an increase in our taxable income.

Net income. Our net income increased approximately $1.5 million, or 166.7%, to $2.4 million for the three months ended March 31, 2011, from approximately $914,686 for the same period last year, as a result of the cumulative effect of all factors described above.

Comparison of Nine Months Ended March 31, 2011 and March 31, 2010

The following table sets forth key components of our results of operations during the nine months ended March 31, 2011 and 2010, both in dollars and as a percentage of our net revenue.

		Nine Months Ended					Nine Months Ended
(Unaudited)		March 31, 2011					March 31, 2010
				Percent of					Percent of
		Amount		Revenue			Amount		Revenue
Revenue	$	36,665,296		100.0%		$	16,728,146		100.0%
Cost of revenue		22,231,230		60.6%			10,351,000		61.9%
Gross profit		14,434,066		39.4%			6,377,146		38.1%
Selling expenses		286,010		0.8%			102,758		0.6%
General and administrative expenses		898,401		2.5%			365,653		2.2%
Total operating expenses		1,184,411		3.2%			468,411		2.8%
Operating income		13,249,655		36.1%			5,908,735		35.3%
Other income/(expense)		(245,203	)	(0.7%	)		8,835		0.1%
Interest income		32,133		0.1%			-		-
Interest expense		(149,103	)	(0.4%	)		(150,898	)	(0.9%	)
Total other income/(expenses)		(362,173	)	(1.0%	)		(142,063	)	(0.9%	)
Pre-tax income		12,887,482		35.2%			5,766,672		34.5%
Provisions for income tax		3,292,612		9.0%			1,439,840		8.6%
Net income	$	9,594,870		26.2%		$	4,326,832		25.9%

Revenue. Our revenue increased significantly to $36.7 million for the nine months ended March 31, 2011 from $16.7 million for the same period last year, representing an increase of $20.0 million, or 119.2% . This significant increase was largely attributed to revenue generated from sales of our EVO sole and EVO compound pellet products. We launched our EVO sole products in May 2010 which we believe were well received by the market and contributed approximately $18.4 million in revenue in the nine months ended March 31, 2011. In addition, we also commenced supplying EVO compound pellets to other local sole makers in 2010. This new line of business contributed approximately $6.2 million in revenue in the nine months ended March 31, 2011.

The following tables show the different segments comprising our total revenue:
		Nine Months Ended
(Unaudited)		March 31,			Change
		2011		2010	(%)
EVA soles	$	9,347,825	$	10,790,980	(13.4%	)
RB soles		2,494,865		5,636,072	(55.7%	)
EVO soles		18,424,125		-	-
EVO compound pellets		6,240,735		-	-
Other		157,746		301,094	(47.6%	)
Total revenue	$	36,665,296	$	16,728,146	119.2%

Total revenue from our EVA segment decreased to $9.4 million for the nine months ended March 31, 2011 from $10.8 million for the same period last year, representing a decrease of $1.4 million, or 13.4% mainly because we made a strategic decision to focus on our newly launched EVO products and have accordingly reduced our production capacity on the traditional EVA product segment. Total revenue from the RB segment decreased by 55.7% to $2.5 million for the nine months ended March 31, 2011 as compared to $5.6 million for the same period last year as a result of lower demands from our RB product customers.

Cost of revenue. Our cost of revenue increased approximately $11.9 million, or 114.8%, to $22.2 million for the nine months ended March 31, 2011 as compared to approximately $10.3 million for the same period last year. As a percentage of revenue, cost of revenue was 60.6% for the nine months ended March 31, 2011 as compared to 61.9% for the same period in 2010. The dollar increase in cost of revenue resulted primarily from the increased production costs associated with the overall increase in the volume of products sold.

