8-K

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

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of Earliest event Reported): February 11, 2011 (February 11, 2011)

LANSDOWNE SECURITY, INC. (Exact name of registrant as specified in its charter)

Nevada	333-94797	75-2738727
(State or other jurisdiction of	(Commission File Number)	(IRS Employer Identification No.)
incorporation or organization)

Jiangtou Village, Jinjiang City, Quanzhou, Fujian Province, 362200
People’s Republic of China
(Address of principal executive offices)

(86) 595 8518 6739
(Registrant's telephone number, including area code)

27 Chicora Avenue, Toronto, ON M5R 1T7 Canada
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[     ]     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[     ]     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a -12)

[     ]     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d -2(b))

[     ]     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e -4(c))

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SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS

This report contains forward-looking statements. The forward-looking statements are contained principally in the sections entitled “Description of Business,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to, the factors described in the section captioned “Risk Factors” above. In some cases, you can identify forward-looking statements by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “would” and similar expressions intended to identify forward-looking statements. Forward-looking statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties. Given these uncertainties, you should not place undue reliance on these forward-looking statements.

Also, forward-looking statements represent our estimates and assumptions only as of the date of this report. You should read this registration statement and the documents that we reference and filed as exhibits to the registration statement completely and with the understanding that our actual future results may be materially different from what we expect. Except as required by law, we assume no obligation to update any forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, even if new information becomes available in the future.

Use of Certain Defined Terms

Except where the context otherwise requires and for the purposes of this report only, references to:

• “Aierda” are to Fujian Jinjiang Aierda Shoe Plastic Co., Ltd., a PRC limited company;

• “BVI” are to the British Virgin Islands;

• the “Company,” “we,” “us,” and “our” refer to the combined business of “Lansdowne Security, Inc.” and its wholly-owned subsidiary, DK, and DK’s wholly-owned subsidiaries Dake and Aierda, as the case may be;

• “Dake” are to Dake (Fujian) Sports Goods Co., Ltd., a PRC limited company;

• “DK” are to DK International Group Ltd., a BV limited company;

• the “Exchange Act” means the Securities Exchange Act of 1934, as amended;

• the “PRC,” and “China,” are to the People’s Republic of China;

• “RMB” are to Renminbi, the legal currency of China; and “U.S. dollar,” “USD” or “$,” are to the legal currency of the United States of America (RMB 6.8172 = $1.00 for its December 31, 2009 audited balance sheet, with the exception of the equity accounts, RMB 6.8173 = $1.00 for its December 31, 2008 audited balance sheets, with the exception of the equity accounts, RMB 6.6781 = $1.00 for its September 30, 2010 audited balance sheets, with the exception of the equity accounts, RMB 6.8176 = $1.00 for its September 30, 2009 audited balance sheets, with the exception of the equity accounts; the equity accounts were stated at their historical rate; the average exchange rates applied to the income statement and statement of cash flows for the years ended December 31, 2009 and 2008 were RMB 6.8311 and RMB 6.9519, respectively, and for the nine months ended September 30, 2010 and September 30, 2009, were RMB 6.8131 and RMB 6.8323, respectively); and

• the “Securities Act” are to Securities Act of 1933, as amended.

In this current report we are relying on and we refer to information and statistics regarding the footwear and retail industry and economy in China and that we have obtained from various cited government and institute research publications. Much of this information is publicly available for free and has not been specifically prepared for us for use or incorporation in this current report on Form 8-K or otherwise. We have not independently verified such information, and you should not unduly rely upon it.

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ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

On February 11, 2011, we consummated a share exchange agreement, or the Share Exchange Agreement, dated February 11, 2011, between the Company, DK International Group Ltd., or DK, a BVI limited company, and its sole shareholder, Mr. Yangbo Cai, pursuant to which we acquired 100% of the issued and outstanding capital stock of DK in exchange for 9,250 shares of our Series A Convertible Voting Preferred Stock, par value $.0001, or Series A Preferred Stock, which constituted 91.71% of our issued and outstanding capital stock on a fully-diluted basis as of and immediately after the consummation of the transactions contemplated by the Share Exchange Agreement. DK was incorporated on November 12, 2010 in the BVI as a holding company for Dake (Fujian) Sports Goods Co., Ltd, a PRC based operating subsidiary, which is engaged in the design, manufacturing, and distribution of footwear materials, branded footwear products and accessories in the Chinese domestic market.

A closing condition to the consummation of the share exchange agreement was the repurchase and cancellation by the Company of 234,616 shares of common stock held by David Roff, the Company’s sole officer and director, for $20,000 in cash and 215 shares of the Series A Preferred Stock, as contemplated by a repurchase agreement, dated February 11, 2011, by and between the Company and Mr. Roff. As a result of the share cancellation, our issued and outstanding shares decreased from 345,780 to 111,164 shares of common stock.

The foregoing description of the terms of the Share Exchange Agreement and the Repurchase Agreement is qualified in its entirety by reference to the provisions of the agreements filed as Exhibit 2.1 and 10.1 to this report, which are incorporated by reference herein.

ITEM 2.01. COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS

On February 11, 2011, we completed the acquisition of DK pursuant to the Share Exchange Agreement described in Item 1.01 above. The acquisition was accounted for as a recapitalization effected by a share exchange, wherein DK is considered the acquirer for accounting and financial reporting purposes. The assets and liabilities of the acquired entity have been brought forward at their book value and no goodwill has been recognized.

DESCRIPTION OF BUSINESS

Business Overview

We are primarily engaged, through our subsidiary Dake and our variable interest entity, or VIE, Aierda, in the design, production, and wholesale distribution of athletic and casual men’s and women’s footwear, footwear accessories, and footwear materials sold in China under our licensed proprietary brand “Aierda.” We also manufacture and export made-to-order footwear products through third party agents and we manufacture and sell footwear materials including insoles, outsoles, linings and heels to other footwear manufacturers in Fujian province. Our branded footwear products, which include approximately 80 low- to mid-priced designs, are sold primarily in second-tier PRC markets, secondary provincial capitals, consisting of 23 cities in China, and third-tier PRC markets, consisting of city capitals at the prefecture or county level.

We operate a 58,000 sq. meter manufacturing facility located in Jinjiang City, Fujian Province, which produces approximately 2.6 million pairs of shoes per year on two production lines. Our footwear products are sold through our network of third-party distributors who sell our products to retail stores and department store boutiques across China. Our company headquarters is located in Jinjiang City, Fujian Province in eastern China.

We generate revenues from the sale of our footwear products and accessories to third-party distributors and to other footwear manufacturers. For the fiscal year ended December 31, 2009 our revenue increased by 16.25%, from $48.5 million to $56.4 million, from fiscal year 2008, and our net income increased by 23.7%, from $5.28 million to $6.53 million, from fiscal year 2008. The increase from period to period is attributable to sustained customer demand during the 2009 period, despite the global economic downturn, and our continuous sales efforts.

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Our Corporate History and Background

We were organized under the laws of the State of Texas on October 30, 1997, as Hudson’s Grill International, Inc. On December 1, 1997, we became a wholly-owned subsidiary of Hudson's Grill of America, Inc. ("HGAI"), a public company, engaged in the business of franchising Hudson's Grill Restaurants, a chain of full-service 50s and 60s era themed restaurants located in the upper Midwest of the United States. HGAI also transferred certain franchise rights and agreements to us in connection with the acquisition. On July 7, 2000, HGAI registered our common stock and distributed 100% of our shares to the stockholders of HGAI at the time. In August 2008, we entered into an asset purchase agreement with Concept Franchising LLC, or Concept Franchising, pursuant to which Concept Franchising purchased all our assets and assumed all of our liabilities as of the date of the agreement, in exchange for 1,975,000 shares of our common stock. Immediately following the asset transfer, our Board of Directors elected Joseph J. Meuse to serve as a member on the Company’s board of directors, and appointed him to serve as the Company’s sole officer, and sole officer, and each of David L. Osborn, Robert Fischer, Anthony B. Duncan and Barbara Amstutz, resigned from their positions as Directors of the Company. On December 22, 2009, Mr. Meuse resigned from all his positions with the Company and our Board of Directors appointed Mr. David Roff to serve as our sole officer and director, effective immediately. As of the date of the asset transfer through to the date of the reverse acquisition disclosed in more detail below, the Company was a shell company with no or nominal operations.

On May 28, 2010, our Board of Directors and stockholders approved a redomicile of the Company from Texas to Nevada, pursuant to a conversion, which conversion was accepted by the Secretaries of State for the State of Nevada and Texas on July 1, 2010 and August 11, 2010, respectively. Our directors and stockholders also approved a reverse stock split of our outstanding common stock on a one-for-fifty basis, the elimination of our Class B common stock, the authorization of preferred stock, and a change of our name to Lansdowne Security, Inc. On July 7, 2010, we filed Articles of Incorporation with the Secretary of State of Nevada, changing our name to Lansdowne Security, Inc. and implementing a 50-to-1 reverse stock split of our issued and outstanding common stock. As a result of the reverse stock split, the number of our issued and outstanding shares decreased from 17,288,986 pre-split shares to 345,780 shares of common stock.

Reverse Acquisition of DK International Group Ltd.

Prior to February 11, 2011, we were a shell company and had no operations. On February 11, 2011, we entered into the Share Exchange Agreement DK and its sole shareholder, Mr. Yangbo Cai, pursuant to which we acquired 100% of the issued and outstanding capital stock of DK in exchange for 9,250 shares of our Series A Preferred Stock, which constituted 91.71% of our issued and outstanding capital stock on a fully-diluted basis as of and immediately after the consummation of the transactions contemplated by the Share Exchange Agreement. DK thereby became our wholly-owned subsidiary, its subsidiary, Dake, became our indirect subsidiary, and its VIE, Aierda became our VIE. DK was incorporated on November 12, 2010 in the BVI as a holding company for Dake (Fujian) Sports Goods Co., Ltd, a PRC based operating subsidiary, which is engaged in the design, manufacturing, and distribution of footwear materials, branded footwear products and accessories in the Chinese domestic market.

A closing condition to the consummation of the share exchange agreement was the repurchase and cancellation by the Company of 234,616 shares of common stock held by David Roff, the Company’s sole officer and director, for $20,000 in cash and 215 shares of the Series A Preferred Stock, as contemplated by a repurchase agreement, dated February 11, 2011, by and between the Company and Mr. Roff. As a result of the share cancellation, our issued and outstanding shares decreased from 345,780 to 111,164 shares of common stock.

Upon the closing of the reverse acquisition on February 11, 2011, Mr. Roff resigned from his offices with the Company, effective immediately, and from his position as a director, effective as of the tenth day following the filing with the SEC and mailing of an information statement on Schedule 14f-1 to the Company’s stockholders. On the same day our Board of Directors increased its size to 4 members and appointed Mr. Yuxi Ding to serve as Chairman, effective immediately, and appointed Mr. Conghui Ding, Mr. Congren Ding, and Mr. Quisheng Ding to serve as directors, effective as of the effective date of Mr. Roff’s resignation. Our Board of Directors also appointed Mr. Conghui Ding to serve as our Chief Executive Officer, Ms. Lifen Zheng to serve as our Chief Financial Officer, Treasurer and Secretary, and Mr. Andong Wang to serve as our Chief Marketing Officer, effective immediately.

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We plan to change our name to Dake Athletics Corp. to more accurately reflect our new business operations.

Acquisition of Dake and Aierda

On December 30, 2010, DK entered into an equity transfer agreement with Mr. Yuxi Ding, pursuant to which DK acquired 100% of the outstanding equity interest of Dake. On January 6, 2011, the transaction was approved by the Fujian authorities, however, the transaction has not yet been approved by the Quanzhou Commission of Economy and Trade, and a new business license for Dake has not yet been issued by the Quanzhou Administration for Industry and Commerce, the competent local PRC approval authorities. See the discussion under “Risk Factors—If we fail to obtain the approval from Quanzhou Commission of Economy and Trade and the new business license from Quanzhou Administration for Industry and Commerce for DK’s acquisition of Dake, we will not have legal ownership over Dake nor control over Aierda.”

On December 31, 2010, Dake entered into a series of 10-year, renewable contracts with Aierda and its sole shareholder, Mr. Yuxi Ding, pursuant to which (1) Mr. Ding agreed to pledge 100% of his equity interests in Aierda to Dake; (2) at any time during the 10-year term of the contractual arrangement, Dake has the absolute right to acquire any portion of the equity interests of Aierda from Mr. Ding; and (3) Dake has the absolute right during the 10-year term to appoint the directors of Aierda and to obtain service fees from Aierda. As a result of these contracts, Dake gained control over Aierda and Aierda became Dake’s VIE.

The commercial arrangement consists of the following contracts:

• Exclusive Business Cooperation Agreement, dated December 31, 2010, between Dake and Aierda, provides that Dake will be the exclusive provider of consulting services to Aierda, and that Aierda will pay a service fee to Dake, based on a percentage of its profits before taxes, which will be payable in an amount and at such  time as determined by Dake in its sole discretion.

• Exclusive Option Agreement, dated December 31, 2010, between Dake, Mr. Ding and Aierda, provides that in the event that Dake exercises its right to purchase the equity interests of Aierda from Aierda’s sole shareholder, the purchase price will be equal to the original price paid by the sole shareholder in acquiring the equity interest of Aierda.

• Proxy Agreement, dated December 31, 2010, between Dake, Mr. Ding and Aierda, authorizes Dake to exercise any and all shareholder rights associated with Mr. Ding’s ownership in Aierda, including the right to sell, assign, transfer or pledge any or all of the equity interest in Aierda, and the right to vote such equity interest for any and all matters.

• Equity Pledge Agreement, dated December 31, 2010, between Dake and Mr. Ding, whereby Mr. Ding pledges all of his equity shares in Aierda to Dake. If Aierda or Mr. Ding breaches their respective obligation under any of the VIE contracts, Dake, as pledgee, will be entitled to certain rights, including the right to foreclose on the pledged equity interests. Mr. Ding has agreed not to dispose of the pledged equity interests or take any actions that would prejudice Dake’s interest during the 10-year term of the agreements. Dake also has right to obtain any and all dividends related to the equity interest pledged during the term of the pledge.

Under these contractual arrangements, which obligate Dake to absorb a majority of the risk of loss from Aierda’s activities and entitle it to receive a majority of its residual returns, Dake now holds the variable interests of Aierda and has become its primary beneficiary. As such, Aierda is deemed to be our Variable Interest Entity, or VIE, under ASC 810, "Consolidation of Variable Interest Entities, an Interpretation of ARB No.51," because the equity investor in Aierda no longer has the characteristics of a controlling financial interest. Accordingly, we have consolidated the financial data of Aierda into our data. Furthermore, each of DK, Dake and Aierda are either wholly owned or under common control of Mr. Yuxi Ding, pursuant to the foregoing contractual arrangements and a voting rights’ entrustment agreement discussed under the “Security Ownership of Certain Beneficial Owners and Management – Changes in Control” heading elsewhere in this report. Accordingly, the historical consolidated financial statements of Dake are considered the historical financial statements of DK and the statements of income and comprehensive income have been presented retrospectively at the beginning of the reporting period.

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Aierda was established on June 13, 1991 as a foreign-invested PRC enterprise and is mainly engaged in the manufacture and sale of footwear parts and materials. On November 16, 2005, Mr. Yuxi Ding, a Philippine resident, entered into a share transfer agreement with Fujian Province Jinjiang City Chendai Jiangtou Labor Insurance Factory and Hong Kong Shengcheng (Pacific) Limited Company, the former shareholders of Aierda, pursuant to which, Mr. Ding acquired 100% of the equity interest in Aierda for a total consideration of RMB 9,000,000. On December 22, 2005, the Jinjiang City Commerce Bureau approved the equity transfer to Mr. Ding and approved the conversion of Aierda to a wholly foreign-owned enterprise. Dake was established on August 8, 1999, as a foreign-invested PRC enterprise and is mainly engaged in the manufacture and wholesale of casual and athletic footwear.

Our Corporate Structure

The chart below presents our corporate structure as of the date of this current report:

Our principal executive offices are located at Jiangtou Village, Jinjiang City, Quanzhou, Fujian Province, 362200, People’s Republic of China. The telephone number at our principal executive office is (+86 595) 851286666.

Our Industry and Market Trends

Through our wholly-owned PRC subsidiary, Dake and our VIE, Aierda, we are primarily engaged in the design, production, and wholesale distribution of athletic and casual men’s and women’s footwear, footwear accessories, and footwear materials sold in China under our licensed proprietary brand “Aierda.” Our footwear products and accessories are mainly sold in the PRC by third party footwear distributors, Our footwear materials are also sold to other footwear manufacturers in Fujian province. We also manufacture footwear products for a limited number of foreign export customers according to specifications during periods that our production line is not engaged in the production of our own branded footwear products.

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According to CIConsulting, a PRC industry researcher, China is the largest footwear producer in the world, with more than 20,000 enterprises employing more than 4 million employees, manufacturing about 10 billion pairs of shoes annually. In 2008, roughly 8 billion pairs of shoes were exported, representing a trade amount of $28.8 billion, while the remaining 2 billion pairs were consumed domestically. China has already played the dominate role in the worldwide footwear market. In September of 2008, due to the worldwide financial crisis, global markets including shoes market was deeply affected by the depressed market resulted from the crisis, a large number of low margin shoe manufacturers have been forced out of the markets.

Despite this crisis, neither our sales revenue nor our margins have been materially affected, which we primarily attribute to our modernized manufacturing procedures, as well as our market efforts in 2009 resulting in growing consumer demand for our branded footwear products. We expect that our performance will improve with increased economic activity in the global economy.

In 2010, we expanded our relationships with many of our distributors operating in retail locations in Fujian, Heilongjiang and Anhui provinces, providing them with additional in-store marketing materials, product displays, and store décor bearing the Aierda logo. We plan to further expand our business to include retail sales in 2011, and open several new company-owned retail locations in Fujian province.

Our Growth Strategy

Our goal is to become one of the leading providers of affordable, quality footwear in China. We intend to pursue the following strategies to achieve our goal:

• New Products and Expansion of Production Capacity: We intend to increase our production capacity through the addition of at least one more production line in our Jinjiang City manufacturing facility which is currently operating at near full capacity. We also plan to adopt an inventory management system that will enable us to better track our inventory cycle to increase our production line utilization rate and sales revenues, and we expect that we will need to hire approximately 200 additional employees to support our additional production line. We also intend to expand our product line to include original designs of casual and athletic Aierda branded clothing and sportswear accessories.

• Increase Marketing Activities and Market Share: We plan to apply for an expansion of our current business license from domestic wholesale distribution to include retail sales and expand our share of the domestic retail PRC footwear market by opening 100 exclusive Aierda brand retail locations, including several flagship stores, by 2014. We also plan to establish broader distribution networks and sales channels to increase our market share. We also intend to initiate an intensive print and television marketing and advertising campaign in the provinces where our footwear products are currently sold to increase our brand awareness. We expect to hire an outside marketing firm to assist us with the above mentioned marketing and brand-building activities.

Our Products

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We design and offer for sale over 90 original designs of casual and athletic footwear and footwear accessories for men and women. Our footwear designs target a growing young consumer market between the ages of 13 and 40, who seek the latest design trends at affordable prices. Our line of casual and athletic footwear products are sold at RMB150 - 250 for retail, and RMB56 - 72 for wholesale, with our hiking and outdoor footwear products priced at the higher end of that range. We manufacture our footwear products and materials at our manufacturing facility in Jinjiang City in Fujian Province. Approximately 60% of our designs are for men and 40% are designs for women. New designs are introduced twice a year, for each of the Spring-Summer and Fall-Winter ordering seasons. Designs are made based on collaboration between our sales department and design department with regard to market demand and assessment of what designs will be fashionable in the upcoming season. In 2009, revenues from our footwear materials and accessories accounted for 60.3% of our total sales revenues, and our designs of men’s and women’s footwear represented 24% and 15.7% of total sales, respectively. During the nine months ended September 30, 2010, we successfully increased the percentage of our footwear sales to 78% of our total sales.

Our footwear accessories include removable insole and outsole products to enhance comfort and add height. Our footwear accessory products are manufactured using Ethylene Vinyl Acetate, or EVA, a co-polymer or compound of ethylene and vinyl acetate typically used as a shock absorber in sports shoes, MD, also called “Phylon” which is used as a super-light, flexible and shock-absorbing material in sports shoes, rubber, and natural and synthetic leather. EVA can be purchased either in granule or injectible form, or in rolled sheets.

Raw Materials and Supplier Relationships

The major raw materials used in the production of our footwear products are EVA, plastic, leather and rubber. We acquire our primary raw materials from a variety of sources in Fujian province, primarily in Jinjiang City and Quanzhou. We purchased approximately 71% of our raw materials from 10 Fujian suppliers in 2009, up from 40% in 2008. The reason for the sharp increase in supplier concentration from 40% to 71% in 2009 was due to the increased transactional familiarity between the Company and a select group of local suppliers which were found to be reliable sources of quality raw materials. Our suppliers are selected for their ability to meet our high quality standards, timely execution of our orders, and competitive pricing. We do not have any material long-term purchase contracts with any of our suppliers; however, we do many long-term relationships with our major suppliers and management believe that we will be able to maintain adequate supply of raw materials at a predictable cost for the foreseeable future. However, the prices for which we pay for our raw materials depend on general market conditions and the market price of certain raw materials, which are primarily dependent on the price of petroleum, and the continued operations of our current suppliers. We do have a limited number of short-term contracts with some of our suppliers and occasionally make one-time purchases to take advantage of favorable pricing.

Our contracts with suppliers are on an as ordered basis, with payment due at the end of the month of delivery, and are usually for a term of one year. Prices are negotiated by our sourcing team.

Marketing and Distribution Efforts

Advertising

We utilize television, print media, the internet and outdoor billboard displays to build brand awareness. We also have sponsored various school and university sports teams and have participated in event sponsorships as a means of increasing our brand awareness in key markets. Our expenses relating to our advertising and marketing activities were $513,088 for the year ended December 31, 2009, and as of September 30, 2010, we had spent approximately $332,511 on marketing and advertising activities.

We plan to hire an outside marketing consulting firm to assist us with developing new marketing and brand-building strategies that may include among others to expand our marketing activities to new areas with high potential for sales, increase our advertising in high traffic areas such as airports and train stations, and initiate a new internet advertising campaign.

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Distributors

We sell our products to distributors located in Fijian, Heilongjiang, Sichuan, Liaoning, Zhejiang, Henan, Anhui, Tianjing, Shandong, Guangxi, Hubei, Shaanxi and Gansu provinces. We invite our distributor customers to our design showroom in Jinjiang City in April and October of each year, to view our new designs and place orders. We also participate and attend periodic sales fairs where distributors can view and select upcoming designs. As of December 2010, we had over 1,000 distributors throughout China, with our top ten distributors accounting for 62% of our total sales in 2009, a slight increase from 58% in 2008. We plan to expand into the retail footwear business with the launch of retail stores by mid-2011.

We identify suitable distributors and enter into distributorship agreements, usually for a term of one year. Distributors purchase wholesale priced shoes and vend them at sales points throughout China. Our distributors are independent third parties that do not pay us any fees other than the purchase price for the purchase of our products, nor do we pay them any incentives or fees. However, we require our distributors to implement, monitor compliance with and enforce our distribution guidelines. Our general distribution contracts usually contain the following terms:

• Wholesale price – Distributors pay a discounted wholesale price for our products.

• Delivery – We are responsible for the cost of shipping and we are obliged to ship our products to the designated warehouse of our distributor within two months after a contract is signed.

• Product Standard – We are responsible for delivering products according to the standards specified by the distributors in each contract.

• Payment and Credit Terms – Payment and credit terms are on a case by case basis. The credit period is usually one month, with a 30% advance deposit required in every case

• Returns – We do not have a product return policy with our distributors, but may from time to time offer them discounts on unsold inventories.

Competition

The retail industry, and in particular the footwear retail industry, is highly competitive in China. We face direct competition from other domestic and international manufacturers of footwear products that operate in the PRC market. There are a number of private companies who are in the process of developing their own brand name in an attempt to enter the PRC retail footwear market. We believe that our top competitors in this market are 361 Degrees International Limited and Anta Sports Products Limited, Hong Kong listed PRC companies who manufacture and market athletic footwear and apparel in China, Exceed Company Ltd., a NASDAQ listed manufacturer of footwear, apparel and accessories, and Hongxing Erke Group, a Singapore-listed footwear manufacturer. Many of our existing and potential competitors have substantially greater financial, manufacturing or other resources than we do. Our competitors’ greater size in some cases provides them with a competitive advantage with respect to manufacturing costs because of their economies of scale and their ability to purchase raw materials at lower prices. Many of our competitors may also have greater brand name recognition, more established distribution networks, larger customer base, or have more extensive knowledge of our customer groups. As a result, they may be able to devote greater resources on innovative designs, promotion and sale of their products and respond more quickly to evolving changes in market conditions than we can. In addition, certain of our competitors may adopt low-margin sales strategies and compete against us based on lower prices.

We believe that competition in the footwear industry in China will continue to be based on, among other things, innovative designs, product quality, promotional activities and brand awareness, extensive distribution networks, comparatively lower material costs, and pricing. We believe that we are highly-competitive in each of these areas. Further, we primarily market our products in second- and third-tier markets, characterized by rapid growing urban populations and disposable household income, in order to avoid direct competition from larger, more recognized competitors. Our products target low to mid-level income portion of the population in these cities and are priced significantly lower than those of our larger competitors.

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Design and Innovation

We believe that design innovation is crucial for our ability to compete and survive in the PRC footwear industry. As a result, we dedicate a large portion of our resources to our internal design team. Our internal design team consists of 85 full-time designers who communicate with our distributors and sales team to create approximately 90 new and unique designs twice a year. Our designs primarily target consumers between the ages of 13 and 40. Our Fall-Winter designs are introduced in April for Spring orders and our Spring-Summer designs are introduced in October.

For the fiscal years ended December 31, 2009 and 2008, approximately 0.1379% and 0.1747% of our expenses, respectively, were allocated to our design and innovation activities.

Intellectual Property Rights

Our products are sold under the Aierda brand name, which is a registered trademark in the PRC.

Trademarks	Certificate #	Valid Term
	615261	October 20, 2002 to October 19, 2012
	1064439	July 29, 2007 to July 28, 2017

Employees

We currently employ a total of 1,823 employees at our Jinjiang City headquarters and manufacturing facility. We use both an internal hiring team and third-party labor providers to hire our employees. Our factory workers are compensated based on productivity, or per units produced and the average salary of our employees is RMB 2,000 per month.. Our administrative staff is compensated based on hours worked. The table below details the various departments and number of employees in each.

Marketing and Sales	78
Design	85
Warehouse	22
Logistics	187
Administrative and Accounting	53
Production and Manufacturing	1,398
Total	1,823

Our salary expenses for 2009 and 2008 were $5,510,570 and $5,127,174, respectively. The 7.5% increase in salary expenses from 2008 to 2009 was primarily due to increased production labor cost in 2009, which constitutes 81% of the total salary expenses, compared to 69% in 2008, as we hired more temporary workers to meet our production demand. We believe that this increase was also caused by the widely reported reverse migration of industrial laborers, including Fujian-based laborers, during the 2009 economic crisis, from their former positions in other industrialized provinces. We do not anticipate that our labor costs will continue to increase at such high rate as this migratory pattern has not continued.

We believe that we are in material compliance with all applicable labor and safety laws and regulations in the PRC, including the PRC Labor Contract Law , the PRC Unemployment Insurance Law, the PRC Provisional Insurance Measures for Maternity of Employees, PRC Interim Provisions on Registration of Social Insurance, PRC Interim Regulation on the Collection and Payment of Social Insurance Premiums and other related regulations, rules and provisions issued by the relevant governmental authorities for our operations in the PRC. According to the PRC Labor Contract Law, we are required to enter into labor contracts with our employees and to pay them no less than local minimum wage. Labor statutes in the PRC also require us to pay additional expenses to cover staff welfare including medical insurance, pensions, disability and unemployment insurance and labor union dues. During 2009 and 2008, we contributed an additional $1,002,816 and $689,088, respectively, towards these employee obligations.

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Regulation

Because our principal operating subsidiaries are located in the PRC, our business is primarily regulated by PRC state and local rules and regulations. We believe that we are in compliance with all applicable rules and regulations.

Environmental Compliance

On June 18, 1999, we received consent for the construction of our manufacturing facility in Jinjiang City from the Quanzhou Environmental Protection Bureau, pursuant to the findings of environmental impact report issued by the Institute of Environmental Protection Design of Huaqiao University that such construction was reasonable and feasible.

Our operation and facilities are subject to environmental laws and regulations stipulated by the national and the local environment protection bureaus in China, including the PRC Environmental Protection Law. Relevant laws and regulations include provisions governing air emissions, water discharges and the management and disposal of hazardous substances and wastes. We maintain controls at our production facilities to facilitate compliance with such environmental rules and regulations. We are not aware of any investigations, prosecutions, disputes, claims or other proceedings in respect of environmental protection, nor has it been subject to any action made by any PRC environmental administration authorities.

Employment and Labor Regulations

Our PRC operating subsidiaries are subject to the PRC Labor Contract Law, the PRC Production Safety Law, the PRC Regulation for Insurance for Labor Injury, the PRC Unemployment Insurance Law, the PRC Provisional Insurance Measures for Maternity of Employees, PRC Interim Provisions on Registration of Social Insurance, PRC Interim Regulation on the Collection and Payment of Social Insurance Premiums and other related regulations, rules and provisions issued by the relevant governmental authorities from time to time. According to these PRC labor laws, we are required to enter into labor contracts with our employees and pay them no less than local minimum wages. Labor statutes in the PRC also require us to pay additional expenses to cover staff welfare including medical insurance, pensions, disability and unemployment insurance and labor union dues, and to comply with PRC employment safety and sanitation standards and carry out regular health examinations of our employees who are engaged in hazardous occupations. We believe we are in material compliance with all applicable PRC labor and safety laws and regulations.

Foreign Currency Exchange

The principal regulations governing foreign currency exchange in China are the Foreign Exchange Administration Regulations (1996), as amended, and the Administration Rules of the Settlement, Sale and Payment of Foreign Exchange (1996). Under these regulations, the Renminbi is freely convertible for current account items, including the distribution of dividends, interest payments, trade and service-related foreign exchange transactions, but not for most capital account items, such as direct investment, loan, repatriation of investment and investment in securities outside China, unless the prior approval of the PRC State Administration of Foreign Exchange, or SAFE, or its local counterparts is obtained. In addition, any loans to an operating subsidiary in China that is a foreign invested enterprise, cannot, in the aggregate, exceed the difference between its respective approved total investment amount and its respective approved registered capital amount.

Furthermore, any foreign loan must be registered with SAFE or its local counterparts for the loan to be effective. Any increase in the amount of the total investment and registered capital must be approved by the PRC Ministry of Commerce or its local counterpart. We may not be able to obtain these government approvals or registrations on a timely basis, if at all, which could result in a delay in the process of making these loans.

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Dividends paid by the PRC subsidiary to its foreign shareholder are deemed shareholder income and are taxable in China. Pursuant to the Administration Rules of the Settlement, Sale and Payment of Foreign Exchange (1996), foreign-invested enterprises in China may purchase or remit foreign exchange, subject to a cap approved by SAFE, for settlement of current account transactions without the approval of SAFE. Foreign exchange transactions under the capital account are still subject to limitations and require approvals from, or registration with, SAFE and other relevant PRC governmental authorities.

Regulation of Income Taxes

The EIT Law and its implementing rules impose a unified earned income tax rate of 25.0% on all domestic-invested enterprises and foreign invested enterprises, or FIEs, unless they qualify under certain limited exceptions. Before the implementation of the EIT Law, FIEs established in the PRC, unless granted preferential tax treatment by the PRC government, were generally subject to an EIT rate of 33.0%, which included a 30.0% state income tax and a 3.0% local income tax.

Under the EIT Law, an enterprise established outside of China with “de facto management bodies” within China is considered a “resident enterprise,” meaning that it can be treated in a manner similar to a Chinese enterprise for enterprise income tax purposes. The implementing rules of the EIT Law define de facto management as “substantial and overall management and control over the production and operations, personnel, accounting, and properties” of the enterprise. In addition, a circular issued by the State Administration of Taxation on April 22, 2009, regarding the standards used to classify certain Chinese-invested enterprises controlled by Chinese enterprises or Chinese group enterprises and established outside of China as “resident enterprises” clarified that dividends and other income paid by such “resident enterprises” will be considered to be PRC source income, subject to PRC withholding tax, currently at a rate of 10%, when recognized by non-PRC enterprise stockholders. This circular also subjects such “resident enterprises” to various reporting requirements with the PRC tax authorities. Furthermore, the circular sets out criteria for determining whether “de facto management bodies” are located in China for overseas incorporated, domestically controlled enterprises. However, as this circular only applies to enterprises established outside of China that are controlled by PRC enterprises or groups of PRC enterprises, it remains unclear how the tax authorities will determine the location of “de facto management bodies” for overseas incorporated enterprises that are controlled by individual PRC residents, as in our case. See also the discussion under “Risk Factors—Under the Enterprise Income Tax Law, we may be classified as a ‘resident enterprise’ of China. Such classification will likely result in unfavorable tax consequences to us and our non-PRC stockholders.”

Value Added Tax

Pursuant to the Provisional Regulation of China on Value Added Tax and its implementing rules, issued in December 1993, all entities and individuals that are engaged in the businesses of sales of goods, provision of repair and placement services and importation of goods into China are generally subject to a 17% VAT (with the exception of certain goods which are subject to a rate of 13%) of the gross sales proceeds received, less any VAT already paid or borne by the taxpayer on the goods or services purchased by it and utilized in the production of goods or provisions of services that have generated the gross sales proceeds.

Business Tax

Companies in China are generally subject to business tax and related surcharges by various local tax authorities at rates ranging from 3% to 20% of revenue generated from providing services and revenue generated from the transfer of intangibles.

Regulation of Dividend Distribution

The principal regulations governing the distribution of dividends by foreign holding companies include the Foreign Investment Enterprise Law (1986), as amended, and the Administrative Rules under the Foreign Investment Enterprise Law (2001). Under these regulations, FIEs in China may pay dividends only out of their retained profits, if any, determined in accordance with PRC accounting standards and regulations. In addition, foreign investment enterprises in China are required to allocate at least 10% of their respective retained profits each year, if any, to fund certain reserve funds unless these reserves have reached 50% of the registered capital of the enterprises. These reserves are not distributable as cash dividends. The board of directors of a FIE has the discretion to allocate a portion of its after-tax profits to staff welfare and bonus funds, which may not be distributed to equity owners except in the event of liquidation.

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Our Facilities and Property

There is no private ownership of land in China and all land ownership is held by the government of the PRC, its agencies and collectives. Land use rights can be obtained from the government for a period of up to 50 years, and are typically renewable. Land use rights can be transferred upon approval by the land administrative authorities of the PRC (State Land Administration Bureau) upon payment of the required land transfer fee.

The table below provides a summary of our contractual land use rights for the properties on which our facilities are located in Jinjiang City:

Land	Usage	Area in Square Meters	Status of Land Use Rights
Land No. GY2010-33 Chendai Town, Jinjiang City	Aierda Industrial Facilities	13,333	Pending
Land No. GY2010-34 Chendai Town, Jinjiang City	Dake Industrial Facilities	20,000	Pending

We have not yet obtained land use right certificates for these facilities but we are in the process of negotiating agreements with the local government authority regarding obtaining such rights, which we expect to receive before the end of 2011.

Since commencing operations in 1991, we have constructed our manufacturing facilities and employee housing on our properties in Jinjiang City for our exclusive use. The table below provides details regarding our use of the space:

No.	Owner	Address	Use	Gross Floor Area (sq. m)	Registration No.
1.	Dake	Jiangtou Industry Area, Chendai Town, Jinjiang City	Factory	30,000	Self-built Building without Certificate of Title

For the years ended December 31, 2009 and 2008, the amortization expense of the land use rights was $146,390 and 143,847, respectively.

Insurance

Insurance companies in China offer limited business insurance products. While business interruption insurance is available to a limited extent in China, we have determined that the risks of interruption, cost of such insurance and the difficulties associated with acquiring such insurance on commercially reasonable terms make it impractical for us to have such insurance. As a result, we could face liability from the interruption of our business as summarized under “Risk Factors – Risks Related to Our Business – We do not carry business interruption insurance so we could incur unrecoverable losses if our business is interrupted.”

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RISK FACTORS

An investment in our common stock involves a high degree of risk. You should carefully consider the risks described below, together with all of the other information included in this report, before making an investment decision. If any of the following risks actually occurs, our business, financial condition or results of operations could suffer. In that case, the trading price of our common stock could decline, and you may lose all or part of your investment. You should read the section entitled “Special Note Regarding Forward-Looking Statements” above for a discussion of what types of statements are forward-looking statements, as well as the significance of such statements in the context of this report.

RISKS RELATED TO OUR BUSINESS

If we fail to obtain approval from the Quanzhou Commission of Economy and Trade and a new business license from the Quanzhou Administration for Industry and Commerce for DK’s acquisition of Dake, we will not have legal ownership over Dake or control over Aierda.

We conduct our business through DK’s PRC operating subsidiary, Dake, and its VIE, Aierda. Although we have obtained approval from the Jinjiang Commission of Economy and Trade for DK’s acquisition of Dake, in order to fully comply with PRC laws, the acquisition of Dake needs to also be approved by the Quanzhou Commission of Economy and Trade, and we need to obtain a new business license for Dake from the Quanzhou Administration for Industry and Commerce. If we do not obtain this approval of the transaction or a new business license for Dake, we will not have legal ownership over Dake, nor control over Aierda, Dake’s VIE.

We face risks related to general domestic and global economic conditions and to the current credit crisis.

Our current operating cash flows provide us with stable funding capacity. However, the current uncertainty arising out of domestic and global economic conditions, including the recent disruption in credit markets, poses a risk to the PRC economy, and may impact our ability to manage normal relationships with our customers, suppliers and creditors. Furthermore, the sale of our products is dependent on the disposable income of PRC citizens. Changes in economic conditions and consumer confidence could adversely affect consumer preferences, purchasing power and spending patterns. For example, the recent global economic and financial market crisis may cause, among other things, lower customer spending in metropolitan markets. If the current situation deteriorates significantly, our business could be materially negatively impacted, as demand for our products and services may decrease from a slow-down in the general economy, or supplier or customer disruptions may result from tighter credit markets.

Adverse changes in the business and creditworthiness of our distributors could materially adversely affect our financial condition and results of operations.

We derive all of our revenue from sales to distributors. Such arrangement is risky for the following reasons:

• Our distributors generally do not have any contractual obligation to purchase minimum quantities of our products and may reduce purchases of our products on short notice.

• Our sources purchase orders primarily at sales fairs, and such orders constitute approximately 70% to 90% of our annual revenue. Purchase order quantities may be subsequently adjusted upward or downward by amounts ranging from 10% to 30% before finalization. The products we ship to our distributors are based on actual orders received from distributors after upward or downward adjustments, if any.

• Certain distributors, especially those adversely affected by the worsened economic conditions, may delay or default on their payments to us. Increased credit risk of distributors may materially adversely affect our financial condition and results of operations and limit our growth prospects.

If our distributors perform poorly or if we fail to maintain good relationship with our distributors or retain them in our distribution network, our sales, financial condition and operating results may be adversely affected.

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We rely on our distributors for the expansion of our retail sales network but they may not be willing to accommodate the needs of our business plans.

As of December 2010, we have over 1,000 distributors covering 13 provinces in China, We rely on our existing and new distributors to assist us in exploring new markets for our products and identifying potential locations for new stores. Some of our distributors, however, also distribute other brands of sports and leisurewear products, including competitor brands. Although these distributors are required to operate separate retail stores for other brands’ products, there can be no assurance that they will always provide favorable retail store locations and marketing resources to us. There can be no assurance that their expansion would be timely or sufficient in scope to satisfy the needs of our business.

We rely on several large distributors for a significant portion of our sales.

With plan to expand into the retail business, but we currently derive a significant portion of our sales from several large distributors. Our top ten distributors account for 62% of our total sales in 2009, a slight increase from 58% in 2008. We generally enter into distribution agreements with our distributors for up to a term of 12 months. The duration of our contractual relationships with each of our top ten distributors has been for two to three years. We do not manufacture our products on a make-to-order basis, but take orders for our prototype products at sales fairs before entering into sale contracts with our distributors to manufacture our products. Our purchase orders at sales fairs constitute approximately 70% to 90% of our revenue. There can be no assurance that our top distributors will renew their distributorship agreements with us on commercially acceptable terms or at all.

Under our agreements with our distributors, we appoint only one distributor instead of multiple competing distributors for one designated geographical area or region. This enables us to manage and monitor the distributor in the designated region more effectively. While we may rely on a sole distributor in a designated region to sell our products, we believe that we would be able to appoint a replacement distributor in the designated region if the need arises. However, to the extent that any distributor for any particular market ceases to cooperate with us for any reason and we are not able to find a suitable replacement distributor for that market in a timely manner, we may lose significant business in that market. Furthermore, our top distributors are not obliged to continue to place orders with us at the same levels as before or at all. There can be no assurance that we would be able to obtain orders from other distributors to replace any such lost sales. Any substantial reduction in purchases from our top distributors, or any failure to renew their agreements with us, may result in a significant loss of sales and our business, financial condition and results of operation may be materially adversely affected.

The wholesale prices at which we sell our products to our distributors are determined by factors beyond our control. In addition, sales of our products at a discount to suggested retail price to end customers could have an adverse effect on our business and brand name.

The prices at which we sell our products are affected by supply and demand fluctuations inherent in the market for our products. Under our business model, we sell our products to distributors and do not sell directly to consumers. We do not have any agreements with our distributors that provide for a minimum purchase price at which the distributors buy our products, however, we do provide suggested retail prices. As such, the wholesale prices we offer for our products to our distributors must match the distributors’ expectations for the retail sale of our products to consumers. If distributors believe that our suggested retail prices do not justify the wholesale prices at which we are offering them, they may require us to lower our wholesale prices. If the wholesale prices of our products should decrease, our growth targets, financial condition, and results of operations may be materially adversely affected.

During the years ended December 31, 2008 and 2009, a number of distributors notified us of certain products with minor deviation from specification. Because such deviation and the amounts involved were immaterial, we allowed the distributors and their authorized third-party retailers to sell these products at a discount to the suggested retail prices to end consumers. The amounts of any such discount were decided and approved by us on a case-by-case basis. Further, such discounts only affected the suggested retail prices to end consumers and had no impact on our revenue because the wholesale price at which we sold these products to the distributors remained unchanged. However, if the deviation from specification and the amounts involved were to become material in the future, the distributors could potentially negotiate for a reduction in wholesale prices, which would adversely affect our business. Increased sales of products with deviation from specifications could also damage our brand image.

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We are exposed to credit risks of our distributors, some of which may experience financial difficulties, which could in turn adversely affect our financial condition and results of operations.

We provide credit terms to our distributors based on our assessment of each distributor’s financial condition. Our distributors place advance orders at sales fairs but the risk of default may increase when dealing with financially ailing distributors or distributors struggling with economic uncertainty. Our increased sales going forward may rely heavily on credit, and we may be unable to collect these accounts receivable in full or at all. The loss of, or significant decrease in, sales to these distributors, or their failure to pay us in a timely manner or at all, could materially adversely affect our business, financial condition and results of operation.

Our sales to distributors may not directly correlate to the demand for our products by end consumers, which could adversely affect our ability to accurately track market trends and preferences of end consumers for our products and respond to such changing market dynamics.

We sell our products to distributors and not to end consumers. We meet distributors at sales fairs and obtain preliminary/budgeted sales data from them in order to budget for sales in future months. We neither accept returns from distributors of unsold stock nor track information on a real-time basis with respect to the inventory levels and movements of our products in retail stores and our distributors do not provide us with any sales reports. In order to monitor consumer demand for products, we require our distributors to submit their orders a few months ahead of production so that we can anticipate general customer needs. Since our distributors are not required to provide us inventory data, we may not be able to assess accurately whether our sales to distributors track sales of our products to end consumers. If we are unable to track end-consumer sales accurately, we may not be able to assess market trends and preferences, which ultimately could have a material adverse effect on our revenue.

We face increasing labor costs and other costs of production in the PRC, which could materially adversely affect our profitability.

The sportswear manufacturing industry is labor intensive. Labor costs in China have been increasing in recent years and could continue to increase in the future. If our labor costs continue to increase, our production costs, including both our own manufacturing and outsourcing costs, will likely increase. This may in turn affect the selling prices of our products, which may then affect the demand of such products and thereby adversely affect our sales, financial condition and results of operations. Moreover, increases in costs of product parts required for production of our products, such as EVA and rubber, increases in electricity costs and other increases in production costs, may cause similar adverse effects, particularly if we are unable to identify and employ other appropriate means to reduce our costs of production. Furthermore, we may not be able to pass on these increased costs to consumers by increasing the selling prices of our products in light of competitive pressure in the markets where we operate. In such circumstances, our profit margin may decrease and our financial results may be adversely affected.

If our suppliers from whom we source raw materials used in the manufacturing of our products fail to perform their contractual obligations, our ability to provide our products to our customers, as well as our ability to obtain future business, may be harmed.

We currently purchase at least 30% of the raw materials used in the manufacturing of our products from outside suppliers, with whom we have contractual agreements. Our contractual relationships with most of our suppliers have been in place since 2003. For 2009 and 2008, our top five raw material suppliers accounted for approximately 46% and 27%, respectively, of our total purchases from raw material suppliers, and our single largest supplier accounted for approximately 11% and 17%, respectively, of our total purchases. There can be no assurance that our top suppliers will continue to deliver raw materials or product parts to us in a timely manner or at acceptable prices and quality, or at all. Any disruption in supply of raw materials or product parts from our suppliers may adversely affect our business, financial condition and results of operations.

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Our profitability may decrease if we are unable to pass on increased cost of raw materials and product parts to our customers.

Our manufacturing operations depend on adequate supplies of raw materials and product parts. We purchase all of our raw materials on an order-by-order basis with suppliers. The prices of certain of our key raw materials, such as EVA and rubber, are subject to factors beyond our control, such as fluctuations in crude oil prices. We may also experience difficulty in obtaining other acceptable quality materials on a timely basis and the prices that we pay for such materials may increase due to increased demand or other factors. We may not be able to pass on the increased cost to our customers by increasing the selling prices due to competitive pressure in the markets. In such circumstances, our business, financial condition and results of operations may be adversely affected.

Failure to continue to obtain high quality endorsers to promote our products could harm our business.

We sponsor various school and university sports teams and participate in event sponsorships as a means of increasing our brand awareness in key markets. If any of the individuals and institutions associated with our products were to stop using our products in violation of their sponsorship agreements, our business could be adversely affected. In addition, actions taken by these individuals and entities that harm their reputations could in turn also harm our brand image with consumers, which could have an adverse effect on our sales and financial condition. In addition, poor performance by these entities and individuals in their fields, our failure to continue to identify correctly promising sports teams to use and endorse our products, or our failure to enter into sponsorship arrangements with prominent athletes and sports organizations, could adversely affect our brand and result in decreased sales of our products.

Failure to effectively promote or maintain the Aierda brand may affect our performance and sales and cause us to incur significant costs.

The image of the Aierda brand is an important factor in influencing consumer preferences and building brand loyalty. Promoting and maintaining the Aierda brand is therefore crucial to our success and growth within the PRC sportswear market. We utilize television, print media, the internet and outdoor billboard displays to build brand awareness. We also have sponsored various school and university sports teams and have participated in event sponsorships as a means of increasing our brand awareness in key markets. Our expenses relating to our advertising and marketing activities were 513,088 USD for the year ended December 31, 2009, and as of September 30, 2010, we had spent approximately 332,511 USD on marketing and advertising activities. If we are unsuccessful in promoting our Aierda brand among its targeted consumer groups, the goodwill and consumer acceptance of our Aierda brand may be eroded, and our business, financial condition, results of operations and prospects may be adversely affected. As we also promote our brand through athletes and sports teams, our brand is partly dependent on the public perception of these individuals and institutions, over which we have no control. Any negative publicity, whether in the PRC or abroad, in relation to our brand or our brand representatives could have an adverse effect on the public’s perception of our brands, which could have a negative impact on our business and results of operations.

In addition, we have incurred and expect to continue to incur significant costs and expenses arising out of our brand-building activities, including sponsorships and increased advertising in regional and national newspapers, magazines, the Internet, television and billboard displays. These activities may not be successful in building the goodwill and profile of our brand, which could have a negative effect on our sales and results of operations.

Our sales may be affected by seasonality, weather conditions and a number of other factors.

We operate our business in the PRC and derive all of our revenue from these operations. Generally, PRC consumers’ spending behavior is stable year-on-year but varies seasonally, particularly during the Chinese New Year in early spring, the Labor Day holiday in early May, the summer months and the National Day holiday in early October.

Generally, we experience moderate fluctuations in our aggregate sales volume during the year. Historically, revenues in the third and fourth fiscal quarters have slightly exceeded those in the first and second fiscal quarters. However, the mix of product sales may vary considerably from time to time as a result of changes in seasonal and geographic demand for particular types of footwear, apparel and accessories. In addition, unexpected and abnormal changes in climate may affect sales of our products that are timed for release during a particular season. For example, the climate change resulted in an extended winter season from 2008 to 2009 in many regions in China. A longer winter adversely affected the delivery schedules to the distributors and the sales volumes of our spring and summer collections in the first quarter of 2009.

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Fluctuations in our sales may also result from a number of other factors including:

• the timing of our competitors’ launch of new products;

• the timing of international and domestic sports events;

• consumer acceptance of our new and existing products;

• changes in the overall sportswear industry growth rates;

• economic and demographic conditions that affect consumer spending and retail sales;

• the mix of products ordered by our distributors;

• the timing of the placement and delivery of distributor orders; and

• variation in the expenditure necessary to support our business.

As a result, we believe that comparisons of our operating results between any interim periods may not be meaningful and that these comparisons may not be an accurate indicator of our future performance.

Our operations may be disrupted and our business, financial condition and/or results of operations may be adversely affected by a failure in our facilities for reasons beyond our control, and since we do not carry business interruption or other insurance, we have to bear losses ourselves.

We are subject to risk inherent to our business, including equipment failure, theft, natural disasters, industrial accidents, labor disturbances, business interruptions, property damage, product liability, personal injury and death. Any significant disruption to our operations could have a material adverse effect on the productivity and profitability of any of our manufacturing facilities and on our business, financial condition or results of operations, and/or the operations of our distributors. We do not carry any business interruption insurance or third-party liability insurance or other insurance to cover such risks. As a result, if we suffer losses, damages or liabilities, including those caused by natural disasters or other events beyond our control and we are unable to make a claim again a third party, we will be required to bear all such losses from our own funds, which could have a material adverse effect on our business, financial condition and results of operations. There can be no assurance that we will not suffer any further losses in the future as a result of similar reasons beyond our control.

Failure to develop technically innovative products could adversely affect our competitiveness.

While design and aesthetics of our products are important factors for consumer acceptance of our products, technical innovation in the design of footwear, apparel, and sports equipment is also essential to the commercial success of our products. Research and development plays a key role in technical innovation. Our internal design team consists of 85 full-time employees, many of whom are specialists in the fields of biomechanics, exercise physiology, engineering, industrial design and related fields. Our design team works with our distributors and sales team to develop cutting edge performance products twice a year. While we strive to produce products that help to reduce injury, enhance athletic performance and maximize comfort, our failure to continue introducing technical innovation in our products could result in a decline in consumer demand for our products.

If we are unable to attract and retain senior management and qualified technical and sales personnel, our operations, financial condition and prospects will be materially adversely affected.

