PART I. FINANCIAL INFORMATION

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

The following discussion of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the notes to those statements included elsewhere in this Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2010. In addition to the historical consolidated financial information, the following discussion and analysis contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2009 filed with the Securities and Exchange Commission and elsewhere in that Annual Report and in this Quarterly Report.

Except as otherwise specifically stated or unless the context otherwise requires, the "Company", "we," "us," "our," and the "Registrant" refer to, collectively, (i) Omnialuo, Inc. (formerly Wentworth II, Inc.), (ii) Omnialuo BVI, a wholly-owned subsidiary of Omnialuo, Inc. organized under the laws of the British Virgin Islands, and (iii) Oriental Fashion, a wholly-owned subsidiary of Omnialuo BVI organized under the laws of the People’s Republic of China (the “PRC).

 

Overview

OmniaLuo, Inc. is a holding company that conducts all its business operations through its direct wholly-owned subsidiary, Omnia BVI, established in August 2006, and Omnia BVI’s Chinese subsidiary, Shenzhen Oriental Fashion Co., Ltd., (“Oriental Fashion”), established in September 2006. Oriental Fashion designs, develops, markets and distributes women’s apparel under the brand names of OMNIALO and OMNIALUO through its network of retail stores across the People’s Republic of China (“PRC” or “China”), which consisted of  115 stores as of June 30, 2010, and 165 stores as of June 30, 2009 in 29 provinces throughout China. Until our acquisition of Omnia BVI on October 9, 2007, our operations were very limited.

Principal Products

 

We offer a complete line of business casual women’s wear including bottoms, tops and outerwear as well as accessories. All apparel is marketed under the OMNIALUO brands through a network of retail stores across China. Our main product line is “fashionable business casual,” which is suitable for both business and casual environments. Fashionable business casual is clothing that can be worn to work as well as outside the office environment. In recent years, fashionable business casual has gained significant market share in the fashion industry. We also have a smaller “business casual” product line.

 

Apparel under the OMNIALUO brands is made of high quality materials, and many pieces contain intricate and delicate craftwork. The designs are made to accentuate a woman’s figure while providing a unique cut and stitching to the material, which provide a slimming look. The majority of materials used are composed of tatting and knitwear. Tatting and knitwear are soft fabrics and allow women’s skin to “breathe” thus providing comfort in addition to style.

Customers

Our current target customers are “white-collar” and “pink-collar” urban females between the ages of 25 and 35. In China, professional women are generally divided into three categories, “white-collar”, “pink-collar” and “golden-collar” (when accounting for purchasing-power parity, the lifestyle of a household with annual income of $12,500 in China is similar to the lifestyle of a household earning $40,000 annually in the United States). (Source: National Bureau of Statistics of China; McKinsey Global Institute Analysis 2006. Both the individual income and household income referred to here are on an after-tax basis).

Pink-collar workers usually work in high-paying industries such as finance, consulting, legal services, or assume senior positions in government agencies. Pink-collar workers typically earn $7,500 to $22,500 annually. White-collar workers usually work in junior or middle positions in an office . This includes positions such as secretaries, administrators, operators, IT staff, accounting staff and junior saleswomen. White-collar workers typically earn $2,500 to $ 7,500 annually. “Golden-collar” refers to the class of professionals with annual incomes over $22,500. They typically hold executive positions in corporations or operate their own businesses.

 

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Distribution Network and Methods

 

Our products are sold in the following types of stores: (i) company-owned stores, which are owned exclusively by the Company, (ii) co-owned stores, which are owned jointly by the Company and a third party, and (iii) independent distributor stores, which are owned exclusively by third parties. All three types of stores carry the OMNIALUO brands exclusively. We refer to company-owned stores and co-owned stores collectively as retail stores. All three types of stores are located throughout China. We also run special, limited-time outlet sales in major malls to sell excess inventories at the end of each season. We currently do not have franchisees or franchised stores.