The following tables show the different segments comprising our total cost of revenue:
(Unaudited)		Nine Months Ended
		March 31,
		2011		2010
EVA soles	$	5,678,462	$	6,579,208
RB soles		1,552,151		3,574,008
EVO soles		11,041,504		-
EVO compound pellets		3,739,949		-
Other		219,164		197,784
Total cost of revenue	$	22,231,230	$	10,351,000

Total costs of revenue for our EVA segment decreased by 13.7% from $6.6 million during the nine months ended March 31, 2010 to $5.7 million for the same period in 2011 as a result of lower sales in this segment. Total costs of revenue for the RB products declined by 56.6% to $1.6 million from $3.6 million for the same period last year due to lower production costs associated with the overall decrease in the volume of RB products sold.

Gross profit and gross margin. Our gross profit was approximately $14.4 million for the nine months ended March 31, 2011, as compared to approximately $6.4 million for the same period last year, representing an increase of approximately $8.0 million, or 126.3% . Gross profit as a percentage of net revenue, or gross margin, was 39.4% for the nine months ended March 31, 2011 as compared to 38.1% in the same period last year. Gross margins for our newly launched EVO sole and EVO compound pellet products were both approximately 40.1% for the nine months ended March 31, 2011. Gross margins for our EVA sole and RB sole were approximately 39.3% and 37.8% for the nine months ended March 31, 2011 as compared to 39.0% and 36.6% for the same period last year, primarily due to lower overhead costs allocated to such segments benefiting from the economics of scale generated by the increase in overall production volume.

Selling expenses. Our selling expenses were $286,010 for the nine months ended March 31, 2011 as compared to $102,758 for the same period last year, representing an increase of $183,252, or 178.3%, mostly as a result of higher sales volume. As a percentage of revenue, selling expenses increased slightly to 0.8% for nine months ended March 31, 2011 from 0.6% for the nine months ended March 31, 2010.

General and administrative expenses. Our general and administrative expenses increased by $532,748, or 145.7%, to $898,401 for the nine months ended March 31, 2011 from $365,653 in the same period in 2010. As a percentage of revenue, general and administrative expenses increased to 2.5% for nine months ended March 31, 2011 from 2.2% for the nine months ended March 31, 2010. This amount and percentage increase are primarily attributable to costs incurred in this period associated with our going public transaction and higher employment disability and welfare payments made for the benefit of employees as a result of a PRC governmental policy change in 2010.

Interest income. Interest income was $32,133 for the nine months ended March 31, 2011 as compared to a negligible amount for the same period last year as a result of higher cash balances in interest bearing deposit accounts during the nine months ended March 31, 2011.

Interest expense. Interest expense was $149,103 for the nine months ended March 31, 2011 as compared to $150,898 for the same period last year, representing a decrease of $1,795, or 1.2% . The slight decrease was attributed to less short-term borrowings during the nine months ended March 31, 2011 as compared to the same period in 2010.

Pre-tax income. Our pre-tax income increased by approximately $7.1 million, or 123.5%, to $12.9 million for the nine months ended March 31, 2011 from $5.8 million for the same period in 2010, due to the factors described above.

Provision for income taxes. Our provision for income taxes was approximately $3.3 million for the nine months ended March 31, 2011, as compared to approximately $1.4 million for the same period last year. The increase was due to an increase in our taxable income.

Net income. Our net income increased approximately $5.3 million, or 121.8%, to $9.6 million for the nine months ended March 31, 2011, from approximately $4.3 million for the same period last year, as a result of the cumulative effect of factors described above.

Liquidity and Capital Resources

To date, we have financed our operations primarily through cash flows from operations, augmented by short-term bank borrowings and equity contributions by our stockholders. Cash flow from operation and short-term bank loans are likely to continue to be our key sources of financing for the foreseeable future, although in the future we may raise additional capital by issuing shares of our capital stock in an equity financing. We expect to renew our short term loans when they become due.

Our liquidity and working capital may be affected by a material decrease in cash flow due to factors such as the continued use of cash in operating activities resulting from a decrease in sales due to the current global economic crisis, increased competition, decreases in the availability, or increases in the cost of raw materials, unexpected equipment failures, or regulatory changes. We are also exposed to a variety of risks associated with short-term borrowings including adverse fluctuations in fixed interest rates for short-term borrowings and unfavorable increases in variable interest rates, potential inability to service our short term indebtedness through cash flow from operations and the overall reduction of credit in the current economic environment.