Our future success depends in part on the contributions of our management team and key technical and sales personnel and our ability to attract and retain qualified new personnel. In particular, our success depends on the continuing employment of our Chairman, Mr. Yuxi Ding, our Chief Executive Officer, Mr. Conghui Ding, our Chief Financial Officer, Mr. Lifen Zheng, our Chief Marketing Officer, Mr. Andong Wang, our Chief Designer, Mr. Tao Zhang; and our Production Manager, Mr. Xinquan Liu. There is significant competition in our industry for qualified managerial, technical and sales personnel and we cannot assure you that we will be able to retain our key senior managerial, technical and sales personnel or that we will be able to attract, integrate and retain other such personnel that we may require in the future. If we are unable to attract and retain key personnel in the future, our business, operations, financial condition, results of operations and prospects could be materially adversely affected.

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Our limited ability to protect our intellectual property, and the possibility that our technology could inadvertently infringe technology owned by others, may adversely affect our ability to compete.

We rely on a combination of trade secret laws and confidentiality procedures to protect the trademarks and technological capital that comprise our intellectual property. We have been granted the use of brand name Aierda and have re-applied for ownership of our brand logo, but have not yet received approval. Our competitors may assert that our technologies or products infringe on their patents or proprietary rights. We may be required to obtain from others licenses that may not be available on commercially reasonable terms, if at all. Problems with intellectual property rights could increase the cost of our products or delay or preclude our new product development and commercialization. If infringement claims against us are deemed valid, we may not be able to obtain appropriate licenses on acceptable terms or at all. Litigation could be costly and time-consuming but may be necessary to protect our technology license positions or to defend against infringement claims.

In order to grow at the pace expected by management, we will require additional capital to support our long-term growth strategies. If we are unable to obtain additional capital in future years, we may be unable to proceed with our plans and we may be forced to curtail our operations.

We will require additional working capital to support our long-term growth strategies, which includes identifying suitable points of market entry for expansion growing the number of points of sale for our products, so as to enhance our product offerings and benefit from economies of scale. Our working capital requirements and the cash flow provided by future operating activities, if any, may vary greatly from quarter to quarter, depending on the volume of business during the period. We may not be able to obtain adequate levels of additional financing, whether through equity financing, debt financing or other sources. Additional financings could result in significant dilution to our earnings per share or the issuance of securities with rights superior to our current outstanding securities. In addition, we may grant registration rights to investors purchasing our equity or debt securities in the future. If we are unable to raise additional financing, we may be unable to implement our long-term growth strategies, develop or enhance our products and services, take advantage of future opportunities or respond to competitive pressures on a timely basis.

We do not currently have the legal land use rights to the two parcel land or the property ownership certificate to the buildings where our main facilities are located.

Our continued operations depend on our success in obtaining the legal land use rights for the two parcel of land on which our main facilities are located in Jinjiang City and the property ownership certificates for the buildings on such property. We are currently pursuing the acquisition of the land use rights and certificates from the local Jinjiang City government authority. If we fail to obtain such land use rights we may be required to relocate or discontinue our business operations. In addition, our production facilities built on the land will be regarded as illegal construction and may be demolished under the order of the local government.

RISKS RELATED TO DOING BUSINESS IN CHINA

Changes in China's political or economic situation could harm us and our operating results.

Economic reforms adopted by the Chinese government have had a positive effect on the economic development of the country, but the government could change these economic reforms or any of the legal systems at any time. This could either benefit or damage our operations and profitability. Some of the things that could have this effect are:

• Level of government involvement in the economy;
  

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• Control of foreign exchange;

• Methods of allocating resources;

• Balance of payments position;

• International trade restrictions; and

• International conflict.

The Chinese economy differs from the economies of most countries belonging to the Organization for Economic Cooperation and Development, or OECD, in many ways. For example, state-owned enterprises still constitute a large portion of the Chinese economy and weak corporate governance and a lack of flexible currency exchange policy still prevail in China. As a result of these differences, we may not develop in the same way or at the same rate as might be expected if the Chinese economy was similar to those of the OECD member countries.

We may have limited legal recourse under PRC law if disputes arise under our contracts with third parties.

The PRC government has enacted some laws and regulations dealing with matters such as corporate organization and governance, foreign investment, commerce, taxation and trade. However, their experience in implementing, interpreting and enforcing these laws and regulations is limited, and our ability to enforce commercial claims or to resolve commercial disputes is unpredictable. If our new business ventures are unsuccessful, or other adverse circumstances arise from these transactions, we face the risk that the parties to these ventures may seek ways to terminate the transactions, or, may hinder or prevent us from accessing important information regarding the financial and business operations of these acquired companies. The resolution of these matters may be subject to the exercise of considerable discretion by agencies of the PRC government, and forces unrelated to the legal merits of a particular matter or dispute may influence their determination. Any rights we may have to specific performance, or to seek an injunction under PRC law, in either of these cases, are severely limited, and without a means of recourse by virtue of the PRC legal system, we may be unable to prevent these situations from occurring. The occurrence of any such events could have a material adverse effect on our business, financial condition and results of operations.

New labor laws in the PRC may adversely affect our results of operations.

On June 29, 2007, the PRC government promulgated a new labor law, namely, the Labor Contract Law of the PRC, or the New Labor Contract Law, which became effective on January 1, 2008. The Implementation Rules of the New Labor Contract Law was subsequently promulgated and became effective on September 18, 2008. The PRC government also promulgated the Law on Mediation and Arbitration of Labor Disputes on December 29, 2007 that came into effect on May 1, 2008. These newly enacted labor laws and regulations impose greater liabilities on employers and significantly impact the cost of an employer’s decision to reduce our workforce. Further, they require certain terminations to be based upon seniority but not merit. In the event we decide to significantly change or decrease our workforce, the New Labor Contract Law could adversely affect our ability to enact such changes in a manner that is most advantageous to our business or in a timely and cost effective manner, thus materially and adversely affecting our financial condition and results of operations.

Future inflation in China may inhibit our ability to conduct business in China.

In recent years, the PRC economy has experienced periods of rapid expansion and highly fluctuating rates of inflation. During the past ten years, the rate of inflation in China has been as high as 5.9% and as low as -0.8% . These factors have led to the adoption by the Chinese government, from time to time, of various corrective measures designed to restrict the availability of credit or regulate growth and contain inflation. High inflation may in the future cause the Chinese government to impose controls on credit and/or prices, or to take other action, which could inhibit economic activity in China, and thereby harm the market for our products.

Uncertainties with respect to the PRC legal system could limit the legal protections available to you and us.

We conduct substantially all of our business through our operating subsidiaries in the PRC. Our principal operating subsidiaries, Aierda and Dake, are subject to laws and regulations applicable to foreign investments in China and, in particular, laws applicable to foreign-invested enterprises. The PRC legal system is based on written statutes, and prior court decisions may be cited for reference but have limited precedential value. Since 1979, a series of new PRC laws and regulations have significantly enhanced the protections afforded to various forms of foreign investments in China. However, since the PRC legal system continues to evolve rapidly, the interpretations of many laws, regulations and rules are not always uniform and enforcement of these laws, regulations and rules involve uncertainties, which may limit legal protections available to you and us. In addition, any litigation in China may be protracted and result in substantial costs and diversion of resources and management attention. In addition, all of our executive officers and all of our directors are residents of China and not of the United States, and substantially all the assets of these persons are located outside the United States. As a result, it could be difficult for investors to affect service of process in the United States or to enforce a judgment obtained in the United States against our Chinese operations and subsidiaries.

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You may have difficulty enforcing judgments against us.

We are a Nevada company, but DK International Group Ltd. is a BVI company, and our principal operating subsidiaries, Aierda and Dake, are located in the PRC. Most of our assets are located outside the United States and all of our current operations are conducted in the PRC. In addition, each of our directors and officers are nationals and residents of countries other than the United States. A substantial portion of the assets of these persons is located outside the United States. As a result, it may be difficult for you to effect service of process within the United States upon these persons. It may also be difficult for you to enforce in U.S. courts judgments predicated on the civil liability provisions of the U.S. federal securities laws against us and our officers and directors, most of whom are not residents in the United States and the substantial majority of whose assets are located outside the United States. In addition, there is uncertainty as to whether the courts of the PRC would recognize or enforce judgments of U.S. courts. The recognition and enforcement of foreign judgments are provided for under the PRC Civil Procedures Law. Courts in China may recognize and enforce foreign judgments in accordance with the requirements of the PRC Civil Procedures Law based on treaties between China and the country where the judgment is made or on reciprocity between jurisdictions. China does not have any treaties or other arrangements that provide for the reciprocal recognition and enforcement of foreign judgments with the United States. In addition, according to the PRC Civil Procedures Law, courts in the PRC will not enforce a foreign judgment against us or our directors and officers if they decide that the judgment violates basic principles of PRC law or national sovereignty, security or the public interest. So it is uncertain whether a PRC court would enforce a judgment rendered by a court in the United States.

The PRC government exerts substantial influence over the manner in which we must conduct our business activities.

The PRC government has exercised and continues to exercise substantial control over virtually every sector of the Chinese economy through regulation and state ownership. Our ability to operate in China may be harmed by changes in its laws and regulations, including those relating to taxation, import and export tariffs, environmental regulations, land use rights, property and other matters. We believe that our operations in China are in material compliance with all applicable legal and regulatory requirements. However, the central or local governments of the jurisdictions in which we operate may impose new, stricter regulations or interpretations of existing regulations that would require additional expenditures and efforts on our part to ensure our compliance with such regulations or interpretations.

Accordingly, government actions in the future, including any decision not to continue to support recent economic reforms and to return to a more centrally planned economy or regional or local variations in the implementation of economic policies, could have a significant effect on economic conditions in China or particular regions thereof and could require us to divest ourselves of any interest we then hold in Chinese properties or joint ventures.

Restrictions on currency exchange may limit our ability to receive and use our revenues effectively.

Our reporting currency is the U.S. dollar and our operations in China use their local currency as their functional currencies. Substantially all of our revenue and expenses are in Chinese renminbi. We are subject to the effects of exchange rate fluctuations with respect to any of these currencies. For example, the value of the renminbi depends to a large extent on Chinese government policies and China’s domestic and international economic and political developments, as well as supply and demand in the local market. Since 1994, the official exchange rate for the conversion of renminbi to the U.S. dollar had generally been stable and the renminbi had appreciated slightly against the U.S. dollar. However, on July 21, 2005, the Chinese government changed its policy of pegging the value of Chinese renminbi to the U.S. dollar. Under the new policy, Chinese renminbi may fluctuate within a narrow and managed band against a basket of certain foreign currencies. As a result of this policy change, Chinese renminbi appreciated approximately 2.5% against the U.S. dollar in 2005 and 3.3% in 2006. It is possible that the Chinese government could adopt a more flexible currency policy, which could result in more significant fluctuation of Chinese renminbi against the U.S. dollar. We can offer no assurance that Chinese renminbi will be stable against the U.S. dollar or any other foreign currency.

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The income statements of our international operations are translated into U.S. dollars at the average exchange rates in each applicable period. To the extent the U.S. dollar strengthens against foreign currencies, the translation of these foreign currencies denominated transactions results in reduced revenue, operating expenses and net income for our international operations. Similarly, to the extent the U.S. dollar weakens against foreign currencies, the translation of these foreign currency denominated transactions results in increased revenue, operating expenses and net income for our international operations. We are also exposed to foreign exchange rate fluctuations as we convert the financial statements of our foreign subsidiaries into U.S. dollars in consolidation. If there is a change in foreign currency exchange rates, the conversion of the foreign subsidiaries’ financial statements into U.S. dollars will lead to a translation gain or loss which is recorded as a component of other comprehensive income. In addition, we have certain assets and liabilities that are denominated in currencies other than the relevant entity’s functional currency. Changes in the functional currency value of these assets and liabilities create fluctuations that will lead to a transaction gain or loss. We have not entered into agreements or purchased instruments to hedge our exchange rate risks, although we may do so in the future. The availability and effectiveness of any hedging transaction may be limited and we may not be able to successfully hedge our exchange rate risks.

Although Chinese governmental policies were introduced in 1996 to allow the convertibility of Chinese renminbi into foreign currency for current account items, conversion of Chinese renminbi into foreign exchange for capital items, such as foreign direct investment, loans or securities, requires the approval of the State Administration of Foreign Exchange, or SAFE, which is under the authority of the People’s Bank of China. These approvals, however, do not guarantee the availability of foreign currency conversion. We cannot be sure that it will be able to obtain all required conversion approvals for our operations or that PRC regulatory authorities will not impose greater restrictions on the convertibility of Chinese renminbi in the future. Because a significant amount of our future revenue may be in the form of Chinese renminbi, our inability to obtain the requisite approvals or any future restrictions on currency exchanges could limit our ability to utilize revenue generated in Chinese renminbi to fund our business activities outside of China, or to repay foreign currency obligations, including our debt obligations, which would have a material adverse effect on our financial condition and results of operations.

Fluctuations in exchange rates could adversely affect our business and the value of our securities.

The value of our common stock will be indirectly affected by the foreign exchange rate between U.S. dollars and RMB and between those currencies and other currencies in which our sales may be denominated. Appreciation or depreciation in the value of the RMB relative to the U.S. dollar would affect our financial results reported in U.S. dollar terms without giving effect to any underlying change in our business or results of operations. Fluctuations in the exchange rate will also affect the relative value of any dividend we issue that will be exchanged into U.S. dollars as well as earnings from, and the value of, any U.S. dollar-denominated investments we make in the future.

Since July 2005, the RMB is no longer pegged to the U.S. dollar. Although the People’s Bank of China regularly intervenes in the foreign exchange market to prevent significant short-term fluctuations in the exchange rate, the RMB may appreciate or depreciate significantly in value against the U.S. dollar in the medium to long term. Moreover, it is possible that in the future PRC authorities may lift restrictions on fluctuations in the RMB exchange rate and lessen intervention in the foreign exchange market.

Very limited hedging transactions are available in China to reduce our exposure to exchange rate fluctuations. To date, we have not entered into any hedging transactions. While we may enter into hedging transactions in the future, the availability and effectiveness of these transactions may be limited, and we may not be able to successfully hedge our exposure at all. In addition, our foreign currency exchange losses may be magnified by PRC exchange control regulations that restrict our ability to convert RMB into foreign currencies.

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Restrictions under PRC law on our PRC subsidiaries’ ability to make dividends and other distributions could materially and adversely affect our ability to grow, make investments or acquisitions that could benefit our business, pay dividends to our shareholders, and otherwise fund and conduct our businesses.

Substantially all of our revenues are earned by our two operating PRC subsidiaries. PRC regulations restrict the ability of our PRC subsidiaries to make dividends and other payments to their offshore parent company. PRC legal restrictions permit payments of dividends by our PRC subsidiaries only out of their accumulated after-tax profits, if any, determined in accordance with PRC accounting standards and regulations. Our PRC subsidiaries are also required under PRC laws and regulations to allocate at least 10% of our annual after-tax profits determined in accordance with PRC GAAP to a statutory general reserve fund until the amounts in said fund reaches 50% of our registered capital. Allocations to these statutory reserve funds can only be used for specific purposes and are not  transferable to us in the form of loans, advances or cash dividends. Any limitations on the ability of our PRC subsidiaries to transfer funds to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends and otherwise fund and conduct our business.

Failure to comply with PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident shareholders to personal liability, limit our ability to acquire PRC companies or to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute profits to us or otherwise materially adversely affect us.

In October 2005, SAFE issued the Notice on Relevant Issues in the Foreign Exchange Control over Financing and Return Investment Through Special Purpose Companies by Residents Inside China, generally referred to as Circular 75, which required PRC residents to register with the competent local SAFE branch before establishing or acquiring control over an offshore special purpose company, or SPV, for the purpose of engaging in an equity financing outside of China on the strength of domestic PRC assets originally held by those residents. Amendments to registrations made under Circular 75 are required in connection with any increase or decrease of capital, transfer of shares, mergers and acquisitions, equity investment or creation of any security interest in any assets located in China to guarantee offshore obligations. In the case of an SPV which was established, and which acquired a related domestic company or assets, before the implementation date of Circular 75, a retroactive SAFE registration was required to have been completed before March 31, 2006. Failure to comply with the requirements of Circular 75 may result in fines and other penalties under PRC laws for evasion of applicable foreign exchange restrictions. Any such failure could also result in the SPV’s affiliates being impeded or prevented from distributing their profits and the proceeds from any reduction in capital, share transfer or liquidation to the SPV, or from engaging in other transfers of funds into or out of China.

On January 27, 2011, Mr. Yangbo Cai and Mr. Yuxi Ding entered into the Voting Rights’ Entrustment Agreement, pursuant to which, Mr. Cai has irrevocably granted to Mr. Ding voting and dispositive control over the shares held by him. Our PRC counsel has not opined on the legality and validity of the Voting Rights’ Entrustment Agreement. To comply with Circular 75, Mr. Ding needs to register with the relevant branch of SAFE, as currently required. However, Mr. Ding has not completed such registration yet. The failure by Mr. Ding to comply with Circular 75 could subject Mr. Ding to fines or legal sanctions, restrict our overseas or cross-border investment activities, limit our subsidiary’s ability to make distributions or pay dividends or affect our ownership structure, which could adversely affect our business and prospects.

Our business and financial performance may be materially adversely affected if the PRC regulatory authorities determine that our acquisition of Dake constitutes a Round-trip Investment without MOFCOM approval.

On August 8, 2006, six PRC regulatory agencies promulgated the Regulation on Mergers and Acquisitions of Domestic Companies by Foreign Investors, referred to as the 2006 M&A Rule, which regulate “Round-trip Investments,” defined as having taken place when a PRC business that is owned by PRC individual(s) is sold to a non-PRC entity that is established or controlled, directly or indirectly, by those same PRC individual(s).

Our Chairman, Mr. Yuxi Ding, is a PRC citizen who is also a permanent resident of the Philippines and may be considered a foreign passport holder for purposes of the 2006 M&A Rule. Mr. Ding is party to an Option Agreement, pursuant to which he has the option to acquire all of the shares of our common stock held by Mr. Yangbo Cai, our controlling stockholder, and he is also party to a voting rights’ entrustment agreement which gives him irrevocable voting and dispositive control over any such shares held by Mr. Cai.

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The PRC regulatory authorities may take the view that his acquisition of control over the Company, and upon exercise of the option, his acquisition of our equity interest, and the reverse acquisition of DK are part of an overall series of arrangements which constitute a Round-trip Investment because at the end of these transactions, Mr. Ding has or will become the majority owner and effective controlling party of a foreign entity that acquired ownership of our Chinese subsidiaries. The PRC regulatory authorities may also take the view that the registration of the Acquisition with the relevant AIC and the filings with the SAFE may not be evidence that the Acquisition has been properly approved because the relevant parties did not fully disclose to the AIC, SAFE or MOFCOM the overall restructuring arrangements, the existence of the reverse acquisition and its link with the Acquisition. If the PRC regulatory authorities take the view that the Acquisition constitutes a Round-trip Investment under the 2006 M&A Rules, we cannot assure you we may be able to obtain the approval required from MOFCOM.

Although in the opinion of our PRC counsel, the Acquisition does not constitute a Round-trip Investment, if the PRC regulatory authorities take the view that the Acquisition constitutes a Round-trip Investment without MOFCOM approval, they could invalidate our acquisition and ownership of our PRC subsidiaries. Additionally, the PRC regulatory authorities may take the view that the Acquisition constitutes a transaction which requires the prior approval of the China Securities Regulatory Commission, or CSRC, before MOFCOM approval is obtained. If we cannot obtain MOFCOM or CSRC approval if required by the PRC regulatory authorities to do so, our business and financial performance will be materially adversely affected.

If we make equity compensation grants to persons who are PRC citizens, they may be required to register with the State Administration of Foreign Exchange of the PRC, or SAFE. We may also face regulatory uncertainties that could restrict our ability to adopt an equity compensation plan for our directors and employees and other parties under PRC law.

On April 6, 2007, SAFE issued the “Operating Procedures for Administration of Domestic Individuals Participating in the Employee Stock Ownership Plan or Stock Option Plan of An Overseas Listed Company, also know as “Circular 78.” It is not clear whether Circular 78 covers all forms of equity compensation plans or only those which provide for the granting of stock options. For any plans which are so covered and are adopted by a non-PRC listed company after April 6, 2007, Circular 78 requires all participants who are PRC citizens to register with and obtain approvals from SAFE prior to their participation in the plan. In addition, Circular 78 also requires PRC citizens to register with SAFE and make the necessary applications and filings if they participated in an overseas listed
company’s covered equity compensation plan prior to April 6, 2007. We intend to adopt an equity compensation plan in the future and make option grants to our officers and directors, most of who are PRC citizens. Circular 78 may require our officers and directors who receive option grants and are PRC citizens to register with SAFE. We believe that the registration and approval requirements contemplated in Circular 78 will be burdensome and time consuming. If it is determined that any of our equity compensation plans are subject to Circular 78, failure to comply with such provisions may subject us and participants of our equity incentive plan who are PRC citizens to fines and legal sanctions and prevent us from being able to grant equity compensation to our PRC employees. In that case, our ability to compensate our employees and directors through equity compensation would be hindered and our business operations may be adversely affected. "

Under the New EIT Law, we may be classified as a “resident enterprise” of China. Such classification will likely result in unfavorable tax consequences to us and our non-PRC shareholders.

Our subsidiaries are incorporated in the PRC and the British Virgin Islands. On March 16, 2007, the new PRC Enterprise Income Tax Law, or the New EIT Law, was issued, and on December 6, 2007, the Rules on the Implementation of Enterprise Income Tax Law of the PRC, or the Implementation Rules, were issued, both of which became effective on January 1, 2008. Under the New EIT Law and the Implementation Rules, effective on January 1, 2008, an enterprise established outside China with “de facto management bodies” within China is considered a “resident enterprise,” meaning that it can be treated in a manner similar to a Chinese enterprise for enterprise income tax purposes. The Implementation Rules define de facto management as “substantial and overall management and
control over the production and operations, personnel, accounting, and properties” of the enterprise.

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On April 22, 2009, the State Administration of Taxation issued the Notice Concerning Relevant Issues Regarding Cognizance of Chinese Investment Controlled Enterprises Incorporated Offshore as Resident Enterprises pursuant to Criteria of de facto Management Bodies, or the Notice, further interpreting the application of the New EIT Law and its implementation non-Chinese enterprise or group controlled offshore entities. Pursuant to the Notice, an enterprise incorporated in an offshore jurisdiction and controlled by a Chinese enterprise or group will be classified as a “non-domestically incorporated resident enterprise” if (i) its senior management in charge of daily operations reside or perform their duties mainly in China; (ii) its financial or personnel decisions are made or approved by bodies or persons in China; (iii) its substantial assets and properties, accounting books, corporate chops, board and shareholder minutes are kept in China; and (iv) at least half of its directors with voting rights or senior management often resident in China. A resident enterprise would be subject to an enterprise income tax rate of 25% on its worldwide income and must pay a withholding tax at a rate of 10% when paying dividends to its non-PRC shareholders. However, it remains unclear as to whether the Notice is applicable to an offshore enterprise incorporated by a Chinese natural person. Nor are detailed measures on imposition of tax from non-domestically incorporated resident enterprises are available. Therefore, it is unclear how tax authorities will determine tax residency based on the facts of each case.

We may be deemed to be a resident enterprise by Chinese tax authorities. If the PRC tax authorities determine that we are a “resident enterprise” for PRC enterprise income tax purposes, a number of unfavorable PRC tax consequences could follow. First, we may be subject to the enterprise income tax at a rate of 25% on our worldwide taxable income as well as PRC enterprise income tax reporting obligations. In our case, this would mean that income such as interest on financing proceeds and non-China source income would be subject to PRC enterprise income tax at a rate of 25%. Second, although under the New EIT Law and its implementing rules dividends paid to us from our PRC subsidiaries would qualify as “tax-exempt income,” we cannot guarantee that such dividends will not be subject to a 10% withholding tax, as the PRC foreign exchange control authorities, which enforce the withholding tax, have not yet issued guidance with respect to the processing of outbound remittances to entities that are treated as resident enterprises for PRC enterprise income tax purposes. Finally, it is possible that future guidance issued with respect to the new “resident enterprise” classification could result in a situation in which a 10% withholding tax is imposed on dividends we pay to our non-PRC shareholders and with respect to gains derived by our non-PRC shareholders from transferring our shares. We are actively monitoring the possibility of “resident enterprise” treatment for the 2009 tax year.

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If we were treated as a “resident enterprise” by PRC tax authorities, we would be subject to taxation in both the U.S. and China, and our PRC tax may not be creditable against our U.S. tax.

We may be exposed to liabilities under the Foreign Corrupt Practices Act and Chinese anti-corruption laws, and any determination that we violated these laws could have a material adverse effect on our business.

We are subject to the Foreign Corrupt Practice Act, or FCPA, and other laws that prohibit improper payments or offers of payments to foreign governments and their officials and political parties by U.S. persons and issuers as defined by the statute, for the purpose of obtaining or retaining business. We have operations, agreements with third parties and we make most of our sales in China. PRC also strictly prohibits bribery of government officials. Our activities in China create the risk of unauthorized payments or offers of payments by the employees, consultants, sales agents or distributors of our Company, even though they may not always be subject to our control. It is our policy to implement safeguards to discourage these practices by our employees. However, our existing safeguards and any future improvements may prove to be less than effective, and the employees, consultants, sales agents or distributors of our Company may engage in conduct for which we might be held responsible. Violations of the FCPA or Chinese anti-corruption laws may result in severe criminal or civil sanctions, and we may be subject to other liabilities, which could negatively affect our business, operating results and financial condition. In addition, the U.S. government may seek to hold our Company liable for successor liability FCPA violations committed by companies in which we invest or that we acquire.

RISKS RELATING TO THE INDUSTRY IN WHICH WE OPERATE

Our products face intense competition, and we may not have the resources necessary to compete with competitors.

We are a sports and leisure footwear, apparel and accessories company. This industry is highly competitive in the PRC and the competitors in this market include both international and domestic companies. Some of our competitors may have greater financial, research and development and design, marketing, distribution, management or other resources. Our results of operations could be affected by a number of competitive factors, including entry by new competitors into our current markets, expansion by existing competitors, better marketing/advertising leading to stronger brand equity for the competitors, and competition with other companies for the production capacity of contract manufacturers. Our results of operations and market position may be adversely impacted by these competitive pressures.

There can be no assurance that our strategies will remain competitive or that we will continue to be successful in the future. Increased competition could result in a loss of our market share. In particular, if our competitors adopt aggressive pricing policies, we may be forced to adjust the pricing of our products to level their competitiveness. This could adversely affect our profitability and financial results.

We may not be able to predict or meet consumer preferences or demand accurately.

We derive a significant amount of revenue from the sale of sports and leisurewear products that are subject to rapidly changing consumer preferences. Our sales and profits are sensitive to these changing preferences and our success depends on our ability to identify, originate and define product and fashion trends as well as to anticipate, gauge and react to changing consumer demands in a timely manner. All of our products are subject to changing consumer preferences that we cannot predict with certainty. Our new products may not receive consumer acceptance as consumer preferences could shift rapidly to different types of performance or other sports footwear or apparel or away from these types of products altogether, and our future success depends in part on our ability to anticipate and respond to these changes. If we fail to anticipate accurately and respond to trends and shifts in consumer preferences by adjusting the mix of existing product offerings, developing new products, designs and styles, or influencing sports and fitness preferences through vigorous marketing, we could experience lower sales, excess inventories and lower profit margins, any of which could have an adverse effect on our results of operations and financial condition.

Consolidation of distributors or concentration of retail market share among a few distributors may increase and concentrate our credit risk and impair our ability to sell our products.

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The sports and leisure footwear, apparel, and accessories retail markets in the PRC are dominated by a few large sports and leisure footwear, apparel, and accessories distributors with many stores. These significant distributors may increase their market share by expanding through acquisitions or through the establishment of additional stores. The consolidation of distributors concentrates our credit risk in a relatively small number of distributors and, if any of these retailers were to experience a shortage of liquidity, it would increase the risk of nonpayment of their outstanding payables to us. In addition, any shifting concentration of market share to a small number of distributors in a particular county or region increases operational risks. If any one of them substantially reduces their purchases of our products, we may be unable to find a sufficient number of other retail stores for our products to sustain the same level of sales and revenues. Further, the consolidation of distributors could limit our ability to negotiate contract terms in our favor. For example, due to a small number of distributors existing in the industry to whom we can sell our products, our ability to sell products at the price level that we wish to may be adversely affected. If the selling prices to the distributors decrease, our profitability would be adversely affected.

RISKS RELATED TO THE MARKET FOR OUR STOCK GENERALLY

Our common stock is quoted on the OTC Bulletin Board, which may have an unfavorable impact on our stock price and liquidity.

Our common stock is quoted on the OTC Bulletin Board. The OTC Bulletin Board is a significantly more limited market than established trading markets such as the New York Stock Exchange or NASDAQ. The quotation of our shares on the OTC Bulletin Board may result in a less liquid market available for existing and potential shareholders to trade shares of our common stock, could depress the trading price of our common stock and could have a long-term adverse impact on our ability to raise capital in the future. We plan to list our common stock as soon as practicable. However, we cannot assure you that we will be able to meet the initial listing standards of any stock exchange, or that we will be able to maintain any such listing.

We may be subject to penny stock regulations and restrictions and you may have difficulty selling shares of our common stock.

The SEC has adopted regulations which generally define so-called “penny stocks” to be an equity security that has a market price less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exemptions. Our common stock is a “penny stock” and is subject to Rule 15g-9 under the Exchange Act, or the Penny Stock Rule. This rule imposes additional sales practice requirements on broker-dealers that sell such securities to persons other than established customers and “accredited investors” (generally, individuals with a net worth in excess of $1,000,000 or annual incomes exceeding $200,000, or $300,000 together with their spouses). For transactions covered by Rule 15g-9, a broker-dealer must make a special suitability determination for the purchaser and have received the purchaser's written consent to the transaction prior to sale. As a result, this rule may affect the ability of broker-dealers to sell our securities and may affect the ability of purchasers to sell any of our securities in the secondary market, thus possibly making it more difficult for us to raise additional capital.

For any transaction involving a penny stock, unless exempt, the rules require delivery, prior to any transaction in penny stock, of a disclosure schedule required by the SEC relating to the penny stock market. Disclosure is also required to be made about sales commissions payable to both the broker-dealer and the registered representative and current quotations for the securities. Finally, monthly statements are required to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stock.

There can be no assurance that our common stock will qualify for exemption from the Penny Stock Rule. In any event, even if our common stock were exempt from the Penny Stock Rule, we would remain subject to Section 15(b)(6) of the Exchange Act, which gives the SEC the authority to restrict any person from participating in a distribution of penny stock, if the SEC finds that such a restriction would be in the public interest.

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Provisions in our Certificate of Incorporation and Bylaws or Nevada law might discourage, delay or prevent a change of control of us or changes in our management and, therefore depress the trading price of the common stock.

Our Certificate of Incorporation authorizes our board of directors to issue up to 10,000,000 shares of preferred stock. The preferred stock may be issued in one or more series, and the preferences, rights and powers of such preferred stocks shall be determined in the discretion of the board of directors without further action by stockholders. These terms may include preferences as to dividends and liquidation, conversion rights, redemption rights and sinking fund provisions. The issuance of any preferred stock could diminish the rights of holders of our common stock, and therefore could reduce the value of such common stock. In addition, specific rights granted to future holders of preferred stock could be used to restrict our ability to merge with, or sell assets to, a third party. The ability of our board of directors to issue preferred stock could make it more difficult, delay, discourage, prevent or make it more costly to acquire or effect a change-in-control, which in turn could prevent our stockholders from recognizing a gain in the event that a favorable offer is extended and could materially and negatively affect the market price of our common stock.

In addition, Nevada corporate law and our Certificate of Incorporation and Bylaws also contain other provisions that could discourage, delay or prevent a change in control of our Company or changes in its management that our stockholders may deem advantageous. These provisions:

• deny holders of our common stock cumulative voting rights in the election of directors, meaning that stockholders owning a majority of our outstanding shares of common stock will be able to elect all of our directors;

• require any stockholder wishing to properly bring a matter before a meeting of stockholders to comply with specified procedural and advance notice requirements; and

• allow any vacancy on the board of directors, however the vacancy occurs, to be filled by the directors.

We do not intend to pay dividends for the foreseeable future.

For the foreseeable future, we intend to retain any earnings to finance the development and expansion of our business, and we do not anticipate paying any cash dividends on our common stock. Accordingly, investors must be prepared to rely on sales of their common stock after price appreciation to earn an investment return, which may never occur. Investors seeking cash dividends should not purchase our common stock. Any determination to pay dividends in the future will be made at the discretion of our board of directors and will depend on our results of operations, financial condition, contractual restrictions, restrictions imposed by applicable law and other factors our board deems relevant.

Our controlling stockholder holds a significant percentage of our outstanding voting securities, which could hinder our ability to engage in significant corporate transactions without his approval.

On January 27, 2011, our Chairman, Mr. Yuxi Ding, entered into an option agreement with Mr. Yangbo Cai, the holder of record of approximately 91.71% of our outstanding voting securities, pursuant to which Mr. Cai granted Mr. Ding an option to acquire all of the shares of our common stock currently owned by Mr. Cai, for an exercise price of $10,000. Mr. Ding may exercise this option, in whole but not in part, during the period commencing six months after the effective date of a resale registration statement for securities issued to investors in the first post-reverse merger equity financing, and ending on the fifth anniversary of the date thereof. On February 11, 2011, Mr. Ding also entered into a voting rights entrustment agreement with Mr. Cai, pursuant to which Mr. Cai irrevocably granted to Mr. Ding all his voting and dispositive control over the shares held by Mr. Cai. Mr. Cai also waived all his rights associated with his shares and agreed to not cause the Company to conduct any transactions which may materially affect the assets, obligations, rights or the operations of the Company. If Mr. Ding exercises this option, he will become our controlling stockholder of record, but, in the interim, Mr. Ding has voting and dispositive control over the shares held by Mr. Cai. As a result of the foregoing agreements, Mr. Ding possesses significant influence over us and has the ability, among other things, to elect a majority of our board of directors and to authorize or prevent proposed significant corporate transactions. His ownership and control may also have the effect of delaying or preventing a future change in control, impeding a merger, consolidation, takeover or other business combination or discourage a potential acquirer from making a tender offer.

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RISKS RELATING TO OUR COMMERCIAL RELATIONSHIP WITH AIERDA

Yuxi Ding’s association with Aierda could pose a conflict of interest which may result in Aierda decisions that are adverse to our business.

Yuxi Ding, our president and Chief Executive Officer and the beneficial owner of 91.71% of our common stock, pursuant to a voting rights entrustment agreement, also beneficially owns 100% of the equity interests in Aierda, our VIE. As a result, conflicts of interest may arise from time to time and these conflicts may result in management decisions that could negatively affect our operations and potentially result in the loss of opportunities.

If Aierda or its shareholder violates our contractual arrangements with it, our business could be disrupted and we may have to resort to litigation to enforce our rights which may be time consuming and expensive.

Our operations will partly depend upon our commercial relationship with Aierda which, pursuant to an Exclusive Business Cooperation Agreement between Dake and Aierda, required Aierda to pay a service fee to Dake in exchange for Dake’s exclusive consulting services to Aierda. If Aierda or its shareholders are unwilling or unable to perform their obligations under our commercial arrangements with it, including payment of the service fee under the Exclusive Business Cooperation Agreement, as it becomes due, we will not be able to conduct our operations in the manner currently planned. In addition, Aierda may seek to renew these agreements on terms that are disadvantageous to us. Although we have entered into a series of agreements that provide us with substantial ability to control Aierda, we may not succeed in enforcing our rights under them. If we are unable to renew these agreements on favorable terms, or to enter into similar agreements with other parties, our business may not be able to operate or expand, and our operating expenses may significantly increase.

Uncertainties in the PRC legal system may impede our ability to enforce the commercial agreements that we have entered into with Aierda or any arbitral award thereunder and any inability to enforce these agreements could materially and adversely affect our business and operation.

The Exclusive Business Cooperation Agreement and our Exclusive Option Agreement with Aierda are governed by PRC law. China’s legal system is a civil law system based on written statutes and unlike common law systems, it is a system in which decided legal cases have little value as precedent. As a result, China’s administrative and judicial authorities have significant discretion in interpreting and implementing statutory and contractual terms, and it may be more difficult to evaluate the outcome of administrative and judicial proceedings and the level of legal protection available than in more developed legal systems. These uncertainties may impede our ability to enforce the terms of the Exclusive Business Cooperation Agreement, the Exclusive Option Agreement and the other contracts that we may enter into with Aierda. Any inability to enforce the Exclusive Business Cooperation Agreement and the Option Agreement could materially and adversely affect our business and operation.

A majority of the share capital of Aierda is held by our controlling stockholder, who may cause these agreements to be amended in a manner that is adverse to us.

Mr. Yuxi Ding, our President and Chief Executive Officer, and our controlling stockholder pursuant to a voting rights entrustment agreement, owns and controls Aierda. As a result, Mr. Ding may be able to cause our commercial arrangements with Aierda to be amended in a manner that will be adverse to our Company, or may be able to cause these agreements not to be renewed, even if their renewal would be beneficial for us. Although we have entered into an agreement that prevents the amendment of these agreements without the approval of the members of our Board other than Mr. Ding, we can provide no assurances that these agreements will not be amended in the future to contain terms that might differ from the terms that are currently in place. These differences may be adverse to our interests.

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Our arrangements with Aierda and its shareholder may be subject to a transfer pricing adjustment by the PRC tax authorities which could have an adverse effect on our income and expenses.

We could face material and adverse tax consequences if the PRC tax authorities determine that our contracts with Aierda and its shareholder were not entered into based on arm’s length negotiations. Although our contractual arrangements are similar to other companies conducting similar operations in China, if the PRC tax authorities determine that these contracts were not entered into on an arm’s length basis, they may adjust our income and expenses for PRC tax purposes in the form of a transfer pricing adjustment. Such an adjustment may require that we pay additional PRC taxes plus applicable penalties and interest, if any.

The exercise of our option to purchase part or all of the equity interests in or assets of Aierda under the Exclusive Option Agreement might be subject to approval by the PRC government. Our failure to obtain this approval may impair our ability to substantially control Aierda and could result in actions by Aierda that conflict with our interests.

Our Exclusive Option Agreement with Aierda gives our Chinese operating subsidiary, Dake, the option to purchase all or part of the equity interests in or assets of Aierda, however, the option may not be exercised by Dake if the exercise would violate any applicable laws and regulations in China or cause any license or permit held by, and necessary for the operation of Aierda, to be cancelled or invalidated. Under the laws of China, if a foreign entity, through a foreign investment company that it invests in, acquires a domestic related company, China’s regulations regarding Mergers and Acquisitions would technically apply to the transaction. Application of these regulations requires an examination and approval of the transaction by China’s Ministry of Commerce, or MOFCOM, or its local counterparts. Also, an appraisal of the equity or assets to be acquired is mandatory. If we are not able to purchase the equity or assets of Aierda, then we will lose a substantial portion of our ability to control Aierda and our ability to ensure that Aierda will act in our interests.

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

Overview

We are primarily engaged, through our subsidiary Dake and VIE, Aierda, in the design, production, and wholesale distribution of athletic and casual men’s and women’s footwear, footwear accessories, and footwear materials sold in China under our licensed proprietary brand “Aierda.” We also manufacture and export made-to-order footwear products through third party agents and we manufacture and sell footwear materials including insoles, outsoles, linings and heels to other footwear manufacturers in Fujian province. Our branded footwear products, which include approximately 80 low- to mid-priced designs, are sold primarily in second-tier PRC markets, secondary provincial capitals, consisting of 23 cities in China, and third-tier PRC markets, consisting of city capitals at the prefecture or county level.

We operate a 58,000 sq. meter manufacturing facility located in Jinjiang City, Fujian Province, which produces approximately 2.6 million pairs of shoes per year on two production lines. Our footwear products are sold through our network of third-party distributors who sell our products to retail stores and department store boutiques across China. Our company headquarters is located in Jinjiang City, Fujian Province in eastern China.

We generate revenues from the sale of our footwear products and accessories to third-party distributors and to other footwear manufacturers. For the fiscal year ended December 31, 2009 our revenue increased by 16.25%, from $48.5 million to $56.4 million, from fiscal year 2008, and our net income increased by 23.7%, from $5.28 million to $6.53 million, from fiscal year 2008. The increase from period to period is attributable to sustained customer demand during the 2009 period, despite the global economic downturn, and our continuous sales efforts.

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Recent Developments

Reverse Acquisition of DK International Group Ltd.

Prior to February 11, 2011, we were a shell company and had no operations. On February 11, 2011, we entered into the Share Exchange Agreement DK and its sole shareholder, Mr. Yangbo Cai, pursuant to which we acquired 100% of the issued and outstanding capital stock of DK in exchange for 9,250 shares of our Series A Preferred Stock, which constituted 91.71% of our issued and outstanding capital stock on a fully-diluted basis as of and immediately after the consummation of the transactions contemplated by the Share Exchange Agreement. DK thereby became our wholly-owned subsidiary, its subsidiary, Dake, became our indirect subsidiary, and its VIE, Aierda became our VIE. In accordance with FASB ASC 805, “Business Combinations,” we recorded this merger using the recapitalization method which consolidated the Company, DK, Dake and Aierda, and treated the Company as a shell at the time of the merger. According to ASC 805-10-55-13, “the acquirer usually is the combining entity whose relative size (measured in, for example, assets, revenues, or earnings), is significantly larger than that of the other.” Since the Company was a shell at the time of the merger while DK had operations through its acquisition of Dake and Aierda and was significantly larger than the Company was, under ASC 805, DK was considered the acquirer.

A closing condition to the consummation of the share exchange agreement was the repurchase and cancellation by the Company of 234,616 shares of common stock held by David Roff, the Company’s sole officer and director, for $20,000 in cash and 215 shares of the Series A Preferred Stock, as contemplated by a repurchase agreement, dated February 11, 2011, by and between the Company and Mr. Roff. As a result of the share cancellation, our issued and outstanding shares decreased from 345,780 to 111,164 shares of common stock.

Upon the closing of the reverse acquisition on February 11, 2011, Mr. David Roff, our former President and Chief Financial Officer resigned from his offices with the Company, effective immediately, and from his position as a director, effective as of the tenth day following the filing with the SEC and mailing of an information statement on Schedule 14f-1 to the Company’s stockholders. On the same day our Board of Directors increased its size to 4 members and appointed Mr. Yuxi Ding to serve as Chairman, effective immediately, and appointed Mr. Conghui Ding, Mr. Congren Ding, and Mr. Quisheng Ding to serve as directors, effective as of the effective date of Mr. Roff’s resignation. Our Board of Directors also appointed Mr. Conghui Ding to serve as our Chief Executive Officer, Ms. Lifen Zheng to serve as our Chief Financial Officer, Treasurer and Secretary, and Mr. Andong Wang to serve as our Chief Marketing Officer, effective immediately.

We plan to change our name to Dake Athletics, Corp to more accurately reflect our new business operations.

Acquisition of Dake and Aierda

On December 30, 2010, DK entered into an equity transfer agreement with Mr. Yuxi Ding, pursuant to which DK acquired 100% of the outstanding equity interest of Dake. On January 6, 2011, the transaction was approved by the Fujian authorities, however, the transaction has not yet been approved by the Quanzhou Commission of Economy and Trade, and a new business license for Dake has not yet been issued by the Quanzhou Administration for Industry and Commerce, the competent local PRC approval authorities. See the discussion under “Risk Factors—If we fail to obtain the approval from Quanzhou Commission of Economy and Trade and the new business license from Quanzhou Administration for Industry and Commerce for DK’s acquisition of Dake, we will not have legal ownership over Dake nor control over Aierda.”

On December 31, 2010, Dake entered into a series of 10-year, renewable contracts with Aierda and its sole shareholder, Mr. Yuxi Ding, pursuant to which (1) Mr. Ding agreed to pledge of 100% of his equity interests in Aierda to Dake; (2) at any time during the 10-year term of the contractual arrangement, Dake has the absolute right to acquire any portion of the equity interests of Aierda from Mr. Ding; and (3) Dake has the absolute right during the 10-year term to appoint the directors of Aierda and to obtain service fees from Aierda. As a result of these contracts, Dake gained control over Aierda and Aierda became Dake’s VIE.

The commercial arrangement consists of the following contracts:

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• Exclusive Business Cooperation Agreement, dated December 31, 2010, between Dake and Aierda, provides that Dake will be the exclusive provider of consulting services to Aierda, and that Aierda will pay a service fee to Dake, based on a percentage of its profit before taxes, which will be payable in an amount and at such time as determined by Dake in its sole discretion.

• Exclusive Option Agreement, dated December 31, 2010, between Dake, Mr. Ding and Aierda, provides that in the event that Dake exercises its right to purchase the equity interests of Aierda from Aierda’s sole shareholder, the purchase price will be equal to the original price paid by the sole shareholder in acquiring the equity interest of Aierda.

• Proxy Agreement, dated December 31, 2010, between Dake, Mr. Ding and Aierda, authorizes Dake to exercise any and all shareholder rights associated with Mr. Ding’s ownership in Aierda, including the right to sell, assign, transfer or pledge any or all of the equity interest in Aierda, and the right to vote such equity interest for any and all matters.

• Equity Pledge Agreement, dated December 31, 2010, between Dake and Mr. Ding, whereby Mr. Ding pledges all of his equity shares in Aierda to Dake. If Aierda or Mr. Ding breaches their respective obligation under any of the VIE contracts, Dake, as pledgee, will be entitled to certain rights, including the right to foreclose on the pledged equity interests. Mr. Ding has agreed not to dispose of the pledged equity interests or take any actions that would prejudice Dake’s interest during the 10-year term of the agreements. Dake also has right to obtain any and all dividends related to the equity interest pledged during the term of the pledge.

Aierda was established on June 13, 1991 as a foreign-invested PRC enterprise and is mainly engaged in the manufacture and sale of footwear parts and materials. On November 16, 2005, Mr. Yuxi Ding, a Philippine resident, entered into a share transfer agreement with Fujian Province Jinjiang City Chendai Jiangtou Labor Insurance Factory and Hong Kong Shengcheng (Pacific) Limited Company, the former shareholders of Aierda, pursuant to which, Mr. Ding acquired 100% of the equity interest in Aierda for a total consideration of RMB 9,000,000. On December 22, 2005, the Jinjiang City Commerce Bureau approved the equity transfer to Mr. Ding and approved the conversion of Aierda to a wholly foreign-owned enterprise. Dake was established on August 8, 1999, as a foreign-invested PRC enterprise and is mainly engaged in the manufacture and wholesale of casual and athletic footwear.

Principal Factors Affecting Our Financial Performance

Our operating results are primarily affected by the following factors:

• Growth in the Chinese Economy - We operate our facilities in China and derive almost all of our revenues from sales to distributor customers in China. Economic conditions in China, therefore, affect virtually all aspects of our operations, including the demand for our products, the availability and prices of our raw materials and our other expenses. China has experienced significant economic growth, achieving a compound annual growth rate of over 10% in gross domestic product from 1996 through 2008. China is expected to experience continued growth in all areas of investment and consumption, even in the face of a global economic recession. However, China has not been entirely immune to the global economic slowdown and is experiencing a slowing of its growth rate. Our business model is also dependent on increasing numbers of middle class urban consumers driving demand for casual and athletic shoes that reflect a modern lifestyle, as well as urban consumer habits, such as window shopping. We anticipate continuing to benefit from these trends due to our presence throughout rapidly urbanizing and gentrifying neighborhoods in second-tier cities all over China. According to the RightSite Criteria, a second tier PRC market usually (1) has a population of more than 5 million; (2) has a GDP of between RMB 250 – 350 billion in economic output and a large year on year GDP growth rate, such as Jiangsu, Zhejiang or Guangdong; and (3) has transportation infrastructure such as an international airport.

• Brand Strength – Continued development of our brand’s strength and visibility are vital to our goal of taking significant market share on a PRC wide scale. We believe our advertising campaigns, from billboards, print media and local event sponsorship activities have been instrumental to the rapid success of building the strength of our brand. Furthermore, our growing expansion will be fueled by our tight management of our brand, customer service, and store image. We are on actively involved in the training of many of our distributors to ensure uniform and superb quality of customer service, product, and consumer experience at every point of sale.

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• Competitive Environment – We face an increasing number of both international and domestic competitors. We believe our ability to produce our own footwear components at a lower cost has enabled our margins to be higher than our competitors. We believe our plan to expand our business to include retail sales will further increase our profit margins. As labor costs continue to rise in China, we believe expansion to retail will enable us to avoid the challenges associated with divesting of factories in China and/or moving to new production facilities in Southeast Asia. We believe that switching to a retail model will enable us to develop in the most profitable portion of the footwear industry’s value chain.

Taxation

We are subject to PRC corporate income taxes at a statutory tax rate of 25%. No provision for income taxes in the United States has been made as we have no income taxable in the United States. DK International Group Ltd. is incorporated in the British Virgin Islands which have no corporate income taxes on profits earned overseas.

The Company accounts for income taxes in accordance with ASC 740 “Income Taxes.” ASC 740 requires an asset and liability approach for financial accounting and reporting for income taxes and allows recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain. There was no deferred tax asset or liability for the years ended December 31, 2009 and 2008. The Company is governed by the Income Tax Law of the PRC concerning the private-run enterprises, which are generally subject to tax at a statutory rate of 25% on income reported in the statutory financial statements after appropriated tax adjustments in 2009 and 2008respectively.

The Company is also subject to value added tax (“VAT”) for selling merchandise. The applicable VAT rate is 17% for products sold in the PRC. The amount of VAT liability is determined by applying the applicable tax rate to the invoiced amount of goods sold (output VAT) less VAT paid on purchases made with the relevant supporting invoices (input VAT). Under the commercial practice of the PRC, the Company pays VAT based on tax invoices issued. The tax invoices may be issued subsequent to the date on which revenue is recognized, and there may be a considerable delay between the date on which the revenue is recognized and the date on which the tax invoice is issued. In the event that the PRC tax authorities dispute the date on which revenue is recognized for tax purposes, the PRC tax office has the right to assess a penalty based on the amount of the taxes which are determined to be late or deficient, and will be expensed in the period if and when a determination is made by the tax authorities that a penalty is due.

Our future effective income tax rate depends on various factors, such as tax legislation, the geographic composition of our pre-tax income and non-tax deductible expenses incurred. Our management carefully monitors these legal developments and will punctually adjust our effective income tax rate when necessary.

Results of Operations

Nine Months ended September 30, 2010 Compared to Nine Months ended September 30, 2009

The following table sets forth key components of our results of operations for the nine months ended September 30, 2010 and 2009:

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		For the nine months ended September 30,
		2010			2009			Difference		% of changes
Sales	$	44,999,626		$	41,334,268		$	3,665,358		9%
Cost of sales		(32,078,763	)		(29,598,060	)		(2,480,703	)	8%
Gross profit		12,920,863			11,736,208			1,184,655		10%
Selling, general and administrative expenses		(4,406,740	)		(4,522,071	)		115,331		–3%
Income from operations		8,514,123			7,214,137			1,299,986		18%
Other income (expenses)
Interest expense, net		(131,472	)		(108,584	)		(22,888	)	21%
Total Other income (expenses)		(131,472	)		(108,584	)		(22,888	)	21%
Income before income taxes		8,382,651			7,105,553			1,277,098		18%
Provision for income taxes		(2,101,018	)		(1,776,388	)		(324,630	)	18%
Net income	$	6,281,633		$	5,329,165		$	952,468		18%

The following table summarizes our sales, cost of sales and gross margin by segments for the nine months ended September 30, 2010 and 2009, respectively:

		For the nine months ended September 30,
		2010		2009		Difference		% of change
Shoe parts & accessories	$	21,039,926	$	24,761,426	$	(3,721,500	)	-15%
OEM products		945,716		840,921		104,795		12%
Aierda brand shoes		23,013,984		15,731,921		7,282,063		46%
Consolidated sales	$	44,999,626	$	41,334,268	$	3,665,358		9%
Shoe parts & accessories	$	15,331,589	$	17,988,255	$	(2,656,666	)	-15%
OEM products		671,658		601,312		70,346		12%
Aierda brand shoes		16,075,516		11,008,493		5,067,023		46%
Consolidated cost of sales	$	32,078,763	$	29,598,060	$	2,480,703		8%
Shoe parts & accessories	$	5,708,337	$	6,773,171	$	(1,064,834	)	-16%
OEM products		274,058		239,609		34,449		14%
Aierda brand shoes		6,938,468		4,723,428		2,215,040		47%
Consolidated gross margin	$	12,920,863	$	11,736,208	$	1,184,655		10%

Sales: The net sales of shoe parts and accessories decreased by $3.7 million, or 15%, to $21.0 million for the nine months ended September 30, 2010, from $24.8 million for the nine months ended September 30, 2009. For the nine months ended September 30, 2010, we took advantage of the economic recovery and focused on the production of Aierda brand shoes which has a higher profit margin than the sales of shoe parts and accessories.