 

The table below summarizes the characteristics of our major distribution channels and the number of stores we had as of June 30, 2010:

 

Sales Channel		Sub Channel		Location		Objective		Characteristics		*Store Level Net Profit Margin
Company		Flagship Stores		Major shopping malls in Tier 1 cities		Showcase brand and attract customers and distributors		Capital outlay: High Inventory risk: High Operating expenses: medium		Medium-low
-owned
Stores (27)		Standard Stores		Key shopping malls in highly competitive Tier 1 & Tier 2 cities		Test market to gauge customer interest and increase sales		Capital outlay: High Inventory risk: Medium Operating expenses: Medium		Medium
Co-owned Stores (8)		Co-owned Stores		Tier 1 & Tier 2 cities		Maximize sales and profit		Capital outlay: Medium Inventory risk: High Operating expenses: Medium		Medium-high
Independent Distributor Stores (80)		Independent Distributor Stores		Tier 1, Tier 2 & Tier 3 cities		Maximize sales and profit		Capital outlay: Low Inventory risk: Low Operating expenses: Low		High

 

*	In calculating the store-level net profit margin, we take into consideration related store expenses billed to us, including decoration, rent, payroll, mall management fees, and utilities.

 

Company-owned Stores

 

Company-owned stores are retail stores owned 100% by us and which sell the OMNIALUO Brand exclusively. We manage the daily operations of these stores, and pay all operating expenses, including decoration, rent, payroll, and utilities. All company-owned stores are located either within shopping malls or in independent stores located on the street. There are two types of company-owned stores, (1) flagship stores, and (2) standard stores. Flagship stores are high-profile stores, located in key shopping malls of first-tier cities, such as Shanghai, Beijing, and Shenzhen. These stores are extravagantly decorated, display a number of luxurious items and offer the complete OMNIALUO Brand product line. The cost of opening and operating flagship stores is high, thus making them the least profitable among all store types. Standard stores are well decorated, however, they are less extravagant than the flagship stores, and are operated in major shopping malls of first- and second-tier cities. These stores are fashionably decorated and offer the most complete product lines. These stores serve to showcase and promote the OMNIALUO brands. In addition, the Company-owned stores are used to monitor market trends and our products’ performance. Company-owned stores have the lowest profitability among all our distribution channels. Nonetheless, we believe that shopping malls are the best location for our stores according to the CGIR (or China Garment Industry Report). Historically, shopping malls and department stores represented more than half of apparel sales in urban cities in China.

 

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Co-owned Stores

 

Co-owned stores are owned jointly by us and a third party and sell the OMNIALUO Brand exclusively. All co-owned stores are located in key shopping malls in first-tier and second-tier cities. We are obligated to share revenues with the shopping malls in which our stores are located. In some instances there are minimum revenue payments to the landlord, or a threshold before revenue is split, or both. On average, we must turn over 20% of the profits from each store to the shopping mall in which such store is located. The co-ownership partner receives 30% of the revenue from co-owned stores, after deducting the 20% due to the shopping mall. Operating expenses are split evenly between us and the co-ownership partners; however, 70% of the up-front investment is made by us. We retain full ownership of the inventory delivered to the co-owned stores. Co-owned stores serve as good complements to Company-owned stores and independent distributor stores with a relatively high net profit margin of 40%-50%.

 

As of June 30, 2010 and 2009, we operated 35 and 58 retail stores, respectively, of which there were 27 and 27 company-owned stores, respectively, in key shopping malls in first- and second-tier cities (see below under “Location of Retail Stores - Markets”), and there were 8 and 31 co-owned stores, respectively, in key shopping malls located in first-tier and second-tier cities. The two types of stores collectively accounted for approximately 35.99% of our total revenue in the six months of 2010 and approximately 42.48% of our total revenue in the same period of 2009.