As of March 31, 2011, we had cash and cash equivalents of approximately $17.8 million, primarily consisting of cash on hand and demand deposits. The following table sets forth a summary of our cash flows for the periods indicated:

Cash Flow
(all amounts in U.S. dollars)
		Nine Months Ended
		December 31,
		2011			2010
Net cash provided by operating activities	$	8,787,083		$	5,635,029
Net cash (used in) investing activities		(1,348,109	)		(407,304	)
Net cash provided by/(used in) financing activities		3,118,828			(2,744,534	)
Net increase in cash and cash equivalents		10,557,802			2,483,191
Effect of foreign currency translation on cash		681,590			2,039
Cash and cash equivalent at beginning of the year		6,513,198			2,960,156
Cash and cash equivalent at end of the year	$	17,752,590		$	5,445,386

Operating Activities

Net cash provided by operating activities was approximately $8.8 million for the nine months ended March 31, 2011, as compared to approximately $5.6 million in the same period of 2010. The increase was mainly due to the increase in operating income as a result of increased sales and expansion in product lines, as described above.

Investing Activities

Net cash used in investing activities for the nine months ended March 31, 2011 was $1.3 million, as compared to $407,304 in the same period in 2010. During the nine months ended March 31, 2011, we spent approximately $0.3 million for the purchases of one automatic EVA ejection machine, one rubbing mixing mill and two vehicles. The remaining cash was predominantly used to purchase molds to meet new design needs, as well as to replace worn-out molds.

Financing Activities

Net cash provided by financing activities was approximately $3.1 million for the nine months ended March 31, 2011 as compared to approximately $2.7 million used in financing activities in the same period in 2010. Such increase in net cash provided by financing activities was mainly due to our private placement transaction described below.

On October 19, 2010, we completed a private placement transaction with an accredited investor, pursuant to which we issued to the investor 2,547,500 shares of our common stock for a purchase price of $4.5 million, or $1.768 per share. As a result of this private placement, we raised approximately $4.5 million in gross proceeds, which left us with approximately $3.9 million in net proceeds after the deduction of offering expenses in the amount of approximately $0.6 million.

Foreign Currency Translation

Our operating subsidiary is located in China. Our operating subsidiary purchases substantially all raw materials and sells all products in China, and receives payments from customers in China using RMB as the functional currency. Hence, the change in exchange rate between the U.S. Dollar and Renminbi has not had a material impact on our business operations. However, since our financial statements are reported in U.S. dollar and due to significant appreciation of the Renminbi to the U.S. dollar over the past few years, we had a foreign currency translation reserve of $68,416 and $681,590 as of June 30, 2010 and March 31, 2011, respectively. The value of the Renminbi against the U.S. dollar and other currencies is affected by changes in China’s political and economic conditions and China’s foreign exchange policies. The Chinese government changed its currency policy of pegging the value of the Renminbi to the U.S. dollar in July 2005. As a result, the Renminbi appreciated over 20% against the U.S. dollar during the following three years. Nevertheless, the People’s Bank of China regularly intervenes in the currency market to limit fluctuations in Renminbi exchange rates. The Renminbi has therefore traded within a narrow range against the U.S. dollar since 2008. International pressure exists for the Chinese government to adopt a more flexible currency policy, there could be further appreciation of the Renminbi against the U.S. dollar and a further increase of our foreign currency translation reserve.

Capital Expenditures

Our capital expenditures are mainly related to the purchase of sole molds and other manufacturing equipment. Our capital expenditures were approximately $1.1 million for the nine months ended March 31, 2011.