The net sales of OEM products increased by 12% to $0.9 million for the nine months ended September 30, 2010, from $0.8 million for the nine months ended September 30, 2009. This segment is traditionally not the main focus of our sales. We placed more resources on other business segments which contributed major profits during fiscal year 2010.

The net sales of Aierda brand shoes reached approximately $23.0 million for the nine months ended September 30, 2010, a $7.3 million, or 46% increase, from $15.7 million for the same period ended September 30, 2009. The increase in sales of Aierda brand shoes is primarily attributable to continued improvement in the economy together with our change in marketing strategy aimed at increasing sales of Aierda brand shoes which has a higher gross margin than sales of shoe parts and accessories. In addition, we enjoyed more demand for our Aierda brand shoes for the nine months ended September 30, 2010, as a result of our increased advertising expenditure in 2009.

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Cost of Sales: Our cost of sales is primarily comprised of the costs of our raw materials, labor and overhead. Our consolidated cost of sales increased $2.5 million, or 8%, to $32.1 million, for the nine months ended September 30, 2010, from $29.6 million for the same period of 2009. The decrease in cost of sales of shoe parts and accessories is generally in line with the decrease in net sales. The increase in cost of sales for our Aierda brand shoes and OEM products is also in line with the increase in net sales.

Gross Profit: Our gross profit increased $1.2 million to $12.9 million for the nine months ended September 30, 2010, from $11.7 million for the same period in 2009. Gross profit as a percentage of net revenues was 29% and 28% for the nine months periods ended September 30, 2010 and 2009, respectively. The average gross margin of shoe part and accessories was 27.1% in the nine months ended September 2010, as compared to 27.4% for the same period of 2009. The average gross margin of Aierda branded shoes was 30.1% for the nine months ended September 30, 2010, as compared to 30.0% for the same period of 2009. The increase in gross margin is primarily attributable to increased sales of Aierda brand shoes which have a higher gross margin.

Operating Expenses: We do not allocate selling, general and administrative expenses incurred at the corporate level to individual reporting segments as we believe our corporate department provides necessary marketing and administrative supporting functions that benefit our entire operations taken as a whole.

Selling and General and Administrative Expenses: Our selling and general and administrative expenses decreased $0.1 million, or 3%, to $4.4 million for the nine months ended September 30, 2010, from $4.5 million for the same period of 2009. The slight decrease is mainly due to a decrease in administrative staff and staff welfare expenses. To enhance our staff efficiency, we have streamlined administrative procedures to reduce our administrative staff headcount during the nine months ended September 30, 2010. For the nine months ended September 30, 2010, our administrative staff costs decreased $0.3 million to $1.6 million, from $1.9 million in the same period of 2009. The decrease in administrative staff headcount has also resulted in a corresponding decrease in staff welfare.

Interest expense, net: Interest expense increased by $22,888 for the nine months ended September 30, 2010, as compared to the three months ended September 30, 2009. The increase is due to the higher short-term borrowing as a result of our business expansion.

Income before Income Taxes: Income before income taxes increased $1.3 million, or 18%, to $8.4 million for the nine months ended September 30, 2010, from $7.1 million in the same period of 2009. As a percentage of net sales, the income before income tax increased from 17% in the nine months ended September 30, 2009, to 19% in the same period of 2010. This increase is mainly attributable to increased sales of our Aierda brand shoes.

Income Taxes: Our income tax increased to $2.1 million for the nine months ended September 30, 2010, from $1.8 million in the same period of 2009. The statutory income tax rate is 25%. This increase is mainly due to better sales revenue and profit derived from sale of our Aierda brand shoes.

Net Income: Net income increased $1.0 million, or 18%, to $6.3 million for the nine months ended September 30, 2010, from $5.3 million in the same period of 2009. The increase is primarily attributable to all the reasons disclosed above.

Year Ended December 31, 2009 Compared to Year Ended December 31, 2008

The following table sets forth key components of our results of operations for the years ended December 31, 2009 and 2008:

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		For the years ended December 31,
		2009			2008		Difference		% of change
Sales	$	56,419,090		$	48,531,649		7,887,441		16%
Cost of sales		(41,055,147	)		(35,981,628	)	(5,073,519	)	14%
Gross profit		15,363,943			12,550,021		2,813,922		22%
Selling, general and administrative expenses		(6,260,214	)		(5,116,705	)	(1,143,509	)	22%
Income from operations		9,103,729			7,433,316		1,670,413		22%
Other income (expenses)
Interest expense, net		(146,917	)		(114,496	)	(32,421	)	28%
Total Other income (expenses)		(146,917	)		(114,496	)	(32,421	)	28%
Income before income taxes		8,956,812			7,318,820		1,637,992		22%
Provision for income taxes		(2,430,573	)		(2,040,170	)	(390,403	)	19%
Net income	$	6,526,239			5,278,650		1,247,589		24%

Our chief operating decision maker ("CODM") is our Chief Executive Officer who reviews the financial information of separate operating segments when making decisions about allocating resources and assessing performance of the group. Based on management's assessment, we have determined that we have three operating segments which are Shoe parts and accessories, OEM products and Aierda shoes. These three operating segments are also identified as reportable segments.

The following table summarizes our sales, cost of sales and gross margin by segments for the years ended December 31, 2009 and 2008, respectively:

		For the years ended December 31,
		2009		2008		Difference		% change
Shoe parts & accessories	$	27,003,628	$	18,849,999	$	8,153,629		43%
OEM products		7,848,994		8,314,522		(465,528	)	-6%
Aierda brand shoes		21,566,468		21,367,128		199,340		1%
consolidated Sales	$	56,419,090	$	48,531,649	$	7,887,441		16%
Shoe parts & accessories	$	20,390,430	$	15,154,134	$	5,236,296		35%
OEM products		5,866,401		6,019,721		(153,320	)	-3%
Aierda brand shoes		14,798,316		14,807,773		(9,457	)	0%
consolidated Cost of sales	$	41,055,147	$	35,981,628	$	5,073,519		14%
Shoe parts & accessories	$	6,613,198	$	3,695,865	$	2,917,333		79%
OEM products		1,982,593		2,294,801		(312,208	)	-14%
Aierda brand shoes		6,768,152		6,559,355		208,797		3%
consolidated Gross profit	$	15,363,943	$	12,550,021	$	2,813,922		22%

Sales: Our net sales consist of Aierda brand shoes, shoe parts and accessories and OEM products. Net sales of shoe parts & accessories increased $8.2 million, or 43%, to $27.0 million in the fiscal year 2009, from $18.8 million in the fiscal year 2008. The increase is mainly due to increased orders from local shoe manufacturers as the economy gradually improved from the financial crisis in 2008.

Net sales of OEM products decreased $0.5 million, or 6%, to $7.8 million in the fiscal year 2009, from $8.3 million in the fiscal year 2008. This segment is traditionally not the Company’s main sales focus. The Company placed more resources on other business segments which contributed to Company’s major profits during fiscal year 2009.

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Net sales of Aierda brand shoes increased by $0.2 million, or 1%, to $21.6 million in the fiscal year 2009, from $21.4 million in the fiscal year 2008. There was no significant change in net sales in this business segment despite the adverse market conditions in early 2009.

Cost of Sales: Our cost of sales is primarily comprised of the costs of raw materials, labor, overhead and sales tax. On consolidated basis, our cost of sales increased $5.0 million, or 14%, to $41.0 million in fiscal year 2009, from $36.0 million in fiscal year 2008. Excluding the raw material inventory write-downs of $738,935 in 2008, our cost of sales increased $6.0 million, or 16%. The increase in cost of sales of shoe parts and accessories and Aierda brand shoes are generally in line with the increase in net sales of our Aierda brand shoes. The decrease in cost of sales of OEM products is also in line with decrease in net sales of such products.

Gross Profit and Gross Margin: Our gross profit increased $2.8 million to $15.4 million in fiscal year 2009, from $12.6 million in fiscal year 2008. Gross profit as a percentage of net revenues was 27% and 26% for fiscal years 2009 and 2008, respectively. The average gross margin of shoe parts and accessories was 24% in fiscal year 2009, as compared to 20% in fiscal year 2008, or 34.2% excluding raw material inventory write-downs of $738,935 in 2008. The average gross margin of Aierda brand shoes was 31.4% in fiscal year 2009, as compared to 30.7% in fiscal year 2008. The slight increase in gross margin is primarily attributable to the general improvement of economic conditions in second half of 2009.

Operating Expenses: We do not allocate selling, general and administrative expenses incurred at the corporate level to individual reporting segments as we believe our corporate department provides necessary marketing and administrative supporting function that benefits our entire operations taken as a whole.

Selling and General and Administrative Expenses: Our selling and general and administrative expenses increased $1.1 million, or 22%, to $6.3 million in fiscal year 2009, from $5.1 million in fiscal year 2008. The increase is mainly due to increased staff compensation, staff welfare, advertising and promotion expenses during the 2009 period. Our advertising expense includes exhibition, trade fairs, outdoor advertising and internet advertising. Our advertising expenses increased by 42% from around $146,470 in the fiscal year 2008 to $208,529 in the fiscal year 2009. Our promotion expense increased by 7% from $283,676 in the fiscal year 2008 to $304,559 in the fiscal year 2009.

Our staff costs increased in line with increased sales which resulted from our employment of additional sales personnel during the 2009 period. Staff costs were approximately $2.0 million and $1.8 million in 2009 and 2008, respectively, with an average salary increment of 10-20% per annum during fiscal year 2009. We also faced the pressure of increased cost from increased staff welfare contributions in compliance with the PRC government’s more stringent employee benefit policy.

Interest expense, net: Interest expense increased by 32,421 for the year ended December 31, 2009 as compared to the year ended December 31, 2009. The increase was due to higher short-term borrowing as a result of our business expansion.

Income before Income Taxes: Income before income taxes increased $1.6 million, or 22%, to $9.0 million in 2009 from $7.3 million in 2008. As a percentage of net sales, the income before income tax increased from 15% in fiscal year 2008 to 16% in fiscal year 2009. The increase is mainly attributable to increased net sales of shoe parts and accessories, which was offset by the decrease in net sales of OEM products.

Income Taxes: Our income tax increase to $2.4 million in the fiscal year 2009 from $2.0 million in the year 2008. The applicable tax rate for company is 25%. This increase is mainly due to the higher sales revenue disclosed above.

Net Income: Net income increased $1.2 million, or 24%, to $6.5 million in fiscal year 2009, from $5.3 million in fiscal year 2008. The increase is primarily attributable to increased sales of shoe parts and accessories due to the general economic improvement during the 2009 period resulting in significant increase in sales from local shoe manufacturers.

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Liquidity and capital resources

Our principal sources of liquidity have been cash generated from our operating activities and short-term financing from banks. Our working capital at September 30, 2010 and December 31, 2009 was approximately $22.8 million and $20.4 million, respectively.

The short-term loans were used in daily operation by the companies. The short-term loans are from to two financial institutions which are normally due within 12 months. The short-term loans as of September 30, 2010 and of December 31, 2009 are $2,914,016 and $2,121,105, respectively. The short-term loans were partially, personally guaranteed by our sole shareholder and his spouse, and other independent third parties.

As of September 30, 2010 and December 31, 2009, we had cash and cash equivalents of approximately $262,321 and $279,065, respectively. The following table provides detailed information about our net cash flow:

		For the nine months ended September 30,
		2010			2009
Net cash provided by operating activities	$	4,568,005		$	4,394,015
Net cash (used in) investing activities		(18,087	)		(809,291	)
Net cash (used in) provided by financing activities		(4,681,287	)		(758,782	)
Effect of exchange rate change on cash and cash equivalents		114,625			7,339
Cash and cash equivalents at beginning of period		279,065			848,195
Cash and cash equivalents at end of period		262,321			3,681,476
		For the year ended December 31,
		2009			2008
Net cash provided by operating activities	$	6,611,826		$	4,048,323
Net cash (used in) investing activities		(1,034,223	)		(21,174	)
Net cash (used in) financing activities		(6,157,666	)		(3,945,911	)
Effect of exchange rate change on cash and cash equivalents		10,933			122,246
Cash and cash equivalents at beginning of year		848,195			644,711
Cash and cash equivalents at end of year		279,065			848,195

Cash flows from operating activities

Net cash provided by operating activities was $4,568,005 for the nine months ended September 30, 2010, an increase of $173,993, from $4,394,015 for the same period in 2009. The increase of net cash provided by operating activities was primarily attributable to a general increase in the scope of our business activities.

Net cash provided by operating activities was $6.6 million in 2009, an increase of $2.6 million, or 63%, from $4.0 million in 2008. The increase in net cash provided by operating activities was primarily attributable to an approximately $6.3 million decrease in inventories. During 2008 there was a general accumulation of raw materials inventory as a result of decreased sales in connection with the global economic crisis. All of our raw materials, except for approximately $0.7 million for which provision has been made, were subsequently utilized for production purposes.

Cash flows from investing activities

Net cash used in investing activities for the nine months ended September 30, 2010 was $18,087 and $809,291 for the same period in 2009. The decrease was primarily attributable to a decrease in capital expenditure in machinery for the nine months ended September 30, 2010.

Net cash used in investing activities in 2009 was $1,034,223, as compared to $21,174 in 2008. The increase was primarily attributable to an increase in capital expenditure on machinery during the 2009 period.

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Cash flows from financing activities

Net cash used in financing activities for the nine months ended September 30, 2010 was $4,681,287 as compared to net cash provided by financing activities of $758,782 for the same period in 2009. The change was primarily attributable to an increase in dividend payment of $4,931,260 for the nine months ended September 30, 2010.

Net cash used in financing activities in 2009 was $6.2 million, as compared to $3.9 million in 2008. The increase was primarily attributable to a $2.1 million dividend payment during 2009 to Mr. Yuxi Ding, Dake’s and Aierda’s sole shareholder, Mr Ding Yuxi, at the time.

Capital expenditures

Our capital expenditures were $18,087 for the nine months ended September 30, 2010, as compared to $545,838 for the nine months ended September 30, 2009. Our capital expenditures were $668,248 and $21,174 for 2009 and 2008, respectively. Our capital expenditures were mainly used for addition of machinery and intangible assets.

We believe that our cash on hand, cash flow from operations, together with the net proceeds from the short-term loans will meet our expected capital expenditure and working capital for the next 12 months. In addition, we may, 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.

We do not have any long-term contractual obligations with respective to ease payment, purchase commitments and capital expenditure commitment.

Critical Accounting Policies

Use of Estimates

In preparing the financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting year. Significant estimates, required by management, include the selection of the useful lives and residual values of property and equipment and intangible assets, provision for doubtful accounts, provision necessary for contingent liabilities, fair values, revenue recognition, and other similar charges. Actual results could differ from those estimates.

PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP"). The consolidated financial statements include the accounts of DK international Group Ltd (“DK”), Dake, a wholly owned subsidiary of DK, and Aierda, a variable interest entity. All inter-company balances and transactions are eliminated in consolidation.

We determined that Dake is the primary beneficiary of Aierda based on the contractual relationship in which Dake has economic control over Aierda, and Dake’s obligations to absorb Aierda's expected returns and losses.

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Fair value

The Company follows the provisions of Accounting Standards Codification ("ASC") 820, Fair Value Measurements and Disclosures. ASC 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.

Level 2 - Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.

Level 3 - Inputs are unobservable inputs which reflect the reporting entity's own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.

As of December 31, 2009 and 2008, the Company's financial instruments include cash and cash equivalents, accounts receivable, Due from other, advances to suppliers, account payables, accrued expenses, deposits from customers, taxes payable, notes payable and other current liabilities. Management has estimated that the fair value of these financial instruments approximate their carrying amounts due to their short-term nature.

Accounts Receivable

According to the Company's policy, accounts receivable over 90 days are considered overdue. The Company does periodical reviews as to whether the carrying values of accounts have become impaired. The assets are considered to be impaired if the collectability of the balances become doubtful, accordingly, the management estimates the valuation allowance for anticipated uncollectible receivable balances. When facts subsequently become available to indicate that the allowance provided requires an adjustment, then the adjustment will be recorded as a change in allowance for doubtful accounts. If we were to apply a hypothetical increase of 5% in estimating allowance for doubtful accounts for the period and year ended September 30, 2010 and December 31, 2009, respectively, the provision for bad debt expenses would increase by $398,708 and 261,429 respectively.

Inventories

Inventories are stated at the lower of cost or market, using the FIFO method. Inventory costs include material, labor and direct manufacturing overhead. The Company estimates net realizable value based on intended use, current market value and inventory ageing analyses. The Company writes down inventories for estimated obsolescence or unmarketable inventory equal to the difference between the cost of inventories and their estimated market value based upon assumptions about future demand and market conditions. During the year ended December 31, 2008, the Company wrote – down $738,935 of inventories which was included in cost of sales. As of December 31, 2009 and September 30, 2010, no additional write-down for inventories is considered necessary.

Impairment of Long-Lived Assets

The Company accounts for impairment of property and equipment and amortizable intangible assets in accordance with ASC 360, “Accounting for Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed Of”, which requires the Company to evaluate a long-lived asset for recoverability when there is event or circumstance that indicate the carrying value of the asset may not be recoverable. An impairment loss is recognized when the carrying amount of a long-lived asset or asset group is not recoverable (when carrying amount exceeds the gross, undiscounted cash flows from use and disposition) and is measured as the excess of the carrying amount over the asset’s (or asset group’s) fair value. There was no impairment of long-lived assets for the years ended December 31, 2009 and 2008.

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Revenue Recognition

The Company recognizes revenue in accordance with ASC 605”Revenue Recognition”. Product sales are recognized when title to the product has transferred to customers in accordance with the terms of the sale; the sales price to the customer is fixed or determinable, and collectability is reasonably assured. The Company accepts customer returns due to defective products.

Income Tax

The Company is governed by the Income Tax Law of the PRC. The Company accounts for income taxes using an asset and liability approach which allows for the recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company is subject to a statutory tax rate of 25% on income reported in the statutory financial statements after appropriate tax adjustments. There were no temporary differences as of September 30, 2010 and December 31, 2009.

Recent Accounting Pronouncements

In December, 2009, FASB issued ASU No. 2009-17, “Improvement to Financial Reporting by Enterprises Involved with Variable Interest Entities”. This Accounting Standard Update amends the FASB Accounting Standards Codification for the issuance of FASB Statement No.167, Amendments to FASB Interpretation No. 46 (R). The amendments in this Accounting Standards Update replace the quantitative-based risks and rewards calculation for determining which reporting entity, if any, has a controlling financial interest in a variable interest entity with an approach focused on identifying which reporting entity has the power to direct the activities of a variable interest entity that most significantly impact the entity's economic performance and (1) the obligation to absorb losses of the entity or (2) the right to receive benefits from the entity. An approach that is expected to be primarily qualitative will be more effective for identifying which reporting entity has a controlling financial interest in a variable interest entity. The amendments in this Update also require additional disclosures about a reporting entity's involvement in variable interest entities, which will enhance the information provided to users of financial statements. The Company was required to adopt this guidance for the year ending December 31, 2010. The adoption of this ASU did not have a material impact on its consolidated financial statements.

Off-Balance Sheet Arrangements

None

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information regarding beneficial ownership of our common stock as of February 11, 2011 (i) by each person who is known by us to beneficially own more than 5% of our common stock; (ii) by each of our officers and directors; and (iii) by all of our officers and directors as a group. Unless otherwise specified, the address of each of the persons set forth below is in care of the Company, No.55 Miyun Road, Nankai District, Tianjin City, 300111, People’s Republic of China.

		Shares Beneficially Owned(1)
				Series A Preferred
		Common Stock(2)		Stock(3)
						% Total
			% of		% of	Voting
Name & Address of Beneficial Owner	Office, If Any	Shares	Class	Shares	Class	Power(4)
Directors and Officers

Yuxi Ding	Chairman	0	*	9,250(5)	92.73%	91.71%
Conghui Ding	CEO and Director	0	*			*
Congren Ding	Director	0	*	0	*	*
Qiusheng Ding	Director	0	*			*
Lifen Zheng	CFO	0	*	0	*	*
Andong Wang	Chief Marketing Officer	0	*	0	*	*
All Officers and Directors as a group (6 persons named above)		0	*	0	*	*
5% Security Holders
Yangbo Cai	--	0	*	9,250(5)	92.73%	91.71%
Yuxi Ding	Chairman	0	*	0	*	*

*Less than 1%

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(1) Beneficial Ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Each of the beneficial owners listed above has direct ownership of and sole voting power and investment power with respect to the shares of the Company’s stock. For each Beneficial Owner above, any options exercisable within 60 days have been included in the denominator.

(2) Based on 111,164 shares of Common Stock issued and outstanding as of February 11, 2011.

(3) Based on 9,975 shares of Series A Preferred Stock issued and outstanding as of February 11, 2011. Shares of Series A Preferred Stock are automatically convertible into Common Stock on a 1-to-1000 basis. Holders of Series A Preferred Stock vote with the holders of Common Stock on all matters on an as-converted to Common Stock basis. See “Description of Securities – Preferred Stock” below for more information regarding our Series A Preferred Stock.

(4) Percentage of Total Capital Stock represents total ownership with respect to all shares of our Common Stock and Series A Preferred Stock, as a single class and on an as-converted to Common Stock basis.

(5) The shares attributed to Mr. Yuxi Ding relate to his option to purchase such shares pursuant to an option agreement, dated January 27, 2011, between Mr. Ding and Mr. Cai and his voting and dispositive control over such shares pursuant to a voting rights’ entrustment agreement, dated January 27, 2011, between them.

Changes in Control

On January 27, 2011, our Chairman, Mr. Yuxi Ding, entered into an option agreement with Mr. Yangbo Cai, the holder of record of approximately 91.71% of our outstanding voting securities, pursuant to which Mr. Cai granted Mr. Ding an option to acquire all of the shares of our common stock currently owned by Mr. Cai, for an exercise price of $10,000. Mr. Ding may exercise this option, in whole but not in part, during the period commencing six months after the effective date of a resale registration statement for securities issued to investors in the first post-reverse merger equity financing, and ending on the fifth anniversary of the date thereof. On January 27, 2011, Mr. Ding also entered into a voting rights’ entrustment agreement with Mr. Cai, pursuant to which Mr. Cai irrevocably granted to Mr. Ding all his voting and dispositive control over the shares held by Mr. Cai. Mr. Cai also waived all his rights associated with his shares and agreed to not cause the Company to conduct any transactions which may materially affect the assets, obligations, rights or the operations of the Company. If Mr. Ding exercises this option, he will become our controlling stockholder of record, but, in the interim, Mr. Ding has voting and dispositive control over the shares held by Mr. Cai.

There are no other arrangements which if consummated may result in a change of control of our Company.

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DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

Directors and Executive Officers

The following sets forth information about our directors and executive officers as of the date of this report:

NAME	AGE	POSITION
Yuxi Ding	55	Chairman of the Board
Conghui Ding	27	Chief Executive Officer, Director
Congren Ding	29	Director
Qiusheng Ding	50	Director
Lifen Zheng	40	Chief Financial Officer
Andong Wang	44	Chief Marketing Officer

Mr. Yuxi Ding. Mr. Ding was appointed to serve as our Chairman on February 11, 2011, and has served as the Vice Chairman of Aierda since its inception in 1991, and its Chairman since 2006. Mr. Ding has also served as Dake’s Chairman since its inception in 1999. Mr. Ding has over 20 years experience in manufacturing and selling athletic shoes.

Mr. Conghui Ding. Mr. Ding was appointed to serve as our Chief Executive Officer on February 11, 2011, and has from January 1996 to January 2009 as Aierda’s Vice General Manager, before pursuing studies in the United Kingdome from 2007 to 2008. Mr. Ding holds a Master’s Degree in International Trade from the University of Hertfordshire.

Mr. Congren Ding. Mr. Ding was appointed to serve as our Director effective as of the tenth day following the mailing to our shareholders of an information statement on Schedule 14F-1 with respect to the resignation of Mr. David Roff. Mr. Ding has also served as the director of Dake since June 1999.

Mr. Qiusheng Ding. Mr. Ding was appointed to serve as our Director effective as of the tenth day following the mailing to our shareholders of an information statement on Schedule 14F-1 with respect to the resignation of Mr. David Roff. Mr. Ding has also served as the director of Aierda since 1991.

Ms. Lifen Zheng. Ms. Zheng has served as our Chief Financial Officer since February 11, 2011, and in the same capacity for our PRC subsidiary, Dake, since 2007. Prior to joining the Company, Ms. Zheng served from 2005 to 2007, as an auditor with the Quanzhou Liancheng Public Accounting Firm, a PRC public accounting firm. Ms. Zheng holds the equivalent of a Certified Public Accountant in the PRC. Ms. Zheng holds a Bachelor’s Degree in accounting from Huaqiao University.

Mr. Andong Wang. Mr. Wang has served as our Chief Marketing Officer since February 11, 2011, and has served in the same capacity for Dake since 2009. Prior to joining us, Mr. Wang served from 2007 to 2009 as a General Manager in the 361Sports Company, a Hong-Kong listed company, and from 2005 to 2007, as Chief Marketing Officer for Anta Beijing, a PRC-based company engaged in shoe manufacturing and distribution. Mr. Wang holds a Bachelor’s Degree in Marketing from the Henan Zhengzhou University.

Significant Employees

The following sets forth the name and position of each of our current significant employees.

NAME	AGE	POSITION
Tao Zhang	32	Chief Designer
Xinquan Liu	44	Production Manager

Mr. Tao Zhang. Mr. Zhang has served as the Chief Designer of Dake, our PRC Subsidiary, since 2008. Prior to joining us, Mr. Tao served from 2006 to 2008 as a designer with the Kaifang (Fujian) Sports Co., Ltd., a PRC-based shoe manufacturer.

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Mr. Xingquan Liu. Mr. Liu has served as the Production Manager of Dake since 2007. Mr. Liu has over 8 years’ management experience in the PRC footwear manufacturing industry. Prior to joining us, Mr. Liu served from 2005 to 2007, as the Chairman in Jinjiang Yichang Shoes Co., Ltd., a PRC-based shoe company.

Family Relationships

Mr. Qiusheng Ding is the brother or our Chairman and principal shareholder Mr. Yuxi Ding, and Mr. Conghui Ding and Mr. Congren Ding are the sons of Mr. Yuxi Ding.

Involvement in Certain Legal Proceedings

To the best of our knowledge, none of our directors or executive officers has been convicted in a criminal proceeding, excluding traffic violations or similar misdemeanors, or has been a party to any judicial or administrative proceeding during the past ten years that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws, except for matters that were dismissed without sanction or settlement. Except as set forth in our discussion below in “Certain Relationships and Related Transactions, and Director Independence – Transactions with Related Persons,” none of our directors, director nominees or executive officers has been involved in any transactions with us or any of our directors, executive officers, affiliates or associates which are required to be disclosed pursuant to the rules and regulations of the SEC.

Governance Structure

The Company is governed by a Board of Directors that currently consists of four members: Yuxi Ding, Conghui Ding, Congren Ding, and Qiusheng Ding. None of the Company’s directors are “independent” as that term is defined by the Nasdaq Stock Market Rules, however the Company intends to appoint one or more independent directors in the near future. The Board may also establish and delegate some of its functions to various committees.

The Board believes the interests of all stockholders are best served at the present time through a leadership model with a separate Board Chair and CEO. However, the Board retains authority to amend the By-Laws to combine the positions of Board Chair and CEO at any time. The current CEO and Board Chair possess an in-depth knowledge of the Company, its integrated operations, the footwear industry in China, and the array of challenges to be faced, gained through years of combined experience in the industry. The Board believes that these experiences and other insights put them in the best position to provide broad leadership for the Company and the Board, respectively, as they consider strategy and exercise fiduciary responsibilities to stockholders, as the case may be.

The Board’s Role in Risk Oversight

The Board is charged with oversight of and safeguarding the assets of the Company and with maintaining appropriate financial and other controls, and conducting the Company’s business wisely and in compliance with applicable laws and regulations and proper governance. Included in these responsibilities is the Board of Directors’ oversight of the various risks facing the Company. In this regard, the Board seeks to understand and oversee critical business risks. The Board does not view risk in isolation. Risks are considered in virtually every business decision and as part of the Company’s business strategy. The Board recognizes that it is neither possible nor optimal to eliminate all risk. Indeed, purposeful and appropriate risk-taking is essential for the Company to be competitive on a global basis and to achieve its objectives.

While the Board oversees risk management, Company management is charged with managing risk. The Company has robust internal processes and a strong internal control environment to identify and manage risks and to communicate with the Board. The Board monitors and evaluates the effectiveness of the internal controls and the risk management program at least annually. Management communicates routinely with the Board and individual Directors on the significant risks identified and how they are being managed. Directors are free to, and indeed often do, communicate directly with senior management. The Board implements its risk oversight function as a whole but intends to establish and delegate this risk oversight function to various committees in the future.

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Director Qualifications

Directors are responsible for overseeing the Company’s business consistent with their fiduciary duty to shareowners. This significant responsibility requires highly-skilled individuals with various qualities, attributes and professional experience. The Board believes that there are general requirements for service on the Company’s Board of Directors that are applicable to all Directors and that there are other skills and experience that should be represented on the Board as a whole but not necessarily by each Director. The Board considers the qualifications of Directors and Director candidates individually and in the broader context of the Board’s overall composition and the Company’s current and future needs.

Qualifications for All Directors

In its assessment of each potential candidate, the Board considers the nominee’s judgment, integrity, experience, independence, understanding of the Company’s business or other related industries and such other factors the Board determines are pertinent in light of the current needs of the Board. The Board also takes into account the ability of a Director to devote the time and effort necessary to fulfill his or her responsibilities to the Company.

The Board requires that each Director be a recognized person of high integrity with a proven record of success in his or her field. Each Director must demonstrate respect for and an ability and willingness to learn corporate governance requirements and practices, an appreciation of multiple cultures and a commitment to ethical business practices. In addition to the qualifications required of all Directors, the Board assesses intangible qualities including the individual’s ability to ask difficult questions and, simultaneously, to work collegially.

The Board does not have a specific diversity policy, but considers diversity of professional and academic experiences in evaluating candidates for Board membership. Diversity is important because a variety of points of view contribute to a more effective decision-making process.

Qualifications, Attributes, Skills and Experience to be Represented on the Board as a Whole

The Board has identified particular qualifications, attributes, skills and experience that are important to be represented on the Board as a whole, in light of the Company’s current needs and business priorities. The Company is a U.S. public company that offers athletic shoe products and shoe accessories in China. Therefore, the Board believes that a diversity of professional experiences in this consumer product industry, specific knowledge of key geographic growth areas, and knowledge of U.S. capital markets and of U.S. accounting and financial reporting standards should be represented on the Board.

Set forth below is a tabular disclosure summarizing some of the specific qualifications, attributes, skills and experiences of our directors.

Director	Titles	Material Qualifications
Yuxi Ding	Chairman of the Board	Co-founder of the Company Mr. Ding contributes invaluable long-term knowledge of the Company’s business and operations and over 20 years experience in manufacturing and selling athletic shoes
Conghui Ding	Director, CEO	Holds a Master’s degree in International Trade Involved in Strategic planning and marketing of the Company since 1996 with a long-term commitment in managerial and strategic planning activities in the Company
Congren Ding	Director	Responsible for administration matters of the Company since 1999 Holds a comprehensive understanding of the Company’s business and operations

Qiusheng Ding

Director

Holds over 20 years’ experience in business trade and sourcing of raw materials. Involved in the Company’s operations and logistics management from its founding in 1991.

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Stockholder Communication with the Board of Directors.

Stockholders may communicate with the Board by sending a letter to our board of directors, c/o Corporate Secretary, Jiangtou Village Chengdai, Jinjiang City, Quanzhou, Fujian Province, 362200 People’s Republic of China, for submission to the board or committee or to any specific director to whom the correspondence is directed. Stockholders communicating through this means should include with the correspondence evidence, such as documentation from a brokerage firm, that the sender is a current record or beneficial stockholder of the Company. All communications received as set forth above will be opened by the Corporate Secretary or her designee for the sole purpose of determining whether the contents contain a message to one or more of our directors. Any contents that are not advertising materials, promotions of a product or service, patently offensive materials or matters deemed, using reasonable judgment, inappropriate for the Board will be forwarded promptly to the chairman of the Board, the appropriate committee or the specific director, as applicable.

EXECUTIVE COMPENSATION

Summary Compensation Table — Fiscal Years Ended December 31, 2009 and 2008

The following table sets forth information concerning all cash and non-cash compensation awarded to, earned by or paid to the named persons for services rendered in all capacities during the noted periods. No other executive officer received total annual salary and bonus compensation in excess of $100,000.

The below table lists each executive position and the compensation received for each of the fiscal years ended December 31, 2009 and 2008.

Name and Principal Position	Year	Salary ($)	Bonus ($)	Stock  Awards ($)	Option Awards ($)	Non-Equity Incentive Plan Compensation Earnings ($)	Non- Qualified Deferred Compensation Earnings ($)	All Other Compensation ($)	Total ($)
Conghui Ding, CEO	2009	17,910	0	0	0	0	0	0	17,910
	2008	17,910	0	0	0	0	0	0	17,910
Lifen Zheng, CFO	2009	10,209	0	0	0	0	0	0	10,209
	2008	10,209	0	0	0	0	0	0	10,209
David Roff, Former CEO and CFO	2009	0	0	0	0	0	0	0	0
	2008	0	0	0	0	0	0	0	0

(1) On February 11, 2011, we acquired DK in a reverse acquisition transaction that was structured as a share exchange and in connection with that transaction, Mr. Ding became our Chief Executive Officer, effective immediately. Prior to the effective date of the reverse acquisition, Mr. Ding served as the Chairman of Aierda, DK’s PRC subsidiary. The annual, long term and other compensation shown in this table include the amount Mr. Ding received from Aierda prior to the consummation of the reverse acquisition.

(2) Upon closing of the reverse acquisition of DK on February 11, 2011, Mr. Roff resigned from all offices he held with us effective immediately, and from his position as our director effective as of the tenth day following the mailing of the Information Statement to our stockholders.

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Summary of Employment Agreements and Material Terms

The Company currently has a service contract with a third-party labor provider. The Company has entered into material labor contracts or employment agreements with its executive officers. Prior to our reverse acquisition, our operating subsidiary was a private limited company organized under the laws of the PRC, and in accordance with PRC regulations, the salary of our executives was determined by our shareholders. In addition, each employee is required to enter into an employment agreement executed by our human resources department and our financial department. Currently we have not executed any employment agreements with our executives and officers. Other than the salary listed above and necessary social benefits required by the government, we currently do not provide other benefits to the officers at this time. Our executive officers are not entitled to severance payments following a change in control.

We have not provided retirement benefits (other than a state pension scheme in which all of our employees in China participate) or severance or change of control benefits to our named executive officers.

Outstanding Equity Awards at Fiscal Year End

For the year ended December 31, 2009, no director or executive officer has received compensation from us pursuant to any compensatory or benefit plan. There is no plan or understanding, express or implied, to pay any compensation to any director or executive officer pursuant to any compensatory or benefit plan, although we anticipate that we will compensate our officers and directors for services to us with stock or options to purchase stock, in lieu of cash.

Compensation of Directors

No member of our board of directors received any compensation for their services as directors during the year ended December 31, 2009.

Promoters and Certain Control Persons

We did not have any promoters at any time during the past five fiscal years.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

A closing condition to the consummation of the share exchange agreement was the repurchase and cancellation by the Company of 234,616 shares of common stock held by David Roff, the Company’s sole officer and director, for $20,000 in cash and 215 shares of the Series A Preferred Stock, as contemplated by a repurchase agreement, dated February 11, 2011, by and between the Company and Mr. Roff. As a result of the share cancellation, our issued and outstanding shares decreased from 345,780 to 111,164 shares of common stock.

Except for the above transaction, there were no transactions since the beginning of the 2009 year, or any currently proposed transaction, in which we were or are to be a participant and the amount involved exceeded or exceeds the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed fiscal years, and in which any related person had or will have a direct or indirect material interest (other than compensation described under “Executive Compensation”). We believe the terms obtained or consideration that we paid or received, as applicable, in connection with the transactions described below were comparable to terms available or the amounts that would be paid or received, as applicable, in arm's-length transactions.

Promoters and Certain Control Persons

We did not have any promoters at any time during the past five fiscal years.

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Director Independence

We currently do not have any independent directors, as the term “independent” is defined by the rules of the Nasdaq Stock Market.

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.

MARKET PRICE AND DIVIDENDS ON OUR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information

Our common stock is quoted under the symbol “HGII” on the Electronic Bulletin Board maintained by the Financial Industry Regulatory Authority, however there is not currently an active trading market for our common stock, and no information is available for the prices of our common stock, as reported by www.otcbb.com. The CUSIP number for our common stock is 516220100.

Holders

As of November 30, 2010, there were approximately 257 stockholders of record of our common stock. This number does not include shares held by brokerage clearing houses, depositories or others in unregistered form.

Dividends

We have in the past distributed earnings to shareholders. Any future decisions regarding dividends will be made by our board of directors. We currently intend to retain and use any future earnings for the development and expansion of our business and do not anticipate paying any cash dividends in the foreseeable future. Our board of directors has complete discretion on whether to pay dividends. Even if our board of directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the board of directors may deem relevant.

Substantially all of our revenues are earned by the Aierda Group, our PRC subsidiary. PRC regulations restrict the ability of our PRC subsidiary to make dividends and other payments to its offshore parent company. PRC legal restrictions permit payments of dividend by our PRC subsidiary only out of its accumulated after-tax profits, if any, determined in accordance with PRC accounting standards and regulations. Our PRC subsidiary is also required under PRC laws and regulations to allocate at least 10% of our annual after-tax profits determined in accordance with PRC GAAP to a statutory general reserve fund until the amounts in said fund reaches 50% of our registered capital. Allocations to these statutory reserve funds can only be used for specific purposes and are not transferable to us in the form of loans, advances or cash dividends. Any limitations on the ability of our PRC subsidiary to transfer funds to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends and otherwise fund and conduct our business.

Securities Authorized for Issuance Under Equity Compensation Plans

We do not have in effect any compensation plans under which our equity securities are authorized for issuance and we do not have any outstanding stock options.

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RECENT SALES OF UNREGISTERED SECURITIES

Reference is made to the disclosure set forth under Item 3.02 of this report, which disclosure is incorporated by reference into this section.

DESCRIPTION OF SECURITIES

Our articles of incorporation authorizes us to issue 100,000,000 shares of common stock, $0.001 par value per share, and 10,000,000 shares of preferred stock, $0.001 par value per share. As of February 11, 2011, we had a total of 111,164 shares of common stock outstanding and 9,975 shares of Series A Preferred Stock outstanding.

Common Stock

We are authorized to issue up to 100,000,000 shares of common stock, $0.001 par value. Each outstanding share of common stock entitles the holder thereof to one vote per share on all matters. Our bylaws provide that any vacancy occurring in the board of directors may be filled by the affirmative vote of a majority of the remaining directors though less than a quorum of the board of directors. Shareholders do not have preemptive rights to purchase shares in any future issuance of our common stock.

The holders of shares of our common stock are entitled to dividends out of funds legally available when and as declared by our board of directors. Our board of directors has never declared a dividend and does not anticipate declaring a dividend in the foreseeable future. Should we decide in the future to pay dividends, as a holding company, our ability to do so and meet other obligations depends upon the receipt of dividends or other payments from our operating subsidiary and other holdings and investments. In addition, our operating subsidiary in the PRC, from time to time, may be subject to restrictions on their ability to make distributions to us, including as a result of restrictive covenants in loan agreements, restrictions on the conversion of local currency into U.S. dollars or other hard currency and other regulatory restrictions. In the event of our liquidation, dissolution or winding up, holders of our common stock are entitled to receive, ratably, the net assets available to shareholders after payment of all creditors.

All of the issued and outstanding shares of our common stock are duly authorized, validly issued, fully paid and non-assessable. To the extent that additional shares of our common stock are issued, the relative interests of existing shareholders will be diluted.

Preferred Stock

We are authorized to issue up to 10,000,000 shares of preferred stock, par value $0.001 per share, in one or more classes or series within a class as may be determined by our board of directors, who may establish, from time to time, the number of shares to be included in each class or series, may fix the designation, powers, preferences and rights of the shares of each such class or series and any qualifications, limitations or restrictions thereof. Any preferred stock so issued by the board of directors may rank senior to the common stock with respect to the payment of dividends or amounts upon liquidation, dissolution or winding up of us, or both. Moreover, while providing desirable flexibility in connection with possible acquisitions and other corporate purposes, under certain circumstances, the issuance of preferred stock or the existence of the unissued preferred stock might tend to discourage or render more difficult a merger or other change of control.

On February 10, 2011, we filed a Certificate of Designation of Series A Preferred Stock with the Secretary of State of the State of Nevada, or the Certificate, which became effective upon filing. Pursuant to the Certificate, there are 100,000 shares of Series A Preferred Stock authorized. The shares of Series A Preferred Stock may be converted into the Company’s Common Stock at the option of the holders of the Series A Preferred Stock in whole or in part at any time at a conversion rate of 1000 shares of Common Stock to each share of Series A Preferred Stock.

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Anti-takeover Effects of Our Articles of Incorporation and By-laws

Our amended and restated articles of incorporation and bylaws contain certain provisions that may have anti-takeover effects, making it more difficult for or preventing a third party from acquiring control of the Company or changing its Board of Directors and management. According to our bylaws and articles of incorporation, neither the holders of the Company’s common stock nor the holders of the Company’s preferred stock have cumulative voting rights in the election of our directors. The combination of the present ownership by a few stockholders of a significant portion of the Company’s issued and outstanding common stock and lack of cumulative voting makes it more difficult for other stockholders to replace the Company’s Board of Directors or for a third party to obtain control of the Company by replacing its Board of Directors.

Anti-takeover Effects of Nevada Law

Business Combinations

The “business combination” provisions of Sections 78.411 to 78.444 of Nevada’s Combinations with Interested Stockholders statute prohibit a Nevada corporation with at least 200 stockholders from engaging in various “combination” transactions with any interested stockholder: for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the transaction is approved by the Board of Directors prior to the date the interested stockholder obtained such status; or after the expiration of the three-year period, unless:

• the transaction is approved by the Board of Directors or a majority of the voting power held by disinterested stockholders, or

• if the consideration to be paid by the interested stockholder is at least equal to the highest of: (a) the highest price per share paid by the interested stockholder within the three years immediately preceding the date of the announcement of the combination or in the transaction in which it became an interested stockholder, whichever is higher, (b) the market value per share of common stock on the date of announcement of the combination and the date the interested stockholder acquired the shares, whichever is higher, or (c) for holders of preferred stock, the highest liquidation value of the preferred stock, if it is higher.

A “combination” is defined to include mergers or consolidations or any sale, lease exchange, mortgage, pledge, transfer or other disposition, in one transaction or a series of transactions, with an “interested stockholder” having: (a) an aggregate market value equal to 5% or more of the aggregate market value of the assets of the corporation, (b) an aggregate market value equal to 5% or more of the aggregate market value of all outstanding shares of the corporation, or (c) 10% or more of the earning power or net income of the corporation.

In general, an “interested stockholder” is a person who, together with affiliates and associates, owns (or within three years, did own) 10% or more of a corporation’s voting stock. The statute could prohibit or delay mergers or other takeover or change in control attempts and, accordingly, may discourage attempts to acquire our company even though such a transaction may offer our stockholders the opportunity to sell their stock at a price above the prevailing market price.

Control Share Acquisitions

Nevada’s Acquisition of Controlling Interest statute (NRS Sections 78.378 -78.3793) applies only to Nevada corporations with at least 200 stockholders, including at least 100 stockholders of record who are Nevada residents, and which conduct business directly or indirectly in Nevada. The Acquisition of Controlling Interest statute prohibits an acquirer, under certain circumstances, from voting its shares of a target corporation’s stock after crossing certain ownership threshold percentages, unless the acquirer obtains approval of the target corporation’s disinterested stockholders. The statute specifies three thresholds: one-fifth or more but less than one-third, one-third but less than a majority, and a majority or more, of the outstanding voting power. Once an acquirer crosses one of the above thresholds, those shares in an offer or acquisition and acquired within 90 days thereof become “control shares” and such Control Shares are deprived of the right to vote until disinterested stockholders restore the right. The Acquisition of Controlling Interest statute also provides that if control shares are accorded full voting rights and the acquiring person has acquired a majority or more of all voting power, all other stockholders who do not vote in favor of authorizing voting rights to the control shares are entitled to demand payment for the fair value of their shares in accordance with statutory procedures established for dissenters’ rights.

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Transfer Agent and Registrar

Our independent stock transfer agent is Pacific Stock Transfer Company. Their mailing address is 4045 South Spencer Street, Suite 403, Las Vegas, NV 89119 and their phone number is (702) 361-3033.

INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 78.138 of the Nevada Revised Statutes, or NRS, provides that a director or officer will not be individually liable unless it is proven that (i) the director’s or officer’s acts or omissions constituted a breach of his or her fiduciary duties, and (ii) such breach involved intentional misconduct, fraud or a knowing violation of the law.

Section 78.7502 of NRS permits a company to indemnify its directors and officers against expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with a threatened, pending or completed action, suit or proceeding if the officer or director (i) is not liable pursuant to NRS 78.138 or (ii) acted in good faith and in a manner the officer or director reasonably believed to be in or not opposed to the best interests of the corporation and, if a criminal action or proceeding, had no reasonable cause to believe the conduct of the officer or director was unlawful.

Section 78.751 of NRS permits a Nevada company to indemnify its officers and directors against expenses incurred by them in defending a civil or criminal action, suit or proceeding as they are incurred and in advance of final disposition thereof, upon receipt of an undertaking by or on behalf of the officer or director to repay the amount if it is ultimately determined by a court of competent jurisdiction that such officer or director is not entitled to be indemnified by the company. Section 78.751 of NRS further permits the company to grant its directors and officers additional rights of indemnification under its articles of incorporation or bylaws or otherwise.

Section 78.752 of NRS provides that a Nevada company may purchase and maintain insurance or make other financial arrangements on behalf of any person who is or was a director, officer, employee or agent of the company, or is or was serving at the request of the company as a director, officer, employee or agent of another company, partnership, joint venture, trust or other enterprise, for any liability asserted against him and liability and expenses incurred by him in his capacity as a director, officer, employee or agent, or arising out of his status as such, whether or not the company has the authority to indemnify him against such liability and expenses.

Our articles of incorporation provide that no director or officer of the Company will be personally liable to the Company or any of its stockholders for damages for breach of fiduciary duty as a director or officer; provided, however, that the foregoing provision shall not eliminate or limit the liability of a director or officer (i) for acts or omissions which involve intentional misconduct, fraud or knowing violation of law, or (ii) the payment of dividends in violation of Section 78.300 of NRS. In addition, our bylaws implement the indemnification and insurance provisions permitted by Chapter 78 of the Nevada Revised Statutes by providing that: the Company shall indemnify its directors to the fullest extent permitted by the Nevada Revised Statutes and may, if and to the extent authorized by the Board of Directors, so indemnify its officers and any other person whom it has the power to indemnify against liability, reasonable expense or other matter whatsoever. The Company may at the discretion of the Board of Directors purchase and maintain insurance on behalf of any person who holds or who has held any position identified in the paragraph above against any and all liability incurred by such person in any such position or arising out of his status as such.

Insofar as indemnification by us for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling the company pursuant to provisions of our articles of incorporation and bylaws, or otherwise, we have been advised that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable. In the event that a claim for indemnification by such director, officer or controlling person of us in the successful defense of any action, suit or proceeding is asserted by such director, officer or controlling person in connection with the securities being offered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by us is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

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At the present time, there is no pending litigation or proceeding involving a director, officer, employee or other agent of ours in which indemnification would be required or permitted. We are not aware of any threatened litigation or proceeding, which may result in a claim for such indemnification.

ITEM 3.02. UNREGISTERED SALES OF EQUITY SECURITIES

On February 11, 2011, we entered into a share exchange agreement, or the Share Exchange Agreement, with DK International Group Ltd. “DK”, a BVI limited company, and its sole shareholder, Mr. Yangbo Cai, pursuant to which we acquired 100% of the issued and outstanding capital stock of DK in exchange for 9,250 shares of our Series A Convertible Voting Preferred Stock, par value $.0001, or Series A Preferred Stock, which constituted 91.71% of our issued and outstanding capital stock on a fully-diluted basis as of and immediately after the consummation of the transactions contemplated by the Share Exchange Agreement. DK is a holding company for two PRC based operating subsidiaries which are engaged in the design, manufacturing, and distribution of footwear materials, branded footwear products and accessories in the Chinese domestic market.

A closing condition to the consummation of the share exchange agreement was the repurchase and cancellation by the Company of 234,616 shares of common stock held by David Roff, the Company’s sole officer and director, for $20,000 in cash and 215 shares of the Series A Preferred Stock, as contemplated by a repurchase agreement, dated February 11, 2011, by and between the Company and Mr. Roff. As a result of the share cancellation, our issued and outstanding shares decreased from 345,780 to 111,164 shares of common stock.

As consideration for its services as financial advisor in connection with the reverse merger, Belmont Partners, LLC, the company’s financial advisor, received 510 shares of the Series A Preferred Stock, convertible into 510,000 shares of our Common Stock.

The issuance of the Series A Preferred Stock to DK’s sole shareholder, Mr. Roff and Belmont was exempt from the registration requirements provided by Section 4(2) of the Securities Act for the offer and sale of securities not involving a public offering and Regulation D promulgated thereunder. Our reliance upon Section 4(2) of the Securities Act in issuing securities was based upon the following factors: (a) the issuance of the securities was an isolated private transaction by us which did not involve a public offering; (b) there were only a limited number of offerees; (c) there were no subsequent or contemporaneous public offerings of the securities by us; (d) the securities were not broken down into smaller denominations; and (e) the negotiations for the sale of the stock took place directly between the offeree and us.

ITEM 5.01. CHANGES IN CONTROL OF REGISTRANT

Reference is made to the disclosure set forth under Item 2.01 of this report, which disclosure is incorporated herein by reference. As a result of the closing of the reverse acquisition of DK, the former shareholder of DK now holds 91.71% of the total outstanding shares of all our outstanding voting securities.

ITEM 5.02. DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS

Upon the closing of the reverse acquisition on February 11, 2011, Mr. David Roff, our former President and Chief Financial Officer resigned from his offices with the Company, effective immediately, and from his position as a director, effective as of the tenth day following the filing with the SEC and mailing of an information statement on Schedule 14f-1 to the Company’s stockholders. On the same day our Board of Directors increased its size to 4 members and appointed Mr. Yuxi Ding to serve as Chairman, effective immediately, and appointed Mr. Conghui Ding, Mr. Congren Ding, and Mr. Quisheng Ding to serve as directors, effective as of the effective date of Mr. Roff’s resignation. Our Board of Directors also appointed Mr. Conghui Ding to serve as our Chief Executive Officer, Ms. Lifen Zheng to serve as our Chief Financial Officer, Treasurer and Secretary, and Mr. Andong Wang to serve as our Chief Marketing Officer, effective immediately.