 

Independent Distributor Stores

 

Independent distributor stores are owned 100% by a third party and sell the OMNIALUO Brand exclusively. Our products are sold to independent distributor stores at 35-40% of the full retail price. We average approximately 50-55% net profit margin on sales to the independent distributors. No items are sold on consignment. The independent distributor stores make a 30% down payment upon ordering and pay the balance before any shipment is sent. Hence, the independent distributor store model generates a high profit margin for us, with no upfront investment, minimal inventory risk and minimal cash flow shortage. Independent distributor stores are the most important distribution channel for our sales. As of June 30, 2009 and June 30, 2010, we had 107 and 80 independent distributor stores, respectively, across China. The independent distributor stores represented approximately 64.01% of our total revenues in the six months ended June 30, 2010, and represent approximately 57.52% of our total revenues in the six months ended June 30, 2009. Our future success is to a large extent dependent on increasing the number of the independent distributor stores.

 

During the six months ended June 30, 2010, there was a customer（Wuxi Langyi, an independent distributor at the provincial level）whose revenue represented approximately 14% of the Company’s consolidated revenue. During the six months ended June 30, 2009, there was no customer who contributed 10% or more to the Company’s consolidated revenue.

 

Seasonality

 

Our business is seasonal, with the highest proportion of sales and operating income likely being generated in the fourth quarter of each year, lesser proportions in the second and third quarter of each year, and the lowest proportion of sales and operating income being generated in the first quarter of each year. Our working capital requirements are likely to fluctuate during the year, increasing substantially during one or more quarters as a result of higher planned seasonal inventory levels and higher receivables.

 

Recent Development

 

Since our formation in the third quarter of 2006, we have focused on implementing our strategy of building a design and marketing workforce and an independent distributor and retail store sales network to design, develop, market and distribute “fashionable business casual”. By November 12, 2008, we had a network of 245 stores across the country. However, as a result of the global economic recession and its negative impact on Chinese consumer spending, we were forced to close certain stores that did not make their pre-determined sales requirements in the fourth quarter of 2008 and throughout 2009. As of June 30, 2010, we had 115 stores in total, including 27 company-owned stores, 8 co-owned stores and 80 independent distributor stores. We did not close any store in the second quarter of 2010.

  

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Although the total store count is still subject to change based on prevailing market conditions, we believe that there has been indication that the deterioration of the Chinese consumer market has slowed down in recent months. If the market condition improves, we expect that no more stores will be closed except those that need to be replaced by new stores. Our goal is to have 150 stores in total by the end of 2010.

 

Factors Relevant to Evaluating Our Business and Financial Performance

We design, develop, and market a diversified selection of women’s wear with a focus on fashionable business casual style. We target moderate to premium priced women’s wear. In evaluating our performance, management reviews certain key performance indicators, including:

 

Gross margin - Gross margin measures our ability to control direct costs associated with the manufacturing and selling of our products. Gross margin is the difference between the net sales and cost of sales, which is comprised of direct inventory costs for merchandise sold, including all costs to transport merchandise from third-party suppliers to our distribution center.

 

Operating income - Operating income is a measure of our earning power from ongoing operations and is measured as our earnings before interest and income taxes.

Results of Operations for the Three Months and Six Months ended June 30, 2010 and June 30, 2009

 

In the advent of the global financial crisis, the Company initiated a sales network restructuring by closing down several non-performing stores, most of which consisted of co-owned stores and independent distributor stores with unfavorable locations and low revenues.  As of June 30, 2010, we operated or had distribution relationships with 115 stores, comprising 27 self-owned stores, 31 co-owned stores and 107 independent distributor stores.

 

Sales revenue for the three months ended June 30, 2010 was $2,174,551, compared with $1,593,049 for the three months ended June 30, 2009, reflecting an increase of $581,502 or 36.50%. Sales revenue for the six months ended June 30, 2010 was $4,069,765, compared with $4,516,837 for the six months ended June 30, 2009, reflecting a 9.90% decrease.