As part of our growth strategy, we intend to acquire land use rights for approximately 40,000 square meters of additional land located in Jinjiang from the local PRC government and expect to begin construction of a new plant in the first half of 2011. We have commenced negotiations with the local government for the acquisition of land use rights for this property. We intend to use commercially reasonable efforts to secure such land rights on favorable terms, but cannot assure that we will be able to acquire the land use rights on commercially favorable terms, if at all. If we acquire the land use rights, we estimate that the purchase price for the land use rights will be approximately RMB 30 million (approximately $4.5 million) and we estimate that we may incur an additional RMB 30 million (approximately $4.5 million) in construction costs to upgrade the infrastructure of the facility. Our expectation is that the transaction and related costs associated with the acquisition of land use rights will be satisfied and paid for with cash on hand, cash flow from operations and bank loans. In light of uncertainty concerning the above-mentioned purchase, we have leased an alternative facility, which is expected to begin operation in June 2011.

We expect to renew our short term loans when they become due. We believe that our cash on hand, cash flow from operations and anticipated bank loans will meet our expected capital expenditure and working capital for the next 12 months. We may, however, in the future, require additional cash resources due to changed business conditions, implementation of our strategy to expand our production capacity or other investments or acquisitions we may decide to pursue. If our own financial resources are insufficient to satisfy our capital requirements, we may seek to sell additional equity or debt securities or obtain additional credit facilities. The sale of additional equity securities could result in dilution to our stockholders. The incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financial covenants that would restrict our operations. Financing may not be available in amounts or on terms acceptable to us, if at all. Any failure by us to raise additional funds on terms favorable to us, or at all, could limit our ability to expand our business operations and could harm our overall business prospects.

Loan Commitments

Our borrowings are mostly short term loans from commercial banks located in China. As of March 31, 2011, the amount, maturity date and term of each of our bank loans are as follows:

Bank	Amount *	Maturity Date	Interest Rate
China Construction Bank, Jinjiang Branch	$304,409	June 17, 2011	5.310%
China Construction Bank, Jinjiang Branch	$228,307	June 17, 2011	5.310%
China Construction Bank, Jinjiang Branch	$152,205	October 8, 2011	5.310%
China Construction Bank, Jinjiang Branch	$654,480	November 2, 2011	6.116%
China Construction Bank, Jinjiang Branch	$106,543	November 10, 2011	5.560%
Industrial and Commercial Bank of China, Jinjiang Xinhuajie Branch	$745,803	August 5, 2011	5.310%
Industrial and Commercial Bank of China, Jinjiang Xinhuajie Branch	$761,024	December 17, 2011	5.810%
Industrial and Commercial Bank of China, Jinjiang Xinhuajie Branch	$456,614	October 28, 2011	5.560%
Industrial and Commercial Bank of China, Jinjiang Xinhuajie Branch	$304,409	January 30, 2012	6.060%

* Calculated based on the exchange rate of $1 = RMB6.5701

Obligations Under Material Contracts

Below is a table setting forth our material contractual obligations as of March 31, 2011:

(All amounts in millions of U.S. dollars)

	Payments due by period
				Less than						More than
		Total		1 year		1-3 years		3-5 years		5 years
Operating Lease Obligations	$	6,023,525	$	294,254	$	3,574,893	$	2,090,664	$	63,714
Total	$	6,023,525	$	294,254	$	3,574,893	$	2,090,664		63,714

Inflation

Inflation and changing prices have not had a material effect on our business and we do not expect that inflation or changing prices will materially affect our business in the foreseeable future. However, our management will closely monitor the price change in travel industry and continually maintain effective cost control in operations.

Off Balance Sheet Arrangements

We do not have any off balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity or capital expenditures or capital resources that is material to an investor in our securities.

Seasonality

Our operating results and operating cash flows historically have been subject to moderate seasonal variations. Our revenues are usually higher in the first and second fiscal quarter than in the other quarters. The third fiscal quarter is usually the slowest quarter because of the Chinese New Year holiday which results in a slowdown in business activity beginning in the second half of January and until March.

In addition, manufactures of athletic shoes tend to experience increased sales just in advance of the summer months when there is an increase in outdoor activities by consumers so we typically experience a increase in production activities and sales orders during the first and second fiscal quarters in order to allow athletic shoe manufacturers to meet demand their peak sales seasons.

Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires our management to make assumptions, estimates and judgments that affect the amounts reported, including the notes thereto, and related disclosures of commitments and contingencies, if any. We have identified certain accounting policies that are significant to the preparation of our financial statements. These accounting policies are important for an understanding of our financial condition and results of operation. Critical accounting policies are those that are most important to the portrayal of our financial conditions and results of operations and require management’s difficult, subjective, or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Certain accounting estimates are particularly sensitive because of their significance to financial statements and because of the possibility that future events affecting the estimate may differ significantly from management’s current judgments. We believe the following critical accounting policies involve the most significant estimates and judgments used in the preparation of our financial statements.

Revenue recognition

In accordance to FASB ASC 605-10, the Company recognizes revenue upon issuance of invoices to customers. The issuance of invoices is concurrent with the shipment of goods to customers, which generally coincides with the transfer of risks and rewards of ownership, and the title has passed.

The Company typically has written contracts with both new customers and existing customers. Contracts between the Company and its customers indicate a fixed price, delivery date, and the type of goods. The products are fully functional upon shipment and the Company is not obliged to provide any further services to be entitled to payment by its customers. The Company allows two-week period for post-delivery refund if quality problem condition exists. Upon such, the Company will reduce the sale revenue. However, the Company has not experienced any significant return of products and, as such, has not prepared an allowance for returns. Inventory credit, rebates, discounts and volume incentive policies are not applicable to the Company’s sales transactions. Collectability is reasonably assured upon issuance of invoices. The invoice value includes sales value and output value added taxes, which are immediately payable to the PRC government upon issuance.

Customer payments received prior to completion of the above criteria are carried as unearned revenue.

Accounts receivable

Accounts receivable are disclosed at gross invoice amounts less management’s estimate for doubtful accounts.. Management regularly reviews outstanding accounts and provides an allowance for doubtful accounts. Management’s allowance for doubtful accounts was 0.5% of gross accounts receivables.

We classify our customers into four tiers: (A) well-known companies in the international or domestic sportswear market, which also have had established business relationships with the Company for a long time; (B) median sized companies with good reputations; (C) small sized companies in the local market; and (D) occasional customers with limited transactions. We grant them credit terms of 120 days, 90 days, 60 days and 30 days, respectively. Currently, the Company seldom trades with tier (D) customers. We understand and expect our days sales outstanding to vary from period to period within a given range. Based on the credit terms we grant to our four tiers of customers respectively, we expect our days sales outstanding not to exceed 120 days by any large margin.

In regard of allowance for doubtful accounts, we keep one general reserve, the amount of which equals 0.5% of gross account receivables. We have no specific reserve, as we believe adequate provisions for doubtful accounts have been provided through our general reserve. When estimating the allowance for doubtful accounts, we take into consideration: 1) our track record of payment collection, which shows zero experience of any material delinquent accounts that were uncollectible and that we have not written off material balance; 2) the enhanced measures we currently take to minimize failure of collection, which include having internal staff call for payment, filing legal pledge, collecting agent to collect the outstanding balance, etc. Since our collection period of receivables has never exceeded one year from past experience, we believe collection becomes improbable once beyond the threshold of one year. Thus we write off receivables after they have aged one year.

Inventories

Inventories consisting of finished goods, work in progress, and raw materials are stated at the lower of cost or market value. Finished goods are comprised of direct materials, direct labor, and an appropriate proportion of overhead. Periodic evaluation is made by management to identity if inventories needed to be written down because of damage or spoilage. Cost is determined on a weighted average basis and includes all expenditures incurred in bringing the goods to the point of sale and putting them in a saleable condition.

Plant and equipment

Plant and equipment are carried at cost less accumulated depreciation. Depreciation is provided over their estimated useful lives, using the straight-line method. Estimated useful lives of the plant and equipment are as follows:

Buildings	20 years
Machinery and equipment	5 - 10 years
Motor vehicles	5 years
Office equipment	5 years

The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the statement of income. The cost of maintenance and repairs is charged to income as incurred, whereas significant renewals and betterments are capitalized.