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For certain biographical and other information regarding the newly appointed officers and directors, see the disclosure under Item 2.01 of this report, which disclosure is incorporated herein by reference.

ITEM 5.06 CHANGE IN SHELL COMPANY STATUS

Reference is made to the disclosure set forth under Item 2.01 and 5.01 of this report, which disclosure is incorporated herein by reference.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(a)	Financial Statements of Business Acquired
	Filed herewith are audited consolidated financial statements of DK International Group Ltd. for the years ended December 31, 2009 and 2008, and unaudited financial statements for the nine months ended September 30, 2010.
(b)	Pro Forma Financial Information
	Filed herewith is the unaudited pro forma condensed combined financial information of the Company and its subsidiaries.
(d)	Exhibits

Exhibit No.	Description
2.1	Share Exchange Agreement, dated February 11, 2011, among the Company, DK International Group Ltd. and its shareholders. (To be filed by amendment.)
3.1	Certificate of Conversion and Articles of Incorporation of the Company, as filed with the Secretary of State of Nevada on July 8, 2010.
3.2	Certificate of Amendment as filed with the Secretary of State of Nevada on August 11, 2011
3.3	Certificate of Designation for Series A Convertible Preferred Stock
3.4	Amended and Restated Bylaws of the Company
10.1	Share Repurchase Agreement, dated February 11, 2011, by and between the Company and David Roff. (To be filed by amendment.)
10.2	English Translation of Equity Transfer Agreement, dated December 30, 2010, among Mr. Yuxi Ding and DK International Group Ltd.
10.3	English Translation of Labor Contract, dated January 1, 2011, between Fujian Jinjiang Aierda Shoe Plastic Co., Ltd and Quanzheng Quan’an Labor Service Company, Ltd.
10.4	English Translation of Employment Agreement between Dake Sports Goods Co., Ltd and Liu Xinquan dated January 31, 2010.
10.5	English Translation of Employment Agreement between Dake Sports Goods Co., Ltd and Wang Andong dated January 5, 2009.
10.6	English Translation of Employment Agreement between Dake Sports Goods Co., Ltd and Zheng Lifeng dated February 10, 2008.

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10.7	English Translation of Employment Agreement between Dake Sports Goods Co., Ltd and Ding Conghui, dated January 1, 2009.
10.8	English Translation of Employment Agreement between Dake Sports Goods Co., Ltd and Ding Congren dated June 15, 1999.
10.9	English Translation of Employment Agreement between Dake Sports Goods Co., Ltd and Zhang Tao dated January 15, 2010.
10.10	English Translation of Employment Agreement between Dake Sports Goods Co., Ltd and Ding Yuxi dated June 15, 1999.
10.11	English Translation of Purchase Contract, dated July 26, 2010, between Dake Sports Goods Co., Ltd. and Chen Kang Jiang Tou Shoe’s Craft Factory.
10.12	English Translation of Sales Contract, dated September 24, 2010, between Dake Sport Goods Co., Ltd and Zhang Zhifa.
10.13	English Translation of Sales Contract, dated August 9, 2010, between Dake Sport Goods Co., Ltd and Ni Changsheng.
10.14	English Translation of Sales Contract, dated August 3, 2010, between Dake Sport Goods Co., Ltd and Liu Rongguang.
10.15	English Translation of Land Transfer Agreement, dated January 10, 1999, between Villagers’ Committee of Jiangtou Village and Dake (Fujian) Sport Goods Co., Ltd.
10.16	English Translation of Land Transfer Agreement, dated June 24, 1991, between Villagers’ Committee of Jiangtou Village and Fujian Jinjiang Aierda Shoe Plastic Co., Ltd.
10.17	English Translation of RMB Loan Contract , dated July 15, 2010, between Fujian Jinjiang Aierda Shoe Plastic Co., Ltd and Branch of Bank of Quanzhou Co., Ltd.
10.18	English Translation of RMB Loan Contract , dated July 22, 2010, between Fujian Jinjiang Aierda Shoe Plastic Co., Ltd and Branch of Bank of Quanzhou Co., Ltd.
10.19	English Translation of RMB Loan Contract , dated August 4, 2010, between Fujian Jinjiang Aierda Shoe Plastic Co., Ltd and Branch of Bank of Quanzhou Co., Ltd.
10.20	English Translation of RMB Loan Contract , dated July 5, 2010, between Dake Sport Good Co., Ltd and Jinjiang Branch of China Construction Bank
10.21	Voting Rights’ Entrustment Agreement, dated January 27, 2011, between Yuxi Ding and Yangbo Cai
10.22	Exclusive Business Corporation Agreement, dated December 31, 2010, between Fujian Jinjiang Aierda Shoe Plastic Co., Ltd. and Dake (Fujian) Sport Goods Co., Ltd.
10.23	Exclusive Option Agreement, dated December 31, 2010, among Yuxi Ding, Fujian Jinjiang Aierda Shoe Plastic Co., Ltd. and Dake (Fujian) Sport Goods Co., Ltd.
10.24	Equity Pledge Agreement, dated December 31, 2010, between Yuxi Ding and Dake (Fujian) Sport Goods Co., Ltd.
10.25	Share Transfer Agreement, dated December 30, 2010, between Yuxi Ding and DK International Group Ltd.
14	Code of Ethics
21	Subsidiaries of the Company

_______________
*incorporated by reference

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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 hereunto duly authorized.

LANSDOWNE SECURITY, INC.

By: /s/ Conghui Ding                           
Conghui Ding
Chief Executive Officer

Dated: February 11, 2011

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INDEX TO FINANCIAL STATEMENTS

	Page
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF DK INTERNATIONAL GROUP, LTD. FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010 AND 2009
Unaudited Condensed Consolidated Statements of Income and Comprehensive Income for the Three and Nine Months Ended September 30, 2010 and 2009	F-2
Unaudited Condensed Consolidated Balance Sheets as of September 30, 2010 and 2009	F-3
Unaudited Condensed Consolidated Statements of Stockholder's Equity for the Nine Months Ended September 30, 2010 and December 31, 2009	F-4
Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2010 and 2009	F-5
Notes to Consolidated Financial Statements	F-6
CONSOLIDATED FINANCIAL STATEMENTS OF DK INTERNATIONAL GROUP, LTD. FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008
Report of Independent Registered Public Accounting Firm	F-22
Consolidated Statements of Income and Other Comprehensive Income	F-23
Consolidated Balance Sheets	F-24
Consolidated Statements of or Stockholders’ Equity	F-25
Consolidated Statements of Cash Flows	F-26
Notes to Consolidated Financial Statements	F-27
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	F-44
Introduction to Unaudited Pro Forma Condensed Consolidated Financial Statements	F-45
Unaudited Pro Forma Condensed Consolidated Balance Sheet as of September 30, 2010	F-47
Unaudited Pro Forma Condensed Consolidated Statements of Operations for the Nine Month Ended September 30, 2010	F-48
Unaudited Pro Forma Condensed Consolidated Statements of Operations for the Year Ended December 31, 2009	F-49
Pro Forma Adjustments to Unaudited Condensed Consolidated Pro Forma Financial Statements	F-50

F- 1

DK INTERNATIONAL GROUP LTD
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(IN US DOLLARS)

		For the three month ended September 30,						For the nine month ended September 30,
		2010			2009			2010			2009
Sales	$	16,059,375		$	13,245,700		$	44,999,626		$	41,334,268
Cost of sales		(11,531,842	)		(9,619,306	)		(32,078,763	)		(29,598,060	)
Gross profit		4,527,533			3,626,394			12,920,863			11,736,208
Selling, general and administrative expenses		(1,606,137	)		(1,374,873	)		(4,406,740	)		(4,522,071	)
Income from operations		2,921,396			2,251,521			8,514,123			7,214,137
Other income (expenses)
Interest expense, net		(48,788	)		(40,433	)		(131,472	)		(108,584	)
Total Other income (expenses)		(48,788	)		(40,433	)		(131,472	)		(108,584	)
Income before income taxes		2,872,608			2,211,088			8,382,651			7,105,553
Provision for income taxes		(723,511	)		(552,772	)		(2,101,018	)		(1,776,388	)
Net income		2,149,097			1,658,316			6,281,633			5,329,165
Other comprehensive income
Foreign currency translation gain		140,171			19,496			450,512			67,488
Comprehensive income	$	2,289,268		$	1,677,812		$	6,732,145		$	5,396,653
Cash dividends declared per share		5,576,110			583,148			5,576,110			583,148
Basic and diluted earnings per share		2,149,097			1,658,316			6,281,633			5,329,165
Weighted average number of shares		1			1			1			1
The accompany notes are an integral part of these condensed consolidated financial statements

F- 2

DK INTERNATIONAL GROUP LTD
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(IN US DOLLARS)
		As of
		September 30,		December 31,
		2010		2009
ASSETS
Current assets
Cash and cash equivalents	$	262,321	$	279,065
Accounts receivable, net		19,485,423		13,071,440
Inventory		1,719,704		5,753,013
Notes receivable		134,769		-
Other current assets		215,671		152,770
Advances to suppliers		654,273		786,132
Due from other		374,360		366,719
Total current assets		22,846,521		20,409,139
Property, plant and equipment, net,		3,324,128		3,641,672
Other assets
Intangible asset, net		5,218,574		5,222,085
Total other assets		5,218,574		5,222,085
Total Assets	$	31,389,223	$	29,272,896
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Short term bank loans	$	2,914,016	$	2,121,105
Accounts payable		8,178,233		6,302,030
Accrued expenses		1,142,439		2,050,323
Other current liabilities		536,134		142,903
Due to related party		19,242		44,593
Deposits from customers		2,633,728		959,079
Dividend payable		-		2,420,349
Taxes payable		2,241,592		2,664,710
Total current liabilities		17,665,384		16,705,092
Total Liabilities		17,665,384		16,705,092
Commitments and contingencies
Stockholders' equity
Common stock $1.00 par value, 50,000 shares authorized;
1 share issued and outstanding as of September 30, 2010 and December 31, 2009, respectively		1		1
Additional paid in capital		2,903,421		2,903,421
Retained earnings		8,557,505		7,851,982
Accumulated other comprehensive income		2,262,912		1,812,400
Total stockholders' equity		13,723,839		12,567,804
Total Liabilities and Stockholders' Equity	$	31,389,223	$	29,272,896

The accompany notes are an integral part of these condensed consolidated financial statements

F- 3

DK INTERNATIONAL GROUP LTD
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(IN US DOLLARS)

					Other
			Paid in		comprehensive		Retained
		Common stock	capital		income		earnings			Total
Balance at December 31, 2008	$	1	2,903,421	$	1,798,925	$	7,271,731		$	11,974,078
Dividend			-		-		(583,148	)		(583,148	)
Net income for the period			-		-		5,329,165			5,329,165
Foreign currency translation gain			-		67,488		-			67,488
Balance at September 30, 2009	$	1	2,903,421	$	1,866,413	$	12,017,748		$	16,787,583
Balance at December 31, 2009	$	1	2,903,421	$	1,812,400		7,851,982			12,567,804
Dividend			-		-		(5,576,110	)		(5,576,110	)
Net income for the period			-		-		6,281,633			6,281,633
Foreign currency translation gain			-		450,512		-			450,512
Balance at September 30, 2010	$	1	2,903,421	$	2,262,912	$	8,557,505		$	13,723,839
The accompany notes are an integral part of these condensed consolidated financial statements

F- 4

DK INTERNATIONAL GROUP LTD
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN US DOLLARS)
		For the nine months ended September 30,
		2010			2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	6,281,633		$	5,329,165
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization		513,789			255,441
Changes in operating assets and liabilities
Accounts receivable		(6,019,969	)		(2,786,482	)
Notes receivables		(132,099	)		1,076,853
Other current assets		(58,535	)		72,112
Inventories		4,070,880			5,048,038
Advances to suppliers		145,300			(1,397,092	)
Accounts payables		1,710,336			(2,830,793	)
Taxes payable		(469,151	)		(239,638	)
Advances from customers		1,621,882			525,878
Other payables and accrued expenses		(3,096,061	)		(659,466	)
Net cash provided by operating activities		4,568,005			4,394,016
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment		(18,087	)		(545,838	)
Due from other		-			(263,453	)
Net cash used in investing activities		(18,087	)		(809,291	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of dividend		(5,576,110	)		(583,148	)
Net proceeds from bank acceptance notes payable		186,697
Repayments of bank acceptance notes payable		-			(682,049	)
Proceeds from related party loans		(25,759	)		-
Net proceeds from short-term bank loans		2,856,280			1,970,040
Repayments of short-term bank loans		(2,122,395	)		(1,463,625	)
Net cash used in financing activities		(4,681,287	)		(758,782	)
EFFECT OF EXCHANGE RATE CHANGE ON
CASH AND CASH EQUIVALENTS		114,625			7,339
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(16,744	)		2,833,282
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		279,065			848,195
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	262,321		$	3,681,477
SUPPLEMENTAL CASH FLOW DISCLOSURE
Income taxes paid	$	2,324,165		$	2,182,774
Interest paid	$	131,982		$	120,509

The accompany notes are an integral part of these condensed consolidated financial statements

F- 5

DK INTERNATIONAL GROUP LTD

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1- ORGANIZATION AND BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of the management, all adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2010 and 2009 are not necessarily indicative of the results that may be expected for the full years.

DK International Group Ltd (“DK”) was incorporated under the laws of the British Virgin Islands on November 12, 2010. On December 30, 2010, DK entered into an equity transfer agreement with Mr. Yuxi Ding, pursuant to which DK acquired 100% of the outstanding equity interest of Dake (Fujian) Sports Goods Ltd. (“Dake”), however, DK is awaiting approval of the transaction by the Quanzhou Commission of Economy and Trade, and the issuance of a new business license by the Quanzhou Administration for Industry and Commerce, the competent local PRC approval authorities. Dake was established in Jinjiang, Fujian Province, People’s Republic of China (“PRC”) on August 17, 1999 and is engaged in the manufacturing of sport and leisure shoes

On December 31, 2010, Dake entered into a series of 10-year, renewable contracts with Aierda and its sole shareholder, Mr. Yuxi Ding, pursuant to which: (1) Mr. Ding agreed to pledge of 100% of his equity interests in Aierda to Dake; (2) at any time during the 10-year term of the contractual arrangement, Dake has the absolute right to acquire any portion of the equity interests of Aierda from Mr. Ding; and (3) Dake has the absolute right during the 10-year term to appoint the directors of Aierda and to obtain service fees from Aierda. As a result of these contracts, Dake gained control over Aierda and Aierda became Dake’s VIE.

The commercial arrangement consists of the following contracts:

• Exclusive Business Cooperation Agreement, dated December 31, 2010, between Dake and Aierda, provides that Dake will be the exclusive provider of consulting services to Aierda, and that Aierda will pay a service fee to Dake, which will be certain percentage of Aierda's profit before taxes, and payable at a time determined by Dake.

F-6

• Exclusive Option Agreement, dated December 31, 2010, between Dake, Mr. Ding and Aierda, provides that in the event that Dake exercises its right to purchase the equity interests of Aierda from Aierda’s sole shareholder, the purchase price will be equal to the original price paid by the sole shareholder in acquiring the equity interest of Aierda.

• Proxy Agreement, dated December 31, 2010, between Dake, Mr. Ding and Aierda, authorizes Dake to exercise any and all shareholder rights associated with Mr. Ding’s ownership in Aierda, including the right to sell, assign, transfer or pledge any or all of the equity interest in Aierda, and the right to vote such equity interest for any and all matters.

• Equity Pledge Agreement, dated December 31, 2010, between Dake and Mr. Ding, whereby Mr. Ding pledges all of his equity shares in Aierda to Dake. If Aierda or Mr. Ding breaches their respective obligation under any of the VIE contracts, Dake, as pledgee, will be entitled to certain rights, including the right to foreclose on the pledged equity interests. Mr. Ding has agreed not to dispose of the pledged equity interests or take any actions that would prejudice Dake’s interest during the 10-year term of the agreements. Dake also has right to obtain any and all dividends related to the equity interest pledged during the term of the pledge.

Under these contractual arrangements, which obligate Dake to absorb a majority of the risk of loss from Aierda’s activities and entitle it to receive a majority of its residual returns, Dake has gained effective control over Aierda. Through these contractual arrangements, Dake now holds the variable interests of Aierda, and Dake becomes the primary beneficiary of Aierda. Based on these contractual arrangements, the Company believes that Aierda should be considered as a Variable Interest Entity (“VIE”) under ASC 810, "Consolidation of Variable Interest Entities, an Interpretation of ARB No.51", because the equity investor in Aierda no longer has the characteristics of a controlling financial interest. Accordingly, the Company believes that Aierda should be consolidated under ASC 810 into Dake.

The carrying amount of Aierda’s assets, liabilities and equity included in the consolidated balance sheets consist of the following:

		September 30		December 31
		2010		2009
Total assets	$	7,665,346	$	12,766,097
Total liabilities		5,231,843		9,132,129
Total equity		2,433,503		3,633,967

Aierda was established on June 13, 1991 as a foreign-invested PRC enterprise and is mainly engaged in the manufacture and sale of footwear parts and materials. On November 16, 2005, Mr. Yuxi Ding, a Philippine resident, entered into a share transfer agreement with Fujian Province Jinjiang City

F-7

Chendai Jiangtou Labor Insurance Factory and Hong Kong Shengcheng (Pacific) Limited Company, the former shareholders of Aierda, pursuant to which, Mr. Ding acquired 100% of the equity interest in Aierda for a total consideration of RMB 9,000,000. On December 22, 2005, the Jinjiang City Commerce Bureau approved the equity transfer to Mr. Ding and approved the conversion of Aierda to a wholly foreign-owned enterprise.

On January 27, 2011, Mr. Yuxi Ding, entered into an option agreement with Mr. Yangbo Cai, the sole shareholder of DK at the time, pursuant to which Mr. Cai granted Mr. Ding an option to acquire all of his shares held in DK, for an exercise price of $10,000. Mr. Ding may exercise this option, in whole but not in part, during the period commencing six months after the effective date of a resale registration statement for securities issued to investors in the first equity financing after a share exchange transaction involving DK, and ending on the fifth anniversary of the date thereof. On January 27, 2011, Mr. Ding also entered into a voting rights’ entrustment agreement with Mr. Cai, pursuant to which Mr. Cai irrevocably granted to Mr. Ding all his voting and dispositive control over the shares held by Mr. Cai. Mr. Cai also waived all his rights associated with his shares and agreed to not cause DK to conduct any transactions which may materially affect the assets, obligations, rights or the operations of DK.

Each of DK, Dake and Aierda (collectively referred herein as the “Company”), are either wholly owned or under common control of Mr. Yuxi Ding, pursuant to the foregoing contractual arrangements. From an accounting perspective, there are no changes to the assets and liabilities of Dake upon consolidation as a result of the Dake shareholder transferring 100% of equity interests in Dake to DK. The historical consolidated financial statements of Dake are considered the historical financial statements of DK. The statements of income and comprehensive income have been presented retrospectively at the beginning of the reporting period.

The Company’s consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).

F-8

DK INTERNATIONAL GROUP LTD

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements of the company include the accounts of DK, Dake and Aierda. All inter-company balances and transactions are eliminated in consolidation.

Use of Estimates

In preparing the financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting year. Significant estimates, required by management, include the selection of the useful lives and residual values of property and equipment and intangible assets, provision for doubtful accounts, provision necessary for contingent liabilities, fair values, revenue recognition, and other similar charges. Actual results could differ from those estimates.

Comprehensive Income

The Company follows ASC 220 “Reporting Comprehensive Income” to recognize the elements of comprehensive income. Comprehensive income comprised of net income and all changes to the statements of stockholders' equity, except those due to investments by stockholders, changes in paid-in capital and distributions to stockholders, including adjustments to minimum pension liabilities, accumulated foreign currency translation, and unrealized gains or losses on marketable securities. The Company’s other comprehensive income arose from the effect of foreign currency translation adjustments.

Foreign Currency Translation

The Company principally operates in PRC and its functional currency is the Chinese currency Renminbi (“RMB”).The reporting currency of the Company is the US dollar. . The Company does not enter into any transactions denominated in foreign currencies. The financial statements of the Company are translated into United States dollars using the year-end rates of exchange for assets and liabilities, and average rates of exchange for the period for revenues, costs, and expenses and historical rates for equity. Translation adjustments resulting from translating the local currency financial statements into U.S. dollars are included in comprehensive income. The cumulative translation adjustment were included as an item of accumulated other comprehensive income in the shareholders’ equity section of the balance sheet.

	September 30	September 30
	2010	2009
Period end exchange rate (RMB:US$)	6.6781	6.8176
Average exchange rate for the period (RMB:US$)	6.8131	6.8323

F-9

DK INTERNATIONAL GROUP LTD

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Foreign Currency Translation (Continued)

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 dollars at the rates used in translation.

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents. The Company maintains uninsured cash and cash equivalents with various banks in the PRC. The Company has not experienced any losses in such accounts and management believes it is not exposed to any risks on its cash in bank accounts.

Accounts Receivable

Accounts receivable consists of unpaid balances due from the whole-sale customers. Accounts receivable are recorded at net realizable value consisting of the carrying amount less an allowance for uncollectible amounts. According to the Company's policy, accounts receivable over 90 days are considered overdue. The Company does periodical reviews as to whether the carrying values of accounts have become impaired. The assets are considered to be impaired if the collectability of the balances become doubtful, accordingly, the management estimates the valuation allowance for anticipated uncollectible receivable balances. When facts subsequently become available to indicate that the allowance provided requires an adjustment, then the adjustment will be recorded as a change in allowance for doubtful accounts. As of September 30, 2010 and December 31, 2009, no allowance for doubtful accounts was considered necessary.

Inventory

Inventory is stated at the lower of cost or market, using the FIFO method. Inventory costs include material, labor and direct manufacturing overhead. The Company estimates net realizable value based on intended use, current market value and inventory ageing analyses. The Company writes down inventory for estimated obsolescence or unmarketable inventory equal to the difference between the cost of inventor and their estimated market value based upon assumptions about future demand and market conditions. During the nine months ended September 30, 2010 and the year ended December 31, 2009, no provision for obsolescences is considered necessary.

F-10

DK INTERNATIONAL GROUP LTD

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Advances to suppliers

Advances to suppliers consist of advance payments for future purchases. They are reviewed periodically to determine whether their carrying value has become impaired. The Company considers the assets to be impaired if facts and circumstances indicate that the collectability of the materials become doubtful. The Company has determined that no reserve is necessary for the period ended September 30, 2010 and the year ended December 31, 2009.

Property, Plant and Equipment

Property, plant and equipment are stated at cost less accumulated depreciation. Expenditures for maintenance and repairs are charged to earnings as incurred while additions, renewals and betterments are capitalized. When the asset property and equipment is retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of property, plant and equipment is provided using the straight-line method for substantially all assets with estimated lives as follows:

Buildings	20 years
Leasehold improvements	20 years
Plant and machinery	10 years
Motor vehicles	10 years
Furniture, fixtures and office equipment	5 years

Intangible Assets

Intangible assets are accounted for in accordance with the provisions of ASC 350, "Goodwill and Other Intangible Assets". Under ASC 350, certain other intangible assets deemed to have indefinite useful lives are not amortized. Indefinite-lived intangible assets are assessed for impairment based on comparisons of their respective fair values to their carrying values. Intangible assets with a finite useful life are amortized over their useful lives. Intangible assets consist of land use rights stated at cost less accumulated amortization. Amortization is provided using the straight-line method over the designated terms of the lease of 50 years obtained from the relevant PRC land authority. The company does not have indefinite lived assets.

F-11

DK INTERNATIONAL GROUP LTD

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Impairment of Long-Lived Assets

The Company accounts for impairment of property and equipment and amortizable intangible assets in accordance with ASC 360, “Accounting for Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed Of”, which requires the Company to evaluate a long-lived asset for recoverability when there is event or circumstance that indicate the carrying value of the asset may not be recoverable. An impairment loss is recognized when the carrying amount of a long-lived asset or asset group is not recoverable (when carrying amount exceeds the gross, undiscounted cash flows from use and disposition) and is measured as the excess of the carrying amount over the asset’s (or asset group’s) fair value. There was no impairment of long-lived assets for the nine months ended September 30, 2010 and 2009, respectively.

Revenue Recognition

The Company recognizes revenue in accordance with ASC 605”Revenue Recognition”. Product sales are recognized when title to the product has transferred to customers in accordance with the terms of the sale; the sales price to the customer is fixed or determinable, and collectability is reasonably assured. The Company accepts customer returns due to defective products. Revenue is recorded net of estimated sales discounts based upon specific customer agreements.

Cost of Sales

Cost of sales includes the raw materials, capitalized direct overhead costs consisting of labor costs, depreciation and amortization, utilities and rent expenses related to the property and equipment used in the manufacturing process.

Advertising and Promotion Expenses

Advertising and promotion are expensed as incurred. Advertising and promotion expenses which were included in selling expenses amounted to $ 120,837 and $332,511 for the three and nine months ended September 30, 2010, respectively, and $126,662 and $349,986 for the three and nine months ended September 30, 2009, respectively.

F-12

DK INTERNATIONAL GROUP LTD

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Income Taxes

The Company is subject to the Income Tax Laws of PRC. It did not generate any taxable income outside of the PRC for the nine months ended September 30, 2010 and 2009. The Company accounts for income taxes in accordance with ASC 740 “Income Taxes”. ASC 740 requires an asset and liability approach for financial accounting and reporting for income taxes and allows recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain. There was no deferred tax asset or liability as of September 30, 2010 and December 31, 2009.

Value Added Taxes

The Company is subject to a value added tax (“VAT”) for selling merchandise. The applicable VAT rate is 17% for products sold in the PRC. The amount of VAT liability is determined by applying the applicable tax rate to the invoiced amount of goods sold (output VAT) less VAT paid on purchases made with the relevant supporting invoices (input VAT). Under the commercial practice of the PRC, the Company pays VAT based on tax invoices issued. The tax invoices may be issued subsequent to the date on which revenue is recognized, and there may be a considerable delay between the date on which the revenue is recognized and the date on which the tax invoice is issued. In the event that the PRC tax authorities dispute the date on which revenue is recognized for tax purposes, the PRC tax office has the right to assess a penalty based on the amount of the taxes which are determined to be late or deficient, and will be expensed in the period if and when a determination is made by the tax authorities that a penalty is due. Sales and purchases are recorded net of VAT collected and paid as the Company acts as an agent for the government.

VAT payables are $391,675 and $617,168 as of September 30, 2010 and December 31, 2009, respectively, and included in taxes payable on the consolidated balance sheets.

F-13

DK INTERNATIONAL GROUP LTD

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Fair Value of Financial Instruments

ASC 820, “Fair Value Measurements and Disclosures”, defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The carrying amounts reported in the balance sheets for current receivables and payables qualify as financial instruments. Management concluded the carrying values are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and if applicable, their stated interest rate approximates current rates available. The three levels are defined as follows:

• Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

• Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.

• Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value.

It is management’s opinion that the estimated fair values of the financial instruments were not materially different from their carrying values as presented on the balance sheet. This is attributed to the short maturities of the instruments and that interest rates on the borrowings approximate those that would have been available for loans of similar remaining maturity and risk profile at respective balance sheet dates. The carrying amounts of short-term loans approximate their fair values because the applicable interest rates approximate current market rates.

The Company's financial instruments include cash and cash equivalents, accounts receivable, due from other, other current assets, advances to suppliers, short-term bank loans, account payables, accrued expenses, due to related party, deposits from customers, taxes payable, and other current liabilities. Management has estimated that the fair value of these financial instruments approximate their carrying amounts due to the short-term nature.

F-14

DK INTERNATIONAL GROUP LTD

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Recent Accounting Pronouncements

In December, 2009, FASB issued ASU No. 2009-17, “Improvement to Financial Reporting by Enterprises Involved with Variable Interest Entities”. This Accounting Standard Update amends the FASB Accounting Standards Codification for the issuance of FASB Statement No.167, Amendments to FASB Interpretation No. 46 (R). The amendments in this Accounting Standards Update replace the quantitative-based risks and rewards calculation for determining which reporting entity, if any, has a controlling financial interest in a variable interest entity with an approach focused on identifying which reporting entity has the power to direct the activities of a variable interest entity that most significantly impact the entity's economic performance and (1) the obligation to absorb losses of the entity or (2) the right to receive benefits from the entity. An approach that is expected to be primarily qualitative will be more effective for identifying which reporting entity has a controlling financial interest in a variable interest entity. The amendments in this Update also require additional disclosures about a reporting entity's involvement in variable interest entities, which will enhance the information provided to users of financial statements. The Company was required to adopt this guidance for the year ending December 31, 2010. The adoption of this ASU did not have a material impact on its consolidated financial statements.

NOTE 3- INVENTORY

As of September 30, 2010 and year ended December 31, 2009, inventory consists of the following:

		September 30, 2010		December 31, 2009
Raw materials	$	486,839	$	1,657,503
Work in progress		690,496		344,540
Finished goods		542,369		3,750,970
	$	1,719,704	$	5,753,013

F-15

DK INTERNATIONAL GROUP LTD

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4- PROPERTY, PLANT AND EQUIPMENT

As of September 30, 2010 and December 31, 2009, property, plant and equipment consisted of the following:

			September 30,			December 31,
	Useful Life		2010			2009
Building and leasehold improvements	20 years	$	6,266,781		$	6,138,884
Machinery and equipment	10 years		2,155,800			2,034,458
Motor vehicles	10 years		415,194			406,721
Computer, office equipment and furniture	5 years		35,679			59,270
Total costs			8,873,454			8,639,333
Less: accumulated depreciation			(5,549,326	)		(4,997,661	)
Total property, plant and equipment, net		$	3,324,128			3,641,672

Depreciation expenses for the three months ended September 30, 2010 and 2009 were $225,027 and $75,009 respectively, of which $42,523 and $ 17,501 were charged to general and administrative expenses, and $182,524 and $57,508 were charged to cost of sales.

Depreciation expenses for the nine months ended September 30, 2010 and 2009 were $403,704 and $145,669 respectively, of which $42,370 and $ 16,567 were charged to general and administrative expenses, and $361,333 and $ 129,102 were charged to cost of sales.

NOTE 5 – INTANGIBLE ASSETS

The Company obtained the right from the local authority for fifty years to use the land on which the office premises, warehouse and production plant of the Company are situated. The Company is in the process of obtaining certificate of land use rights from PRC government. As of September 30, 2010 and December 31, 2009, intangible assets consisted of the following:

F-16

		September 30,			December 31,
		2010			2009
Costs of land use rights	$	7,334,389		$	7,334,389
Less: accumulated amortization		(2,115,815	)		(2,112,304	)
Total intangible assets, net	$	5,218,574		$	5,222,085

NOTE 5 – INTANGIBLE ASSETS (Continued)

Amortization expenses for the three months ended September 30, 2010 and 2009 were $41,800 and $36,598, respectively and included in costs of sales. Amortization expenses for the nine months ended September 30, 2010 and 2009 were $110,083 and $109,772, respectively and included in costs of sales.

NOTE 6 - SHORT TERM BANK LOANS

The short-term loans are due to two financial institutions. For the period ended September 30, 2010 and year ended December 31, 2009, the Company’s short term bank loans consisted of the following:

		September 30,		December 31,
		2010		2009
Loans from Quanzhou Commercial Banks bearing interest rates from 7.254% to 9.711% secured by third parties.	$	1,491,449	$	1,461,010
Loans from China Construction Bank bearing interest rates from 6.903% to 8.964% secured by third parties and sole stockholder and his spouse		1,422,567		660,095
Total short term bank loans	$	2,914,016	$	2,121,105

 

NOTE 7 - INCOME TAXES

The Company is governed by the Income Tax Law of the PRC concerning the private-run enterprises, which are subject to tax at a statutory rate of 25% on net income reported in the statutory financial statements after appropriate tax adjustments. The Company files income tax returns with both the National Tax Bureau and the Local Tax Bureaus in PRC. There is no difference between the statutory and effective income tax rate for the three and nine months ended September 30, 2010 and 2009.

 F-17

Tax payable as of September 30, 2010 and December 31, 2009 consist of the following:

		September 30, 2010		December 31, 2009
VAT tax payable	$	391,675	$	617,168
Corporate income tax payable		1,808,277		2,001,651
Other		41,640		45,891
Total taxes payable	$	2,241,592	$	2,664,710

NOTE 8 - RELATED PARTY TRANSACTIONS

As of September 30, 2010 and December 31, 2009, due to/from related party consist of loan from a family member of the Chief Executive Officer of the Company. In addition, the CEO, who is also the stockholder of the Company, along with his spouse provide personal guarantee on the short-term bank loans. Due from related party of $70,979 is included in other current assets on the condensed consolidated balance sheets.

NOTE 9- SEGMENT INFORMATION

ASC 280, "Segment Reporting", establishes standards for reporting information about operating segments on a basis consistent with the Company's internal organizational structure as well as information about geographical areas, business segments and major customers in financial statements for details on the Company's business segments.

 The Company is engaged in the manufacturing of shoes parts and accessories, Aierda brand shoes, as well as manufacturing other brand shoes for our original equipment manufacturer (“OEM”) customers. The Company's chief operating decision maker ("CODM") has been identified as the CEO who reviews the financial information of separate operating segments when making decisions about allocating resources and assessing performance of the group. Based on management's assessment, the Company has determined that it has three operating segments which are Shoe parts and accessories, Aierda shoes and OEM products.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The CODM evaluates performance based on each reporting segment's revenues, cost of revenues, and gross profit. Selling expenses and G&A expenses are not separated to each segment. The CODM does not review balance sheet information to measure the performance of the reportable segments, nor is this part of the segment information regularly provided to the CODM.

Sales, cost of sales, gross profit, total capital expenditure and total depreciation and amortization by segment were as follows:

F-18

 

		For the three months ended September 30, 2010
		Shoes parts						Andera
		and accessories			OEM products			brand shoes			Consolidated
Sales	$	7,508,685		$	337,506		$	8,213,184		$	16,059,375
Cost of sales		(5,511,480	)		(241,451	)		(5,778,911	)		(11,531,842	)
Gross profit	$	1,997,205		$	96,055		$	2,434,273		$	4,527,533
Depreciation and amortization		85,075			-			94,188			179,263
Total capital expenditures		5,819			-			5,210			11,029
Total assets		14,676,275			-			16,712,948			31,389,223
		For the three months ended September 30, 2009
		Shoes parts						Andera
		and accessories			OEM products			brand shoes			Consolidated
Sales	$	7,934,879		$	269,476		$	5,041,345		$	13,245,700
Cost of sales		(5,846,145	)		(195,425	)		(3,577,736	)		(9,619,306	)
Gross profit	$	2,088,734		$	74,051		$	1,463,609		$	3,626,394
Depreciation and amortization		44,311			-			48,316			92,627
Total capital expenditures		107,070			-			104,876			211,946
Total assets		17,536,022			-			11,736,874			29,272,896
		For the nine months ended September 30, 2010
		Shoes parts						Aiderm
		and accessories			OEM products			brand shoes			Consolidated
Sales	$	21,039,926		$	945,716		$	23,013,984		$	44,999,626
Cost of sales		(15,331,589	)		(671,658	)		(16,075,516	)		(32,078,763	)
Gross profit	$	5,708,337		$	274,058		$	6,938,468		$	12,920,863
Depreciation and amortization		240,226			-			273,563			513,789
Total capital expenditures		8,457			-			9,630			18,087
Total assets		14,676,275			-			16,712,948			31,389,223

F-19

		For the nine months ended September 30, 2009
		Shoes parts						Aidera
		and accessories			OEM products			brand shoes			Consolidated
Sales	$	24,761,426		$	840,921		$	15,731,921		$	41,334,268
Cost of sales		(17,988,255	)		(601,312	)		(11,008,493	)		(29,598,060	)
Gross profit	$	6,773,171		$	239,609		$	4,723,428		$	11,736,208
Depreciation and amortization		119,433			-			136,008			255,441
Total capital expenditures		255,211			-			290,627			545,838
Total assets		17,536,022			-			11,736,874			29,272,896

F-20

NOTE 10 – SUBSEQUENT EVENTS

Reverse Acquisition

On February 11, 2011, the Company closed into a Share Exchange Agreement with Lansdowne Security, Inc. (“Lansdowne”) and the Company’s sole shareholder, Mr. Yangbo Cai, pursuant to which Mr. Cai exchanged 100% of the issued and outstanding capital stock of DK for 9,250 shares of Lansdowne’s Series A Preferred Stock, which constituted 91.71% of Lansdowne’s issued and outstanding capital stock on a fully-diluted basis as of and immediately after the consummation of the transactions contemplated by the Share Exchange Agreement. The Company is now the wholly-owned subsidiary of Lansdowne, and the Company’s subsidiary, Dake, and VIE, Aierda, became Lansdowne’s indirect subsidiary and VIE, respectively. In accordance with FASB ASC 805, “Business Combinations,” the Company accounted for this transaction as a reverse acquisition or recapitalization method which consolidated the Company, Lansdowne, Dake and Aierda, and treated the Company as a shell at the time of the merger. According to ASC 805-10-55-13, “the acquirer usually is the combining entity whose relative size (measured in, for example, assets, revenues, or earnings), is significantly larger than that of the other.” Since Lansdowne was a shell at the time of the merger while the Company had operations through its acquisition of Dake and Aierda and was significantly larger than Lansdowne’s was, under ASC 805, the Company was considered the acquirer.

F-21

 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders
DK International Group Ltd.

We have audited the accompanying consolidated balance sheets of DK International Group Ltd of December 31, 2009 and 2008, and the related consolidated statements of income and comprehensive income, cash flows and changes in stockholders’ equity for each of the years in the two-year period ended December 31, 2009. DK International Ltd’s management is responsible for these consolidated financial statements. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of DK International Group Ltd as of December 31, 2009 and 2008, and the results of their consolidated operations and their cash flows for each of the years in the two-year period ended December 31, 2009 in conformity with accounting principles generally accepted in the United States of America.

/s/ Friedman LLP
Marlton, New Jersey
February 11, 2011

F-22

DK INTERNATIONAL GROUP LTD
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(IN US DOLLARS)

		For the year ended December 31,
		2009			2008
Sales	$	56,419,090		$	48,531,649
Cost of sales		(41,055,147	)		(35,981,628	)
Gross profit		15,363,943			12,550,021
Selling, general and administrative expenses		(6,260,214	)		(5,116,705	)
Income from operations		9,103,729			7,433,316
Other income (expenses)
Interest expense, net		(146,917	)		(114,496	)
Total Other income (expenses)		(146,917	)		(114,496	)
Income before income taxes		8,956,812			7,318,820
Provision for income taxes		(2,430,573	)		(2,040,170	)
Net income		6,526,239			5,278,650
Other comprehensive income
Foreign currency translation gain		13,474			785,274
Comprehensive income	$	6,539,713		$	6,063,924
Cash dividends declared per share		5,945,988			3,828,474
Basic and diluted earnings per share		6,526,239			5,278,650
Weighted average number of shares		1			1

The accompany notes are an integral part of these consolidated financial statements

F-23

DK INTERNATIONAL GROUP LTD   CONSOLIDATED BALANCE SHEETS   (IN US DOLLARS)
		As of
		December 31,		December 31,
		2009		2008
ASSETS
Current assets
Cash and cash equivalents	$	279,065	$	848,195
Accounts receivable, net		13,071,440		7,825,726
Inventory		5,753,013		12,008,387
Notes receivable		-		1,079,228
Other current assets		152,770		83,176
Advances to suppliers		786,132		260,013
Due from other		366,719		-
Total current assets		20,409,139		22,104,725
Property, plant and equipment, net,		3,641,672		3,527,680
Other assets
Intangible asset, net		5,222,085		5,368,687
Total other assets		5,222,085		5,368,687
Total Assets	$	29,272,896	$	31,001,092
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Short termbank loans	$	2,121,105	$	1,613,540
Accounts payable		6,302,030		10,467,795
Bank acceptantce notes payable		-		764,231
Accrued expenses		2,050,323		1,231,963
Due to related party		44,593		-
Advances from customers		959,079		435,274
Dividend payable		2,420,349		2,048,095
Taxes payable		2,664,710		2,155,741
Other current liability		142,903		310,374
Total current liabilities		16,705,092		19,027,013
Total Liabilities		16,705,092		19,027,013
Commitments and contingencies
Stockholders' equity
Common stock $1.00 par value, 50,000 shares authorized;
1 share issued and outstanding as of December 31, 2009 and 2008, respectively		1		1
Additional paid in capital		2,903,421		2,903,421
Retained earnings		7,851,982		7,271,731
Accumulated other comprehensive income		1,812,400		1,798,926
Total stockholders' equity		12,567,804		11,974,079
Total Liabilities and Stockholders' Equity	$	29,272,896	$	31,001,092

The accompany notes are an integral part of these consolidated financial statements

F-24

DK INTERNATIONAL GROUP LTD CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (IN US DOLLARS)
				Additional		Other
				paid in		comprehensive		Retained
		Common stock		capital		income		earnings			Total
Balance at December 31, 2007	$	1	$	2,903,421	$	1,013,652	$	5,821,555		$	9,738,629
Dividend				-		-		(3,828,474	)		(3,828,474	)
Net income for the year				-		-		5,278,650			5,278,650
Foreign currency translation gain				-		785,274		-			785,274
Balance at December 31, 2008		1		2,903,421		1,798,926		7,271,731			11,974,079
Dividend				-		-		(5,945,988	)		(5,945,988	)
Net income for the year				-		-		6,526,239			6,526,239
Foreign currency translation gain				-		13,474		-			13,474
Balance at December 31, 2009	$	1	$	2,903,421	$	1,812,400	$	7,851,982		$	12,567,804

The accompany notes are an integral part of these consolidated financial statements

F-25

DK INTERNATIONAL GROUP LTD  CONSOLIDATED STATEMENTS OF CASH FLOWS  (IN US DOLLARS)
		For the year ended December 31,
		2009			2008
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	6,526,239		$	5,278,650
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization		700,934			648,177
Write-down of inventory		-			738,935
Changes in operating assets and liabilities
Accounts receivable		(5,234,935	)		(1,633,015	)
Other assets		1,007,602			(1,135,025	)
Inventories		6,242,866			(6,968,450	)
Advances to suppliers		(525,046	)		(254,982	)
Accounts payables		(4,157,476	)		3,579,506
Taxes payable		507,901			685,336
Advances from customers		522,733			426,851
Other payables and accrued expenses		1,021,008			2,682,340
Net cash provided by operating activities		6,611,826			4,048,323
CASH FLOWS FROM INVESTING ACTIVITIES:
Due from other		(365,975	)		-
Acquisition of property and equipment		(668,248	)		(21,174	)
Net cash used in investing activities		(1,034,223	)		(21,174	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of dividend		(5,945,988	)		(3,828,474	)
Repayments of bank acceptance notes		(762,690	)		(405,130	)
Proceeds from related party loans		44,503			-
Net proceeds from short-term bank loans		2,116,798			1,582,313
Repayments of short-term bank loans		(1,610,289	)		(1,294,620	)
Net cash provided by financing activities		(6,157,666	)		(3,945,911	)
EFFECT OF EXCHANGE RATE CHANGE ON
CASH AND CASH EQUIVALENTS		10,933			122,246
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(569,130	)		203,484
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR		848,195			644,711
CASH AND CASH EQUIVALENTS, END OF YEAR	$	279,065		$	848,195
SUPPLEMENTAL CASH FLOW DISCLOSURE
Income taxes paid	$	1,455,972		$	1,924,189
Interest paid	$	149,429		$	127,472

The accompany notes are an integral part of these consolidated financial statements

F-26

DK INTERNATIONAL GROUP LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1- ORGANIZATION AND BASIS OF PRESENTATION

DK International Group Ltd (“DK”) was incorporated under the laws of the British Virgin Islands on November 12, 2010. On December 30, 2010, DK entered into an equity transfer agreement with Mr. Yuxi Ding, pursuant to which DK acquired 100% of the outstanding equity interest of Dake (Fujian) Sports Goods Ltd. (“Dake”), however, DK is awaiting approval of the transaction by the Quanzhou Commission of Economy and Trade, and the issuance of a new business license by the Quanzhou Administration for Industry and Commerce, the competent local PRC approval authorities. Dake was established in Jinjiang, Fujian Province, People’s Republic of China (“PRC”) on August 17, 1999 and is engaged in the manufacturing of sport and leisure shoes.

On December 31, 2010, Dake entered into a series of 10-year, renewable contracts with Aierda and its sole shareholder, Mr. Yuxi Ding, pursuant to which: (1) Mr. Ding agreed to pledge of 100% of his equity interests in Aierda to Dake; (2) at any time during the 10-year term of the contractual arrangement, Dake has the absolute right to acquire any portion of the equity interests of Aierda from Mr. Ding; and (3) Dake has the absolute right during the 10-year term to appoint the directors of Aierda and to obtain service fees from Aierda. As a result of these contracts, Dake gained control over Aierda and Aierda became Dake’s VIE.

The commercial arrangement consists of the following contracts:

• Exclusive Business Cooperation Agreement, dated December 31, 2010, between Dake and Aierda, provides that Dake will be the exclusive provider of consulting services to Aierda, and that Aierda will pay a service fee to Dake, which will be certain percentage of Aierda's profit before taxes, and payable at a time determined by Dake.

• Exclusive Option Agreement, dated December 31, 2010, between Dake, Mr. Ding and Aierda, provides that in the event that Dake exercises its right to purchase the equity interests of Aierda from Aierda’s sole shareholder, the purchase price will be equal to the original price paid by the sole shareholder in acquiring the equity interest of Aierda.

• Proxy Agreement, dated December 31, 2010, between Dake, Mr. Ding and Aierda, authorizes Dake to exercise any and all shareholder rights associated with Mr. Ding’s ownership in Aierda, including the right to sell, assign, transfer or pledge any or all of the equity interest in Aierda, and the right to vote such equity interest for any and all matters.

F-27

DK INTERNATIONAL GROUP LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1- ORGANIZATION AND BASIS OF PRESENTATION (Continued)

• Equity Pledge Agreement, dated December 31, 2010, between Dake and Mr. Ding, whereby Mr. Ding pledges all of his equity shares in Aierda to Dake. If Aierda or Mr. Ding breaches their respective obligation under any of the VIE contracts, Dake, as pledgee, will be entitled to certain rights, including the right to foreclose on the pledged equity interests. Mr. Ding has agreed not to dispose of the pledged equity interests or take any actions that would prejudice Dake’s interest during the 10-year term of the agreements. Dake also has right to obtain any and all dividends related to the equity interest pledged during the term of the pledge.

Under these contractual arrangements, which obligate Dake to absorb a majority of the risk of loss from Aierda’s activities and entitle it to receive a majority of its residual returns, Dake has gained effective control over Aierda. Through these contractual arrangements, Dake now holds the variable interests of Aierda, and Dake becomes the primary beneficiary of Aierda. Based on these contractual arrangements, the Company believes that Aierda should be considered as a Variable Interest Entity (“VIE”) under ASC 810, "Consolidation of Variable Interest Entities, an Interpretation of ARB No.51", because the equity investor in Aierda no longer has the characteristics of a controlling financial interest. Accordingly, the Company believes that Aierda should be consolidated under ASC 810 into Dake.

The carrying amount of Aierda’s assets, liabilities and equity included in the consolidated balance sheets consist of the following:

	December 31,
	2009	2008
Total assets	12,766,097	13,982,770
Total liabilities	9,132,129	9,268,635
Total equity	3,633,967	4,714,134

Aierda was established on June 13, 1991 as a foreign-invested PRC enterprise and is mainly engaged in the manufacture and sale of footwear parts and materials. On November 16, 2005, Mr. Yuxi Ding, a Philippine resident, entered into a share transfer agreement with Fujian Province Jinjiang City Chendai Jiangtou Labor Insurance Factory and Hong Kong Shengcheng (Pacific) Limited Company, the former shareholders of Aierda, pursuant to which, Mr. Ding acquired 100% of the equity interest in Aierda for a total consideration of RMB 9,000,000. On December 22, 2005, the Jinjiang City Commerce Bureau approved the equity transfer to Mr. Ding and approved the conversion of Aierda to a wholly foreign-owned enterprise.

F-28

DK INTERNATIONAL GROUP LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1- ORGANIZATION AND BASIS OF PRESENTATION (Continued)

On January 27, 2011, Mr. Yuxi Ding, entered into an option agreement with Mr. Yangbo Cai, the sole shareholder of DK at the time, pursuant to which Mr. Cai granted Mr. Ding an option to acquire all of his shares held in DK, for an exercise price of $10,000. Mr. Ding may exercise this option, in whole but not in part, during the period commencing six months after the effective date of a resale registration statement for securities issued to investors in the first equity financing after a share exchange transaction involving DK, and ending on the fifth anniversary of the date thereof. On January 27, 2011, Mr. Ding also entered into a voting rights’ entrustment agreement with Mr. Cai, pursuant to which Mr. Cai irrevocably granted to Mr. Ding all his voting and dispositive control over the shares held by Mr. Cai. Mr. Cai also waived all his rights associated with his shares and agreed to not cause DK to conduct any transactions which may materially affect the assets, obligations, rights or the operations of DK.

Each of DK, Dake and Aierda (collectively referred herein as the “Company”), are either wholly owned or under common control of Mr. Yuxi Ding, pursuant to the foregoing contractual arrangements. From an accounting perspective, there are no changes to the assets and liabilities of Dake upon consolidation as a result of the Dake shareholder transferring 100% of equity interests in Dake to DK. The historical consolidated financial statements of Dake are considered the historical financial statements of DK. The statements of income and comprehensive income have been presented retrospectively at the beginning of the reporting period.

The Company’s consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).

F-29

DK INTERNATIONAL GROUP LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements of the company include the accounts of DK, Dake and Aierda. All inter-company balances and transactions are eliminated in consolidation.

Use of Estimates

In preparing the financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting year. Significant estimates, required by management, include the selection of the useful lives and residual values of property and equipment and intangible assets, provision for doubtful accounts, provision necessary for contingent liabilities, fair values, revenue recognition, and other similar charges. Actual results could differ from those estimates.

Risks and Uncertainties

The Company is subject to substantial risks from, among other things, intense competition associated with the industry in general, other risks associated with financing, liquidity requirements, rapidly changing customer requirements, and foreign currency exchange rates.

The Company has significant investments in the PRC. The operating results of the Company may be adversely affected by changes in the political and social conditions in the PRC and by changes in Chinese government policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. The Company can give no assurance that those changes in political and other conditions will not result in a material adverse effect upon the Company’s business and financial condition.

F-30

DK INTERNATIONAL GROUP LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Concentration Risks

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and trade receivables. As of December 31, 2009, and December 31, 2008, substantially all of the Company’s cash were held by major financial institutions located in the PRC. The Company performs ongoing credit evaluations of its customers and generally does not require collateral for trade receivables and has not experienced any credit losses in collecting the trade receivables.

No single customer accounted for more than 10% of the Company's net sales in 2009 and 2008. One customer accounted for 16% of account receivable as of December 31, 2008.

For the year ended December 31, 2009, two suppliers accounted 10% and 11% of the company’s total purchases during the year. Three suppliers accounted for 21%, 14% and 14% of total outstanding account payables. For the year ended December 31, 2008, two suppliers accounted for 17% and 15% of the total purchases, one supplier accounted for 33% of total outstanding account payables.

Comprehensive Income

The Company follows ASC 220 “Reporting Comprehensive Income” to recognize the elements of comprehensive income. Comprehensive income comprised of net income and all changes to the statements of stockholders' equity, except those due to investments by stockholders, changes in paid-in capital and distributions to stockholders, including adjustments to minimum pension liabilities, accumulated foreign currency translation, and unrealized gains or losses on marketable securities. The Company’s other comprehensive income arose from the effect of foreign currency translation adjustments.