Revenue from sales to distributors for the three months ended June 30, 2010 was $1,489,015 (68.47% of the total sales revenue for the period), representing a 66.05% increase over revenue from sales to distributors of $896,711 for the three months ended June 30, 2009 (56.29% of the total sales revenue for the period). Revenue from sales to distributors for the six months ended June 30, 2010 was $2,604,899 (64.01% of the total sales revenue for the period), representing a 0.26% increase over revenue from sales to distributors of $2,598,076 for the six months ended June 30, 2009 (57.52% of the total sales revenue for the period).

Revenue from retail sales for the three months ended June 30, 2010, including from Company-owned and co-owned stores, was $685,536 (31.53 % of the total sales revenue for the period), representing a 1.55% decrease over retail sales for the three months ended June 30, 2009 of $696,338 (43.71% of the total sales revenue for the period). Revenue from retail sales for the six months ended June 30, 2010, including from Company-owned and co-owned stores, was $1,464,866, (35.99% of the total sales revenue for the period), representing a 23.66% decrease over retail sales of $1,918,761 for the six months ended June 30, 2009 (42.48% of the total sales revenue for the period).

 

Overall gross profit for the three months ended June 30, 2010 was $ 1,435,392 (representing an overall gross profit margin of 66.01%), compared with overall gross profit of $1,010,838 (representing an overall gross profit margin of 63.45%) for the three months ended June 30, 2009. Overall gross profit for the six months ended June 30, 2010 was $2,531,199 (representing an overall gross profit margin of 62.20%), compared with overall gross profit of $2,563,929 (representing an overall gross profit margin of 56.76%) for the six months ended June 30, 2009.

  

General and administrative expenses, which include rental expenses for head office, salary expenses for management and head office staff, , travel and entertainment expenses, were $509,433 for the three months ended June 30, 2010 (23.43% of total sales revenue) and $412,218 for the three months ended June 30, 2009 (25.88% of total sales revenue). General and administrative expenses were $943,878 for the six months ended June 30, 2010 (23.19% of total sales revenue) and $914,686 for the six months ended June 30, 2009 (20.25% of total sales revenue). The increase in general & administrative expenses for both the three and six month periods was mainly a result of higher consultancy fees.  We have engaged the services of domestic and Korean sales and design experts to further focus on strengthening brand and design value.

 

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Selling and marketing expenses, which also includes all distribution costs, were $627,498 for the three months ended June 30, 2010 (28.86% of total sales revenue), compared with $624,439 for the three months ended June 30, 2009 (39.20% of total sales revenue).  Selling and marketing expenses were $1,068,093 for the six months ended June 30, 2010 (26.24% of total sales revenue), compared with $1,276,524 for the six months ended June 30, 2009 (28.26% of total sales revenue).  Selling and administrative expenses decreased as a percentage of total sales as a result of fewer co-owned stores as compared with the same period in 2009.

 

Overall segment profit for the three months ended June 30, 2010 was $251,195, which represented an overall segment profit margin of 11.55%, compared with overall segment profit for the three months ended June 30, 2009 of $60,884, which represented an overall segment profit margin of 3.82%. Oriental Fashion is the company’s only operating subsidiary. Our total profit for reportable segment was derived from the operations of Oriental Fashion. For the three months ended June 30, 2010 and 2009, the overall segment profit can be reconciled to the income before income taxes by: (i) deducting the general and administrative expenses of $19,246 and $101,514 for the three months ended June 30, 2010 and 2009 respectively, and (ii) Stock-based compensation of $19,663 and $48,369 for the three months ended June 30, 2010 and 2009, respectively.

Overall segment profit for the six months ended June 30, 2010 was $434,987, which represented an overall segment profit margin of 10.69%, compared with overall segment profit for the six months ended June 30, 2009 of $664,571, which represented an overall segment profit margin of 14.71%.  For the six months ended June 30, 2010 and 2009, the overall segment profit can be reconciled to the income before income taxes by: (i) deducting the general and administrative expenses of $81,212 and $207,303 for the three months ended June 30, 2010 and 2009, respectively, and (ii) Stock-based compensation of $43,420 and $207,472 for the six months ended June 30, 2010 and 2009, respectively.