Accounting for impairment of long lived Assets

The Company has adopted Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS 144”), ASC 360-10-35. The Company evaluates its long lived assets for impairment when indicators of impairment are present or annually, whichever occurs sooner. In the event that there are indications of impairment, the Company will record a loss to statements of income equal to the difference between the carrying value and the fair value of the long lived asset. The Company typically, but not exclusively uses the expected future discounted flows method to determine fair value of long lived asset subject to impairment. The fair value of long lived assets that held for disposition will include the cost of disposal.

The Company’s long-lived assets are grouped by their presentation on the consolidated balance sheets, and further segregated by their operating and asset type. Long-lived assets subject to impairment include buildings, equipment, vehicles, software licenses, and land-use-rights. The Company makes its determinations based on various factors that impact those assets.

At March 31, 2011 and June 30, 2010, the Company assessed its buildings, equipment, vehicles, software licenses, and land-use-rights for production and has concluded its long-lived assets have not experienced any impairment losses because the Company’s long lived assets have enabled the Company to experience significant profit growth during the nine months and twelve months ended March 31, 2011 and June 30, 2010.

Foreign currency translation

*Exchange Rates*	3/31/2011	12/31/2010	6/30/2010	12/31/2009	6/30/2009
Year end RMB : US$ exchange rate	6.5701	6.6118	6.8086	6.8372	6.8448
Average yearly RMB : US$ exchange rate	6.6796	6.7237	6.8347	6.8386	6.8481

The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into US Dollar at the rates used in translation.

Commitments and contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

Recent Accounting Pronouncements

See Note 2.X (Recent accounting pronouncements) to our unaudited consolidated financial statements included elsewhere in this report.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) that are designed to ensure that information that would be required to be disclosed in Exchange Act reports is recorded, processed, summarized and reported within the time period specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including to our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

As required by Rule 13a-15 under the Exchange Act, our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2011. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that because of the material weakness in internal control over financial reporting described below, our disclosure controls and procedures were not effective as of March 31, 2011. The term “material weakness” is defined as a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the financial statements will not be prevented, or detected and corrected on a timely basis.

Changes in Internal Control Over Financial Reporting

We believe that we have material weaknesses in our internal controls over financial reporting due to our accounting staff’s relative lack of experience and knowledge of U.S. GAAP. Our accounting staffs have limited experience in preparing financial statements in accordance with U.S. GAAP and will require additional training and assistance in U.S. GAAP. Management is committed to improving the Company’s internal control over financial reporting and plan to implement changes designed to enhance the effectiveness of our internal control, including (i) hiring additional staff with U.S. GAAP experience, (ii) implementing expanded policies and procedures over financial reporting, and (iii) instituting expanded training of management and staff responsible for financial transactions and records. Our management is not aware that the material weakness in our internal control over financial reporting causes them to believe that any material inaccuracies or errors existed in our financial statements as of March 31, 2011.

Other than described above, there have been no changes in our internal control over financial reporting during the three months ended March 31, 2011 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.

From time to time, we may become involved in various lawsuits and legal proceedings, which arise, in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these, or other matters, may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse affect on our business, financial condition or operating results.

ITEM 1A.

RISK FACTORS.

Not applicable.

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None.

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4.	(REMOVED AND RESERVED).

ITEM 5.	OTHER INFORMATION.

We have no information to disclose that was required to be in a report on Form 8-K during the period covered by this report, but was not reported. There have been no material changes to the procedures by which security holders may recommend nominees to our board of directors.

ITEM 6.

EXHIBITS.

The following exhibits are filed as part of this report or incorporated by reference:

Exhibit No.	Description

31.1	Certifications of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2	Certifications of Principal Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1	Certifications of Principal Executive Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2	Certifications of Principal Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: May 12, 2011

8888 ACQUISITION CORPORATION

By: /s/ Guoqing Zhuang
Guoqing Zhuang, Chief Executive Officer
(Principal Executive Officer)

By: /s/ Xuanzhi Luo
Xuanzhi Luo, Chief Financial Officer
(Principal Financial Officer and Principal
Accounting Officer)