Foreign Currency Translation

The Company principally operates in PRC and its functional currency is the Chinese currency Renminbi (“RMB”).The reporting currency of the Company is the US dollar. The Company does not enter into any transactions denominated in foreign currencies. The financial statements of the Company are translated into United States dollars using the year-end rates of exchange for assets and liabilities, and average rates of exchange for the period for revenues, costs, and expenses and historical rates for equity. Translation adjustments resulting from translating the local currency financial statements into U.S. dollars are included in comprehensive income. The cumulative translation adjustment were included as an item of accumulated other comprehensive income in the shareholders’ equity section of the balance sheet.

	December 31,	December 31,
	2009	2008
Year end exchange rate (RMB:US$)	6.8172	6.8173
Average exchange rate for the year (RMB:US$)	6.8311	6.9519

F-31

DK INTERNATIONAL GROUP LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Foreign Currency Translation (Continued)

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 dollars at the rates used in translation.

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents. The Company maintains uninsured cash and cash equivalents with various banks in the PRC. The Company has not experienced any losses in such accounts and management believes it is not exposed to any risks on its cash in bank accounts.

Accounts Receivable

Accounts receivable consists of unpaid balances due from the whole-sale customers. Accounts receivable are recorded at net realizable value consisting of the carrying amount less an allowance for uncollectible amounts. According to the Company's policy, accounts receivable over 90 days are considered overdue. The Company does periodical reviews as to whether the carrying values of accounts have become impaired. The assets are considered to be impaired if the collectibility of the balances become doubtful, accordingly, the management estimates the valuation allowance for anticipated uncollectible receivable balances. When facts subsequently become available to indicate that the allowance provided requires an adjustment, then the adjustment will be recorded as a change in allowance for doubtful accounts. As of December 31, 2009 and 2008, no allowance for doubtful accounts was considered necessary.

F-32

DK INTERNATIONAL GROUP LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Inventory

Inventory is stated at the lower of cost or market, using the FIFO method. Inventory costs include material, labor and direct manufacturing overhead. The Company estimates net realizable value based on intended use, current market value and inventory ageing analyses. The Company writes down inventory for estimated obsolescence or unmarketable inventory equal to the difference between the cost of inventories and their estimated market value based upon assumptions about future demand and market conditions. During the year ended December 31, 2008, the Company wrote – down $738,935 of inventory which was included in cost of sales. As of December 31, 2009 and 2008, no reserve for slow - moving or obsolete inventories is considered necessary.

Advances to Suppliers

Advances to suppliers consist of payments made to suppliers for future purchases. They are reviewed periodically to determine whether their carrying value has become impaired. The Company considers the assets to be impaired if facts and circumstances indicate that the collectability of the materials become doubtful. The Company has determined that no reserve is necessary for the years ended December 31, 2009 and 2008.

Property, Plant and Equipment

Property, plant and equipment are stated at cost less accumulated depreciation. Expenditures for maintenance and repairs are charged to earnings as incurred while additions, renewals and betterments are capitalized. When the asset property and equipment is retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of property, plant and equipment is provided using the straight-line method for substantially all assets with estimated lives as follows:

Buildings	20 years
Leasehold improvements	20 years
Plant and machinery	10 years
Motor vehicles	10 years
Furniture, fixtures and office equipment	5 years

F-33

DK INTERNATIONAL GROUP LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Intangible Assets

Intangible assets are accounted for in accordance with the provisions of ASC 350, "Goodwill and Other Intangible Assets". Under ASC 350, certain other intangible assets deemed to have indefinite useful lives are not amortized. Indefinite-lived intangible assets are assessed for impairment based on comparisons of their respective fair values to their carrying values. Intangible assets with a finite useful life are amortized over their useful lives. Intangible assets consist of land use rights stated at cost less accumulated amortization. Amortization is provided using the straight-line method over the designated terms of the lease of 50 years obtained from the relevant PRC land authority. The company does not have indefinite lived assets.

Impairment of Long-Lived Assets

The Company accounts for impairment of property and equipment and amortizable intangible assets in accordance with ASC 360, “Accounting for Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed Of”, which requires the Company to evaluate a long-lived asset for recoverability when there is event or circumstance that indicate the carrying value of the asset may not be recoverable. An impairment loss is recognized when the carrying amount of a long-lived asset or asset group is not recoverable (when carrying amount exceeds the gross, undiscounted cash flows from use and disposition) and is measured as the excess of the carrying amount over the asset’s (or asset group’s) fair value. There was no impairment of long-lived assets for the years ended December 31, 2009 and 2008.

Revenue Recognition

The Company recognizes revenue in accordance with ASC 605”Revenue Recognition”. Product sales are recognized when title to the product has transferred to customers in accordance with the terms of the sale; the sales price to the customer is fixed or determinable, and collectability is reasonably assured. The Company accepts customer returns due to defective products. Revenue is recorded net of estimated sales discounts based upon specific customer agreements.

Cost of Sales

Cost of sales includes the raw materials, capitalized direct overhead costs consisting of labor costs, depreciation and amortization, utilities and rent expenses related to the property and equipment used in the manufacturing process.

F-34

DK INTERNATIONAL GROUP LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Advertising and Promotion Expenses

Advertising and promotion are expensed as incurred. Advertising and promotion expenses which were included in selling expenses amounted to $513,088 and $430,146 for the years ended December 31, 2009 and 2008, respectively.

Income Taxes

The Company is subject to the Income Tax Laws of PRC. It did not generate any taxable income outside of the PRC for the years ended December 31, 2009 and 2008. The Company accounts for income taxes in accordance with ASC 740 “Income Taxes”. ASC 740 requires an asset and liability approach for financial accounting and reporting for income taxes and allows recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain. There was no deferred tax asset or liability for the years ended December 31, 2009 and 2008.

Value Added Taxes

The Company is subject to a value added tax (“VAT”) for selling merchandise. The applicable VAT rate is 17% for products sold in the PRC. The amount of VAT liability is determined by applying the applicable tax rate to the invoiced amount of goods sold (output VAT) less VAT paid on purchases made with the relevant supporting invoices (input VAT). Under the commercial practice of the PRC, the Company pays VAT based on tax invoices issued. The tax invoices may be issued subsequent to the date on which revenue is recognized, and there may be a considerable delay between the date on which the revenue is recognized and the date on which the tax invoice is issued. In the event that the PRC tax authorities dispute the date on which revenue is recognized for tax purposes, the PRC tax office has the right to assess a penalty based on the amount of the taxes which are determined to be late or deficient, and will be expensed in the period if and when a determination is made by the tax authorities that a penalty is due.

F-35

DK INTERNATIONAL GROUP LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Value Added Taxes – (continued)

VAT payables are $617,168 and $420,796 as of December 31, 2009 and 2008, respectively, and included in taxes payable on the consolidated balance sheets.

Fair Value of Financial Instruments

ASC 820, “Fair Value Measurements and Disclosures”, defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The carrying amounts reported in the balance sheets for current receivables and payables qualify as financial instruments. Management concluded the carrying values are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and if applicable, their stated interest rate approximates current rates available. The three levels are defined as follows:

• Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

• Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.

• Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value.

It is management’s opinion that the estimated fair values of the financial instruments were not materially different from their carrying values as presented on the balance sheet. This is attributed to the short maturities of the instruments and that interest rates on the borrowings approximate those that would have been available for loans of similar remaining maturity and risk profile at respective balance sheet dates. The carrying amounts of short-term loans approximate their fair values because the applicable interest rates approximate current market rates.

As of December 31, 2009 and 2008, the Company's financial instruments include cash and cash equivalents, accounts receivable, due from other, advances to suppliers, short- term bank loans, account payables, accrued expenses, deposits from customers, taxes payable, notes payable and other current liabilities. Management has estimated that the fair value of these financial instruments approximate their carrying amounts due to the short-term nature.

F-36

DK INTERNATIONAL GROUP LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Recent Accounting Pronouncements

In December, 2009, FASB issued ASU No. 2009-17, “Improvement to Financial Reporting by Enterprises Involved with Variable Interest Entities”. This Accounting Standard Update amends the FASB Accounting Standards Codification for the issuance of FASB Statement No.167, Amendments to FASB Interpretation No. 46 (R). The amendments in this Accounting Standards Update replace the quantitative-based risks and rewards calculation for determining which reporting entity, if any, has a controlling financial interest in a variable interest entity with an approach focused on identifying which reporting entity has the power to direct the activities of a variable interest entity that most significantly impact the entity's economic performance and (1) the obligation to absorb losses of the entity or (2) the right to receive benefits from the entity. An approach that is expected to be primarily qualitative will be more effective for identifying which reporting entity has a controlling financial interest in a variable interest entity. The amendments in this Update also require additional disclosures about a reporting entity's involvement in variable interest entities, which will enhance the information provided to users of financial statements. The Company is required to adopt this guidance for the year ending December 31, 2010. However, the adoption of this ASU will not have a material impact on its consolidated financial statements.

NOTE 3- INVENTORY
As of December 31, inventory consists of the following:
		2009		2008
Raw materials	$	1,657,503	$	7,807,087
Work in progress		344,540		2,009,389
Finished goods		3,750,970		2,191,911
	$	5,753,013	$	12,008,387

F-37

DK INTERNATIONAL GROUP LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4- PROPERTY, PLANT AND EQUIPMENT

As of December 31, 2009 and December 31, 2008, property, plant and equipment consisted of the following:

			December 31,
	Useful life		2009			2008
Building and leasehold improvement	20 years	$	6,138,884		$	6,138,785
Machinery and equipment	10 years		2,034,458			1,578,196
Motor vehicles	10 years		406,721			203,893
Computer, office equipment and furniture	5 years		59,270			48,724
Total costs			8,639,333			7,969,598
Less: accumulated depreciation			(4,997,661	)		(4,441,917	)
Total property, plant and equipment, net		$	3,641,672		$	3,527,680

Depreciation expenses for the years ended December 31, 2009 and 2008 were $554,544 and $504,330, respectively, of which $69,701 and $49,280 respectively, were charged to general and administrative expenses; and $484,843 and $455,050 respectively, were charged to cost of sales.

 F-38

DK INTERNATIONAL LIMITED GROUP LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 - INTANGIBLE ASSETS

The Company obtained the right from local authority for fifty years to use the land on which the office premises, warehouse and production plant of the Company are situated. The Company is in the process of obtaining certificate of land use rights from PRC government. As for the years December 31, 2009 and 2008, intangible assets consisted of the following:

  

		December 31,
		2009			2008
Costs of land use rights	$	7,334,389		$	7,334,389
Less: accumulated amortization		(2,112,304	)		(1,965,702	)
Total intangible assets, net	$	5,222,085		$	5,368,687

 Amortization expense was $146,390 and $143,847 for the years ended December 31, 2009 and 2008, respectively, and included in cost of sales. Amortization expense for the next five years and thereafter at December 31, 2009 is as follows:

2010	$	146,390
2011		146,390
2012		146,390
2013		146,390
2014		146,390
Thereafter		4,490,135
Total	$	5,222,085

F-39

DK INTERNATIONAL GROUP LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 - SHORT TERM BANK LOANS

The short-term loans are due to two financial institutions. For the years ended December 31, the Company’s short-term bank loans consisted of the following:

		2009		2008
Loans from Quanzhou Commercial Banks bearing interest rates from 7.254% to 9.711% secured by third parties.	$	1,461,010	$	880,114
Loans from China Construction Bank bearing interest rates from 6.903% to 8.964% secured by third parties and sole stockholder and his spouse		660,095		733,426
Total short term bank loans	$	2,121,105	$	1,613,540

NOTE 7 - INCOME TAX

The Company is governed by the Income Tax Law of the PRC concerning the private-run enterprises, which are subject to tax at a statutory rate of 25% on net income reported in the statutory financial statements after appropriate tax adjustments. The Company files income tax returns with both the National Tax Bureau and the Local Tax Bureaus in PRC. The reconciliation of the difference between income tax expenses and the amounts computed by applying the PRC statutory rate for the years ended December 31:

 

		2009		2008
Statutory income tax rate		25%		25%
Non-deductible expenses- permanent differences		2%		3%
Effective tax rate		27%		28%
Tax payable as of December 31consist of the following:
		2009		2008
VAT tax payable	$	617,168	$	420,796
Corporate income tax payable		2,001,651		1,703,294
Other		45,891		31,650
Total taxes payable	$	2,664,710	$	2,155,741

F-40

DK INTERNATIONAL GROUP LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 8 - RELATED PARTY TRANSACTIONS

As of December 31, 2009 and 2008, due to related party consists of a loan from a family member of the Chief Executive Officer (“CEO”) of the Company. In addition, the CEO, who is also the stockholder of the Company, along with his spouse provide personal guarantee on the short-term bank loans.

NOTE 9- SEGMENT INFORMATION

ASC 280, "Segment Reporting", establishes standards for reporting information about operating segments on a basis consistent with the Company's internal organizational structure as well as information about geographical areas, business segments and major customers in financial statements for details on the Company's business segments.

The Company is engaged in the manufacturing of shoes parts and accessories, Aierda brand shoes, as well as manufacturing other brand shoes for our original equipment manufacturer (“OEM”) customers. The Company's chief operating decision maker ("CODM") has been identified as the CEO who reviews the financial information of separate operating segments when making decisions about allocating resources and assessing performance of the group. Based on management's assessment, the Company has determined that it has three operating segments which are Shoe parts and accessories, Aierda shoes and OEM products.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The CODM evaluates performance based on each reporting segment's revenues, cost of revenues, and gross profit. Selling expenses and G&A expenses are not separated reviewed to each segment. The CODM does not review balance sheet information to measure the performance of the reportable segments, nor is this part of the segment information regularly provided to the CODM.

Sales, cost of sales, gross profit, total capital expenditure and total depreciation and amortization by segment were as follows:

F-41

	For the year ended December 31, 2009
		Shoes parts						Aidera
		and accessories			OEM products			brand shoes			Consolidated
Sales	$	27,003,628		$	7,848,994		$	21,566,468		$	56,419,090
Cost of sales		(20,390,430	)		(5,866,401	)		(14,798,316	)		(41,055,147	)
Gross profit	$	6,613,198		$	1,982,593		$	6,768,153		$	15,363,943
Depreciation and amortization		335,485			-			365,449			700,934
Total capital expenditures		319,841			-			348,407			668,248
Total assets		14,010,761			-			15,262,135			29,272,896
		For the year ended December 31, 2008
		Shoes parts						Aidera
		and accessories			OEM products			brand shoes			Consolidated
Sales	$	18,849,999		$	8,314,521		$	21,367,129		$	48,531,649
Cost of sales		(15,154,134	)		(6,019,721	)		(14,807,773	)		(35,981,628	)
Gross profit	$	3,695,865		$	2,294,800		$	6,559,356		$	12,550,021
Depreciation and amortization		251,756			-			396,421			648,177
Total capital expenditures		8,224			-			12,950			21,174
Total assets		12,041,020			-			18,960,072			31,001,092

F-42

NOTE 10 – SUBSEQUENT EVENTS

Reverse Acquisition

On February 11, 2011, the Company closed into a Share Exchange Agreement with Lansdowne Security, Inc. (“Lansdowne”) and the Company’s sole shareholder, Mr. Yangbo Cai, pursuant to which Mr. Cai exchanged 100% of the issued and outstanding capital stock of DK for 9,250 shares of Lansdowne’s Series A Preferred Stock, which constituted 91.71% of Lansdowne’s issued and outstanding capital stock on a fully-diluted basis as of and immediately after the consummation of the transactions contemplated by the Share Exchange Agreement. The Company is now the wholly-owned subsidiary of Lansdowne, and the Company’s subsidiary, Dake, and VIE, Aierda, became Lansdowne’s indirect subsidiary and VIE, respectively. In accordance with FASB ASC 805, “Business Combinations,” the Company accounted for the transaction as a reverse acquisition or recapitalization method which consolidated the Company, Lansdowne, Dake and Aierda, and treated the Company as a shell at the time of the merger. According to ASC 805-10-55-13, “the acquirer usually is the combining entity whose relative size (measured in, for example, assets, revenues, or earnings), is significantly larger than that of the other.” Since Lansdowne was a shell at the time of the merger while the Company had operations through its acquisition of Dake and Aierda and was significantly larger than Lansdowne’s was, under ASC 805, the Company was considered the acquirer.

F-43

LANSDOWNE SECURITY, INC

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

..F-44

Introduction to Unaudited Pro Forma Condensed Consolidated Financial Statements (In US Dollars)

On February 11, 2011, Lansdowne Security, Inc (the “Company”) a Nevada Corporation, consummated a share exchange agreement with DK International Group Ltd. (“DK”), a BVI limited company, and its sole shareholder, Mr. Yangbo Cai, pursuant to which the Company acquired 100% of the issued and outstanding capital stock of DK in exchange for 9,250 shares of the Company’s Series A Convertible Voting Preferred Stock, par value $.0001, or Series A Preferred Stock, which constituted 91.71% of the Company’s issued and outstanding capital stock on a fully-diluted basis as of and immediately after the consummation of the transactions contemplated by the Share Exchange Agreement. Each share of Series A Preferred Stock is convertible into 1,000 shares of common stock.

DK was incorporated on November 12, 2010 in the BVI as a holding company for Dake (Fujian) Sports Goods Co., Ltd, a PRC based operating subsidiary, which is engaged in the design, manufacturing, and distribution of footwear materials, branded footwear products and accessories in the Chinese domestic market.

In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codifications (“ASC”) 805 , “Business Combination”, we accounted for this transaction as a reverse acquisition or recapitalization method. Accordingly to ASC 805-10-55-13, “the acquirer usually is the combining entity whose relative size (measure in, for example, assets, revenues, or earnings), is significantly larger than that of the other. Since Lansdowne Security Inc. was a shell at the time of the merger while DK’s operations are significantly larger through its wholly owned subsidiary Dake and Dake’s variable interest entity Aierda. Under ASC 805, DK was considered the accounting acquirer for financial reporting purposes.

The following unaudited pro forma condensed consolidated financial information has been prepared to illustrate the effect of reverse acquisition and has been prepared for informational purposes only. The unaudited pro forma condensed combined financial information is based upon the historical consolidated financial statements and notes thereto of Lansdowne Security, Inc. and DK International Group, Ltd. and should be read in conjunction with the:

• historical financial statements and the accompanying notes of Lansdowne Security, Inc. include in the Annual Report on Form 10K for the year ended December 31, 2009, and Quarterly Repo on Form 10-Q for the quarter ended September 30, 2010 each of which are incorporated by reference in this 8K;

• Audited historical financial statements and the accompanying notes of DK International Group Ltd. for the year ended December 31, 2009 and 2008, unaudited condensed consolidated financial statements for the nine months ended September 30,2010 and 2009 , each of which are attached herein to this Form 8K.

F-45

The historical consolidated financial information has been adjusted in the unaudited pro forma condensed consolidated financial statements to give effect to pro forma events that are (1) directly attributable to the transaction, (2) factually supportable, and (3) with respect to the statements of operations, expected to have a continuing impact on the company. Accordingly, the following unaudited pro forma condensed consolidated financial information depicts the condensed consolidated balance sheet as of September 30, 2010 and the condensed consolidated statements of operations for the year ended December 31, 2009 and for the nine months ended September 30, 2010 , as if the transaction had occurred. The unaudited pro forma condensed consolidated statements of operations have been prepared assuming the transaction had been completed on January 1, 2009. The unaudited pro forma condensed consolidated balance sheet has been computed assuming the transaction had been completed on September 30, 2010.

The unaudited pro forma condensed combined financial information was prepared in accordance with the acquisition method of accounting under existing United States generally accepted accounting principles, or GAAP standards, and the regulations of the SEC, and is not necessarily indicative of the financial position or results of operations that would have occurred if the transaction had been completed on the dates indicated, nor is it indicative of the future operating results or financial position of the Company. 

F-46

LANSDOWNE SECURITY, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2010
(UNAUDITED)

					DK
		LANSDOWNE			INTERNATIONAL		PRO-FORMA
		SECURITY INC.			GROUP LIMITED0		ADJUSTMENTS				PRO-FORMA
		US$			US$		US$				US$
ASSETS
CURRENT ASSETS
Cash & cash equivalents	$	-		$	262,321	$	-			$	262,321
Accounts receivable		-			19,485,423		-				19,485,423
Inventory		-			1,719,704		-				1,719,704
Notes receivable		-			134,769		-				134,769
Other current assets		-			215,671		-				215,671
Advances to suppliers		-			654,273		-				654,273
Due from other		-			374,360		-				374,360
Total current assets		-			22,846,521		-				22,846,521
PROPERTY AND EQUIPMENT, net		-			3,324,128		-				3,324,128
		-					-				-
OTHER ASSETS		-					-				-
Intangible asset, net		-			5,218,574		-				5,218,574
Total other assets		-			5,218,574		-				5,218,574
TOTAL ASSETS	$	-		$	31,389,223	$	-			$	31,389,223
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Short term loans	$	-		$	2,914,016	$	-			$	2,914,016
Accounts payable		5,240			8,178,233		(5,240	)	(a)		8,178,233
Accrued expenses		-			1,142,439		-				1,142,439
Other current liabilities		65,421			536,134		(65,421	)	(a)		536,134
Due to related party		-			19,242		-				19,242
Deposits from customers		-			2,633,728		-				2,633,728
Dividend payable		-			-		-				-
Taxes payable		-			2,241,592		-				2,241,592
Total current liabilities		70,661			17,665,384		(70,661	)	(a)		17,665,384
TOTAL LIABILITIES		70,661			17,665,384		(70,661	)			17,665,384
SHAREHOLDERS' EQUITY
Series A Convertible Preferred Stock, par value $0.001, 10,000,000 authorized, 9,975 issued and outstanding as of September 30, 2010		-			-		10		(c)		10
Common stock, par value $0.001, 100,000,000 authorized, 25,000 issued and outstanding as of September 30, 2010		402,678			1		(402,654	)	(a)		25
Additional Paid-in-capital					2,903,421						2,903,421
Retained earnings		(473,339	)		8,557,505		473,305		(a)		8,557,471
Accumulated other comprehensive income					2,262,912		-				2,262,912
Total shareholders' equity		(70,661	)		13,723,839		70,661				13,723,839
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	-		$	31,389,223.0	$	-			$	31,389,223

F-47

LANSDOWNE SECURITY, INC.    PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS   FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010    (UNAUDITED)
					DK
		LANSDOWNE			INTERNATIONAL			PRO-FORMA
		SECURITY INC.			GROUP LIMITED			ADJUSTMENTS				PRO-FORMA
		US$			US$			US$				US$
Sales	$	-		$	44,999,626						$	44,999,626
Cost of sales		-			(32,078,763	)						(32,078,763	)
Gross profit		-			12,920,863			-				12,920,863
Selling, general and administrative expenses		(34,203	)		(4,406,740	)		34,203		(a)		(4,406,740	)
Income from operations		(34,203	)		8,514,123			34,203				8,514,124
Other income (expenses):
Interest expenses		-			(131,472	)						(131,472	)
Total Other income (expenses)		-			(131,472	)		-				(131,472	)
Income before income tax		(34,203	)		8,382,651			34,203				8,382,651
Income tax expense		-			(2,101,018	)						(2,101,018	)
Net income		(34,203	)		6,281,633			34,203				6,281,633
Other comprehensive income
Foreign currency translation gain		-			450,512							450,512
Comprehensive Income	$	(34,203	)	$	6,732,145		$	34,203.0			$	6,732,145
Cash dividends declared per share	$	-		$	5,576,110		$	(5,576,110	)	(b)	$	-
Basic earnings per share	$	-		$	6,281,633		$	(6,281,633	)	(b)	$	-
Diluted earnings per share	$	-		$	6,281,633		$	(6,281,633	)	(b)	$	0.67
Weighted average number of shares		345,939			1			9,654,061		(c)		10,000,000

F-48

LANSDOWNE SECURITY, INC. PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2009 (UNAUDITED)
					DK
		LANSDOWNE			INTERNATIONAL			PRO-FORMA
		SECURITY INC.			GROUP LIMITED			ADJUSTMENTS				PRO-FORMA
		US$			US$			US$				US$
Sales	$	-		$	56,419,090		$	-			$	56,419,090
Cost of sales		-			(41,055,147	)		-				(41,055,147	)
Gross profit		-			15,363,943			-				15,363,943
Selling, general and administrative expenses		(35,435	)		(6,260,214	)		35,435		(a)		(6,260,214	)
Income from operations		(35,435	)		9,103,729			35,435				9,103,729
Other income (expenses):
Interest expenses		-			(146,917	)		-				(146,917	)
Total Other income (expenses)		-			(146,917	)		-				(146,917	)
Income before income tax		(35,435	)		8,956,812			35,435				8,956,812
Income tax expense		-			(2,430,573	)						(2,430,573	)
Net income		(35,435	)		6,526,239			35,435				6,526,239
Other comprehensive income
Foreign currency translation gain		-			13,474							13,474
Comprehensive Income	$	(35,435	)	$	6,539,713		$	35,435			$	6,539,713
Cash dividends declared per share	$	-		$	5,945,988		$	(5,945,988	)	(b)	$	-
Basic earnings per share	$	-		$	6,526,239		$	(6,526,239	)	(b)	$	-
Diluted earnings per share	$	-		$	6,526,239		$	(6,526,239	)	(b)	$	0.65
Weighted average number of shares		10,388,986			1			(388,986	)	(c)		10,000,000

F-49

PRO FORMA ADJUSTMENTS TO

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(a) To reflect the spinoff of Lansdowne Security, Inc.’s (“Lansdowne”) assets and liabilities to Concept Franchising LLC. As part of the agreement, the assets and liabilities of Lansdowne will be spun off to Concept Franchising LLC after the reverse merger

(b) To eliminate the equity of the accounting acquiree, Lansdowne, and to reflect the recapitalization of the common stock and additional paid in capital of the Company as a result of the reverse merger.

(c) To reflect the changes in capital structure in connection with this transaction:

(i)  The cancellation of 234,616 shares of common stock;

(ii)  The issuance of 9,975 shares of Series A Preferred Stock pursuant to the Share Exchange Agreement. Each share of Series A Preferred Stock is convertible into 1,000 shares of common stock;

(iii)  The 4.44656 to 1 reverse stock split on the common stock immediately subsequent to the closing of the transaction.

F-50

EX-3.1

Exhibit 3.1

EX-3.2

Exhibit 3.2

EX-3.3

Exhibit 3.3

EX-3.4

Exhibit 3.4

EX-10.3

Exhibit 10.3

Party A: Fujian Jinjiang Aierda Shoe Plastics Company, Ltd
Party B: Quanzheng Quan'an Labor Service Company, Ltd
 
Contract #: AR20111201001

After mutual negotiation and on the basis that Party B will provide labor employment services to Party A, this agreement was reach based on the principles of equality and mutual trust and the terms are as follows:

1.	Term:
	a.	Party B will provide a number of temporary workers for Party A, and the number will be calculated based on the actual arrival to the factory, prior to which a list of names will be sent to Party A
	b.	According to the contract, Party B will send to Party A according to Party A's requirement (the exact number of workers will be determined by both parties according to the requirement), at a pre-determined date. The term of corporation is from 01/01/2011 to 12/31/2011 for a period of 1 year.
2.	Staff requirement:
	a.	The staff that Party B sends to Party A must meet the following requirements:
		i.	Age 16 or over, no disabilities, no infection diseases, with true and accurate ID, proof of residency and a copy of Hukou certificate
		ii.	Responsible, independent working abilities, good teamwork spirit, understand Mandarin, healthy and can handle shifts
		iii.	Education requirement: Elementary school and above, no major requirement, no eyesight requirement
	b.	The staff sent by Party B shall complete a health check beforehand and can provide a health certificate by local hospitals
	c.	The staff provided by Party B shall carry out all rules and regulations of Party A and support Party A's company image.
3.	Position: Party A can adjust Party B's position in the Company according to the requirements of the production situation and staff's personal situation
4.	Compensation: Method of calculation (according to the recruitment advertisement provided by the Company)
	a.	Internship: compensation is according to units of production, which is confirmed on-site. The working time shall be according to Party A's rules. If additional 1 or 2 hours of overtime is needed, management shall talk to staff first and receive consent. Party B's staff shall follow Party A's arrangement and if there's special needs or situation, shall talk to Party A first.
	b.	Party A shall fully pay the salary upon receiving the invoice provided by Party B, and shall wire the amount into the bank account designated by Party B, or Party B can pay the staff by cash with the presence of Party A's representative,
5.	Production management:

	a.	During the production, if it's found that there's a serious violation of Party A's rules and regulations, Party A has the right to impose certain punishment according to relevant rules and regulations. If it's severe, Party A has the right to return the staff to Party B, after sending explanations to Party B.
	b.	Party B shall assist with Party A in managing the staff and monitor any improper behavior. Party A can impose punishment to the staff according to Party A's regulation during the period when the staff is working at Party A's factory
	c.	If Party B's staff has some serious illness during the period, it shall provide the evidence from the hospital, and Party A can return the staff to Party B and pay compensation according to the calculation method.
6.	Rights and obligations of Party A
	a.	Party A can give some training to the staff sent by Party B
	b.	Party A shall pay appropriate compensation to the staff sent by Party B on the timely manner according to the contract
	c.	Party A shall ensure the working environment safety where the staff sent by Party B will work in
	d.	The staff can't terminate the contract on his own. A written notice shall be submitted one week ahead and shall be approved by Party A.
	e.	After the term, Party A shall assist in the evaluation of the staff
	f.	If the following happens, Party A can return the staff to Party B. After the return, Party A shall have no further obligations:
		i.	Severe violation of company rule and regulations; violation of laws
		ii.	Severe negligence and incompetency
		iii.	Using false ID or other people's ID
		iv.	Illness (due to personal reasons that are irrelevant to Party A)
7.	Rights and obligations of Party B
	a.	The information of the staff provided by Party B shall be true and correct
	b.	During the process of interview, health check, reporting and commencement of job, Party B shall appoint 1-3 people to assist Party A for the process.
	c.	Party B shall check up with the staff's situation constantly and collect any thoughts or difficulty reported by the staff to provide moral support and communicate with the staff. Party B shall provide the feedback to Party A, vice versa.
	d.	If any accident happens during the work, Party B shall assist Party A for the follow-up.
	e.	Party B shall not interfere with Party A's operations by any means, or incur any communications or partnerships that are against the interest of Party A.
8.	Important agreements:
	a.	If Party B fails to abide by the terms in the contract, Party A has the right to terminate the contract, ask Party B to withdraw its staff and take up relevant cost; Any undecided matters shall come in the form of supplement agreements that bear the same power as this contract.

b.	The contract is effective upon the signing by both parties, with two copies and each party having one. During the term, if any party would like modification, it shall be approved by both parties.
c.	Both parties shall keep the business secrets for each other and shall not by any chance provide other with Party A or Party B's business secrets; Both parties shall not contact directly with business partners of each other for direct corporation. If there's a violation, compensation shall be made (amount=3*200/person*total number of staff provided by Party B).
d.	Resolution of conflict: Both parties shall negotiate for a solution of one parties wants to terminate or violate the terms in the contract. If not resolved by negotiation, it can be solved through processes according to relevant laws.

Party A: Dake (Fujian) Sports Goods Company, Ltd
Party B: Quanzheng Quan'an Labor Service Company, Ltd

Contract #: DK20110201001

After mutual negotiation and on the basis that Party B will provide labor employment services to Party A, this agreement was reach based on the principles of equality and mutual trust and the terms are as follows:

1.	Term:
	a.	Party B will provide a number of temporary workers for Party A, and the number will be calculated based on the actual arrival to the factory, prior to which a list of names will be sent to Party A
	b.	According to the contract, Party B will send to Party A according to Party A's requirement (the exact number of workers will be determined by both parties according to the requirement), at a pre-determined date. The term of corporation is from 01/01/2011 to 12/31/2011 for a period of 1 year.
2.	Staff requirement:
	a.	The staff that Party B sends to Party A must meet the following requirements:
		i.	Age 16 or over, no disabilities, no infection diseases, with true and accurate ID, proof of residency and a copy of Hukou certificate
		ii.	Responsible, independent working abilities, good teamwork spirit, understand Mandarin, healthy and can handle shifts
		iii.	Education requirement: Elementary school and above, no major requirement, no eyesight requirement
	b.	The staff sent by Party B shall complete a health check beforehand and can provide a health certificate by local hospitals
	c.	The staff provided by Party B shall carry out all rules and regulations of Party A and support Party A's company image.
3.	Position: Party A can adjust Party B's position in the Company according to the requirements of the production situation and staff's personal situation
4.	Compensation: Method of calculation (according to the recruitment advertisement provided by the Company)
	a.	Internship: compensation is according to units of production, which is confirmed on-site. The working time shall be according to Party A's rules. If additional 1 or 2 hours of overtime is needed, management shall talk to staff first and receive consent. Party B's staff shall follow Party A's arrangement and if there's special needs or situation, shall talk to Party A first.
	b.	Party A shall fully pay the salary upon receiving the invoice provided by Party B, and shall wire the amount into the bank account designated by Party B, or Party B can pay the staff by cash with the presence of Party A's representative,
5.	Production management:

	a.	During the production, if it's found that there's a serious violation of Party A's rules and regulations, Party A has the right to impose certain punishment according to relevant rules and regulations. If it's severe, Party A has the right to return the staff to Party B, after sending explanations to Party B.
	b.	Party B shall assist with Party A in managing the staff and monitor any improper behavior. Party A can impose punishment to the staff according to Party A's regulation during the period when the staff is working at Party A's factory
	c.	If Party B's staff has some serious illness during the period, it shall provide the evidence from the hospital, and Party A can return the staff to Party B and pay compensation according to the calculation method.
6.	Rights and obligations of Party A
	a.	Party A can give some training to the staff sent by Party B
	b.	Party A shall pay appropriate compensation to the staff sent by Party B on the timely manner according to the contract
	c.	Party A shall ensure the working environment safety where the staff sent by Party B will work in
	d.	The staff can't terminate the contract on his own. A written notice shall be submitted one week ahead and shall be approved by Party A.
	e.	After the term, Party A shall assist in the evaluation of the staff
	f.	If the following happens, Party A can return the staff to Party B. After the return, Party A shall have no further obligations:
		i.	Severe violation of company rule and regulations; violation of laws
		ii.	Severe negligence and incompetency
		iii.	Using false ID or other people's ID
		iv.	Illness (due to personal reasons that are irrelevant to Party A)
7.	Rights and obligations of Party B
	a.	The information of the staff provided by Party B shall be true and correct
	b.	During the process of interview, health check, reporting and commencement of job, Party B shall appoint 1-3 people to assist Party A for the process.
	c.	Party B shall check up with the staff's situation constantly and collect any thoughts or difficulty reported by the staff to provide moral support and communicate with the staff. Party B shall provide the feedback to Party A, vice versa.
	d.	If any accident happens during the work, Party B shall assist Party A for the follow-up.
	e.	Party B shall not interfere with Party A's operations by any means, or incur any communications or partnerships that are against the interest of Party A.
8.	Important agreements:
	a.	If Party B fails to abide by the terms in the contract, Party A has the right to terminate the contract, ask Party B to withdraw its staff and take up relevant cost; Any undecided matters shall come in the form of supplement agreements that bear the same power as this contract.

 

b.	The contract is effective upon the signing by both parties, with two copies and each party having one. During the term, if any party would like modification, it shall be approved by both parties.
c.	Both parties shall keep the business secrets for each other and shall not by any chance provide other with Party A or Party B's business secrets; Both parties shall not contact directly with business partners of each other for direct corporation. If there's a violation, compensation shall be made (amount=3*200/person*total number of staff provided by Party B).
d.	Resolution of conflict: Both parties shall negotiate for a solution of one parties wants to terminate or violate the terms in the contract. If not resolved by negotiation, it can be solved through processes according to relevant laws.

EX-10.4

Exhibit 10.4

Employment Agreement

Party A: Dake (Fujian) Sports Goods Co., Ltd
Address: Henggoutou Industrial District, Chendai Town, Jinjiang City, Fujian Province, China
Legal Representative: Yuxi Ding
Tel.: 82011827

Party B: Xinquan Liu
Sex: Male
Census Register: Government Yard, Yongfeng Village, Hanyang District, Wuhan
Tel.: 13645986647
ID No.: 429004197112093234

In accordance with relevant laws and regulations of Labor Contract Law of the People’s Republic of China and through negotiation based on equality and free will, the two parties agree to conclude this Employment Agreement under the following terms and conditions.

1. Term of Labor Contract

1)	Fixed–term Agreement: the validity term of this Agreement commences on the date of Jan 31st , 2010, and expires on the date of Jan 30th , 2015, including probation of 3 months from the date of Jan 31st , 2010 to the date of Apr 30th , 2010.
2)	Uncertain term Agreement: the validity term of this Agreement commences on the date of , and expires on occurrence of legal termination conditions, including probation of months from the date of to the date of .
3)	Period Agreement: the validity term of this Agreement commences on the date of , and expires on completion of certain task.

2. Content and Location of Work

1)	Party B is to work at the location of Jinjiang in the position of Production Manager.
2)	Party B shall be subject to the work arrangement made by Party A, according to working requirements and working capacity and performance of Party B.
3)	Party B shall perform his or her work duties provided by Party A, and shall complete his or her work task in accordance with the provisions in terms of time limit, quality and workload.

3. Working Days and Holidays

1) Party A is pursuant to the full–time standard working time system and could make arrangement of working time in accordance with relevant regulations of laws and specific position requirements of Party B. Party B should comply with the working time regulated by Party A.

2) To the particularity of the position, Party B shall be subject to the work arrangement made by Party A, according to working requirement, on working time, working shift, and days off.

4. Remuneration

1) Wage of Party B is paid at yuan/month during probation. After probation wage is paid in the first way stated below.

i.	Wage paid by time: wage is yuan/month.
ii.	Wage paid by piece: piece wage is decided though proper and scientific pricing standard of Party A and timely negotiation of both parties.
iii.	Other ways: _______________
	Party A should pay Party B wage in legal currency on every month. Standard of wage of Party B should not below minimum wage standard published by People’s Government of Fujian Province. Over–time payment is paid to relevant laws and regulations.

2) Party A shall adjust Party B’s wage standard according to actual operational conditions, rules and regulations of the company, performance assessment of Party B, as well as working seniority, records of rewards and punishments, and formation of position. After position adjustment, wage of Party B should be adjusted according to wage standard in the same level of position, type of work, and post and should meet minimum wage standard.

5.	Social Insurance
	Both parties should honor regulations of social insurance and pay social insurance premium. Personal part of social insurance premium will be deducted from wage of Party B.
	On the termination or conclusion of this Agreement, Party A should be responsible for relevant formalities of social insurance transfer for Party B and issue termination or conclusion certification of Employment Agreement. Party B should be responsible for timely handing over formalities.

6. Labor Protection, Working Condition and Prevention against Occupational Hazard

1)	Party A shall provide Party B with preventing conditions against occupational hazard in accordance with the State’s labor standard.
2)	Party B is entitled to the corresponding labor protection and working condition by provided by Party A.
3)	If Party B engages in work of exposure to occupational disease hazard, Party A should arrange occupational health check, according to state’s regulations concerned before on board and departure, as well as annual occupational health check during the term of this Agreement.

7. Agreed Provisions

1)	Agreement on trainings paid by Party A:
2)	Agreement on keeping commercial information confidential: this provision is limited to senior officers, senior technology personnel and others evolved in commercial information. (see staff discipline for details)
3)	Agreement on supplementary of insurance and well–being: if Party B voluntarily gives up the well–being of social insurance, Party B should sign confirmation of giving up social insurance.

4) Agreement on other issues

i.	Party B should comply with rules and regulations of Party A.
ii.	If Party B leaves halfway, entry allowances should be returned.
iii.	Absence from work will be charged three–day wage and accumulatively three–day absence a month is regarded as voluntarily giving up the position with no wage settlement; fighting and brawls lead to dismiss with no wage settlement.

8.	Formation of Labor Contract
	This Agreement could be altered after negotiation of both parties. Any change of this Agreement should be effective after recording the change in written form, listing out date of change, signing and sealing by both parties. For alteration of this Agreement, parties should make alteration letter, or specific alteration agreement which is appendix of this Agreement with the same legal validity to this Agreement.
9.	Termination, conclusion and renewal of this Agreement are pursuant to relevant regulations of municipal, provincial and state government.
10.	Resolving of Labor Disputes
	In case of any disputes arising from the performance of this Agreement which could not be solved by negotiation, either party may submit the case to labor dispute mediation commission of Party A for mediation; if such mediation fails, either party may submit the case in written application to labor dispute arbitration commission within statutory prescription; if either party refuses to accept the award rendered by the arbitration commission, it may lodge a lawsuit to local court within 15 days after receiving award sample.
11.	Issues not stated in this Agreement are to be solved by relevant regulations or under negotiation of both parties. If provisions of this Agreement are against latest laws or regulations, regulations of latest laws are ultimate.
12.	This Agreement is made in two copies with each party holding one.

Party A (Sealing): ___________________
Legal Representative: ________________
Signing Date: ______________________

Party B: __________________________
Signing Date: ______________________

Witnessed By (Sealing): ______________
Signing Date: ______________________

EX-10.5

Exhibit 10.5

Employment Agreement

Party A: Dake (Fujian) Sports Goods Co., Ltd
Address: Henggoutou Industrial District, Chendai Town, Jinjiang City, Fujian Province, China
Legal Representative: Yuxi Ding
Tel.: 82011827

Party B: Andong Wang
Sex: Male
Census Register: No. 21, Ruhe Alley, Xinhua Road, Runan County, Henan Province
Tel.: 14741160199
ID No.: 412826197609170016

In accordance with relevant laws and regulations of Labor Contract Law of the People’s Republic of China and through negotiation based on equality and free will, the two parties agree to conclude this Employment Agreement under the following terms and conditions.

1.	Term of Labor Contract
	1)	Fixed-term Agreement: the validity term of this Agreement commences on the date of Jan. 5th , 2009, and expires on the date of Jan. 4th , 2014, including probation of 3 months from the date of Jan. 5th , 2009 to the date of Apr. 4th , 2009.
	2)	Uncertain term Agreement: the validity term of this Agreement commences on the date of _____, and expires on occurrence of legal termination conditions, including probation of __ months from the date of _____to the date of ______.
	3)	Period Agreement: the validity term of this Agreement commences on the date of and expires on completion of certain task.
2.	Content and Location of Work
	1)	Party B is to work at the location of Jinjiang in the position of Chief Marketing Officer.
	2)	Party B shall be subject to the work arrangement made by Party A, according to working requirements and working capacity and performance of Party B.
	3)	Party B shall perform his or her work duties provided by Party A, and shall complete his or her work task in accordance with the provisions in terms of time limit, quality and workload.
3.	Working Days and Holidays
	1)	Party A is pursuant to the full-time standard working time system and could make arrangement of working time in accordance with relevant regulations of laws and specific position requirements of Party B. Party B should comply with the working time regulated by Party A.
	2)	To the particularity of the position, Party B shall be subject to the work arrangement made by Party A, according to working requirement, on working time, working shift, and days off.
4.	Remuneration
	1)	Wage of Party B is paid at ____ yuan/month during probation. After probation wage is paid in the first way stated below.

i.	Wage paid by time: wage is ____yuan/month.
ii.	Wage paid by piece: piece wage is decided though proper and scientific pricing standard of Party A and timely negotiation of both parties.
iii.	Other ways:

Party A should pay Party B wage in legal currency on every month. Standard of wage of Party B should not below minimum wage standard published by People’s Government of Fujian Province. Over-time payment is paid to relevant laws and regulations.

2) Party A shall adjust Party B’s wage standard according to actual operational conditions, rules and regulations of the company, performance assessment of Party B, as well as working seniority, records of rewards and punishments, and formation of position. After position adjustment, wage of Party B should be adjusted according to wage standard in the same level of position, type of work, and post and should meet minimum wage standard.

5.	Social Insurance
	Both parties should honor regulations of social insurance and pay social insurance premium. Personal part of social insurance premium will be deducted from wage of Party B.
	On the termination or conclusion of this Agreement, Party A should be responsible for relevant formalities of social insurance transfer for Party B and issue termination or conclusion certification of Employment Agreement. Party B should be responsible for timely handing over formalities.
6.	Labor Protection, Working Condition and Prevention against Occupational Hazard
	1)	Party A shall provide Party B with preventing conditions against occupational hazard in accordance with the State’s labor standard.
	2)	Party B is entitled to the corresponding labor protection and working condition by provided by Party A.
	3)	If Party B engages in work of exposure to occupational disease hazard, Party A should arrange occupational health check, according to state’s regulations concerned before on board and departure, as well as annual occupational health check during the term of this Agreement.
7.	Agreed Provisions
	1)	Agreement on trainings paid by Party A:
	2)	Agreement on keeping commercial information confidential: this provision is limited to senior officers, senior technology personnel and others evolved in commercial information. (see staff discipline for details)
	3)	Agreement on supplementary of insurance and well-being: if Party B voluntarily gives up the well-being of social insurance, Party B should sign confirmation of giving up social insurance.
8.	Formation of Labor Contract
	This Agreement could be altered after negotiation of both parties. Any change of this Agreement should be effective after recording the change in written form, listing out date of change, signing and sealing by both parties. For alteration of this Agreement, parties should make alteration letter, or specific alteration agreement which is appendix of this Agreement with the same legal validity to this Agreement.

2

9.	Termination, conclusion and renewal of this Agreement are pursuant to relevant regulations of municipal, provincial and state government.
10.	Resolving of Labor Disputes
	In case of any disputes arising from the performance of this Agreement which could not be solved by negotiation, either party may submit the case to labor dispute mediation commission of Party A for mediation; if such mediation fails, either party may submit the case in written application to labor dispute arbitration commission within statutory prescription; if either party refuses to accept the award rendered by the arbitration commission, it may lodge a lawsuit to local court within 15 days after receiving award sample.
11.	Issues not stated in this Agreement are to be solved by relevant regulations or under negotiation of both parties. If provisions of this Agreement are against latest laws or regulations, regulations of latest laws are ultimate.
12.	This Agreement is made in two copies with each party holding one.

Party A (Sealing):
Legal Representative:
Signing Date:

Party B:
Signing Date:

Witnessed By (Sealing):
Signing Date:

3

EX-10.6

Exhibit 10.6

Employment Agreement

Party A: Dake (Fujian) Sports Goods Co., Ltd
Address: Henggoutou Industrial District, Chendai Town, Jinjiang City, Fujian Province, China
Legal Representative: Yuxi Ding
Tel.: 82011827

Party B: Lifen Zheng
Sex: Female
Census Register: Room 202, Building No. 7, Donghu Real Estate, Fengze District, Quanzhou City, Fujian Province
Tel.: 13960277755
ID No.: 350525197010205621

In accordance with relevant laws and regulations of Labor Contract Law of the People’s Republic of China and through negotiation based on equality and free will, the two parties agree to conclude this Employment Agreement under the following terms and conditions.

1.	Term of Labor Contract
	1)	Fixed-term Agreement: the validity term of this Agreement commences on the date of Feb. 10th , 2008, and expires on the date of Feb. 10th , 2013, including probation of 3 months from the date of Feb. 10th , 2008 to the date of May 9th , 2008.
	2)	Uncertain term Agreement: the validity term of this Agreement commences on the date of ____ , and expires on occurrence of legal termination conditions, including probation of ____months from the date of ____to the date of ____.
	3)	Period Agreement: the validity term of this Agreement commences on the date of and expires on completion of certain task.
2.	Content and Location of Work
	1)	Party B is to work at the location of Jinjiang in the position of Chief Financial Officer.
	2)	Party B shall be subject to the work arrangement made by Party A, according to working requirements and working capacity and performance of Party B.
	3)	Party B shall perform his or her work duties provided by Party A, and shall complete his or her work task in accordance with the provisions in terms of time limit, quality and workload.
3.	Working Days and Holidays
	1)	Party A is pursuant to the full-time standard working time system and could make arrangement of working time in accordance with relevant regulations of laws and specific position requirements of Party B. Party B should comply with the working time regulated by Party A.
	2)	To the particularity of the position, Party B shall be subject to the work arrangement made by Party A, according to working requirement, on working time, working shift, and days off.

4.	Remuneration
	1)	Wage of Party B is paid at ____yuan/month during probation. After probation wage is paid in the first way stated below.

i.	Wage paid by time: wage is ____yuan/month.
ii.	Wage paid by piece: piece wage is decided though proper and scientific pricing standard of Party A and timely negotiation of both parties.
iii.	Other ways:

Party A should pay Party B wage in legal currency on ____ every month. Standard of wage of Party B should not below minimum wage standard published by People’s Government of Fujian Province. Over-time payment is paid to relevant laws and regulations.

2) Party A shall adjust Party B’s wage standard according to actual operational conditions, rules and regulations of the company, performance assessment of Party B, as well as working seniority, records of rewards and punishments, and formation of position. After position adjustment, wage of Party B should be adjusted according to wage standard in the same level of position, type of work, and post and should meet minimum wage standard.

5.	Social Insurance
	Both parties should honor regulations of social insurance and pay social insurance premium. Personal part of social insurance premium will be deducted from wage of Party B.
	On the termination or conclusion of this Agreement, Party A should be responsible for relevant formalities of social insurance transfer for Party B and issue termination or conclusion certification of Employment Agreement. Party B should be responsible for timely handing over formalities.
6.	Labor Protection, Working Condition and Prevention against Occupational Hazard
	1)	Party A shall provide Party B with preventing conditions against occupational hazard in accordance with the State’s labor standard.
	2)	Party B is entitled to the corresponding labor protection and working condition by provided by Party A.
	3)	If Party B engages in work of exposure to occupational disease hazard, Party A should arrange occupational health check, according to state’s regulations concerned before on board and departure, as well as annual occupational health check during the term of this Agreement.
7.	Agreed Provisions
	1)	Agreement on trainings paid by Party A:
	2)	Agreement on keeping commercial information confidential: this provision is limited to senior officers, senior technology personnel and others evolved in commercial information. (see staff discipline for details)
	3)	Agreement on supplementary of insurance and well-being: if Party B voluntarily gives up the well-being of social insurance, Party B should sign confirmation of giving up social insurance.
8.	Formation of Labor Contract
	This Agreement could be altered after negotiation of both parties. Any change of this Agreement should be effective after recording the change in written form, listing out date of change, signing and sealing by both parties. For alteration of this Agreement, parties should make alteration letter, or specific alteration agreement which is appendix of this Agreement with the same legal validity to this Agreement.

2

9.	Termination, conclusion and renewal of this Agreement are pursuant to relevant regulations of municipal, provincial and state government.
10.	Resolving of Labor Disputes
	In case of any disputes arising from the performance of this Agreement which could not be solved by negotiation, either party may submit the case to labor dispute mediation commission of Party A for mediation; if such mediation fails, either party may submit the case in written application to labor dispute arbitration commission within statutory prescription; if either party refuses to accept the award rendered by the arbitration commission, it may lodge a lawsuit to local court within 15 days after receiving award sample.
11.	Issues not stated in this Agreement are to be solved by relevant regulations or under negotiation of both parties. If provisions of this Agreement are against latest laws or regulations, regulations of latest laws are ultimate.
12.	This Agreement is made in two copies with each party holding one.

Party A (Sealing):
Legal Representative:
Signing Date:

Party B:
Signing Date:

Witnessed By (Sealing):
Signing Date:

3

EX-10.7

Exhibit 10.7

Employment Agreement

Party A: Dake (Fujian) Sports Goods Co., Ltd
Address: Henggoutou Industrial District, Chendai Town, Jinjiang City, Fujian Province, China
Legal Representative: Yuxi Ding
Tel.: 82011827

Party B: Conghui Ding
Sex: Male
Census Register: Jiangtou Village, Chendai Town, Jinjiang City
Tel.: 15859508666
ID No.: 350582198308080552

In accordance with relevant laws and regulations of Labor Contract Law of the People’s Republic of China and through negotiation based on equality and free will, the two parties agree to conclude this Employment Agreement under the following terms and conditions.