 

Income from operations for the three months ended June 30, 2010 was $225,805 (10.38% of the total sales revenues), compared with a loss from operations for the three months ended June 30, 2009 of $96,265 (6.04% of the total sales revenues), representing an increase of $322,070. Income from operations for the six months ended June 30, 2010 was $373,817 (9.19% of the total sales revenues), compared with income from operations for the six months ended June 30, 2009 of $231,922 (5.13% of the total sales revenues), representing an increase of 61.18%.

 

Net income for the three months ended June 30, 2010 was $180,103, compared with a net loss of $102,850 for the three months ended June 30, 2009, representing an increase of $282,953. Net income for the six months ended June 30, 2010 was $257,699, compared with $177,269 for the six months ended June 30, 2009, representing an increase of 45.37% .

Liquidity and Capital Resources

As of June 30, 2010, the Company’s net cash position was $1,009,874, compared with $869,495 as of December 31, 2009. Its working capital was $4,930,806, compared with $4,487,800 as of December 31, 2009. 

As of June 30, 2010, inventories were $3,391,743, an increase of $967,142 (or 39.89%), compared with $2,424,601 as of December 31, 2009.

 

As of June 30, 2010, trade receivables were $1,175,525, which was a decrease of $204,655(or 14.83%) compared with trade receivables of $1,380,180 as of December 31, 2009.

 

As of June 30, 2010, other receivables and deposits were $3,259,245, which was a decrease of $63,169 (or 1.90%) compared with $3,322,414 as of December 31, 2009.

 

Net cash used in operating activities for the six months ended June 30, 2010 was $670,774, compared with net cash used in operating activities of $110,088 for the six months ended June 30, 2009.

 

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The Company’s investing activities to date have consisted mainly of the purchase of property and equipment, and purchase and disposal of marketable securities. For the six months ended June 30, 2010 and 2009, the net use of cash in investing activities was $10,218 and $2,940, respectively.

 

The Company had a bank loan of $1,263,108 as of June 30, 2010. This one year term bank loan is guaranteed by (i) Ms. Zheng Luo, who did not receive any compensation for acting as guarantor, (ii) the Company’s bank deposit of $440,619, and (iii) bank deposits of three unrelated parties in the amount of $1,321,857.

The Company’s restricted cash of $440,619 was also pledged to the bank to secure the bank loans of $3,789,324 granted to the aforementioned unrelated parties. The restricted cash will be released by the bank after the Company and the unrelated parties have fully repaid their borrowings

  

Our remaining material capital expenditure requirements as of June 30, 2010 were approximately $2.0 million, which will be used for store expansions and operation. We anticipate funding these requirements by bank loan.

 

We believe that our currently available working capital should be adequate to sustain our operations at our current levels. Thereafter, based on our current operating plan and our available cash and cash equivalents, we expect that we will need to obtain additional financing in the future through the sale of equity securities, private placements, and loans to fund our cash needs and continue our presently planned operations. However, depending on our future needs and changes and trends in the capital markets affecting our shares and the Company, we may determine to seek additional equity or debt financing in the private or public markets. Additional financing, whether through public or private equity or debt financing, arrangements with stockholders or other sources to fund operations, may not be available, or if available, may be on terms unacceptable to us.

 

Critical Accounting Policies

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires our management to make assumptions, estimates and judgments that affect the amounts reported in the financial statements, including the notes thereto, and related disclosures of commitments and contingencies, if any. We consider our critical accounting policies to be those that require the more significant judgments and estimates in the preparation of financial statements, including the following:

 

Use of estimates. In preparing financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. These accounts and estimates include, but are not limited to, the valuation of trade and other receivables, inventories and deferred income taxes, provision for warranty and the estimation on useful lives of property and equipment. 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. 

Concentrations of credit risk. Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents, restricted cash and trade receivables. As of June 30, 2010, the Company’s cash and cash equivalents and restricted cash were held by major financial institutions located in the PRC, Hong Kong and the United States, which management believes are of high credit quality. With respect to trade receivables, the Company extends credit based on an evaluation of the customer’s financial condition. The Company generally does not require collateral for trade receivables and maintains an allowance for doubtful accounts of trade receivables.