1.	Term of Labor Contract
	1)	Fixed-term Agreement: the validity term of this Agreement commences on the date of ____, and expires on the date of ____, including probation of months from the date of to the date of ____.
	2)	Uncertain term Agreement: the validity term of this Agreement commences on the date of Jan. 1st , 2009, and expires on occurrence of legal termination conditions, including probation of ___ months from the date of ___to the date of ___.
	3)	Period Agreement: the validity term of this Agreement commences on the date of and expires on completion of certain task.

2.	Content and Location of Work
	1)	Party B is to work at the location of Jinjiang in the position of General Manager , .
	2)	Party B shall be subject to the work arrangement made by Party A, according to working requirements and working capacity and performance of Party B.
	3)	Party B shall perform his or her work duties provided by Party A, and shall complete his or her work task in accordance with the provisions in terms of time limit, quality and workload.

3.	Working Days and Holidays
	1)	Party A is pursuant to the full-time standard working time system and could make arrangement of working time in accordance with relevant regulations of laws and specific position requirements of Party B. Party B should comply with the working time regulated by Party A.
	2)	To the particularity of the position, Party B shall be subject to the work arrangement made by Party A, according to working requirement, on working time, working shift, and days off.

4.	Remuneration
	1)	Wage of Party B is paid at ____yuan/month during probation. After probation wage is paid in the first way stated below.

i.	Wage paid by time: wage is ___ yuan/month.
ii.	Wage paid by piece: piece wage is decided though proper and scientific pricing standard of Party A and timely negotiation of both parties.
iii.	Other ways:

Party A should pay Party B wage in legal currency on every month. Standard of wage of Party B should not below minimum wage standard published by People’s Government of Fujian Province. Over-time payment is paid to relevant laws and regulations.

2) Party A shall adjust Party B’s wage standard according to actual operational conditions, rules and regulations of the company, performance assessment of Party B, as well as working seniority, records of rewards and punishments, and formation of position. After position adjustment, wage of Party B should be adjusted according to wage standard in the same level of position, type of work, and post and should meet minimum wage standard.

5.	Social Insurance
	Both parties should honor regulations of social insurance and pay social insurance premium. Personal part of social insurance premium will be deducted from wage of Party B.
	On the termination or conclusion of this Agreement, Party A should be responsible for relevant formalities of social insurance transfer for Party B and issue termination or conclusion certification of Employment Agreement. Party B should be responsible for timely handing over formalities.
6.	Labor Protection, Working Condition and Prevention against Occupational Hazard
	1)	Party A shall provide Party B with preventing conditions against occupational hazard in accordance with the State’s labor standard.
	2)	Party B is entitled to the corresponding labor protection and working condition by provided by Party A.
	3)	If Party B engages in work of exposure to occupational disease hazard, Party A should arrange occupational health check, according to state’s regulations concerned before on board and departure, as well as annual occupational health check during the term of this Agreement.
7.	Agreed Provisions
	1)	Agreement on trainings paid by Party A:
	2)	Agreement on keeping commercial information confidential: this provision is limited to senior officers, senior technology personnel and others evolved in commercial information. (see staff discipline for details)
	3)	Agreement on supplementary of insurance and well-being: if Party B voluntarily gives up the well-being of social insurance, Party B should sign confirmation of giving up social insurance.
8.	Formation of Labor Contract
	This Agreement could be altered after negotiation of both parties. Any change of this Agreement should be effective after recording the change in written form, listing out date of change, signing and sealing by both parties. For alteration of this Agreement, parties should make alteration letter, or specific alteration agreement which is appendix of this Agreement with the same legal validity to this Agreement.
9.	Termination, conclusion and renewal of this Agreement are pursuant to relevant regulations of municipal, provincial and state government.

2

10.	Resolving of Labor Disputes
	In case of any disputes arising from the performance of this Agreement which could not be solved by negotiation, either party may submit the case to labor dispute mediation commission of Party A for mediation; if such mediation fails, either party may submit the case in written application to labor dispute arbitration commission within statutory prescription; if either party refuses to accept the award rendered by the arbitration commission, it may lodge a lawsuit to local court within 15 days after receiving award sample.
11.	Issues not stated in this Agreement are to be solved by relevant regulations or under negotiation of both parties. If provisions of this Agreement are against latest laws or regulations, regulations of latest laws are ultimate.
12.	This Agreement is made in two copies with each party holding one.

Party A (Sealing):
Legal Representative:
Signing Date:

Party B:
Signing Date:

Witnessed By (Sealing):
Signing Date:

3

EX-10.8

Exhibit 10.8

Employment Agreement

Party A: Dake (Fujian) Sports Goods Co., Ltd
Address: Henggoutou Industrial District, Chendai Town, Jinjiang City, Fujian Province, China
Legal Representative: Yuxi Ding
Tel.: 82011827

Party B: Congren Ding
Sex: Male
Census Register: Jiangtou Village, Chendai Town, Jinjiang City
Tel.: 13506063506
ID No.: 350582198103130552

In accordance with relevant laws and regulations of Labor Contract Law of the People’s Republic of China and through negotiation based on equality and free will, the two parties agree to conclude this Employment Agreement under the following terms and conditions.

1.	Term of Labor Contract
	1)	Fixed-term Agreement: the validity term of this Agreement commences on the date of ____, and expires on the date of ____, including probation of months from the date of ____to the date of ____.
	2)	Uncertain term Agreement: the validity term of this Agreement commences on the date of June 15th , 1999, and expires on occurrence of legal termination conditions, including probation of ____ months from the date of ____to the date of ____.
	3)	Period Agreement: the validity term of this Agreement commences on the date of ___ and expires on completion of certain task.

2.	Content and Location of Work
	1)	Party B is to work at the location of Jinjiang in the position of Director.
	2)	Party B shall be subject to the work arrangement made by Party A, according to working requirements and working capacity and performance of Party B.
	3)	Party B shall perform his or her work duties provided by Party A, and shall complete his or her work task in accordance with the provisions in terms of time limit, quality and workload.

3.	Working Days and Holidays
	1)	Party A is pursuant to the full-time standard working time system and could make arrangement of working time in accordance with relevant regulations of laws and specific position requirements of Party B. Party B should comply with the working time regulated by Party A.
	2)	To the particularity of the position, Party B shall be subject to the work arrangement made by Party A, according to working requirement, on working time, working shift, and days off.

4.	Remuneration
	1)	Wage of Party B is paid at ____yuan/month during probation. After probation wage is paid in the first way stated below.

i.	Wage paid by time: wage is ___ yuan/month.
ii.	Wage paid by piece: piece wage is decided though proper and scientific pricing standard of Party A and timely negotiation of both parties.
iii.	Other ways:

Party A should pay Party B wage in legal currency on ___ every month. Standard of wage of Party B should not below minimum wage standard published by People’s Government of Fujian Province. Over-time payment is paid to relevant laws and regulations.

2) Party A shall adjust Party B’s wage standard according to actual operational conditions, rules and regulations of the company, performance assessment of Party B, as well as working seniority, records of rewards and punishments, and formation of position. After position adjustment, wage of Party B should be adjusted according to wage standard in the same level of position, type of work, and post and should meet minimum wage standard.

5.	Social Insurance
	Both parties should honor regulations of social insurance and pay social insurance premium. Personal part of social insurance premium will be deducted from wage of Party B.
	On the termination or conclusion of this Agreement, Party A should be responsible for relevant formalities of social insurance transfer for Party B and issue termination or conclusion certification of Employment Agreement. Party B should be responsible for timely handing over formalities.
6.	Labor Protection, Working Condition and Prevention against Occupational Hazard
	1)	Party A shall provide Party B with preventing conditions against occupational hazard in accordance with the State’s labor standard.
	2)	Party B is entitled to the corresponding labor protection and working condition by provided by Party A.
	3)	If Party B engages in work of exposure to occupational disease hazard, Party A should arrange occupational health check, according to state’s regulations concerned before on board and departure, as well as annual occupational health check during the term of this Agreement.
7.	Agreed Provisions
	1)	Agreement on trainings paid by Party A:
	2)	Agreement on keeping commercial information confidential: this provision is limited to senior officers, senior technology personnel and others evolved in commercial information. (see staff discipline for details)
	3)	Agreement on supplementary of insurance and well-being: if Party B voluntarily gives up the well-being of social insurance, Party B should sign confirmation of giving up social insurance.
8.	Formation of Labor Contract
	This Agreement could be altered after negotiation of both parties. Any change of this Agreement should be effective after recording the change in written form, listing out date of change, signing and sealing by both parties. For alteration of this Agreement, parties should make alteration letter, or specific alteration agreement which is appendix of this Agreement with the same legal validity to this Agreement.
9.	Termination, conclusion and renewal of this Agreement are pursuant to relevant regulations of municipal, provincial and state government.

2

10.	Resolving of Labor Disputes
	In case of any disputes arising from the performance of this Agreement which could not be solved by negotiation, either party may submit the case to labor dispute mediation commission of Party A for mediation; if such mediation fails, either party may submit the case in written application to labor dispute arbitration commission within statutory prescription; if either party refuses to accept the award rendered by the arbitration commission, it may lodge a lawsuit to local court within 15 days after receiving award sample.
11.	Issues not stated in this Agreement are to be solved by relevant regulations or under negotiation of both parties. If provisions of this Agreement are against latest laws or regulations, regulations of latest laws are ultimate.
12.	This Agreement is made in two copies with each party holding one.

Party A (Sealing):
Legal Representative:
Signing Date:

Party B:
Signing Date:

Witnessed By (Sealing):
Signing Date:

3

EX-10.9

Exhibit 10.9

Employment Agreement

Party A: Dake (Fujian) Sports Goods Co., Ltd
Address: Henggoutou Industrial District, Chendai Town, Jinjiang City, Fujian Province, China
Legal Representative: Yuxi Ding
Tel.: 82011827

Party B: Tao Zhang
Sex: Male
Census Register: Lunqiao Village, Hufeng Town, Tongliang County, Chongqing City
Tel.:
ID No.: 51022819780705435X

In accordance with relevant laws and regulations of Labor Contract Law of the People’s Republic of China and through negotiation based on equality and free will, the two parties agree to conclude this Employment Agreement under the following terms and conditions.

1.	Term of Labor Contract
	1)	Fixed-term Agreement: the validity term of this Agreement commences on the date of Jan. 15th , 2010, and expires on the date of Jan. 4th , 2014, including probation of 3 months from the date of Jan 15th , 2010 to the date of Apr. 14th , 2010.
	2)	Uncertain term Agreement: the validity term of this Agreement commences on the date of ____, and expires on occurrence of legal termination conditions, including probation of __ months from the date of ___to the date of ___.
	3)	Period Agreement: the validity term of this Agreement commences on the date of and expires on completion of certain task.
2.	Content and Location of Work
	1)	Party B is to work at the location of Jinjiang in the position of Chief Designer.
	2)	Party B shall be subject to the work arrangement made by Party A, according to working requirements and working capacity and performance of Party B.
	3)	Party B shall perform his or her work duties provided by Party A, and shall complete his or her work task in accordance with the provisions in terms of time limit, quality and workload.
3.	Working Days and Holidays
	1)	Party A is pursuant to the full-time standard working time system and could make arrangement of working time in accordance with relevant regulations of laws and specific position requirements of Party B. Party B should comply with the working time regulated by Party A.
	2)	To the particularity of the position, Party B shall be subject to the work arrangement made by Party A, according to working requirement, on working time, working shift, and days off.
4.	Remuneration
	1)	Wage of Party B is paid at ___ yuan/month during probation. After probation wage is paid in the first way stated below.

i.	Wage paid by time: wage is ___ yuan/month.
ii.	Wage paid by piece: piece wage is decided though proper and scientific pricing standard of Party A and timely negotiation of both parties.
iii.	Other ways:

Party A should pay Party B wage in legal currency on ___ every month. Standard of wage of Party B should not below minimum wage standard published by People’s Government of Fujian Province. Over-time payment is paid to relevant laws and regulations.

2) Party A shall adjust Party B’s wage standard according to actual operational conditions, rules and regulations of the company, performance assessment of Party B, as well as working seniority, records of rewards and punishments, and formation of position. After position adjustment, wage of Party B should be adjusted according to wage standard in the same level of position, type of work, and post and should meet minimum wage standard.

5.	Social Insurance
	Both parties should honor regulations of social insurance and pay social insurance premium. Personal part of social insurance premium will be deducted from wage of Party B.
	On the termination or conclusion of this Agreement, Party A should be responsible for relevant formalities of social insurance transfer for Party B and issue termination or conclusion certification of Employment Agreement. Party B should be responsible for timely handing over formalities.
6.	Labor Protection, Working Condition and Prevention against Occupational Hazard
	1)	Party A shall provide Party B with preventing conditions against occupational hazard in accordance with the State’s labor standard.
	2)	Party B is entitled to the corresponding labor protection and working condition by provided by Party A.
	3)	If Party B engages in work of exposure to occupational disease hazard, Party A should arrange occupational health check, according to state’s regulations concerned before on board and departure, as well as annual occupational health check during the term of this Agreement.
7.	Agreed Provisions
	1)	Agreement on trainings paid by Party A:
	2)	Agreement on keeping commercial information confidential: this provision is limited to senior officers, senior technology personnel and others evolved in commercial information. (see staff discipline for details)
	3)	Agreement on supplementary of insurance and well-being: if Party B voluntarily gives up the well-being of social insurance, Party B should sign confirmation of giving up social insurance.
	4)	Agreement on other issues
		i.	Party B should comply with rules and regulations of Party A.
		ii.	If Party B leaves halfway, entry allowances should be returned.
		iii.	Absence from work will be charged three-day wage and accumulatively three-day absence a month is regarded as voluntarily giving up the position with no wage settlement; fighting and brawls lead to dismiss with no wage settlement.

2

8.	Formation of Labor Contract
	This Agreement could be altered after negotiation of both parties. Any change of this Agreement should be effective after recording the change in written form, listing out date of change, signing and sealing by both parties. For alteration of this Agreement, parties should make alteration letter, or specific alteration agreement which is appendix of this Agreement with the same legal validity to this Agreement.
9.	Termination, conclusion and renewal of this Agreement are pursuant to relevant regulations of municipal, provincial and state government.
10.	Resolving of Labor Disputes
	In case of any disputes arising from the performance of this Agreement which could not be solved by negotiation, either party may submit the case to labor dispute mediation commission of Party A for mediation; if such mediation fails, either party may submit the case in written application to labor dispute arbitration commission within statutory prescription; if either party refuses to accept the award rendered by the arbitration commission, it may lodge a lawsuit to local court within 15 days after receiving award sample.
11.	Issues not stated in this Agreement are to be solved by relevant regulations or under negotiation of both parties. If provisions of this Agreement are against latest laws or regulations, regulations of latest laws are ultimate.
12.	This Agreement is made in two copies with each party holding one.

Party A (Sealing):
Legal Representative:
Signing Date:

Party B:
Signing Date:

Witnessed By (Sealing):
Signing Date:

3

EX-10.10

Exhibit 10.10

Employment Agreement

Party A: Dake (Fujian) Sports Goods Co., Ltd
Address: Henggoutou Industrial District, Chendai Town, Jinjiang City, Fujian Province, China
Legal Representative: Yuxi Ding
Tel.: 82011827

Party B: Yuxi Ding
Sex: Male
Census Register: No. 82, China Town, Manila, Philippines
Tel.: 13505902789
ID No.: F000032444

In accordance with relevant laws and regulations of Labor Contract Law of the People’s Republic of China and through negotiation based on equality and free will, the two parties agree to conclude this Employment Agreement under the following terms and conditions.

1.	Term of Labor Contract
	1)	Fixed-term Agreement: the validity term of this Agreement commences on the date of ____, and expires on the date of ____, including probation of __ months from the date of ____to the date of ____.
	2)	Uncertain term Agreement: the validity term of this Agreement commences on the date of June 15th , 1999, and expires on occurrence of legal termination conditions, including probation of __ months from the date of ____ to the date of ____.
	3)	Period Agreement: the validity term of this Agreement commences on the date of and expires on completion of certain task.

2.	Content and Location of Work
	1)	Party B is to work at the location of Jinjiang in the position of Chairman of the Board.
	2)	Party B shall be subject to the work arrangement made by Party A, according to working requirements and working capacity and performance of Party B.
	3)	Party B shall perform his or her work duties provided by Party A, and shall complete his or her work task in accordance with the provisions in terms of time limit, quality and workload.

3.	Working Days and Holidays
	1)	Party A is pursuant to the full-time standard working time system and could make arrangement of working time in accordance with relevant regulations of laws and specific position requirements of Party B. Party B should comply with the working time regulated by Party A.
	2)	To the particularity of the position, Party B shall be subject to the work arrangement made by Party A, according to working requirement, on working time, working shift, and days off.

4.	Remuneration
	1) Wage of Party B is ____ paid at yuan/month during probation. After probation wage is paid in the first way stated below.

i.	Wage paid by time: wage is ____ yuan/month.
ii.	Wage paid by piece: piece wage is decided though proper and scientific pricing standard of Party A and timely negotiation of both parties.
iii.	Other ways:

Party A should pay Party B wage in legal currency on __ every month. Standard of wage of Party B should not below minimum wage standard published by People’s Government of Fujian Province. Over-time payment is paid to relevant laws and regulations.

2) Party A shall adjust Party B’s wage standard according to actual operational conditions, rules and regulations of the company, performance assessment of Party B, as well as working seniority, records of rewards and punishments, and formation of position. After position adjustment, wage of Party B should be adjusted according to wage standard in the same level of position, type of work, and post and should meet minimum wage standard.

5.	Social Insurance
	Both parties should honor regulations of social insurance and pay social insurance premium. Personal part of social insurance premium will be deducted from wage of Party B.
	On the termination or conclusion of this Agreement, Party A should be responsible for relevant formalities of social insurance transfer for Party B and issue termination or conclusion certification of Employment Agreement. Party B should be responsible for timely handing over formalities.
6.	Labor Protection, Working Condition and Prevention against Occupational Hazard
	1)	Party A shall provide Party B with preventing conditions against occupational hazard in accordance with the State’s labor standard.
	2)	Party B is entitled to the corresponding labor protection and working condition by provided by Party A.
	3)	If Party B engages in work of exposure to occupational disease hazard, Party A should arrange occupational health check, according to state’s regulations concerned before on board and departure, as well as annual occupational health check during the term of this Agreement.
7.	Agreed Provisions
	1)	Agreement on trainings paid by Party A:
	2)	Agreement on keeping commercial information confidential: this provision is limited to senior officers, senior technology personnel and others evolved in commercial information. (see staff discipline for details)
	3)	Agreement on supplementary of insurance and well-being: if Party B voluntarily gives up the well-being of social insurance, Party B should sign confirmation of giving up social insurance.
8.	Formation of Labor Contract
	This Agreement could be altered after negotiation of both parties. Any change of this Agreement should be effective after recording the change in written form, listing out date of change, signing and sealing by both parties. For alteration of this Agreement, parties should make alteration letter, or specific alteration agreement which is appendix of this Agreement with the same legal validity to this Agreement.

2

9.	Termination, conclusion and renewal of this Agreement are pursuant to relevant regulations of municipal, provincial and state government.
10.	Resolving of Labor Disputes
	In case of any disputes arising from the performance of this Agreement which could not be solved by negotiation, either party may submit the case to labor dispute mediation commission of Party A for mediation; if such mediation fails, either party may submit the case in written application to labor dispute arbitration commission within statutory prescription; if either party refuses to accept the award rendered by the arbitration commission, it may lodge a lawsuit to local court within 15 days after receiving award sample.
11.	Issues not stated in this Agreement are to be solved by relevant regulations or under negotiation of both parties. If provisions of this Agreement are against latest laws or regulations, regulations of latest laws are ultimate.
12.	This Agreement is made in two copies with each party holding one.

Party A (Sealing):
Legal Representative:
Signing Date:

Party B:
Signing Date:

Witnessed By (Sealing):
Signing Date:

3

EX-10.11

Exhibit 10.11

Purchase Contract

Party A: Jinjiang Chen Kang Jiang Tou Shoe's Craft Factory
Party B: Dake (Fujian) Sports Goods Co., Ltd	Contract No.: ZXX20100726001
	Signing date: 2010-7-26

1. Product Name, Specification, Quantity, Unite Price, Amount:

Product Name	Unit	Quantity	Unit Price	Amount	Tax rate	Tax amount	Sum of amount
Slice	M2	74760	2.65	198,115.28	17%	33,679.60	231,794.8776
Half fork	pair	81050	0.41	33,258.87	17%	5,654.01	38,912.8779
Surface lining	pair	389432	0.61	239,215.48	17%	40,666.63	279,882.1116
Big sole	pair	128078	6.45	825,663.50	17%	140,362.80	966,026.2950
Medium sole	pair	51745	5.23	270,696.52	17%	46,018.41	316,714.9284
sole	pair	171641	4.85	832,446.81	17%	141,515.96	973,962.7677
Rubber sole	pair	30621	5.07	174,403.04	17%	29,648.52	204,051.5568
		927327		2,573,799.50		437,545.92	¥3,011,345.42
Total amount (RMB)	¥3,011,345.42

2. Quality standard:

(1) The implementation of national standards;

(2) No national standards but ministerial standard, the implementation of ministerial standards;

(3) No national and ministerial standards, the implementation of standards by enterprises;

(4) No any of above mentioned standards, or with special requirements by Party B, the implementation of contracted technical standards, sample or supplementary technical requirements.

3. Goods delivery date:

Party A shall be responsible for delivering the above mentioned goods to Party B’s designated place within 1 month upon this contract signed up.

4. Goods delivery place:

Party A shall by phone inform Party B the goods delivery method 7 days before making the delivery. Party B shall prepare well correspondingly, conduct any necessary procedures and take delivery of goods within 48 hours upon arrival.

5. Transportation Mode: Land-carriage.

6. Settlement method: Cash or bank deposit.

7. Liability for breach:

1

(1) Under condition that Party B hadn’t taken delivery of goods within Party A informed or contracted date, Party B shall make deferred payment to Party A in accordance with related regulations by People’s Bank of China and based on total amount of deferred goods, and shall be responsible for the expense incurred for goods keeping by Party A.

(2) Under condition that Party A incorrectly made the delivery place or person or raised inaccurate objection, Party shall be responsible for incurred loss to Party B.

(3) Where either party fails to implement this contract for the reason of force majeure, it shall notify the other party immediately for the reason of not implementing or not fully implementing the contract, after the obtaining the certificate of the unexpected accident issued by the competent authorities, bear part or none of the liabilities for breach according to the conditions. According to the certificate, both parties determine to implement this contract in delay, in part or terminate this contract.

8. Dispute Resolution

Any dispute arising from or in connection with this contract shall be settled through friendly negotiation between the Parties; if no solution is reached through such negotiation, either party shall apply to related arbitration committee for an arbitration or the disputes shall be referred to the People's Court having jurisdiction over the prosecutor's domicile in accordance with the governing law.

9. This contract shall be in duplicate, with each party holding one copy. The contract shall be effective on the date of signed up and terminated after the goods are delivered and bills cleared, Party A shall issue invoice.

Party A: Jinjiang Chen Kang Jiang Tou Shoe's Craft Factory

Address: Jiangtou village, Chenkang town, Jinjiang city, Fujian

Tel: 0595-85180430

Party B: Dake (Fujian) Sports Goods Co., Ltd

Address: Jiangtou Village, Chendai Town, Jinjiang city

Tel: 0595-85186739

2

EX-10.12

Exhibit 10.12

Sales Contract

Party A: Dake (Fujian) Sports Goods Co., Ltd.	Signing place: Jinjiang, Quanzhou
Party B: Zhang Zhifa	Contract No.: ZZF2010092400
	Signing date: Sep 24, 2010

1. Product Name, Model, Quantity, Amount:

Product	Model	Unit	Quantity	Unit Price	Amount	Tax rate	Tax amount	Sum of
Name								amount
Rubber soles	36#	Pair	32255	7.92	255,459.60	17%	43,428.13	298,887.73
Rubber soles	37#	Pair	28741	8.33	239,412.53	17%	40,700.13	280,112.66
Rubber soles	38#	Pair	36584	8.45	309,134.80	17%	52,552.92	361,687.72
Rubber soles	39#	Pair	14505	8.99	130,399.95	17%	22,167.99	152,567.94
Travel shoes	40#	Pair	3658	59.75	218,565.50	17%	37,156.14	255,721.64
Travel shoes	41#	Pair	4585	60.65	278,080.25	17%	47,273.64	325,353.89
Travel shoes	42#	Pair	3694	61.50	227,181.00	17%	38,620.77	265,801.77
Travel shoes	43#	Pair	4588	62.30	285,832.40	17%	48,591.51	334,423.91
Casual shoes	36#	Pair	10221	32.58	333,000.18	17%	56,610.03	389,610.21
Casual shoes	37#	Pair	21515	33.65	723,979.75	17%	123,076.56	847,056.31
Casual shoes	38#	Pair	20364	34.73	707,241.72	17%	120,231.09	827,472.81
Casual shoes	39#	Pair	27957	36.12	1,009,806.84	17%	171,667.16	1,181,474.00
Athletic shoes	40#	Pair	4884	63.45	309,889.80	17%	52,681.27	362,571.07
Athletic shoes	41#	Pair	6852	64.02	438,665.04	17%	74,573.06	513,238.10
Athletic shoes	42#	Pair	7758	65.30	506,597.40	17%	86,121.56	592,718.96
Athletic shoes	43#	Pair	6822	66.48	453,526.56	17%	77,099.52	530,626.08
Total			234983		6,426,773.32		1,092,551.46	7,519,324.78

2. Party B shall be responsible for providing technical standards for quality requirements; Party A shall produce according to Party B’s quality requirements and specifications and be responsible for the quality issue.

3. Goods delivery place and expense bearing:

Party A shall be responsible for delivering the contracted goods to Party B’s warehouse within 2 months upon this contract signed up and Party A shall be responsible for the incurred delivery expense.

4. Settlement method and term:

(1) After delivering the goods to Party B, Party A shall provide real and valid invoice based on actual amount and Party B’s request.

5. Responsibility of breach:

In accordance with <Economic Contract Law of the PRC>, in case of default by either party, the default party shall not only be responsible for the default obligation by law but also for the incurred expense to realize the obligation by the observant party, the above mentioned expense shall include but not limited to attorney fee, litigation fee and communication expense.

6. Dispute resolution:

Any dispute arising from or in connection with this contract shall be settled through friendly negotiation between the Parties; if no solution is reached through such negotiation, the disputes shall be referred to the People's Court having jurisdiction over the prosecutor's domicile in accordance with the governing law.

7. Miscellaneous:

(1) Party A shall guarantee that the goods provided be in line with national policies and regulations and not infringing others’ intellectual properties, otherwise any resulted economic and legal obligation shall be Party A’s responsibility.

(2) Faxed copy contract shall be regarded as with same legal effect to the original copy.

(3) In case of any unaccomplished manners, both parties shall negotiate in a friendly manner.

Party A: Dake (Fujian) Sports Goods Co., Ltd.	Party B: Zhang Zhifa
Address: Chendai Jiangtou Village, Jinjiang	Address: 260 Linyi Shoe&Hat market, Shandong
Tel: 0595 - 85186739	Tel: 13805491906

EX-10.13

Exhibit 10.13

Sales Contract

Party A: Dake (Fujian) Sports Goods Co., Ltd.	Signing place: Jinjiang, Quanzhou
Party B: Xie Huanglong	Contract No.: D20100813001
	Signing date: Aug 13, 2010

1. Product Name, Model, Quantity, Amount:

Product	Model	Unit	Quantity	Unit Price	Amount	Tax rate	Tax amount	Sum of amount
Name
Rubber soles	36#	Pair	32542	8.45	274,979.90	17%	46746.58	321,726.48
Rubber soles	37#	Pair	23642	9.12	215,615.04	17%	36,654.56	252,269.60
Rubber soles	38#	Pair	16854	9.33	157,247.82	17%	26732.13	183,979.95
Rubber soles	39#	Pair	19215	9.99	191,957.85	17%	32632.83	224,590.68
Athletic shoes	40#	Pair	4201	63.21	265,545.21	17%	45,142.69	310,687.90
Athletic shoes	41#	Pair	6636	63.7	422,713.20	17%	71,861.24	494,574.44
Athletic shoes	42#	Pair	5212	64.5	336,174.00	17%	57,149.58	393,323.58
Athletic shoes	43#	Pair	5452	65.12	355,034.24	17%	60,355.82	415,390.06
Total			113754		2,219,267.26		377,275.43	2,596,542.69

2. Party B shall be responsible for providing technical standards for quality requirements; Party A shall produce according to Party B’s quality requirements and specifications and be responsible for the quality issue.

3. Goods delivery place and expense bearing:

Party A shall be responsible for delivering the contracted goods to Party B’s warehouse within 2 months upon this contract signed up and Party A shall be responsible for the incurred delivery expense.

4. Settlement method and term:

(1) After delivering the goods to Party B, Party A shall provide real and valid invoice based on actual amount and Party B’s request.

5. Responsibility of breach:

In accordance with <Economic Contract Law of the PRC>, in case of default by either party, the default party shall not only be responsible for the default obligation by law but also for the incurred expense to realize the obligation by the observant party, the above mentioned expense shall include but not limited to attorney fee, litigation fee and communication expense.

6. Dispute resolution:

Any dispute arising from or in connection with this contract shall be settled through friendly negotiation between the Parties; if no solution is reached through such negotiation, the disputes shall be referred to the People's Court having jurisdiction over the prosecutor's domicile in accordance with the governing law.

7. Miscellaneous:

(1) Party A shall guarantee that the goods provided be in line with national policies and regulations and not infringing others’ intellectual properties, otherwise any resulted economic and legal obligation shall be Party A’s responsibility.

(2) Faxed copy contract shall be regarded as with same legal effect to the original copy.

(3) In case of any unaccomplished manners, both parties shall negotiate in a friendly manner.

Party A: Dake (Fujian) Sports Goods Co., Ltd.	Party B: Xie Huanglong
Address: Chendai Jiangtou Village, Jinjiang	Address: Tanyuan Ju Ground Floor, Building 53-1,
	Fei E Lu Fei E Whole Sale Center, Liuzhou, Guangxi

EX-10.14

Exhibit 10.14

Sales Contract

Party A: Dake (Fujian) Sports Goods Co., Ltd.	Signing place: Jinjiang, Quanzhou
Party B: Liu Rongguang	Contract No.: D20100803002
	Signing date: Aug 3, 2010

1. Product Name, Model, Quantity, Amount:

Product	Model	Unit	Quantity	Unit Price	Amount	Tax rate	Tax amount	Sum of
Name								amount
Tennis shoes	40#	Pair	3824	61.2	234,018.59	17%	39,783.16	273,801.75
Tennis shoes	41#	Pair	5538	61.45	340,310.10	17%	57,852.72	398,162.82
Tennis shoes	42#	Pair	7248	62.11	450,173.28	17%	76,529.46	526,702.74
Tennis shoes	43#	Pair	4521	62.87	284,235.27	17%	48,320.00	332,555.27
Athletic shoes	39#	Pair	8545	62.93	537,736.85	17%	91,415.26	629,152.11
Athletic shoes	39#	Pair	10251	63.45	650,425.95	17%	110,572.41	760,998.36
Athletic shoes	39#	Pair	2245	63.99	143,657.55	17%	24,421.78	168,079.33
Athletic shoes	39#	Pair	3356	64.63	216,898.28	17%	36,872.71	253,770.99
Rubber soles	36#	Pair	40215	7.82	314,481.30	17%	53,461.82	367,943.12
Rubber soles	37#	Pair	32541	7.86	255,772.26	17%	43,481.28	299,253.54
Rubber soles	38#	Pair	26689	7.90	210,843.10	17%	35,843.33	246,686.43
Rubber soles	39#	Pair	33684	8.05	271,156.20	17%	46,096.55	317,252.75
Total			178657		3,909,708.73		664,650.48	4,574,359.21

2. Party B shall be responsible for providing technical standards for quality requirements; Party A shall produce according to Party B’s quality requirements and specifications and be responsible for the quality issue.

3. Goods delivery place and expense bearing:

Party A shall be responsible for delivering the contracted goods to Party B’s warehouse within 2 months upon this contract signed up and Party A shall be responsible for the incurred delivery expense.

4. Settlement method and term:

(1) After delivering the goods to Party B, Party A shall provide real and valid invoice based on actual amount and Party B’s request.

5. Responsibility of breach:

In accordance with <Economic Contract Law of the PRC>, in case of default by either party, the default party shall not only be responsible for the default obligation by law but also for the incurred expense to realize the obligation by the observant party, the above mentioned expense shall include but not limited to attorney fee, litigation fee and communication expense.

6. Dispute resolution:

Any dispute arising from or in connection with this contract shall be settled through friendly negotiation between the Parties; if no solution is reached through such negotiation, the disputes shall be referred to the People's Court having jurisdiction over the prosecutor's domicile in accordance with the governing law.

7. Miscellaneous:

(1) Party A shall guarantee that the goods provided be in line with national policies and regulations and not infringing others’ intellectual properties, otherwise any resulted economic and legal obligation shall be Party A’s responsibility.

(2) Faxed copy contract shall be regarded as with same legal effect to the original copy.

(3) In case of any unaccomplished manners, both parties shall negotiate in a friendly manner.

Party A: Dake (Fujian) Sports Goods Co., Ltd.	Party B: Liu Rongguang
Address: Chendai Jiangtou Village, Jinjiang	Address: No. 70-71, District 2, Ruijing Shoe
	Market, Tianjing
Tel: 0595 – 85186739	Tel: 13902088857

EX-10.15

Exhibit 10.15

Land Transfer Agreement

Party A: Villagers’ Committee of Jiangtou Village
Party B: Dake (Fujian) Sport Goods Co., Ltd.

After negotiation, the parties have reached an agreement on the issue concerning the transfer the thirty units of land located in Chendai, Jinjiang City, Fujian Province.

1.	Party B agrees to pay RMB 30 millions for land-use right of the said land of Party A, with term of use 50 years.
2.	Party A should timely hand the land over to Party B once the use and operation right of land is transferred. Within the term of transferring, the whole land-use right belongs to Party B. When the agreement expires, Party A should assist Party B with relevant formalities of contract extending issue and Party B doesn’t need to bear any relevant expenses.
3.	Party A shall not make excuses, rejections, or postpones when it is needed by Party B for relevant formalities of the said land, otherwise, Party A will be charged penalty equaling two times of the transfer fee and other relevant loss of Party B.
4.	Party A makes a commitment to Party B that the said land in this Agreement does not belong to land for basic use, and if any recourse due to this cause happens, Party A will be charged penalty equaling two times of the transfer fee and other relevant loss of Party B.
5.	Party B will first pay Party A 10 RMB millions after signing this Agreement, the rest part will be paid up in one time after all the transfer formalities are done under the assistance of Party A.
6.	This Agreement is made in two copies, and each party will hold one copy which is effective upon signing this Agreement.

Party A: Villagers’ Committee of Jiangtou Village
Date: Jan 10, 1999

Party B: Dake (Fujian) Sport Goods Co., Ltd.
Date: Jan 10, 1999

EX-10.16

Exhibit 10.16

Land Transfer Agreement

Party A: Villagers’ Committee of Jiangtou Village
Party B: Aierda Shoe Plastic Co., Ltd, Jinjiang, Fujian

After negotiation, the parties have reached an agreement on the issue concerning the transfer of the twenty units of land located in Chendai, Jinjiang City, Fujian Province.

1.	Party B agrees to pay RMB 20 millions for land-use right of the said land of Party A, with term of use 50 years.
2.	Party A should timely hand the land over to Party B once the use and operation right of land is transferred. Within the term of transferring, the whole land-use right belongs to Party B. When the agreement expires, Party A should assist Party B with relevant formalities of contract extending issue and Party B doesn’t need to bear any relevant expenses.
3.	Party A shallnot make excuses, rejections, or postpones when it is needed by Party B for relevant formalities of the said land, otherwise, Party A will be charged penalty equaling two times of the transfer fee and other relevant loss of Party B.
4.	Party A makes a commitment to Party B that the said land in this Agreement does not belong to land for basic use, and if any recourse due to this cause happens, Party A will be charged penalty equaling two times of the transfer fee and other relevant loss of Party B.
5.	Party B will first pay Party A RMB 5 millions after signing this Agreement, the rest part will be paid up in one time after all the transfer formalities are done under the assistance of Party A.
6.	This Agreement is made in two copies, and each party will hold one copy which is effective upon signing this Agreement.

Party A: Villagers’ Committee of Jiangtou Village
Date: June 24, 1991

Party B: Aierda Shoe Plastic Co., Ltd, Jinjiang, Fujian
Date: June 24, 1991

EX-10.17

Exhibit 10.17

BANK OF QUANZHOU

LOAN CONTRACT

Bank of Quanzhou Co., Ltd.
Loan Contract

No. 180120100701021

Borrower (Party A): Fujian Jinjiang Aierda Shoe Plastic Co., Ltd.
Address: Jiangtou Village, Chendai Town, Jinjiang City
Legal Representative: Yuxi Ding

Creditor (Party B): Jinjiang Branch of Bank of Quanzhou Co., Ltd.
Address: Middle Heping Road, Qingyang, Jinjiang
Legal Representative: Luncong Yang

Content

1 Loan Classification

2 Purpose

3 Term and Amount of Loan

4 Interest Rate and Calculation of Loan

5 Ways of Repayment

6 Guarantee

7 Statement of Borrower

8 Rights and Responsibilities

9 Breach Responsibilities

10 Execution, Formation, Termination and Conclusion of Contract

11 Disputes Settlement

12 Others

13 Supplementary Provision

Important Notice: this Contact is made after a negotiation on an equal and voluntary basis, and all the Clauses well express the true meanings of both parties. To fully protect rights of borrower, Creditor makes a special warning that Borrower should carefully read the Clauses of this Contract in Boldface and pay close attentions to these Clauses.

Party B agrees to lend to Party A credit at a highest lending quotas of TEN MILLION ONLY valid within May 17^th, 2010 and May 17^th, 2011. Lending amount this time is ONE MILLION ONLY, and aggregate lending amount has constituted NINE MILLION NINE HUNDRED AND SIXTY THOUSAND ONLY of lending quotas (put “whole” here if the lending quotas are used up). To make rights and responsibilities of both parties clear, according to the regulations of laws of Contract Law, Lending General Provisions and other relevant laws, Party A and Party B make this Contract after negotiation on an equal basis.

1	Loan Classification
	1.1 The loan under this Contract is medium or short term loans.
2	Purpose

2.1 The loan under this Contract will be used for financing working capital of company.

2.2 Party A could not change usage of the loan under this Contract without written consent of Party B.

3 Term and Amount of Loan

3.1 Lending amount under this Contract is (UPPERCASE) ONE MILLION ONLY (lowercase) 1,000,000.00 (UPPERCASE is ultimate if the above two numbers could not match.) 3.2 Loan term under this Contract is twelve months, from July 15^th, 2010 to July 15^th, 2011. 3.3 According to the conditions and terms of 3.2 under this Contract, Party A should finish the Advance in one time, while Actual Advance Date and Final Maturity Date is pursuant to the date on Loan Receipt. Loan Receipt or Advance Voucher is inseparable part of this Contract, and except for the date, other terms and conditions in this Contract will be final.

4 Interest Rate and Calculation of Loan

4.1 The loan under this Contract, dated from Actual Advance Date, according to actual days of the loan, will be charged interest calculated by day (day interest rate = annual interest rate/360), and paid by month (month/quarter). Interest Settlement date is the twentieth date of every month (the twentieth date of every month/the twentieth date of every last month of every quarter).

4.2 Credit Interest Rate under this Contract is decided by following ways in 4.2.1.

4.2.1 Annual Credit Interest Rate is 7.965%, fixed, without adjustment within the term of this Contract.

4.2.2 Credit Interest Rate under this Contract is % (up/down) the benchmark interest rate of equal classification of loans published by People’s Bank of China. The Credit Interest rate is to be adjusted in every fixed period and every (year/half year/quarter/month) is regarded as a period. The adjusting day of the first Period is the Effective Day of this Contract, and the rate of this period is adjusted according to the benchmark interest rate of equal classification of loans on the Effective Day of this Contract published by People’s Bank of China and floating ratio agreed in this Contract, which is %. The adjusting days of the second Period and later periods are corresponding days of the Effective Day of this Contract, and the rate of every corresponding period is adjusted according to the benchmark interest rate of equal classification of loans on the corresponding day of Effective Day of this Contract published by People’s Bank of China and floating ratio agreed in this Contract. When there is no corresponding day of the Effective Day of this Contract in a month, the last day of the month is regarded the corresponding day.

If the loan is withdrew in Advances, no matter how many times, Credit Interest Rate is confirmed by the rate of the Effective Day of this Contract or the corresponding days, and respectively adjusted in the next corresponding day of the Effective Day of this Contract.

Corresponding day of the Effective Day of this Contract is the day when a period expires since the Effective Day of this Contract. For example, if the Effective Day of this Contract is May 9^th, then the second-period corresponding day of the Effective Day of this Contract is June 9^th while a month is regarded as a period; the second-period corresponding day of the Effective Day of this Contract is August 9^th while a quarter is regarded as a period; the second-period corresponding day of the Effective Day of this Contract is November 9^th while a half year is regarded as a period; the second-period corresponding day of the Effective Day of this Contract is June 9^th of the next year while a year is regarded as a period accordingly.

4.2.3 Other Ways

Party A should be informed in written documents within 30 days after change of interest rate, which will not influence the execution of the latest interest rate.

4.3 When People’s Bank of China adjusted interest rate or ways interest rate confirmation, regulations concerned of People’s Bank of China is ultimate.

5 Ways of Repayment

5.1 Party A should payment interest in time and full amount as agreed in this Contract, and pay back principals according to the way stated in 5.1.1.

5.1.2 For one-time repayment, Party A should pay back the entire principal before July 15^th, 2011.

5.1.3 For installment, amount and date of repayment is as follows. 5.1.3.1Date , Amount (UPPERCASE) (LOWERCASE) 5.1.3.2Date , Amount (UPPERCASE) (LOWERCASE) 5.1.3.3Date , Amount (UPPERCASE) (LOWERCASE) 5.1.3.4Date , Amount (UPPERCASE) (LOWERCASE) 5.1.3.5Date , Amount (UPPERCASE) (LOWERCASE) (to attach pages for more periods)

5.2 Party A should prepare adequate amount for interest or principal of a respective period on account opened in Party B before agreed Interest Settlement Day or Principal Settlement Day.

6 Guarantee

6.1 Means of Loan Guarantee under this Contract should be Guarantee. 6.2 The following contracts are Guarantee Contracts of this Contract.

6.2.1 Maximum Guarantee Contract numbering 180120090504020-1 whose mean of guarantee is Guarantee and guarantor is Fujian Jinjiang Chendai Aiermei Shoe Manufacturing Co., Ltd.

6.2.2 Maximum Guarantee Contract numbering 180220090504020 whose mean of guarantee is Guarantee and guarantor is Yuxi Ding, Qiusheng Ding, Conghui Ding.

6.2.3 Maximum Guarantee Contract numbering 180220090504020-1 whose mean of guarantee is Guarantee and guarantor is .

6.3 If there’s any change of Guarantee harmful to creditor’s right of Party B under this Contract, after informed by Party B, Party A should provide other satisfactory Guarantee.

7	Statement of Borrower
	The loan under this Contract of Party A has been authorized by Institutes with power and is pursuant to laws, regulations, strategies and relevant rules of Company Policy. If Borrower signs this Contract with conditions against Company Policy or other internal regulations of the company, Borrower should take all the responsibility due to this.
8	Rights and Responsibilities

8.1 Rights and Responsibilities of Party A

8.1.1 Party A should withdraw and use the loan in time and channel agreed in this Contract.

8.1.2 If Party A honors repayment before agreed time, Party A should get approval of Party B and compensate Party B for loss of expected yield and other expenses.

8.1.3 Party A should be responsible for trustfulness, accuracy and completeness of files handed over during the process of loan inspection.

8.1.4 Party A should voluntarily accept investigation, learning and supervision of Party B.

8.1.5 Party A should be cooperative in investigation, learning and supervision of Party B in operating, managing and financial conditions of the company and be responsible in offering files like Income Statement and Balance Sheet of relevant periods.

8.1.6 Party A should pay off principal and interest under this Contract as agreed.

8.1.7 Party A should cover relevant expenses under this Contract, including but not limited to expenses of notarization, appraisal, evaluation, registration, etc.

8.1.8 Party A should send back Demand Letter or Demand Files posted or delivered in other ways by Party B within 3 days after receiving.

8.1.9 Actions, like contract, lease, transformation of shareholding system, joint operation, consolidation, merger, joint venture, separation, capital reduction, stock transfer, transfer of business and others fully influential on realization of creditor’s right of Party B, should be informed to Party B at least 30 days ahead of time and should be approved by Party B in written files, or else actions above should not be implemented before the debt is paid off.

8.1.10 Modifications of Industrial and commercial registration items, like company location, mail address, scope of business, legal representatives, etc., should be informed to Party B in written form within 7 days after certain modification is implemented.

8.1.11 Any incidents, harmful to daily operations of the company but not to repayment of the loan under this Contract, including but not limited to incidents concerning significant economic disputes, bankruptcy, deterioration of financial conditions, etc., should be immediately informed to Party B in written form. 8.1.12 Close of business, business dissolution, suspending of business, revoking or cancelling of business license, etc., should be informed to Party B within 5 days right after the said incidents happen in written form, and balance of principal the interest should be paid off immediately.

8.2 Rights and Responsibilities of Party B

8.2.1. Party B has the right to ask Party A to provide all the files related to the loan under this Contract.

8.2.2. Party B has the right to transfer principal, interest, compound interest, penalty interest and other expenses related to the loan Party A should repay, according to the provisions in this Contract or regulations of laws, from Party A’s account.

8.2.3. To serious breach actions of Party A, like evading from Party B’s supervision and default of payment, Party B has the right to implement Credit Sanctions, report the action to departments or institutes concerned, and publicize through mass media for collection.

8.2.4. Party B should provide Party A loan in agreed time the amount, and any delay due to Party A is not included.

8.2.5. Party B should keep all the files and conditions related to debts, finance, producing, and operating of the company confidential, not including the conditions specifically stated in this Contract or regulations of laws.

9 Breach Responsibilities

9.1 Both parties should meet obligations agreed in this Contract. Any party partially or completely dishonors its obligations should bear breach responsibilities.

9.2 If Party A fails to make the Advance as agreed in 3.3 of this Contract, Party B has the right to charge penalty by day in interest rate agreed in this Contract.

9.3 If Party A repays the loan ahead of time without written consent of Party B, Party B has the right to charge interest according to term and interest rate agreed in this Contract.

9.4 If Party A fails to honor principal and interest under this Contract in agreed time, Party B has the right to ask Party A to pay in limited time. Party A authorizes Party B the right to transfer capital from accounts of Party A and all its affiliated branches opened in Bank of Quanzhou for repayment of the loan under this Contract. Besides, for overdue loans, Party A should be charged extra 50% of interest rate agreed in this Contract for penalty, and for overdue interest, extra 50% for compound interest. If the currency deducted is foreign, it is exchanged by buying rate published by Party B.

9.5 If Party A does not use the loan in ways agreed in this Contract, Party B has the right to stop granting the loan, partially or completely take back the loan capital, or terminate this Contract. For loan capital not used in ways agreed in this Contract, Party A should be charged extra 100% of interest rate agreed in this Contract for penalty interest, and for overdue interest, extra 50% for compound interest.

9.6 For overdue interest during the term of the loan under this Contract, compound interest is calculated by interest rate agreed in this Contract, and for overdue interest after the term of the loan under this Contract, compound interest is calculated according to provision agreed in 9.4 of this Contract.

9.7 If conditions stated in 9.4 and 9.5 happen at the same time, Party B takes the harder punishment and the punishments could not be implemented at the same time.

9.8 For any actions listed below, Party A should correct within 7 days after receiving notice fro party B and carry out remedial measures to Party B’s satisfactory, or else, Party B has the right to announce the loan due ahead of time and ask borrower to repay all the principal and interest till termination of this Contract.

9.8.1. Party A provides artificial or purposely cover information of balance sheet, income statement and other financial files.

9.8.2. Party A is not cooperative or refuses to accept supervision of Party B on conditions of loan use and operating, producing and financial activities.

9.8.3. Party A transfers or deals with, or threatens to transfer or deal with the main part of its assets without approval of Party B.

9.8.4. The main part of Party A’s assets is obtained by other creditors, taken over by appointed trustee, receiver, or similar persons, detained or frozen, which will brings huge loss of Party B.

9.8.5. Party A has actions like contract, lease, transformation of shareholding system, joint operation, consolidation, merger, joint venture, separation, capital reduction, stock transfer, transfer of business and others fully influential on realization of creditor’s right of Party B.

9.8.6. Modifications of Industrial and commercial registration items, like company location, mail address, scope of business, legal representatives, etc., and investment fully influential on realization of creditor’s right of Party B happen.

9.8.7. Incidents concerning significant economic disputes, deterioration of financial conditions or any other condition which is fully influential or threatening on realization of creditor’s right of Party B happen.

9.8.8. Any other condition which is fully influential or threatening on realization of creditor’s right of Party B happen.

10 Execution, Formation, Termination and Conclusion of Contract

10.1 This Contract is effective upon signing of both parties; this Contract is effective when there is a Guarantee Contract. This Contract is concluded when principal, interest, compound interest, penalty and other expenses of the loan under this Contract is paid off.

10.2 For any conditions listed below, Party B has the right to terminate this Contract and ask Party A to cover principal and interest ahead of time, as well as loss of Party B.

10.2.1 Close of business, business dissolution, suspending of business, revoking or cancelling of business license, etc., happen.

10.2.2 Any change of guarantee deteriorating creditor’s right of Party B under this Contract happens and Party A fails to provide another guarantee to the satisfactory of Party B.

10.2.3 Party A fails to make repayment before agreed time, use the loan in agreed way, pay the interest in agreed time or honor other obligations stated in this Contract.

10.3 If repayment is required to be postponed, Party A should provide written application and written guarantee signed by guarantor for continuity of guarantee under this Contract 30 days before conclusion of this Contract, and the loan under this Contract is postponed upon the approval of Party B and signing of extension agreement; this Contract is still under implementing before signing of extension agreement.

10.4 After this Contract becomes effective, unless provisions of this Contract specifically stated, both party should not change or terminate ahead of time this Contract, and formation and termination of this Contract should be negotiated to a written agreement. This Contract is still under implementing before written agreement is reached.

11 Disputes Settlement

11.1 Any disputes happen during the process of this Contract should firstly be resolved through negotiation. If the negotiation could not reach an agreement, the way stated in 11.1.2 is chosen.

11.1.1 It is arbitrated by .

11.1.2 It is solved by raising a lawsuit at local court where Party B is.

12 Others

12.1

12.2

12.3

13 Supplementary Provision

13.1 Party B has the right to, according to relevant regulations of laws and other regulatory files and requirements of financial supervision institutes, provide information of this Contract and other relevant information to Credit Database of People’s Bank of China or other database set in legal ways for information search of institutes or persons with proper authorities, and look up information related to Party A in Credit Database of People’s Bank of China or other database set in legal ways since signing the implementing of this Contract.

13.2 Supplementary Provision is an inseparable part of this Contract with the same legal validity.

13.3 This Contract is in copies, with each party holds copy (copies) with the same legal validity.

Creditor has warned Borrower to comprehensively and accurately understand Clauses in this Contract, especially those in boldface, and respectively explained content of Clauses to requirements of Borrower. Borrower is now definitely without any misunderstanding and dubious interpretation towards this Contract.

Borrower (Sealing): Fujian Jinjiang Aierda Shoe Plastic Co., Ltd.

Signature or Sealing of Legal Representative: Yuxi Ding

Creditor (Sealing): Jinjiang Branch of Bank of Quanzhou Co., Ltd.

Signature or Sealing of Authorized Person:

Date: July 15^th, 2010

EX-10.18

Exhibit 10.18

BANK OF QUANZHOU

LOAN CONTRACT

Bank of Quanzhou Co., Ltd.
Loan Contract

No. 180120100701032

Borrower (Party A): Fujian Jinjiang Aierda Shoe Plastic Co., Ltd.
Address: Jiangtou Village, Chendai Town, Jinjiang City
Legal Representative: Yuxi Ding

Creditor (Party B): Jinjiang Branch of Bank of Quanzhou Co., Ltd.
Address: Middle Heping Road, Qingyang, Jinjiang
Legal Representative: Luncong Yang

Content

1 Loan Classification

2 Purpose

3 Term and Amount of Loan

4 Interest Rate and Calculation of Loan

5 Ways of Repayment

6 Guarantee

7 Statement of Borrower

8 Rights and Responsibilities

9 Breach Responsibilities

10 Execution, Formation, Termination and Conclusion of Contract

11 Disputes Settlement

12 Others

13 Supplementary Provision

Important Notice: this Contact is made after a negotiation on an equal and voluntary basis, and all the Clauses well express the true meanings of both parties. To fully protect rights of borrower, Creditor makes a special warning that Borrower should carefully read the Clauses of this Contract in Boldface and pay close attentions to these Clauses.

Party B agrees to lend to Party A credit at a highest lending quotas of TEN MILLION ONLY valid within May 17^th, 2010 and May 17^th, 2011. Lending amount this time is TWO MILLION ONLY, and aggregate lending amount has constituted NINE MILLION NINE HUNDRED AND SIXTY THOUSAND ONLY of lending quotas (put “whole” here if the lending quotas are used up). To make rights and responsibilities of both parties clear, according to the regulations of laws of Contract Law, Lending General Provisions and other relevant laws, Party A and Party B make this Contract after negotiation on an equal basis.

1	Loan Classification
	1.1	The loan under this Contract is medium or short term loans.
2	Purpose
	2.1	The loan under this Contract will be used for financing working capital of company.
	2.2	Party A could not change usage of the loan under this Contract without written consent of Party B.
3	Term and Amount of Loan
	3.1	Lending amount under this Contract is (UPPERCASE) TWO MILLION ONLY (lowercase) 2,000,000.00 (UPPERCASE is ultimate if the above two numbers could not match.)
	3.2	Loan term under this Contract is twelve months, from July 22nd, 2010 to July 22nd, 2011.
	3.3	According to the conditions and terms of 3.2 under this Contract, Party A should finish the Advance in one time, while Actual Advance Date and Final Maturity Date is pursuant to the date on Loan Receipt. Loan Receipt or Advance Voucher is inseparable part of this Contract, and except for the date, other terms and conditions in this Contract will be final.

2

4 Interest Rate and Calculation of Loan

4.1 The loan under this Contract, dated from Actual Advance Date, according to actual days of the loan, will be charged interest calculated by day (day interest rate = annual interest rate/360), and paid by month (month/quarter). Interest Settlement date is the twentieth date of every month (the twentieth date of every month/the twentieth date of every last month of every quarter).

4.2 Credit Interest Rate under this Contract is decided by following ways in 4.2.1.

4.2.1 Annual Credit Interest Rate is 7.965%, fixed, without adjustment within the term of this Contract.

4.2.2 Credit Interest Rate under this Contract is % (up/down) the benchmark interest rate of equal classification of loans published by People’s Bank of China. The Credit Interest rate is to be adjusted in every fixed period and every (year/half year/quarter/month) is regarded as a period. The adjusting day of the first Period is the Effective Day of this Contract, and the rate of this period is adjusted according to the benchmark interest rate of equal classification of loans on the Effective Day of this Contract published by People’s Bank of China and floating ratio agreed in this Contract, which is %. The adjusting days of the second Period and later periods are corresponding days of the Effective Day of this Contract, and the rate of every corresponding period is adjusted according to the benchmark interest rate of equal classification of loans on the corresponding day of Effective Day of this Contract published by People’s Bank of China and floating ratio agreed in this Contract. When there is no corresponding day of the Effective Day of this Contract in a month, the last day of the month is regarded the corresponding day.

If the loan is withdrew in Advances, no matter how many times, Credit Interest Rate is confirmed by the rate of the Effective Day of this Contract or the corresponding days, and respectively adjusted in the next corresponding day of the Effective Day of this Contract. Corresponding day of the Effective Day of this Contract is the day when a period expires since the Effective Day of this Contract. For example, if the Effective Day of this Contract is May 9^th, then the second-period corresponding day of the Effective Day of this Contract is June 9^th while a month is regarded as a period; the second-period corresponding day of the Effective Day of this Contract is August 9^th while a quarter is regarded as a period; the second-period corresponding day of the Effective Day of this Contract is November 9^th while a half year is regarded as a period; the second-period corresponding day of the Effective Day of this Contract is June 9^th of the next year while a year is regarded as a period accordingly.

4.2.3 Other Ways

Party A should be informed in written documents within 30 days after change of interest rate, which will not influence the execution of the latest interest rate.

4.3 When People’s Bank of China adjusted interest rate or ways interest rate confirmation, regulations concerned of People’s Bank of China is ultimate.

5	Ways of Repayment
	5.1 Party A should payment interest in time and full amount as agreed in this Contract, and pay back principals according to the way stated in 5.1.1.

5.1.2 For one-time repayment, Party A should pay back the entire principal before July 15^th, 2011. 5.1.3For installment, amount and date of repayment is as follows.

5.1.3.1 Date , Amount (UPPERCASE) (LOWERCASE)
5.1.3.2 Date , Amount (UPPERCASE) (LOWERCASE)
5.1.3.3 Date , Amount (UPPERCASE) (LOWERCASE)
5.1.3.4 Date , Amount (UPPERCASE) (LOWERCASE)

3

5.1.3.5 Date , Amount (UPPERCASE) (LOWERCASE)
          (to attach pages for more periods)

5.2 Party A should prepare adequate amount for interest or principal of a respective period on account opened in Party B before agreed Interest Settlement Day or Principal Settlement Day.

6 Guarantee

6.1 Means of Loan Guarantee under this Contract should be Guarantee.

6.2 The following contracts are Guarantee Contracts of this Contract.

6.2.1 Maximum Guarantee Contract numbering 180120090504020-1 whose mean of guarantee is Guarantee and guarantor is Fujian Jinjiang Chendai Aiermei Shoe Manufacturing Co., Ltd.

6.2.2 Maximum Guarantee Contract numbering 180220090504020 whose mean of guarantee is Guarantee and guarantor is Yuxi Ding, Qiusheng Ding, Conghui Ding.

6.2.3 Maximum Guarantee Contract numbering 180220090504020-1 whose mean of guarantee is Guarantee and guarantor is .

6.3 If there’s any change of Guarantee harmful to creditor’s right of Party B under this Contract, after informed by Party B, Party A should provide other satisfactory Guarantee.

7	Statement of Borrower
	The loan under this Contract of Party A has been authorized by Institutes with power and is pursuant to laws, regulations, strategies and relevant rules of Company Policy. If Borrower signs this Contract with conditions against Company Policy or other internal regulations of the company, Borrower should take all the responsibility due to this.
8	Rights and Responsibilities

8.1 Rights and Responsibilities of Party A

8.1.1 Party A should withdraw and use the loan in time and channel agreed in this Contract.

8.1.2 If Party A honors repayment before agreed time, Party A should get approval of Party B and compensate Party B for loss of expected yield and other expenses.

8.1.3 Party A should be responsible for trustfulness, accuracy and completeness of files handed over during the process of loan inspection.

8.1.4 Party A should voluntarily accept investigation, learning and supervision of Party B.

8.1.5 Party A should be cooperative in investigation, learning and supervision of Party B in operating, managing and financial conditions of the company and be responsible in offering files like Income Statement and Balance Sheet of relevant periods.

8.1.6 Party A should pay off principal and interest under this Contract as agreed.

8.1.7 Party A should cover relevant expenses under this Contract, including but not limited to expenses of notarization, appraisal, evaluation, registration, etc.

8.1.8 Party A should send back Demand Letter or Demand Files posted or delivered in other ways by Party B within 3 days after receiving.

8.1.9 Actions, like contract, lease, transformation of shareholding system, joint operation, consolidation, merger, joint venture, separation, capital reduction, stock transfer, transfer of business and others fully influential on realization of creditor’s right of Party B, should be informed to Party B at least 30 days ahead of time and should be approved by Party B in written files, or else actions above should not be implemented before the debt is paid off.

8.1.10 Modifications of Industrial and commercial registration items, like company location, mail address, scope of business, legal representatives, etc., should be informed to Party B in written form within 7 days after certain modification is implemented.

8.1.11 Any incidents, harmful to daily operations of the company but not to repayment of the loan under this Contract, including but not limited to incidents concerning significant economic disputes, bankruptcy, deterioration of financial conditions, etc., should be immediately informed to Party B in written form.

8.1.12 Close of business, business dissolution, suspending of business, revoking or cancelling of business license, etc., should be informed to Party B within 5 days right after the said incidents happen in written form, and balance of principal the interest should be paid off immediately.

4

8.2 Rights and Responsibilities of Party B

Party B has the right to ask Party A to provide all the files related to the loan under this Contract.

Party B has the right to transfer principal, interest, compound interest, penalty interest and other expenses related to the loan Party A should repay, according to the provisions in this Contract or regulations of laws, from Party A’s account.

8.2.1 To serious breach actions of Party A, like evading from Party B’s supervision and default of payment, Party B has the right to implement Credit Sanctions, report the action to departments or institutes concerned, and publicize through mass media for collection.

8.2.2  Party B should provide Party A loan in agreed time the amount, and any delay due to Party A is not included.

8.2.3 Party B should keep all the files and conditions related to debts, finance, producing, and operating of the company confidential, not including the conditions specifically stated in this Contract or regulations of laws.

9 Breach Responsibilities

9.1 Both parties should meet obligations agreed in this Contract. Any party partially or completely dishonors its obligations should bear breach responsibilities.

9.2 If Party A fails to make the Advance as agreed in 3.3 of this Contract, Party B has the right to charge penalty by day in interest rate agreed in this Contract.

9.3 If Party A repays the loan ahead of time without written consent of Party B, Party B has the right to charge interest according to term and interest rate agreed in this Contract.

9.4 If Party A fails to honor principal and interest under this Contract in agreed time, Party B has the right to ask Party A to pay in limited time. Party A authorizes Party B the right to transfer capital from accounts of Party A and all its affiliated branches opened in Bank of Quanzhou for repayment of the loan under this Contract. Besides, for overdue loans, Party A should be charged extra 50% of interest rate agreed in this Contract for penalty, and for overdue interest, extra 50% for compound interest. If the currency deducted is foreign, it is exchanged by buying rate published by Party B.

9.5 If Party A does not use the loan in ways agreed in this Contract, Party B has the right to stop granting the loan, partially or completely take back the loan capital, or terminate this Contract. For loan capital not used in ways agreed in this Contract, Party A should be charged extra 100% of interest rate agreed in this Contract for penalty interest, and for overdue interest, extra 100% for compound interest.

9.6 For overdue interest during the term of the loan under this Contract, compound interest is calculated by interest rate agreed in this Contract, and for overdue interest after the term of the loan under this Contract, compound interest is calculated according to provision agreed in 9.4 of this Contract.

9.7 If conditions stated in 9.4 and 9.5 happen at the same time, Party B takes the harder punishment and the punishments could not be implemented at the same time.

9.8 For any actions listed below, Party A should correct within 7 days after receiving notice fro party B and carry out remedial measures to Party B’s satisfactory, or else, Party B has the right to announce the loan due ahead of time and ask borrower to repay all the principal and interest till termination of this Contract.

9.8.1 Party A provides artificial or purposely cover information of balance sheet, income statement and other financial files.

9.8.2 Party A is not cooperative or refuses to accept supervision of Party B on conditions of loan use and operating, producing and financial activities.

9.8.3 Party A transfers or deals with, or threatens to transfer or deal with the main part of its assets without approval of Party B.

9.8.4 The main part of Party A’s assets is obtained by other creditors, taken over by appointed trustee, receiver, or similar persons, detained or frozen, which will brings huge loss of Party B.

9.8.5 Party A has actions like contract, lease, transformation of shareholding system, joint operation, consolidation, merger, joint venture, separation, capital reduction, stock transfer, transfer of business and others fully influential on realization of creditor’s right of Party B.

9.8.6 Modifications of Industrial and commercial registration items, like company location, mail address, scope of business, legal representatives, etc., and investment fully influential on realization of creditor’s right of Party B happen.

9.8.7 Incidents concerning significant economic disputes, deterioration of financial conditions or any other condition which is fully influential or threatening on realization of creditor’s right of Party B happen.

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9.8.8 Any other condition which is fully influential or threatening on realization of creditor’s right of Party B happen.

1 10. Execution, Formation, Termination and Conclusion of Contract

10.1 This Contract is effective upon signing of both parties; this Contract is effective when there is a Guarantee Contract. This Contract is concluded when principal, interest, compound interest, penalty and other expenses of the loan under this Contract is paid off.

10.2 For any conditions listed below, Party B has the right to terminate this Contract and ask Party A to cover principal and interest ahead of time, as well as loss of Party B.

10.2.1 Close of business, business dissolution, suspending of business, revoking or cancelling of business license, etc., happen.

10.2.2 Any change of guarantee deteriorating creditor’s right of Party B under this Contract happens and Party A fails to provide another guarantee to the satisfactory of Party B.

10..2.3 Party A fails to make repayment before agreed time, use the loan in agreed way, pay the interest in agreed time or honor other obligations stated in this Contract.

10.3 If repayment is required to be postponed, Party A should provide written application and written guarantee signed by guarantor for continuity of guarantee under this Contract 30 days before conclusion of this Contract, and the loan under this Contract is postponed upon the approval of Party B and signing of extension agreement; this Contract is still under implementing before signing of extension agreement. 10.4 After this Contract becomes effective, unless provisions of this Contract specifically stated, both party should not change or terminate ahead of time this Contract, and formation and termination of this Contract should be negotiated to a written agreement. This Contract is still under implementing before written agreement is reached.

6.3 11 Disputes Settlement 11.1Any disputes happen during the process of this Contract should firstly be resolved through negotiation. If the negotiation could not reach an agreement, the way stated in 11.1.2 is chosen.

11.1.1It is arbitrated by __________.

11.1.2 It is solved by raising a lawsuit at local court where Party B is.

2 Others

12.1

13 Supplementary Provision

13.1 Party B has the right to, according to relevant regulations of laws and other regulatory files and requirements of financial supervision institutes, provide information of this Contract and other relevant information to Credit Database of People’s Bank of China or other database set in legal ways for information search of institutes or persons with proper authorities, and look up information related to Party A in Credit Database of People’s Bank of China or other database set in legal ways since signing the implementing of this Contract.

13.2 Supplementary Provision is an inseparable part of this Contract with the same legal validity.

13.3 This Contract is in two copies, with each party holds copy (copies) with the same legal validity.

Creditor has warned Borrower to comprehensively and accurately understand Clauses in this Contract, especially those in boldface, and respectively explained content of Clauses to requirements of Borrower. Borrower is now definitely without any misunderstanding and dubious interpretation towards this Contract.

Borrower (Sealing): Fujian Jinjiang Aierda Shoe Plastic Co., Ltd.

Signature or Sealing of Legal Representative: Yuxi Ding

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Creditor (Sealing): Jinjiang Branch of Bank of Quanzhou Co., Ltd.

Signature or Sealing of Authorized Person:

Date: July 22^nd, 2010

EX-10.19

Exhibit 10.19

BANK OF QUANZHOU

LOAN CONTRACT

Bank of Quanzhou Co., Ltd.

Loan Contract

No. 180120100801017

Borrower (Party A): Fujian Jinjiang Aierda Shoe Plastic Co., Ltd.
Address: Jiangtou Village, Chendai Town, Jinjiang City
Legal Representative: Yuxi Ding

Creditor (Party B): Jinjiang Branch of Bank of Quanzhou Co., Ltd.
Address: Middle Heping Road, Qingyang, Jinjiang
Legal Representative: Luncong Yang

Content

1 Loan Classification

2 Purpose

3 Term and Amount of Loan

4 Interest Rate and Calculation of Loan

5 Ways of Repayment

6 Guarantee

7 Statement of Borrower

8 Rights and Responsibilities

9 Breach Responsibilities

10 Execution, Formation, Termination and Conclusion of Contract

11 Disputes Settlement

12 Others

13 Supplementary Provision

Important Notice: this Contact is made after a negotiation on an equal and voluntary basis, and all the Clauses well express the true meanings of both parties. To fully protect rights of borrower, Creditor makes a special warning that Borrower should carefully read the Clauses of this Contract in Boldface and pay close attentions to these Clauses.

Party B agrees to lend to Party A credit at a highest lending quotas of RMB TEN MILLION ONLY valid within May 17^th, 2010 and May 17^th, 2011. Lending amount this time is RMB ONE MILLION ONLY, and aggregate lending amount has constituted RMB NINE MILLION NINE HUNDRED AND SIXTY THOUSAND ONLY of lending quotas (put “whole” here if the lending quotas are used up). To make rights and responsibilities of both parties clear, according to the regulations of laws of Contract Law, Lending General Provisions and other relevant laws, Party A and Party B make this Contract after negotiation on an equal basis.

1	Loan Classification
	1.1	The loan under this Contract is medium or short term loans.
2	Purpose
	2.1	The loan under this Contract will be used for financing working capital of company.
	2.2	Party A could not change usage of the loan under this Contract without written consent of Party B.
3	Term and Amount of Loan

3.1 Lending amount under this Contract is (UPPERCASE)RMB ONE MILLION ONLY (lowercase) 1,000,000.00 (UPPERCASE is ultimate if the above two numbers could not match.)

3.2 Loan term under this Contract is twelve months, from August 11^th, 2010 to August 11^th, 2011.

3.3 According to the conditions and terms of 3.2 under this Contract, Party A should finish the Advance in one time, while Actual Advance Date and Final Maturity Date is pursuant to the date on Loan Receipt. Loan Receipt or Advance Voucher is inseparable part of this Contract, and except for the date, other terms and conditions in this Contract will be final.

4 Interest Rate and Calculation of Loan

4.1 The loan under this Contract, dated from Actual Advance Date, according to actual days of the loan, will be charged interest calculated by day (day interest rate = annual interest rate/360), and paid by month (month/quarter). Interest Settlement date is the twentieth date of every month (the twentieth date of every month/the twentieth date of every last month of every quarter).

4.2 Credit Interest Rate under this Contract is decided by following ways in 4.2.1.

4.2.1 Annual Credit Interest Rate is 7.965%, fixed, without adjustment within the term of this Contract.

4.2.2 Credit Interest Rate under this Contract is % (up/down) the benchmark interest rate of equal classification of loans published by People’s Bank of China. The Credit Interest rate is to be adjusted in every fixed period and every (year/half year/quarter/month) is regarded as a period. The adjusting day of the first Period is the Effective Day of this Contract, and the rate of this period is adjusted according to the benchmark interest rate of equal classification of loans on the Effective Day of this Contract published by People’s Bank of China and floating ratio agreed in this Contract, which is %. The adjusting days of the second Period and later periods are corresponding days of the Effective Day of this Contract, and the rate of every corresponding period is adjusted according to the benchmark interest rate of equal classification of loans on the corresponding day of Effective Day of this Contract published by People’s Bank of China and floating ratio agreed in this Contract. When there is no corresponding day of the Effective Day of this Contract in a month, the last day of the month is regarded the corresponding day.

If the loan is withdrew in Advances, no matter how many times, Credit Interest Rate is confirmed by the rate of the Effective Day of this Contract or the corresponding days, and respectively adjusted in the next corresponding day of the Effective Day of this Contract.

Corresponding day of the Effective Day of this Contract is the day when a period expires since the Effective Day of this Contract. For example, if the Effective Day of this Contract is May 9^th, then the second-period corresponding day of the Effective Day of this Contract is June 9^th while a month is regarded as a period; the second-period corresponding day of the Effective Day of this Contract is August 9^th while a quarter is regarded as a period; the second-period corresponding day of the Effective Day of this Contract is November 9^th while a half year is regarded as a period; the second-period corresponding day of the Effective Day of this Contract is June 9^th of the next year while a year is regarded as a period accordingly.

4.2.3 Other Ways

Party A should be informed in written documents within 30 days after change of interest rate, which will not influence the execution of the latest interest rate.

4.3 When People’s Bank of China adjusted interest rate or ways interest rate confirmation, regulations concerned of People’s Bank of China is ultimate.

5 Ways of Repayment

5.1 Party A should payment interest in time and full amount as agreed in this Contract, and pay back principals according to the way stated in 5.1.1.

5.1.2. For one-time repayment, Party A should pay back the entire principal before August 11^th, 2011.

5.1.3. For installment, amount and date of repayment is as follows.

5.1.3.1. Date , Amount (UPPERCASE) (LOWERCASE)

5.1.3.2. Date , Amount (UPPERCASE) (LOWERCASE)

5.1.3.3. Date , Amount (UPPERCASE) (LOWERCASE)

5.1.3.4. Date , Amount (UPPERCASE) (LOWERCASE)

5.1.3.5. Date , Amount (UPPERCASE) (LOWERCASE)

(to attach pages for more periods)

5.2. Party A should prepare adequate amount for interest or principal of a respective period on account opened in Party B before agreed Interest Settlement Day or Principal Settlement Day.

6 Guarantee

6.1	Means of Loan Guarantee under this Contract should be Guarantee.
6.2	The following contracts are Guarantee Contracts of this Contract.

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6.2.1Maximum Guarantee Contract numbering 180120090504020-2 whose mean of guarantee is Guarantee and guarantor is Fujian Jinjiang Chendai Aiermei Shoe Manufacturing Co., Ltd.

6.2.2Maximum Guarantee Contract numbering 180220090504020 whose mean of guarantee is Guarantee and guarantor is Yuxi Ding, Qiusheng Ding, Conghui Ding.

6.2.3Maximum Guarantee Contract numbering 180220090504020-2 whose mean of guarantee is Guarantee and guarantor is Qinghe Zhu, Xiuzhu Lin.

6.3 If there’s any change of Guarantee harmful to creditor’s right of Party B under this Contract, after informed by Party B, Party A should provide other satisfactory Guarantee.

7	Statement of Borrower
	The loan under this Contract of Party A has been authorized by Institutes with power and is pursuant to laws, regulations, strategies and relevant rules of Company Policy. If Borrower signs this Contract with conditions against Company Policy or other internal regulations of the company, Borrower should take all the responsibility due to this.
8	Rights and Responsibilities

8.1 Rights and Responsibilities of Party A

8.1.1 Party A should withdraw and use the loan in time and channel agreed in this Contract.

8.1.2 If Party A honors repayment before agreed time, Party A should get approval of Party B and compensate Party B for loss of expected yield and other expenses.

8.1.3 Party A should be responsible for trustfulness, accuracy and completeness of files handed over during the process of loan inspection.

8.1.4 Party A should voluntarily accept investigation, learning and supervision of Party B.

8.1.5 Party A should be cooperative in investigation, learning and supervision of Party B in operating, managing and financial conditions of the company and be responsible in offering files like Income Statement and Balance Sheet of relevant periods.

8.1.6 Party A should pay off principal and interest under this Contract as agreed.

8.1.7 Party A should cover relevant expenses under this Contract, including but not limited to expenses of notarization, appraisal, evaluation, registration, etc.

8.1.8 Party A should send back Demand Letter or Demand Files posted or delivered in other ways by Party B within 3 days after receiving.

8.1.9 Actions, like contract, lease, transformation of shareholding system, joint operation, consolidation, merger, joint venture, separation, capital reduction, stock transfer, transfer of business and others fully influential on realization of creditor’s right of Party B, should be informed to Party B at least 30 days ahead of time and should be approved by Party B in written files, or else actions above should not be implemented before the debt is paid off.

8.1.10 Modifications of Industrial and commercial registration items, like company location, mail address, scope of business, legal representatives, etc., should be informed to Party B in written form within 7 days after certain modification is implemented.

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8.1.11 Any incidents, harmful to daily operations of the company but not to repayment of the loan under this Contract, including but not limited to incidents concerning significant economic disputes, bankruptcy, deterioration of financial conditions, etc., should be immediately informed to Party B in written form.

8.1.12 Close of business, business dissolution, suspending of business, revoking or cancelling of business license, etc., should be informed to Party B within 5 days right after the said incidents happen in written form, and balance of principal the interest should be paid off immediately.

8.2 Rights and Responsibilities of Party B

8.2.1 Party B has the right to ask Party A to provide all the files related to the loan under this Contract.

8.2.2 Party B has the right to transfer principal, interest, compound interest, penalty interest and other expenses related to the loan Party A should repay, according to the provisions in this Contract or regulations of laws, from Party A’s account.

8.2.3 To serious breach actions of Party A, like evading from Party B’s supervision and default of payment, Party B has the right to implement Credit Sanctions, report the action to departments or institutes concerned, and publicize through mass media for collection.

8.2.4 Party B should provide Party A loan in agreed time the amount, and any delay due to Party A is not included.

8.2.5 Party B should keep all the files and conditions related to debts, finance, producing, and operating of the company confidential, not including the conditions specifically stated in this Contract or regulations of laws.

9 Breach Responsibilities

9.1 Both parties should meet obligations agreed in this Contract. Any party partially or completely dishonors its obligations should bear breach responsibilities.

9.2 If Party A fails to make the Advance as agreed in 3.3 of this Contract, Party B has the right to charge penalty by day in interest rate agreed in this Contract.

9.3 If Party A repays the loan ahead of time without written consent of Party B, Party B has the right to charge interest according to term and interest rate agreed in this Contract.

9.4 If Party A fails to honor principal and interest under this Contract in agreed time, Party B has the right to ask Party A to pay in limited time. Party A authorizes Party B the right to transfer capital from accounts of Party A and all its affiliated branches opened in Bank of Quanzhou for repayment of the loan under this Contract. Besides, for overdue loans, Party A should be charged extra 50% of interest rate agreed in this Contract for penalty, and for overdue interest, extra 50% for compound interest. If the currency deducted is foreign, it is exchanged by buying rate published by Party B.

9.5 If Party A does not use the loan in ways agreed in this Contract, Party B has the right to stop granting the loan, partially or completely take back the loan capital, or terminate this Contract. For loan capital not used in ways agreed in this Contract, Party A should be charged extra 100% of interest rate agreed in this Contract for penalty interest, and for overdue interest, extra 100% for compound interest.

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9.6 For overdue interest during the term of the loan under this Contract, compound interest is calculated by interest rate agreed in this Contract, and for overdue interest after the term of the loan under this Contract, compound interest is calculated according to provision agreed in 9.4 of this Contract.

9.7 If conditions stated in 9.4 and 9.5 happen at the same time, Party B takes the harder punishment and the punishments could not be implemented at the same time.

9.8 For any actions listed below, Party A should correct within 7 days after receiving notice fro party B and carry out remedial measures to Party B’s satisfactory, or else, Party B has the right to announce the loan due ahead of time and ask borrower to repay all the principal and interest till termination of this Contract.

9.8.1 Party A provides artificial or purposely cover information of balance sheet, income statement and other financial files.

9.8.2 Party A is not cooperative or refuses to accept supervision of Party B on conditions of loan use and operating, producing and financial activities.

9.8.3 Party A transfers or deals with, or threatens to transfer or deal with the main part of its assets without approval of Party B.

9.8.4 The main part of Party A’s assets is obtained by other creditors, taken over by appointed trustee, receiver, or similar persons, detained or frozen, which will brings huge loss of Party B.

9.8.5 Party A has actions like contract, lease, transformation of shareholding system, joint operation, consolidation, merger, joint venture, separation, capital reduction, stock transfer, transfer of business and others fully influential on realization of creditor’s right of Party B.

9.8.6 Modifications of Industrial and commercial registration items, like company location, mail address, scope of business, legal representatives, etc., and investment fully influential on realization of creditor’s right of Party B happen.

9.8.7 Incidents concerning significant economic disputes, deterioration of financial conditions or any other condition which is fully influential or threatening on realization of creditor’s right of Party B happen.

9.8.8 Any other condition which is fully influential or threatening on realization of creditor’s right of Party B happen.

10 Execution, Formation, Termination and Conclusion of Contract

10.1 This Contract is effective upon signing of both parties; this Contract is effective when there is a Guarantee Contract. This Contract is concluded when principal, interest, compound interest, penalty and other expenses of the loan under this Contract is paid off.

10.2 For any conditions listed below, Party B has the right to terminate this Contract and ask Party A to cover principal and interest ahead of time, as well as loss of Party B.

10.2.1 Close of business, business dissolution, suspending of business, revoking or cancelling of business license, etc., happen.

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10.2.2 Any change of guarantee deteriorating creditor’s right of Party B under this Contract happens and Party A fails to provide another guarantee to the satisfactory of Party B.

10.2.3 Party A fails to make repayment before agreed time, use the loan in agreed way, pay the interest in agreed time or honor other obligations stated in this Contract.

10.3 If repayment is required to be postponed, Party A should provide written application and written guarantee signed by guarantor for continuity of guarantee under this Contract 30 days before conclusion of this Contract, and the loan under this Contract is postponed upon the approval of Party B and signing of extension agreement; this Contract is still under implementing before signing of extension agreement.

10.4 After this Contract becomes effective, unless provisions of this Contract specifically stated, both party should not change or terminate ahead of time this Contract, and formation and termination of this Contract should be negotiated to a written agreement. This Contract is still under implementing before written agreement is reached.

11 Disputes Settlement

11.1 Any disputes happen during the process of this Contract should firstly be resolved through negotiation. If the negotiation could not reach an agreement, the way stated in 11.1.2 is chosen.

11.1 2 It is arbitrated by .

11.1.2 It is solved by raising a lawsuit at local court where Party B is.

12	Others
13	Supplementary Provision

13.1 Party B has the right to, according to relevant regulations of laws and other regulatory files and requirements of financial supervision institutes, provide information of this Contract and other relevant information to Credit Database of People’s Bank of China or other database set in legal ways for information search of institutes or persons with proper authorities, and look up information related to Party A in Credit Database of People’s Bank of China or other database set in legal ways since signing the implementing of this Contract.

13.2 Supplementary Provision is an inseparable part of this Contract with the same legal validity.

13.3 This Contract is in two copies, with each party holds copy (copies) with the same legal validity.

Creditor has warned Borrower to comprehensively and accurately understand Clauses in this Contract, especially those in boldface, and respectively explained content of Clauses to requirements of Borrower. Borrower is now definitely without any misunderstanding and dubious interpretation towards this Contract.

9

Borrower (Sealing): Fujian Jinjiang Aierda Shoe Plastic Co., Ltd.

Signature or Sealing of Legal Representative: Yuxi Ding

Creditor (Sealing): Jinjiang Branch of Bank of Quanzhou Co., Ltd.

Signature or Sealing of Authorized Person:

Date: August 11^th, 2010

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EX-10.20

Exhibit 10.20

LOAN CONTRACT

CHINA CONSTRUCTION BANK

This Contract is made between

Borrower (Party A): see Clause XII of this Contract
Creditor (Party B): see Clause XII of this Contract

Party A applies to ask for a loan from Party B, and Party B agrees to offer a loan to Party A. According to certain laws and regulations, Party A and Party B agree to make this Contract after negotiation for the pursuant of both arties.

I.	Amount of the Loan
	See Clause XIII of this Contract
II.	Use of the Loan
	See Clause XIV of this Contract
III.	Term of the Loan
	See Clause XV of this Contract
IV.	Loan Interest Rate, Penalty for Interest Rate, Interest Bearing, and Interest Settlement

A.	Loan Interest Rate
	See Clause XVI of this contract
B.	Penalty for Interest Rate
	See Clause XVII of this contract
C.	Value Date of this Contract begins when the initial granting of the loan is transferred to the appointed account by Party A.
	When the initial loan of this Contract is granted, benchmark interest rate is the loan interest rate of the same term and level loan published and implemented by Bank of China on the Value Day; when the loan interest rate is to be adjusted as agreed above, benchmark interest rate is the loan interest rate of the same term and level loan published and implemented by Bank of China on the adjusting day; if Bank of China stops to publish the loan interest rate of the same term and level loan, benchmark interest rate is the loan interest rate of the same term and level loan approved by the banking industry on the adjusting day, not including the circumstance that the parties have reached any specific agreements.
D.	Loan Interest begins when the loan is transferred to the appointed account by Party A. Loan Interest of this Contract is calculated by day (day interest rate = annual interest rate/360). If Party A fails to pay interest on the Interest Settlement Day, it will due compound interest from the other day.
E.	Interest Settlement

a)	If loan interest rate is fixed, interest is settled according to the fixed interest rate. If loan interest rate is floating, interest is settled according to the interest rate of each floating period. If the interest rate during a floating period fluctuates, interest is settled according to the accumulated interest rate during a floating period.
b)	See Clause XVIII of this contract

V. Granting and Spending of the Loan

A.	Premise of Loan Granting See Clause XIX of this contract
B.	Spending Plan of the Loan See Clause XX of this contract
C.	Party A should use the Loan in the ways agreed in Clause II of this Contract, and should not advance, delay, or cancel the withdrawal of money without the written consent of Party B.
D.	When the Loan is in split use by Party A, the due date of the Loan is pursuant to Clause III of this Contract.

VI. Repayment

A.	Principles of Repayment
	Repayment under this Contract by Party A should follow the below principles.
	Party B has the right to use the repayment first on the expenses on the account of Party A under this Contract which are prepaid by Party B, and the relevant expenses at which Party B realized its creditor’s right. The rest part of the repayment is used first to cover the interest, and all the interest is covered together with the clearance of principal. To the loans that repayment of principal is not made within 90 days after the settlement date, repayment of interest is not made within 90 days after the settlement date, or stipulated in other laws, regulations, or rules, Party A should, on the basis of covering the said payment, first pay back the interest and then the principal.

B.	Interest Payment
	Party A should pay Party B on the settlement date interest due. The first pay date of interest is the first interest settlement date after granting of the loan, and the interest is fully covered when the principal is repaid on the last pay day.
C.	Principal Repayment Plan See Clause XXI of this contract
D.	Ways of Repayment
	Party A should prepare sufficient in the account appointed by Party B and make an automatic account transfer before the repayment day as agreed in this Contract (Party B also has the right to transfer money from this account for the use of repayment.), or transfer money from other accounts to this account for repayment on the repayment day as agreed in this Contract.
E.	Advancing the Date of Repayment

a)	If Party A is to repay the principal ahead of the agreed date, Party A should make a written application of repaying part of or all the principal 20 working days before the settlement day with consent of Party B.
b)	See Clause XXII of this contract

VII. Rights and Responsibilities of Party A A. Rights of Party A

a)	Party A has the right to ask Party B to grant the loan as agreed in this Contract.
b)	Party A has the right to use the loan in the channels agreed in this Contract.
c)	Complying with the regulations of Party B, Party A has the right to apply for extending of the due time.
d)	Party A has the right to ask Party B to keep all the relevant accounting and business information confidential, unless it is otherwise stipulated by laws and regulations, required by organs of power, or agreed by both parties.
e)	Party A has the right to reject offer a bribe to Party B and its staff, as well as reporting the said deeds or actions against relevant laws and regulations on credit interest rate, service charges, etc.

B. Responsibilities of Party A

a)	Party A has the responsibility to make timely draw of the loan, sufficient repayment of principal and interest, and coverage of all the relevant expenses as agreed in this Contract.
b)	Party A has the responsibility to offer all the relevant accounting and business information required by Party B, including but not limited to balance sheet of the end of latest quarter within the first 20 days of every quarter, income statement of the end of latest quarter (income-expense statement for public institutions), and timely annual chart of cash flow at the end of every year, and ensure all the information true, complete, effective, without any untrue statement or important operating and accounting information concealing.
c)	Any change of commerce register items, like name, representatives (persons in charge), address, business scope, register capital, or constitutions of company (enterprise), etc., of Party A should be informed to Party B in written document with all the relevant materials within 5 days of change.
d)	Party A should use the loan in the channels agreed in this Contract, no occupation, misappropriate, or use for any illegal or prohibited trading; be cooperative and accept any investigation or supervision of Party B on daily operations, accounting activities, and use of the loan; not evade the debt by taking out capital, transferring assets, or affiliate transactions; not acquire cash or bank credit in the means of discount or equity mortgage of any creditor’s right, like through fake contract signed with a connected party, documents or accounts receivable without actual trading background.
e)	If the loan in this Contract is to be used on manufacturing, or constructing industry, Party A should be pursuant to relevant regulations of environment protection.

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f)	Before the interest and principal of the loan is repaid, Party A could not offer a guarantee for any third party by the assets formed from the loan in this contract without the written consent of Party B.
g)	If Party A is a group client, any affiliated transactions constitute 10% of the group’s net assets should be timely reported to Party B, including 1)relations of transaction parties 2)content and nature of transaction 3)amount and respective quota of transaction 4)pricing policies (including transactions without amount or with nominal amount)
h)	If the loan drafted in this Contract is for the use of fixed assets or projects, Party A should ensure that the projects to be carried out get the relevant government approval without any illegal conditions, and the capital is to be granted timely in agreed ratio for the progress of projects.

VIII. Rights and Responsibilities of Party B

A.	Party B has the right to ask Party A to timely pay back the principal, interest and expenses, and fulfill the liabilities in this Contract.
B.	Party B should grant the loan as agreed in this Contract, not including any postpone due to Party A or in no connection with the fault of Party.
C.	Party B should keep the relevant accounting and business information offered by Party A confidential, unless it is otherwise stipulated by laws and regulations, required by organs of power, or agreed by both parties.
D.	Party B should not offer to or ask for from Party A and its staff a bribe.
E.	Party B should not do anything harmful to the legal rights of Party A.

IX. Liabilities for Breach and Remedial Measures for Conditions Being Harm to Creditor’s Rights

A. Beach of Contract by Party B And Respective Liabilities

a)	If Party B ceases to grant the loan in this Contract without any proper reasons, Party A has the right to ask for the continuity of loan granting.
b)	If Party B charges improper interest, expenses against the laws and regulation of government, Party A has the right to take back the money.

B. Beach of Contract by Party A

a)	Party A is against any clause of this Contract or fails to fulfill any legal liability.
b)	Party A makes certain definite declaration on or actions indicating its failure to fulfill any liability in this Contract.

C. Possible Conditions Harmful to Creditor’s Right of Party B

a)	Party B could consider it’s creditor’s right in this Contract is invaded under the following circumstances: any undertaken, trusteeship (taken over), leasing, decrease of register capital, investment, joint operation, consolidation, merger, acquisition, separation, joint venture, suspending or dismissing of business, bankrupt, change of holding shareholder/actual controller, transferring, shutting down, or closing of important assets, high government penalty, cancellation, revocation of business license, involved in serious lawsuit, operational difficulties, deterioration of financial conditions, management failure of legal representative or chief leader of Party A.
b)	Party B could consider its creditor’s right in this Contract is invaded under the following circumstances: Party A fails to honor the payment due (including liabilities to any branch of China Construction Bank or other third party institutes), transfers its assets in low or no returns, remits debt of a third party, is sluggish in honor of creditor’s right or other relevant rights, or offers a guarantee to a third party.
c)	Party B could consider its creditor’s right in this Contract is invaded if any shareholder of Party A abuses the private rights of legal representative or limited liabilities of shareholder to dodge a creditor.
d)	Any premises of loan granting in this Contract is failed to be honored continuously.
e)	Party B could consider its creditor’s right in this Contract is invaded if the warrantor is in any of the following circumstance:

4

	1) violation, false, wrong or omitting statement of any clause in warrant contract
	2) any undertaken, trusteeship (taken over), leasing, decrease of register capital, investment, joint operation, consolidation, merger, acquisition, separation, joint venture, suspending or dismissing of business, bankrupt, change of holding shareholder/actual controller, transferring, shutting down, or closing of important assets, high government penalty, cancellation, revocation of business license, involved in serious lawsuit, operational difficulties, deterioration of financial conditions, management failure of legal representative or chief leader of the warrantor, which may deteriorate its capacity to offer the guarantee 3) other conditions that may deteriorate warrantor’s guarantee capacity
f)	Party B could consider its creditor’s right in this Contract is invaded if any equity mortgage, impawn happens.
	1) Any destroy, lost, or depreciation of the mortgage or impawn equity due to actions of a third party, being levied, confiscated, required, or redeemed by government, removing, fluctuation of market situation, or other conditions 2) Any sealing up, detaining, freezing, deduction, lien, auction, supervision, or equity disputes of the mortgage or impawn equity by legal authority 3) Violation, false, wrong or omitting statement of any clause in the mortgage or impawn contract 4) Other conditions that may endanger the fulfillment of mortgage or impawn
g)	Party B could consider its creditor’s right in this Contract is invaded if the guarantee is disestablished, ineffective, invalid, revoked, relieved, the warrantor makes certain definite declaration on or actions indicating its failure to fulfill any liability, or in any other conditions, like the warrantor loses part or all the capacity to honor the guarantee, the value of guarantee depreciates, etc.
h)	other conditions in which Party B could consider its creditor’s right in this Contract is invaded

D. Remedies by Party B

If any condition in B or C of this Clause happens, Party B has the right to exercise one or some of its following authority.

a)	Ceasing to grant the loan
b)	Declaring the maturity of the loan, and requiring Party A to pay back all the principal, interest and expenses in this Contract whether due or not
c)	See Clause XXIII of this contract
d)	When Party A uses the loan against the ways agreed in this Contract, to the part of money diverted, the interest and compound interest is calculated by penalty interest rate in the ways agreed in this Contract from the day Party A failed to use the loan in the agreed ways to the settlement day.
e)	If the date of actual drawing exceeds the time limit, to the part of principal, interest and expenses dishonored (including all or part of the principal and interest declared by Party B to be due ahead of the time limit) should be charged penalty and compound interest in the penalty interest rate and ways agreed in this Contract from the due day to the ultimate settlement day of all the interest and principal. Exceeding the time limit indicates the action Party A fails to honor the repayment within the agreed time line or times of this Contract.
	Compound interest is calculated in the credit interest rate and ways agreed in this Contract if Party A fails to make a timely repayment before the due day.
f)	Other remedies, including but not limited to:
	1)transferring RMB or respective amount in other kinds of currencies from other accounts of Party A in China Construction Bank without prior inform 2)exercising authority of guarantee 3)requiring Party A to offer a new guarantee meeting the demands of all the debts in this Contract 4)termination of this Contract

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X. Others

A.	Responsibilities of Expenses
	All expenses under this Clause and in this Contract of the attorneys, insurance, evaluation, registration, safekeeping, authenticating, notarizing, etc. should be on the duly account of Party A, unless specific agreements are made by both parties.
	All the expenses (including but not limited to costs of lawsuits, arbitrations, safekeeping of assets, business trips, implementing, evaluations, auctions, notarizations, delivery, publication, attorneys, etc. ) in which Party B realize its creditor’s right should be on the duly account of Party A.
B.	Use of Party A’s Information
	Party A agrees that Party B could investigate credit status of Party A in Credit Database or departments or institutes concerned authorized by People’s Bank of China and departments in charge of credit inspection, offer information provided by Party A to Credit Database authorized by People’s Bank of China and departments in charge of credit inspection, and use and disclosure proper information of Party A according to Party B’s actual business requirements.
C.	Publication for Collections
	Party b has the right to announce to relevant departments or institutes, or to declare through mass media for collections, if Party A fails to honor the repayment or other clauses in this Contract.
D.	Efficiency of Evidences Recorded by Party B
	All the internal accounting records about principal, interest, expenses, repayment, etc., and made or kept by Party B all the documents and vouchers against money withdrawal, as well as principal and interest repayment honored by Party A and records and vouchers of collections by Party B, effectively prove the debtor-creditor relationship between the two parties, unless there’s any reliable and certain proofs to the contrary. Party A could not raise any objection that Party B keeps all the said records, catalogs, documents and vouchers.
E.	Reserved Rights
	The rights of Party B in this Contract are not contradicted with any legal rights it ought to enjoy. Any tolerance, extending of time limit, preferences, delays of rights exercise in this Contract of Party B toward default and postpone made by Party A should not be considered as abandon of rights and interests in this Contract, permission or approval of actions against this Contract, declaration to limit, prohibit, impede any action continuing to honor this or other rights, or statement to take any responsibilities or liabilities of Party A.
F.	If Party A has other mature debts to Party B besides the debts in this Contract, Party B has the right to transfer RMB or respective amount in other kinds of currencies from other accounts of Party A in China Construction Bank to pay back any of the mature debts, and Party A has no right to object.
G.	Any change of mail address or contact information of Party A should be timely informed to Party B in written documents, and any loss due to the failure of timely informing should be on the duly account of Party A.
H.	Transferring And Receiving of Payment Receivable
	Party B has the right to transfer RMB or respective amount in other kinds of currencies from other accounts of Party A in China Construction Bank to cover all of the mature debts in this Contract without any need for prior notice to Party A. Party A needs to assist Party B with all the formalities in exchange sales and settlement business and should take the risk of fluctuation of exchange rate.
I.	Effective Conditions of Contract
	This Contract is effective upon the signing and sealing of legal representatives or authorized agent of both parties.
J.	Party A declares that there is not and will not be any actions or conditions against the laws, regulations, or rules of environment protection, energy-saving and ejection-decreasing, and pollution reducing at or after the time this Contract is signed. Party B has the right to postpone the credit approval (including but not limited to ceasing of loan granting, financing offer, issuing of Guarantee Letter or Bank’s Acceptance Bill) of Party A, declare to advance the maturity date of the creditor’s right (including but not limited to loan, financing capital, advanced money or possible advanced money, etc.), or take other remedies agreed in this Contract or approved by laws, if any untrue statement, violation, or possible violation of the above declaration of Party A is observed.

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XI. Declarations

A.	Party A has a clear understanding of Party B’s business scope and limits of authority
B.	Party A has read all the clauses in this Contract. To the requirements of Party A, Party B has made respective explanations of this Contract. Party A has a comprehensive understanding of meaning and respective legal consequences of every clause in this Contract.
C.	The liabilities in this Contract signed and respected by Party A should follow all the laws, regulations, rules of government, and regulations of constitutions and internal organizational documents of Party A, and have been approved by internal institutes of Party A and/or government institutes concerned.

Special Terms of Contract

No. of this Capital Loan Contract is 2010túÉK7CZW206÷

Loan Classification: loan of industry operational funds

XII.	Information of Contractors
	Borrower (Party A): Dake (Fujian) Sport Goods Co., Ltd. Address: Jiangtou Village Chendai, Jinjiang City Zip Code: 362211 Legal Representative (Chief Leader): Yuxi Ding Fax: 86-595-85196905 Tel: 86-595-85186739 Creditor (Party B): Jinjiang Branch of China Construction Bank Address: Zengjing Community, Qingyang, Jinjiang City Chief Leader: Deming Wang Fax: 86-595-85632053 Tel: 86-595-85688436
XIII.	Agreement on Clause I
	Amount of the Loan: one million RMB
XIV.	Agreement on Clause II
	The loan should be used in capital conversion and could not be used in other ways without written consent of Party B.
XV.	Agreement on Clause III
	Term of the loan in this Contract is twelve months, from July 16th , 2010 to July 16th , 2011.
	When the starting date of the loan term and the date on the loan transfer voucher (an IOU) are different, the settlement dates is respectively adjusted according to the date on the first loan transfer voucher. Loan transfer vouchers constitute part of this Contract and are with legal authority.
XVI.	Agreement on Clause IV A
	Credit interest rate in this Contract is annual interest rate, which is the first interest rate among the following ones.

a)	Fixed interest rate, which is 5.841%, without any floating during the loan term
b)	Fixed interest rate, which is (choose “up” or “down”) the benchmark interest rate of the starting date , without any floating during the loan term
c)	Floating interest rate, which is (choose “up” or “down”) the benchmark interest rate of the starting date and is to be adjusted every months according to the benchmark interest rate of the adjusting day and the said interest rate floating from the starting date to the settlement date in this Contract Interest adjusting day is the corresponding day of the starting day of the month, and if there’s no corresponding day of the starting day, the last day of the month is regarded as interest adjusting day.

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XVII. Agreement on Clause IV B

a)	If Party A doesn’t use the loan in the agreed ways in this Contract, penalty interest rate is 100% up of credit interest rate; if credit interest rate is to be adjusted according to Clause IV A c), penalty interest rate is to have the same range of adjustment.
b)	If Party A fails to honor the repayment, penalty interest rate is 50% up of credit interest rate; if credit interest rate is to be adjusted according to Clause IV A c), penalty interest rate is to have the same range of adjustment.
c)	If the above two conditions happen at the same time, the harder penalty interest rate is chosen for penalty and compound interest calculation.

XVIII. Agreement on Clause IV E b)

Interest payment in this Contract is settled in the first way among the following ones.

1) Interest is paid by month, and the 20^th of every month is the settlement day.

2) Interest is paid by quarter, and the 20^th of the last month of every quarter is the settlement day.

3) Other ways

XIX. Agreement on Clause V A

Party B needs to grant the loan when the following premises are continuously fulfilled unless otherwise Party B gives up part of all of them.

1) Party A has made all the formalities of loan approval, registration, handing over, insurance and others.

2) Party A has a qualified and effective guarantee to the requirements of Party B.

3) Party A has opened accounts of loan granting and repaying to the requirements of Party B.

4) Party A fulfills all the clauses agreed in this Contract and has no possible actions which will endanger creditor’s right of Party B.

5) The granting loan is not prohibited or limited by any laws, regulations, or government institutes.

6) Other conditions

XX.	Agreement on Clause V B
	Plan of Loan Use: one million RMB on July 16th , 2010
XXI.	Agreement on Clause VI C
	Plan of Loan Repayment: one million RMB on July 16th , 2011
XXII.	Agreement on Clause VI E b)
	Party B has the right to charge compensation when Party B agrees that Party A could make a repayment ahead of time, and the amount of compensation is decided by the first way among the following ones.

1) Compensation=prepaid amount X prepaid month(s) X 1‰, days less then a month is to be regarded as one month 2) If Party A repays the loan in times and repays part of the loan, the capital prepaid should cover the loan in back sequence of repayment plan while the rest unpaid part should be charged interest as agreed in this Contract.

XXIII.	Agreement on Clause IX D c)
	If Party A fails to withdraw the capital as agreed in this Contract, Party B has the right to charge Party A penalty equaling to 8.7615% of the amount failed to be honored and reject Party A to withdraw the rest part of money.
XXIV.	Arbitrations Resolving
	Any arbitration during the term of this Contract should be settled through friendly negotiation between parties. If the negotiation fails, the arbitration is settle in the first way among the following ones.

1) To conduct a suit in local court of Party B

2) To hand the case over to Arbitration Committee (Address ), and to be settled by the arbitration rules effective in the period when the case is handed over The consequence of arbitration is eventual and restrained to both parties.

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Clauses not within the range of arbitration should be followed during the law or arbitration period.

XXV.	This Contract is made in three copies.
XXVI.	Others

1) Time limit in this Contract is the mature date of the loan.

2) Creditor’s right in this Contract is within the guarantee range of Guarantee Contract, numbering 2010túÉKêØÝW113÷.