Stock-based compensation. The Company adopted the fair value method of accounting for share-based compensation.

Under the fair value method, compensation cost related to employee stock options or similar equity instruments which are equity-classified awards is measured at the grant date based on the value of the award and is recognized over the requisite service period, which is usually the vesting period. The cost of a liability-classified award is measured based on its current fair value. Fair value of share options granted is determined using the Black-Scholes model. Under this model, certain assumptions, including the risk-free interest rate, the expected life of the options, the estimated fair value of the Company’s common stock and the expected volatility, are required to determine the fair value of the options. If different assumptions had been used, the fair value of the options would have been different from the amount the Company computed and recorded, which would have resulted in either an increase or decrease in the compensation expense. 

 

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Fair value of financial instruments. The Company considers the carrying values reported in the condensed consolidated balance sheet for current assets and current liabilities qualifying as financial instruments approximate their fair values due to the short-term maturity of such instruments. It is the management’s opinion that the Company is not exposed to significant interest, price, foreign currency or credit risks arising from these financial instruments.

Income Taxes.

The United States

The Company is subject to the United States of America Tax law at tax rate of 34%. It has no assessable profit for the six months ended June 30, 2010 and 2009 respectively. The Company has not recognized a deferred tax liability for the undistributed earnings of its non-U.S. subsidiaries as of June 30, 2010 and December 31, 2009 respectively, because the Company currently does not expect those unremitted earnings to reverse and become taxable to the Company in the foreseeable future. A deferred tax liability will be recognized when the Company no longer plans to permanently reinvest undistributed earnings. Calculation of related unrecognized deferred tax liability is not practicable.

The British Virgin Islands

Omnia BVI was incorporated in the British Virgin Islands (or “BVI”) and, under the current laws of the BVI, is not subject to income tax.

The Peoples Republic of China

Oriental Fashion is subject to the PRC Enterprise Income Tax (“EIT”). As Oriental Fashion was a wholly-foreign owned enterprise engaged in the manufacture industry which was duly approved by the PRC tax authority, it was entitled to two years’ exemption, from the first profit making calendar year of operations after offset of accumulated taxable losses, followed by 50% tax reduction for the immediate next three calendar years. This tax holiday commenced in the fiscal financial year 2007. Oriental Fashion was subject to an EIT rate of 11% and 10% during the six months ended June 30, 2010 and 2009, respectively.

 

No provision for EIT has been made for the six-month period ended June 30, 2010 since Oriental Fashion had no assessable profit for the period. The tax expense for the six-month period ended June 30, 2010 in the condensed consolidated statements of income and comprehensive income represented the deferred tax recognized.  

The management evaluated the Company’s tax position in accordance with ASC 740 and considered that no provision for uncertainty in income taxes was necessary as of June 30, 2010. 

 

Item 4. Controls and Procedures

Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer and chief financial officer, Ms. Zheng Luo and Mr. David Wang, respectively, evaluated the effectiveness of our disclosure controls and procedures. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports, such as this report, that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on that evaluation, our management concluded that as of June 30, 2010, and as of the date that the evaluation of the effectiveness of our disclosure controls and procedures was completed, our disclosure controls and procedures were effective to satisfy the objectives for which they are intended.

 

Changes in Internal Controls over Financial Reporting

During the three months ended June 30, 2010, there were no changes in our internal control over financial reporting identified in connection with the evaluation performed during the fiscal year covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

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PART II – OTHER INFORMATION

Item 1.

Legal Proceedings

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

	OMNIALUO, INC.
	(Registrant)
Date: August 16, 2010		/s/ Zheng Luo
		Zheng Luo
		President & Chief Executive Officer
		(Principal Executive Officer)
Date: August 16, 2010		/s/ David Wang
		David Wang
		Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)

 

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