Party A (Sealing):

Signature of Legal Representative (Chief Leader) of Authorized Agent: Yuxi Ding
Date: July 16^th, 2010

Party B (Sealing):

Signature of Authorized Agent:
Date: July 16^th, 2010

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EX-10.21

Exhibit 10.21

EX-10.22

Exhibit 10.22

Exclusive Business Cooperation Agreement
独家业务合作协议

This Exclusive Business Cooperation Agreement (this “Agreement”) is made and entered into as of December [] 2010, by and between the following parties on December [], 2010 in Jinjiang City, Fujian Province, the People’s Republic of China (“China” or the “PRC”):
 本独家业务合作协议（“本协议”）由以下双方于2010年12月【】日在中华人民共和国（“中国”）福建省晋江市签署:

Party A :	Dake (Fujian) Sports Goods Co., Ltd.
Address:	Henggoutou Industrial District, Chendai Town, Jinjiang City, Fujian Province, China
甲方:	达克（福建）体育用品有限公司
地址:	福建省晋江市陈埭镇横沟头工业区

Party B:	Fujian Jinjiang Aierda Shoe Plastic Co., Ltd
Address:	Jiangtou Village, Chendai Town, Jinjiang City, Fujian Province, China
乙方	福建省晋江爱尔达鞋塑有限公司
地址	福建省晋江市陈埭镇江头村

Each of Party A and Party B shall be hereinafter referred to as a “Party” respectively, and as the “Parties” collectively.
 福建省晋江市陈埭镇江头村

RECITALS
陈述

(1)	Party A is a wholly foreign-owned limited company duly incorporated under the laws of China which has the expertise in the business of the production and retail of plastic sports shoes, shoemaking material.
	甲方为依据中国法律设立的外商独资企业，专业进行塑料运动鞋、鞋业材料的生产和零售。

(2)	Party B is a wholly foreign-owned limited company duly incorporated under the laws of China which has the expertise in the business of the production and retail of plastic sports shoes, fashion shoes and leather sandals (the “Business”).
	乙方是一家依据中国法律设立的外商独资企业，专业进行旅游鞋、时装鞋及皮凉鞋的生产和零售（“业务”）。

(3)	The Parties desire that Party A provide exclusive business support and technical and consulting services and relevant services to Party B.
	各方期望甲方向乙方提供独家的业务支持和技术和咨询服务和其他相关服务。

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(4)	The Parties are entering into this Agreement to set forth the terms and conditions under which Party A shall provide consulting services to Party B.
	各方签订本协议以确定相关条款，据于此，甲方将向乙方提供咨询服务。

NOW THEREFORE, the Parties agree as follows:

因此，各方签订以下协议，以资双方遵守

1.	DEFINITIONS
	解释

1.1	In this Agreement the following terms shall be construed to have the meanings set forth or referenced below:1.1
	本协议中以下词组应具有以下含义:

“Affiliate” means, with respect to any Person, shall mean any other Person that directly or indirectly controls, is controlled by, or is under common control with such specified Person. As used in this definition, “control” means possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether ownership of securities or partnership or other ownership interests, by contract or otherwise);
 “关联企业”，指的是对于任何人而言，任何其他人直接或者间接的予以控制，或共同控制，或者其对他人进行控制。在本定义中，控制指的是直接或者间接拥有，具有能力直接或者间接影响管理的方向和政策（不管是通过担保权益还是通过合伙或者其他所有权权益，这种安排可以通过合 1516;或者其他形式进行）;

“Services Fee” shall be as defined in Clause 3.1;
“服务费”由第3.1条进行定义

“Indebtedness” shall mean, as to any Person, without duplication, (i) all indebtedness (including principal, interest, fees and charges) of such Person for borrowed money for the deferred purchase price of property or services, (ii) the face amount of all letters of credit issued for the amount of such Person and all drafts drawn thereunder, (iii) all liabilities secured by any Lien on any property owned by such person, whether or not such liabilities have been assumed by such Person, (iv) the aggregate amount required to be capitalized under leases under which such Person is the lessee and (v) all contingent obligations (including, without limitation, all guarantees to third parties) of such Person;
“债务”指的是，对任何人而言，无重复的(i)所有因此类人的借款以便还清迟延支付的购买财产价款或者服务费而产生的债务（包括本金，利息，费用和收费）；(ii)所有应当由此类人支付的信用证以及由此出具的票据的票面价值；(iii)任何由设置于此类人拥有的财产之上的留置担保的责任，不管Ē 92;类人是否承担了这些责任；(iv)此类人作为租赁人应当支付的租约总金额；(v)所有此类人的或有债务（包括但不限于向所有第三方作出的担保）

“Lien” shall mean any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), preference, priority or other security agreement of any kind or nature whatsoever (including. without limitation, any conditional sale or other title retention agreement, any financing or similar statement or notice filed under recording or notice statute, and any lease having substantially the same effect as any of the foregoing);
“担保”指的是任何抵押，质押，担保契约，分配，定金，阻碍，留置（法定或者其他），优惠，优先权或者任何其他性质或种类的担保安排（包括但不限于任何有条件的出售或者其他回购协议，根据法定形式签发的任何金融或者类似的申明或者通知，并且任何与前述安排具有实质性相同效 6524;的租约）;

“Person” shall mean any individual, corporation, company, voluntary association, partnership, joint venture, trust, unincorporated organization, entity or other organization or any government body;
 “人”，指的是任何个人，公司，自愿性的组织，合伙，合资企业，信托，非公司型组织，团体或者其他组织和政府机构;

“PRC” means the People’s Republic of China;
“中国”指的是中华人民共和国;

“Services” means the services to be provided under the Agreement by Party A to Party B, as more specifically described in Clause 2;
“服务”指的是根据本协议，由甲方向乙方提供的，并由第二条详细解释的服务

In this Agreement a reference to a Clause, unless the context otherwise requires, is a reference to a clause of this Agreement.
本协议中对任何条款的索引，都是指对本协议中条款的索引，除非协议另有规定。

1.2	The headings in this Agreement shall not affect the interpretation of this Agreement.
1.2	本协议中的标题不应当影响对本协议的解释。

2.	RETENTION AND SCOPE OF SERVICES
2.	聘用和服务范围

2.1	Party A hereby agrees to provide Party B with exclusive business support and technical and consulting services, including but not limited to, general operational management, technical support, strategic planning, marketing and sale channel development and human resource management.
2.1	甲方在此同意向乙方提供独家业务支持和技术和咨询服务，包括但不限于，日常业务管理, 技术支持，战略规划，市场及销售渠道拓展和人力资源管理

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2.2	Exclusive Services Provider. During the term of this agreement, Party A shall be the exclusive service provider. Party B shall not seek or accept similar services from other providers unless the prior written approval is obtained from Party A.
2.2	排他性的服务提供者。在本协议有效期间，甲方应当是排他性的服务提供者。除非获得了甲方事先书面同意，乙方不可以寻求或者接受来自其他服务提供者类似的服务。

2.3

Intellectual Properties Related to the Services. Party A is entitled to have exclusive and proprietary rights and interests to any intellectual properties or technologies arising out of or created during the performance of this agreement. Such intellectual property rights shall include patents, trademarks, trade names, copyrights, patent application rights, copyright and trademark application rights, research and technical documents and materials, and other related intellectual property rights including the right to license or transfer such intellectual properties. If Party B must utilize any intellectual property, Party A agrees to grant an appropriate license to Party B on terms and conditions to be set forth in a separate agreement.

2.3

有关服务的知识产权。甲方对履行本协议而产生或创造的任何所有知识产权或技术享有独占的和排他的权利和利益。此类知识产权应当包括专利，商标，商号，版权，专利申请权，版权和商标申请权，研究及技术文件资料，以及其他有关的知识产权（包括许可，转让此类知识产权的权力） ;。如果乙方必须使用任何知识产权，甲方应当通过和乙方签订独立的协议授予乙方合适的权利。

2.4	Pledge. Party B shall permit and cause Party B's shareholders to pledge the equity interests of Party B to Party A for securing the Fee that should be paid by Party B pursuant to this Agreement.
2.4	质押。乙方应当允许和促使乙方的股东向甲方出质其在乙方的股东权利以便保证乙方向甲方支付本协议规定的服务费。

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2.5

Party B hereby grants to Party A an irrevocable and exclusive option to purchase from Party B, at Party A’s sole discretion, any or all of the assets (including trademarks) of Party B, to the extent permitted under the PRC laws, at the lowest purchase price permitted by the PRC laws. In this case, the Parties shall enter into a separate asset transfer agreement, specifying the terms and conditions of the transfer of the assets.

2.5

乙方特此向甲方授予一项不可撤销的排他性的购买权，根据该购买权，甲方可在中国法律允许的范围内，由甲方自行选择，向乙方购买任何部分或全部资产（包括商标），作价为中国法律允许的最低价格。届时双方将另行签订一份资产转让合同，对该资产转让的条款和条件进行约定。

3.	PAYMENT
3.	支付

3.1	General
3.1	普通条款

(a)

In consideration of the Services provided by Party A hereunder, Party B shall pay to Party A during the term of this Agreement a services fee (the “Services Fee”). Party A and Party B agree that the Services Fee shall be determined and paid based on a percentage of Party B's profit before tax, which is determined and adjustable at the sole discretion of Party A. The time of payment is determined at the sole discretion of Party A.

(a)

就甲方提供的服务，乙方应当在本协议有效期间向甲方支付服务费（“服务费”）。甲方和乙方同意，服务费应根据乙方税前利润的一定比例确定和支付，且甲方有权单方自行决定该费用并对该费用进行调整。付款时间由甲方单方自行决定。

(b)

Party B will permit, from time to time during regular business hours as reasonably requested by Party A, or its agents or representatives (including independent public accountants, which may be Party B’s independent public accountants),(i)to conduct periodic audits of books and records of Party B,(ii) to examine and make copies of and abstracts from all books, records and documents (including, without limitation, computer tapes and disks)in the possession or under the control of Party B(iii) to visit the offices and properties of Party B for the purpose of examining such materials described in clause (ii) above, and (iv) to discuss matters relating to the performance by Party B hereunder with any of the officers or employees of Party B having knowledge of such matters. Party A may exercise the audit rights provided in the preceding sentence at any time, provided that Party A provides ten days written notice to Party B specifying the scope, purpose and duration of such audit. All such audits shall be conducted in such a manner as not to interfere with Party B’s normal operations.

(b)

乙方应当允许，在通常的工作时间，根据甲方或者其代理人或者代表的要求（包含独立的注册会计师，其可以是乙方的独立的注册会计师），(i)对乙方的账簿和财务记录进行审计；(ii)在乙方控制和占有下，对所有的账簿，财务记录和文件进行摘要，检查和备份（包括但不限于电脑磁盘和磁带 ）；(iii)造访乙方的办公场所和财产以便对上述(ii)中的材料进行审查；以及(iv)和乙方了解情况的雇员讨论乙方的经营活动。甲方可以在任何时间行使前述规定的任何审计权利，只要提前十天向乙方提供书面的通知确定审计的范围，目的和持续时间。所有此类的审计不应当影响乙方一般的经营活动&# 12290;

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3.2	Party B shall not be entitled to set off any amount it may claim is owed to it by Party A against any Services Fee payable by Party B to Party A unless Party B first obtains Party A's written consent.
3.2	乙方不应当把其应当向甲方支付的服务费和甲方可能的欠款自行抵消，除非乙方已获得了甲方的书面同意。

3.3	Should Party B fail to pay all or any part of the Service’s Fee due to Party A in RMB under this Clause 3 within the time limits stipulated, Party B shall pay to Party A interest in RMB on the amount overdue based on the three (3) month lending rate for RMB announced by the Bank of China on the relevant due date.
3.3	如果乙方没有依据本第三条的规定在规定的期间内，支付全部或者部分人民币服务费，乙方应当向甲方支付未付款的人民币利息；相关利息的支付应当依据中国银行公布的近三月银行同期贷款利率。

3.4	All payments to be made by Party B hereunder shall be made free and clear of and without deduction for or on account of tax, unless Party B is required to make such payment subject to the deduction or withholding of tax.
3.4	所有本条规定的乙方的支付义务不包含任何扣除和税负考虑，除非乙方被要求在扣除后或者代扣税后进行支付。

4.	UNDERTAKINGS
	Party B hereby agrees that, during the term of the Agreement:
4.	保证
	乙方在此同意，在本协议有效期间：

4.1	Information Covenants. Party B will furnish to Party A:
4.1	信息条款。乙方将提供甲方:

4.1.1	Preliminary Monthly Reports. Within five (5) days of the end of each calendar month the preliminary income statements and balance sheets of Party B made up to and as at the end of such calendar month, in each case prepared in accordance with the PRC generally accepted accounting principles, consistently applied.
4.1.1	初期月报。每公历月度的最后五天，乙方在月末依据中国普遍接受的会计原则制作的月收入报表和资产损益表。

4.1.2

Final Monthly Reports. Within ten (10) days after the end of each calendar month, a final report from Party B on the financial position and results of operations and affairs of Party B made up to and as at the end of such calendar month and for the elapsed portion of the relevant financial year, setting forth in each case in comparative form figures for the corresponding period in the preceding financial year, in each case prepared in accordance with the PRC generally accepted accounting principles, consistently applied.

4.1.2

最后月报。每公历月度最后十天，乙方在月末制作月报，用以说明其财务状况，经营成绩，以及与往年同期的比较，该报表依据中国普遍接受的会计原则制作。

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4.1.3

Quarterly Reports. As soon as available and in any event within forty-five (45) days after each Quarterly Date (as defined below), unaudited consolidated and consolidating statements of income, retained earnings and changes in financial position of the Party B and its subsidiaries, if any, for such quarterly period and for the period from the beginning of the relevant fiscal year to such Quarterly Date and the related consolidated and consolidating balance sheets as at the end of such quarterly period, setting forth in each case actual versus budgeted comparisons and in comparative form the corresponding consolidated and consolidating figures for the corresponding period in the preceding fiscal year, accompanied by a certificate of the chief financial officer of the Party B, which certificate shall state that said financial statements fairly present the consolidated and consolidating financial condition and results of operations, as the case may be, of the Party B and its subsidiaries, if any, in accordance with PRC general accepted accounting principles applied on a consistent basis as at the end of, and for, such period (subject to normal year-end audit adjustments and the preparation of notes for the audited financial statements).

4.1.3

季报。在每季度日（定义见下文）结束45天内制作，乙方及其予公司未审计的合并和未合并收入报表，未分配利润和乙方财务状况的变化；如果可能的话，每季度及从每财务年度的开始到季度日，相关合并和未合并报表，并且以比照形式和去年同期的相关报表列于一处。相关报表应有乙ਬ 1;首席财务官的证明。该证明应当申明相关财务报表依法提供了乙方及其子公司合并及未合并的财务状况和经营业绩，并且该报表的制作符合中国普遍接受的会计原则（相关数据应以年度审计的调整和相关已审计的财务报表为准）。

4.1.4	Annual Audited Accounts. Within six (6) months of the end of the financial year, the annual audited accounts of Party B to which they relate (setting forth in each case in comparative form the corresponding figures for the preceding financial year), in each case prepared in accordance with, among others, the PRC generally accepted accounting principles, consistently applied.
4.1.4	年度审计。每会计年度结束六个月内，乙方年度审计纪录（以比较形式与去年同期进行对比）应以中国普遍接受的会计原则制作。

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4.1.5

Budgets. At least 90 days before the first day of each financial year of Party B, a budget in form satisfactory to Party A(including budgeted statements of income and sources and uses of cash and balance sheets) prepared by Party B for each of the four financial quarters of such financial year accompanied by the statement of the chief financial officer of Party B to the effect that, to the best of his knowledge, the budget is a reasonable estimate for the period covered thereby.

4.1.5

预算。每财务年度开始前90天，甲方能够接受的乙方准备之预算（包括预算收入，资金流量表和资产负债表）。该预算应当包括每财务年度季度预算。该预算应由乙方首席财务官申明以确定根据其所知相关预算是对相关期间合理的估计。

4.1.6

Notice of Litigation. Promptly, and in any event within one (1) business day after an officer of Party B obtains knowledge thereof, notice of (i) any litigation or governmental proceeding pending against Party B which could materially adversely affect the business, operations, property, assets, condition (financial or otherwise) or prospects of Party B and (ii) any other event which is likely to materially adversely affect the business, operations, property, assets, condition (financial or otherwise) or prospects of Party B.

4.1.6

诉讼通知。在任何情况下，在乙方获知(i)任何尚未了结的诉讼或者政府行政程序即将对乙方的业务，经营，财产或者财务状况或者乙方未来的发展产生实质性的不利影响，并且(ii)任何其他有可能对乙方上述方面产生实质性不利影响的情况后的一个工作日之内，通知甲方。

4.1.7

Other Information. From time to time, such other information or documents (financial or otherwise) as Party A may reasonably request. For purposes of this Agreement, “a Quarterly Date” shall mean the last day of March, June, September and December in each year, the first of which shall be the first such day following the date of this Agreement; provided that if any such day is not a business day in the PRC, then such Quarterly Date shall be the next succeeding business day in the PRC.

4.1.7

其他情况。其他甲方不时合理要求的信息和文件（财务或者其他方面）。在本协议中，“季度日”的含义是：每年三月份、六月份、九月份和十二月份的最后一天，第一个季度日应当是本协议签订日后的以上月份的最后一天。如果上述日起在中国不是营业日，那么相关日期应推迟到此后&# 30340;第一个营业日。

4.2

Books,Records and Inspections. Party B will keep proper books of record and account in which full, true and correct entries in conformity with generally accepted accounting principles in the PRC and all requirements of law shall be made of all dealings and transactions in relation to its business and activities. Party B will permit officers and designated representatives of Party A to visit and inspect, under guidance of officers of Party B, any of the properties of Party B, and to examine the books of record and account of Party B and discuss the affairs, finances and accounts of Party B with, and be advised as to the same by, its and their officers, all at such reasonable times and intervals and to such reasonable extent as Party A may request.

4.2

账簿，财务记录和审查。乙方应当保留相关账簿和财务记录并且相关材料应当完全真实并且正确地按照中国普遍接受的会计原则以及所有法律的要求制作，同时应当包含所有的交易和业务活动。乙方应当允许甲方的高级管理人员和任命的代表，在合适的时间和间隔，依据甲方合理要求的 范围，在乙方高级管理人员的引导下对乙方财产迸行检查，审查乙方的账簿和财务记录并且和乙方高级管理人员讨论乙方的经营、财务和账款。

4.3	Corporate Franchises. Party B will do or cause to be done, all things necessary to preserve and keep in full force and effect its existence and its material rights, franchises and licenses.
4.3	公司特许。乙方应当尽最大的努力，保留其拥有的重大权利，特许和许可的完全效力和强制力。

4.4

Compliance with Statutes, etc. Party B will comply with all applicable statutes, regulations and orders of, and all applicable restrictions imposed by, all governmental bodies, in respect of the conduct of its business and the ownership of its property, including without limitation maintenance of valid and proper government approvals and licenses necessary to provide the services, except that such noncompliances could not, in the aggregate, have a material adverse effect on the business, operations, property, assets, condition (financial or otherwise) or prospects of Party B.

4.4

遵守法律。乙方就其业务、财产所有权（包括但不限于保留有效和合适的政府和审批和许可以便提供相关服务）应当遵守所有适用的法律，法规，政府机构的行政命令和限制；除非此类不遵守，总体而言，对乙方的业务、经营、财产和财务状况及未来发展不会带来实质性的不利影响。

5.	NEGATIVE COVENANTS
	Party B covenants and agrees that, during the term of this Agreement, without the prior written consent of Party A
5.	不作为保证
	乙方同意并且保证，在本协议有效期间，在没有事先获得甲方书面同意的情况下:

5.1	Equity. Party B will not issue, purchase or redeem any equity or debt securities of Party B.
5.1	股权。乙方不会发行，购买或者回购任何乙方的股权或者债权凭证。

5.2	Liens. Party B will not create, incur, assume or suffer to exist any Lien upon or with respect to any property or assets (real or personal, tangible or intangible) of Party B whether now owned or hereafter acquired.
5.2	担保。乙方不会产生、招致、承担或者承担任何加诸于其财产（动产或者不动产，有形或者无形）之上的担保权，不管这类财产是现在拥有的还是之后获得的。

5.3

Consolidation, Merger, Sale of Assets, etc. Party B will not wind up, liquidate or dissolve its affairs or enter into any transaction of merger or consolidation, or convey, sell, lease or otherwise dispose of (or agree to do any of the foregoing at any future time) all or any part of its property or assets, or purchase or otherwise acquire (in one or a series of related transactions) any part of the property or assets (other than purchases or other acquisitions of inventory, materials and equipment in the ordinary course of business) of any Person, except that (i) Party B may make sales of inventory in the ordinary course of business and (ii) Party B may, in the ordinary course of business, sell equipment which is uneconomic or obsolete.

5.3

联营，兼并和资产出售等。乙方不会进行歇业，清算或者解散，或者签定任何兼并合并协议，或者转让，出售，出租或者处置（或者同意在未来进行任何前述的活动）所有或者其部分财产，或者购买或者另行获取（通过一次或者一系列相关联的交易行为）任何的全部或者部分财产（除非 通过正常的交易购买，获取任何存货，材料和设备），除非(i)乙方通过通常的方式出售存货；(ii)乙方通过通常的方式出售其多余或者高成本的设备。

5.4

Dividends. Party B will not declare or pay any dividends, or return any capital, to its shareholders or authorize or make any other distribution, payment or delivery of property or cash to its shareholders as such, or redeem, retire, purchase or otherwise acquire, directly or indirectly, for a consideration, any shares of any class of its capital stock now or hereafter outstanding (or any options or warrants issued by Party B with respect to its capital stock), or set aside any funds for any of the foregoing purposes.

5.4

分红。乙方不会宣布任何红利或者支付红利，不会向其股东退返任何资本，向股东授权或者直接进行任何分配，支付或者交付任何财产或者现金，或者回购，撤销，购买或者直接或者间接通过支付对价的方式获取现在已发行或者以后将发行的任何种类的资本股（或者乙方依据其股本发行 之任何期权或者股权凭证），或者为了前述的目的进行拨款。

5.5	Leases. Party B will not permit the aggregate payments by Party B under agreements to rent or lease any real or personal property to exceed USD50,000 in any fiscal year of Party B.
5.5	租约。乙方不应当使其签订的任何动产不动产租约总额在任何一个会计年度超过五万美元。

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5.6	Indebtedness. Party B will not contract, create, incur, assume or suffer to exist any indebtedness, except accrued expenses and current trade accounts payable incurred in the ordinary course of business.
5.6	债务。乙方不会签约、产生、招致、承受或者承担债务，除非此类费用及应付款产生于通常的业务活动中。

5.7

Advances, Investment and Loans. Party B will not lend money or credit or make advances to any Person, or purchase or acquire any stock, obligations or securities of, or any other interest in, or make any capital contribution to, any other Person, except that Parry A may acquire and hold receivables owing to it, if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms.

5.7

预付款，投资和借款。乙方不得出借，提供信用或者提供赊账给任何人，或者购买任何人的股权，义务或者证券及其相关利益，不得向任何人出资，除非产生于通常的交易并且依照商业惯例是应当支付和履行的，甲方获得因此产生的应收账款。

5.8

Transactions with Affiliates. Party B will not enter into any transaction or series of related transactions, whether or not in the ordinary course of business, with any Affiliate of Party B, other than on terns and conditions substantially as favorable to Party B as would be obtainable by Party B at the time in a comparable arm’s-length transaction with a Person other than an Affiliate and with the prior written consent of Party A.

5.8

关联交易。无论是否是通常的交易，乙方不得和乙方的任何关联企业进行任何或者一系列的关联交易，除非获得甲方的书面批准，并且相关交易根据和非关联企业进行一般公平交易的比较，对乙方具有实质性的有利。

5.9	Capital Expenditures. Party B will not make any expenditure for fixed or capital assets which exceed 2,000,000 USD in any fiscal year.
5.9	资本支出。乙方不得为任何固定资产或者资本资产在任何一个会计年度进行总计超过两百万美元的开支。

5.10	Modifications to Articles of Association. Party B will not amend, modify or change its Articles of Association or Business License, or any agreement entered into by it, with respect to its capital stock, or enters into any new agreement with respect to its capital stock, except with the prior written consent of Party A.
5.10	对于章程的修改。乙方不会修正，修改或者改变其章程，营业执照，或者任何其签订的有关资本股的协议；或者签订与其资本股有关的新协议，除非事先获得了甲方书面的同意。

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5.11	Line of Business. Party B will not engage (directly or indirectly) in any business other than those types of business prescribed within the business scope of Party B’s business license except with the prior written consent of Party A.
5.11	业务。乙方不会从事（直接或者间接）乙方营业执照确定的业务范围以外的业务，除非事先获得了甲方书面的同意。

6.	TERM AND TERMINATION
6.	有效期和终止

6.1	This Agreement shall take effect on the date of execution of this Agreement and the term of this agreement is 10 years. This agreement may be extended with Party A's written confirmation prior to the expiration date.
6.1	本协议自签署之日起生效，有效期为10年。在本协议终止前，经甲方书面确认，本协议的期限可以延长。

6.2	This Agreement may be terminated:
6.2	本协议在以下情况下终止:

6.2.1	By either Party giving written notice to the other Party if the other Party has committed a material breach of this Agreement (including but not limited to the failure by Party B to pay the Services Fee) and such breach, if capable of remedy, has not been so remedied within, in the case of breach of a non-financial obligation, 14 days, following receipt of such written notice;
6.2.1	根据任何一方因为另一方重大违约而发出的书面通知（包括但不限于乙方未支付相关服务费），并且此等违约，如果是可以救济并且是非金额方面的违约的话，此类救济未在收到书面通知后14天内作出;

6.2.2	Either Party giving written notice to the other Party if the other Party becomes bankruptcy or insolvent or is the subject of proceedings or arrangements for liquidation or dissolution or ceases to carry on business or becomes unable to pay its debts as they come due;
6.2.2	任何一方向另一方发出书面通知，如果该另一方破产或者进入了清算或者解散程序，或者不再开展任何业务或者无法支付到期债务;

6.2.3	By either Party giving written notice to the other Party if, for any reason, the operations of Party A are terminated;
6.2.3	任何一方向另一方发出书面通知，如果甲方的业务因为任何原因而终止;

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6.2.4	By either Party giving written notice to the other Party if the business license or any other license or approval material for the business operations of Party B is terminated, cancelled or revoked;
6.2.4	任何一方向另一方发出书面通知如果一方的营业执照或者对乙方经营具有重大影响的许可和批准被终止，取消或者撤销;

6.2.5	By either Party giving written notice to the other Party if circumstances arise which materially and adversely affect the performance or the objectives of this Agreement; or
6.2.5	任何一方向另一方发出书面通知，如果因为实际情况发生重大不利变化导致本协议的目标或履行无法实现；或

6.2.6	By election of Party A with or without reason.
6.2.6	不管有无原因，根据甲方的选择

6.3

Any Party electing properly to terminate this Agreement pursuant to Clause 6.2 shall have no liability to the other Party for indemnity, compensation or damages arising solely from the exercise of such right. The expiration or termination of this Agreement shall not affect the continuing liability of Party B to pay any Services Fees already accrued or due and payable to Party A. Upon expiration or termination of this Agreement, all amounts then due and unpaid to Party A by Party B hereunder, as well as all other amounts accrued but not yet payable to Party A by Party B, shall forthwith become due and payable by Party B to Party A

6.3

任何一方根据第6.2条选择合适地终止本协议，则不应当承担向另一方补偿和赔偿的责任，该种责任的产生仅源自于行使此等权利。本协议的到期或者终止不应当影响已经产生的乙方向甲方支付服务费的责任。在本协议终止或者到期时，本协议规定的乙方向甲方支付的任何到期未支付以及所 377;其他已经产生但是未到支付期的钱款，应当就此到期并且可支付。

7.	PARTY A’S REMEDY UPON PARTY B’S BREACH
	In addition to the remedies provided elsewhere under this Agreement, Party A shall be entitled to remedies permitted under the PRC laws, including without limitation compensation for any direct and indirect losses arising from the breach and legal fees incurred to recover losses from such breach.
7.	甲方因为乙方违约而应得到的救济
	除了本协议其他规定提供的救济外，甲方应当有权获得中国法律规定的其他救济，包括但不限于对产生于此类违约直接或者间接损失的补偿，以及为弥补损失而产生的律师费。

8.	AGENCY
	The Parties are independent contractors, and nothing in this Agreement shall be construed to constitute either Party to be the agent, partner, legal representative, attorney or employee of the other for any purpose whatsoever. Neither Party shall have the power or authority to bind the other except as specifically set out in this Agreement.
8.	代理
	各方为独立之签约人。并且本协议的任何规定不管任何原因均不得被解释为一方为另一方的代理人，合伙人，法定代表人，律师或者雇员。除非本协议另有规定，任何一方均无权利或者授权去约束另一方。

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9.	GOVERNING LAW AND JURISDICTION
9.	适用法和管辖。

9.1	Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the PRC.
9.1	法律适用。本协议的适用法为中国法律，并依据其进行解释

9.2

Arbitration. Any dispute arising from, out of or in connection with this Agreement shall be settled through friendly consultations between the Parties. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the other Parties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic and Trade Arbitration Commission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Shanghai, and the language used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties.

9.2

仲裁。双方应尽量通过友好协商解决与本协议解释或履行相关的任何争议。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在上海进行，使用之෾ 1;言为中文。仲裁裁决是终局性的，对各方均有约束力。

9.3	Continuing Obligations. During the period when a dispute is being resolved, the Parties shall in all other respects continue their implementation of this Agreement.
9.3	持续之义务。在相关纠纷解决期间，各方应在各个方面继续履行本协议。

   

10.	ASSIGNMENT
10.	转让

No part of this Agreement shall be assigned or transferred by either Party without the prior written consent of the other Party. Any such assignment or transfer shall be void. Party A, however, may assign its rights and obligations hereunder to an Affiliate.
在没有得到另一方事先书面同意的情况下，本协议的任何一部份都不能转让或者分配。任何此类的分配和转让都无效。但是甲方可以将其在本协议下的权利和义务转让给其关联企业。

11.	NOTICES
11.	通知

Notices or other communications required to be given by any party pursuant to this Agreement shall be written in English and Chinese and delivered personally or sent by registered mail or postage prepaid mail or by a recognized courier service or by facsimile transmission to the address of relevant each party or both parties set forth below or other address of the party or of the other addressees specified by such party from time to time. The date when the notice is deemed to be duly served shall be determined as the follows: (a) a notice delivered personally is deemed duly served upon the delivery; (b) a notice sent by mail is deemed duly served the tenth(10th) day after the date when the air registered mail with postage prepaid has been sent out (as is shown on the postmark),or the fourth(4th) day after the delivery date to the internationally recognized courier service agency; and (c) a notice sent by facsimile transmission is deemed duly served upon the receipt time as is shown on the transmission confirmation of relevant documents.
任何一方根据本协议要求发出的通知或其他函件应以英文和中文制作，在以专人递送、或挂号信或邮资预付邮件、或知名邮件服务机构或传真方式等送达到下列相关各方的地址或者各方不时通知的地址。通知有效送达的日期应当由以下条件决定：(a)由专人递送的通知，在递交时视作有效送达A 307;(b)通过邮递送达的，在邮资预付的航空挂号邮件投递后（见邮戳）的第十天视为有效送达如果通过国际知名快递公司邮寄的，在投递后的第四天视为有效送达；(c)如果一份邮件是通过传真递送的，在相关文件传真件上显示的接受时间应当视作有效送达日期。

Party A :	Dake (Fujian) Sports Goods Co., Ltd
甲方:	达克（福建）体育用品有限公司

Address:	Henggoutou Industrial District, Chendai Town, Jinjiang City, Fujian Province, China
地址	福建省晋江市陈埭镇横沟头工业区

Attn:
联系人:

Fax:
传真:

Tel:
电话:

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Party B:	Fujian Jinjiang Aierda Shoe Plastic Co., Ltd
乙方:	福建省晋江爱尔达鞋塑有限公司

Address: Jiangtou Village, Chendai Town, Jinjiang City, Fujian Province, China
地址:       福建省晋江市陈埭镇江头村

Attn:
联系人:

Fax:
传真:

Tel:
电话:

12.	GENERAL
12.	一般条款

12.1	The failure to exercise or delay in exercising a right or remedy under this Agreement shall not constitute a waiver of the right or remedy or waiver of any other rights or remedies and no single or partial exercise of any right or remedy under this Agreement shall prevent any further exercise of the right or remedy or the exercise of any other right or remedy.
12.1	未主张权利或者救济不能被视作对于本协议下其他权利和救济的放弃并且对于部分权利和救济的主张不能阻止对其他权利和救济的进一步主张。

12.2	Should any Clause or any part of any Clause contained in this Agreement be declared invalid or unenforceable for any reason whatsoever, all other Clauses or parts of Clauses contained in this Agreement shall remain in full force and effect.
12.2	如果本协议任何条款或者部分条款因为任何原因被宣布为无效或者无执行力，所有其他的条款或者条款的其他部分仍保持完全的效力和强制力。

12.3	This Agreement constitutes the entire agreement between the Parties relating to the subject matter of this Agreement and supersedes all previous agreements.
12.3	本协议构成各方针对本协议标的的完整协议并且取代所有之前的协议。

12.4	No amendment or variation of this Agreement shall be valid unless it is in writing and signed by or on behalf of each of the Parties.
12.4	除非通过书面的方式并由各方或者各方代表签署，任何修正或者更改均无效。

12.5	This Agreement shall be executed in two (2) duplicate originals in English and Chinese. Each Party has received one (1) duplicate original, and all originals shall be equally valid.
12.5	本协议用英文和中文制作两份。每方各持有一份，每份具有同等效力。

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[SIGNATURE PAGE, FOLLOWS]

17

[SIGNATURE PAGE]
签字页

IN WITNESS WHEREOF both parties hereto have caused this Agreement to be duly executed by their representatives and duly authorized representatives on their behalf as of the date first set forth above.
各方或其代表在协议确定的日期签署本协议。

PARTY A:	Dake (Fujian) Sports Goods Co., Ltd
甲方:	达克（福建）体育用品有限公司

Legal/Authorized Representative:

法定代表人/或被授权人（签字）：

Name: Ding Yuxi

姓名：丁玉希

PARTY B:	Fujian Jinjiang Aierda Shoe Plastic Co., Ltd
乙方:	福建省晋江爱尔达鞋塑有限公司

Legal/Authorized Representative:

法定代表人/或被授权人（签字）：

Name: Ding Yuxi

姓名:  丁玉希

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EX-10.23

Exhibit 10.23

EX-10.24

Exhibit 10.24

EQUITY PLEDGE AGREEMENT
 股权质押协议

This Equity Pledge Agreement (hereinafter this "Agreement") is made and entered into as of December 31, 2010, by and between the following parties on December 31, 2010 in Jinjiang City, Fujian Province, the People’s Republic of China (“China” or the “PRC”):
本股权质押协议（“本协议”）由以下各方于2010年12月【】日在中华人民共和国（“中国”）福建省晋江市签署

Party A :	Dake (Fujian) Sports Goods Co., Ltd (the “Pledgee”)
Address:	Henggoutou Industrial District, Chendai Town, Jinjiang City, Fujian
	Province, China
甲方	达克（福建）体育用品有限公司（“质权人”）
地址	福建省晋江市陈埭镇横沟头工业区

Party B:	Ding Yuxi (the “Pledgor”)
Passport No.
乙方	丁玉希（“出质人”）
护照编号	G24616229

Party C:	Fujian Jinjiang Aierda Shoe Plastic Co., Ltd (the “Company”)
Address:	Jiangtou Village, Chendai Town, Jinjiang City, Fujian Province, China
丙方	福建省晋江爱尔达鞋塑有限公司（“公司”）
地址	福建省晋江市陈埭镇江头村

Each of the Pledgee and Pledgor and Party C shall be hereinafter referred to as a “Party” respectively, and as the “Parties” collectively.
质权人和出质人和丙方以下各称为“一方”，统称为“双方”。

RECITALS
陈 述

(1)	The Pledgee, a wholly foreign-owned limited company duly incorporated under the laws of China which has the expertise in the business of the production and retail of plastic sports shoes, shoemaking material.
	质权人为依据中国法律设立的外商独资企业，专业进行塑料运动鞋、鞋业材料的生产和零售。

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(2)	The Company is a wholly foreign-owned limited company duly incorporated under the laws of China which has the expertise in the business of the production and retail of plastic sports shoes, fashion shoes and leather sandals.
	公司是一家依据中国法律设立的外商独资企业，专业进行旅游鞋、时装鞋及皮凉鞋的生产和零售。

(3)	The Pledgor is the sole shareholder of the Company by holding 100 % of equity interests.
	出质人是公司的唯一股东，持有100%股权。

(3)	The Pledgee and the Company have executed an Exclusive Business Cooperation Agreement (hereinafter “Services Agreement”) concurrently herewith. The Company shall pay service fees to Pledgee for offering services (the “Services Fees”).
	在签署本协议的同时，质权人和公司签署了独家业务合作协议(下称“服务协议”)。公司应向质权人就其提供的服务支付服务费（下称“服务费”）。

(4)

In order to ensure that the Company and Pledgor will perform its obligations under the Services Agreement, and in order to provide an additional mechanism for the Pledgee to enforce its rights to collect the Services Fees from the Company, the Pledgor agrees to pledge all his equity interest in the Company as security for the performance of the obligations of the Company and Pledgor under the Services Agreement and the payment of Services Fees under such agreements.

为确保公司和出质人依据服务协议履行其职责并对质权人收取服务费提供额外保障，出质人同意质押其持有的全部公司股权作为公司和出质人履行服务协议项下义务和支付服务费用的担保。

NOW THEREFORE, the Pledgee, the Company and the Pledgor through mutual negotiations hereby enter into this Agreement based upon the following terms:

 因此，质权人，公司和出质人通过协商达成协议如下：

1.	Definitions and Interpretation. Unless otherwise provided in this Agreement, the following terms shall have the following meanings:
1.	定义和解释。如果本协议另有约定，下述词语具有下述含义

1.1	“Pledge” refers to the full content of Section 2 hereunder.
1.1	“质押” 指的是下文第2条的全部内容。

1.2	“Equity Interest” refers to all the equity interest in the Company legally held by the Pledgor.
1.2	“股权权益”指的是由出质人合法拥有的公司所有股权权益。

1.3	“Term of Pledge” refers to the period provided for under Section 3.2 hereunder.
1.3	“抵押期限” 指的是下文第3.2条所规定的期限。

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1.4	“Event of Default” refers to any event in accordance with Section 7.1 hereunder.
1.4	“违约事件” 指的是下文第7.1条所列任何事件。

1.5	“Notice of Default” refers to the notice of default issued by the Pledgee in accordance with this Agreement.
1.5	“违约通知” 指的是由质权人根据本协议发出的违约通知。

2.

Pledge. The Pledgor agrees to pledge his equity interest in the Company to the Pledgee (“Pledged Collateral”) as a security for the obligations of the Company and Pledgor under the Services Agreement and the payment of Services Fees under such agreements. The Pledge under this Agreement refers to the rights owned by the Pledgee, who shall be entitled to a priority in receiving payment by the proceeds from the auction or sale of the equity interest pledged by the Pledgor to the Pledgee.

2.

质押。出质人同意向质权人质押其持有的公司股权（“质押担保”），以作为公司和出质人履行服务协议项下义务和支付服务费用的保证。本协议中的质押是指质权人所拥有的权利，有权从出质人向质权人质押的股权的拍卖或出售的收益价款中获得优先偿付的权利。

3.	Term of Pledge
3.	质押期限

3.1	The Pledge shall take effect as of the date when the Pledge of the equity interest under this Agreement is registered with the Administration for Industry and Commerce of the Company. The term of the Pledge shall last until two (2) years after the obligations under the Services Agreement are fulfilled.
3.1	质押自本协议项下的股权质押在公司登记机关登记之日开始生效。质押期限持续至服务协议的义务履行完毕后两年内。

3.2	During the term of the Pledge, the Pledgee shall be entitled to sell, or dispose of the pledged assets in accordance with this Agreement in the event that the Company and Pledgor fail to pay the Service Fees in accordance with the Services Agreement.
3.2	在质押期间，如果公司和出质人未能根据服务协议支付服务费，质押权人有权根据本协议出售或处置被质押资产。

3.3	During the term of the Pledge, the Pledgee shall be entitled to collect any and all dividends declared or paid in connection with the equity interest.
3.3	在股权质押期间，质权人有权收取任何或所有与股权权益有关的支付或宣告的股息。

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4.	Pledge Procedure and Registration
4.	质押程序和登记

4.1	The Pledge under this Agreement shall be recorded in the Register of Shareholders/owners of the Company. The Pledgor shall process the registration procedures with the Administration for Industry and Commerce concerning the Pledge.
4.1	本协议下的股权质押应在公司股东／所有人登记薄上载明。出质人应向工商行政管理局办理质押登记。

5.	Representation and Warranties of Pledgor
5.	出质人的陈述和保证

5.1	The Pledgor is the legal owner of the equity interest pledged.
5.1	出质人是质押股权的法定所有人。

5.2	The Pledgor has not pledged the equity interest to any other party, and or the equity interest is not encumbered to any other person except for the Pledgee.
5.2	除向质权人质押外，出质人未向其它任何第三人质押其股权或在股权上设定对其他第三人的负担。

6.	Covenants of Pledgor
6.	出质人承诺

6.1	During the effective term of this Agreement, the Pledgors promise to the Pledgee for its benefit that the Pledgors shall:
6.1	在本协议有效期内，为质权人之利益，出质人向质权人承诺如下:

6.1.1	Not transfer or assign the equity interest, create or permit to create any pledges which may have an adverse effect on the rights or benefits of the Pledgee without prior written consent from the Pledgee.
6.1.1	未经质权人事先书面同意，不转让股权，不设置或同意设置任何对质权人权利或利益产生负面影响的质押。

6.1.2

Comply with and implement laws and regulations with respect to the pledge of rights; present to the Pledgee the notices, orders or suggestions with respect to the Pledge issued or made by the competent authority within five (5) days upon receiving such notices, orders or suggestions; and comply with such notices, orders or suggestions; or object to the foregoing matters at the reasonable request of the Pledgee or with consent from the Pledgee.

6.1.2

遵守并实施关于质押权利的法律、法规；在接到主管机构发布或出具的关于质押的通知、命令或者建议的5天内提交给质权人；遵守该等通知、命令或者建议；或者根据质权人提出的适当理由或经其同意，拒绝该等通知、命令或建议

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6.1.3	Timely notify the Pledgee of any events or any received notices which may affect the Pledgor's equity interest or any part of its right, and any events or any received notices which may change the Pledgor's any warranty and obligation under this Agreement or affect the Pledgor’s performance of its obligations under this Agreement.
6.1.3	及时通知质权人下述事件或所收到的通知，该等事件或通知可能影响出质人股权或其权利，或者可能改变本协议项下出质人的担保和义务，或者可能影响出质人对本协议项下义务的履行。

6.2	The Pledgor agrees that the Pledgee’s right to the Pledge obtained from this Agreement shall not be suspended or inhibited by any legal procedure launched by the Pledgor or any successors of the Pledgor or any person authorized by the Pledgor or any such other person.
	出质人同意，质权人根据本协议获得的质押权利不得被出质人或者其继承者或者其授权的任何人或者其他人提起的法律程序所中止或禁止。

6.3

The Pledgor promises to the Pledgee that in order to protect or perfect the security for the payment of the Services Fees, the Pledgor shall execute in good faith and cause other parties who have interests in the Pledge to execute all the title certificates, contracts, and perform actions and cause other parties who have interests to take action, as required by the Pledgee; and make access to exercise the rights and authorization vested in the Pledgee under this Agreement.

出质人向质权人承诺，为保障或完善对服务费支付的担保，出质人应根据质权人要求，善意地签署并且促使拥有质押权益的其他方签署权属证明、合同，履行并且促使拥有质押权益的其他方采取行动；行使根据本协议所赋予质权人的权利和授权。

6.4	The Pledgor promises to the Pledgee that he will execute all amendment documents (if applicable and necessary) in connection with any registration of the Pledge with the Pledgee or its designated person (a natural person or a legal entity), and provide the notice, order and decision to the Pledgee as necessary, within a reasonable amount of time upon request.
	出质人向质权人承诺，其将与质权人或其指定的人员（自然人或法人实体）签署与股权质押登记有关的所有修正文件（如果适用且必要的话），并且根据要求在合理的时间内向质权人转达通知、命令或作出决定。

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6.5	The Pledgor promises to the Pledgee that he will comply with and perform all the guarantees, covenants, warranties, representations and conditions for the benefits of the Pledgee. The Pledgor shall compensate all the losses suffered by the Pledgee as a result of the Pledgor failing to perform or fully perform his guarantees, covenants, warranties, representations and conditions.
	出质人向质权人承诺，其将遵守和执行所有体现质权人利益的担保、承诺、保证、声明和条件。出质人应对由于出质人没有执行或未完全执行担保、承诺、保证、声明和条件款而造成的所有损失向质权人作出赔偿。

7.	Events Of Default.
7.	违约事项。

7.1	The following events shall be regarded as the events of default:
7.1	如下事项将被视为违约事项:

7.1.1	This Agreement is deemed illegal by a governing authority in the PRC, or the Pledgor is not capable of continuing to perform the obligations herein due to any reason except force majeure;
7.1.1	本协议被中国监管部门视为非法，或者无论任何原因，出质人均不能继续履行本协议规定的义务，但是不可抗力除外;

7.1.2	The Company and Pledgor fail to make full payment of the Services Fees as scheduled under the Service Agreement;
7.1.2	公司和出质人未能如期全额支付服务协议中的服务费用;

7.1.3	The Pledgor makes any materially false or misleading representations or warranties under Section 5 herein, and/or the Pledgor breaches any warranties under Section 5 herein;
7.1.3	出质人就本协议第5条作出任何实质性误导或错误陈述或担保，和/或者出质人违反第5条规定的担保;

7.1.4	The Pledgor breaches the covenants under Section 6 herein;
7.1.4	出质人违反本协议第6条规定的承诺;

7.1.5	The Pledgor breaches the term or condition herein;
7.1.5	出质人违反本协议规定的条款或条件;

7.1.6	The Pledgor waives the pledged equity interest or transfers or assigns the pledged equity interest without prior written consent of the Pledgee;
7.1.6	未经质权人事先书面同意，出质人放弃质押股权或转让质押股权;

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7.1.7	The Company is incapable of repaying the general debt or other debt;
7.1.7	公司无力偿付日常或其他债务;

7.1.8	The property of the Pledgor is adversely affected causing the Pledgee to believe that the capability of the Pledgor to perform the obligations herein is adversely affected;
7.1.8	出质人财产受到不利影响导致质权人确信出质人履行本协议规定的义务的能力也受到不利影响;

7.1.9	The successors or agents of the Company and Pledgor are only able to perform a portion of or refuse to perform the payment obligations under the Service Agreement;
7.1.9	公司和出质人的承继人或代理人仅能履行部分或拒绝履行服务协议中的支付义务;

7.1.10	The breach of the other terms by action or inaction under this agreement by the Pledgor.
7.1.10	出质人以作为或不作为违反本协议的其他条款。;

7.2	The Pledgor shall immediately give a written notice to the Pledgee if the Pledgor is aware of or discovers that any event under Section 7.1 herein or any event that may result in the foregoing events has occurred or is likely to occur.
	出质人一旦意识到或发现本协议第7.1条规定的事件或其他可能导致前述事件的事件已经发生或可能发生的，应立即向出质人发行书面通知。

7.3

Unless the event of default under Section 7.1 herein has been solved to the Pledgee’s satisfaction, the Pledgee, at any time when the event of default occurs or thereafter, may give a written notice of default to the Pledgor and require the Pledgor to immediately make full payment of the outstanding Service Fees under the Service Agreement and other payables or exercise other rights in accordance with Section 8 herein.

除非本协议第7.1条约定的违约情况已经解决，并令质权人满意，出质人可以在任何违约事件发生时或之后向质权人发出书面违约通知，并且要求出质人根据本协议第8条的规定立即全额支付服务协议中未付的服务费以及其他应付款，或者行使其他权利。

8.	Exercise of Remedies
8.	补救措施

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8.1

Authorized Action by Secured Party. The Pledgor hereby irrevocably appoints the Pledgee the attorney-in-fact of the Pledgor for the purpose of carrying out the security provisions of this Agreement and taking any action and executing any instrument that the Pledgee may deem necessary or advisable to accomplish the purposes of this Agreement. If an event of default occurs, or is continuing, the Pledgee shall have the right to exercise the following rights and powers:

担保方授权措施。出质人在此不可撤销地指定质权人为出质人的代理人，以执行本协议的担保条款，采取质权人认为有必要或有利于完成本协议目的的行动以及签署文件。如果违约事件发生，或者正在发生，质权人有权利执行如下权利和权力:

(a)	Collect by legal proceedings or otherwise and endorse and/or receive all payments, proceeds and other sums and property now or hereafter payable on or on account of the Pledged Collateral;
(a)	以法定程序或其他方式签收、背书和/或接收现今或今后的应付或与质押担保有关的所有费用、收益及其它款项及财产。

(b)	Enter into any extension, reorganization, deposit, merger, consolidation or other agreement pertaining to, or deposit, surrender, accept, hold or apply other property in exchange for the Pledged Collateral;
(b)	达成与质押担保有关的任何展期、重组、保证、兼并、合并或其他协议，或者保证、放弃、接受、保持或运用其它财产以替换抵押担保。

(c)	Transfer the Pledged Collateral to its own or its nominee’s name,
(c)	将质押担保转让给本人或指定方。

(d)	Make any compromise or settlement, and take any action it deems advisable, with respect to the Pledged Collateral;
(d)	就质押担保作出妥协或和解，并采取明智的措施。

(e)	Notify any obligor with respect to any Pledged Collateral to make payment directly to the Pledgee;
(e)	通知有关质押担保的债务人将款项直接支付给质押权人。

   

8.2	Event of defaults; Remedies. Upon the occurrence of an event of default, Pledgee may, without notice to or demand on the Pledgor and in addition to all rights and remedies available to Pledgee, at law or otherwise, do any of the following:
8.2	违约事项；补救措施。在违约事项发生时，除法律或其它方面所授予质权人权利及补救措施外，质权人可以采取下列行动，而无须通知或要求出质人

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(a)	Require the Pledgor to immediately pay all outstanding unpaid amounts due under the Consulting Services Agreement;
(a)	要求出质人立即支付服务协议中的到期未付的债务;

(b)	Foreclose or otherwise enforce Pledgee's security interest in any manner permitted by law or provided for in this Agreement;
(b)	以法律允许或本协议约定的方式取消或执行质押权人的担保权益;

(c)	Terminate this Agreement pursuant to Section 11;
(c)	根据第11条终止本协议

(d)	Exercise any and all rights as beneficial and legal owner of the Pledged Collateral; and
(d)	行使质押担保法定所有人和受益人的任何和所有权利；及

(e)	Exercise any and all the rights and remedies of a secured party upon default under applicable law.
(e)	行使所有都法律所赋予的担保方的权利及补救措施。

8.3	The Pledgee shall give a notice of default to the Pledgor when the Pledgee exercises its remedies under this Agreement.
8.3	当质权人执行本协议项下的补救措施，质权人应向出质人发出违约通知。

8.4	The Pledgee may exercise its remedies under this Agreement at any time after the Pledgee gives a notice of default according to this Agreement.
8.4	在根据本协议发出违约通知后，质权人可在任何时候行使本协议的补救措施。

8.5	The Pledgee is entitled to priority in receiving payment by the evaluation or proceeds from the auction or sale of whole or part of the equity interest pledged herein in accordance with legal procedure until the unpaid Services Fees under the Services Agreement are repaid.
8.5	质权人对于根据法律程序拍卖或出售质押股权所得收益或估值的价款享有优先受偿权，直至服务协议下所欠服务费被偿清为止。

8.6	The Pledgor shall not hinder the Pledgee from exercising its rights in accordance with this Agreement and shall give necessary assistance so that the Pledgee may exercise its rights in full.
8.6	出质人不可阻碍质权人根据本协议行使权利，并应给予必要的协助以确保质权人充分行使其权利。

9.	Assignment.
9.	转让

9.1	The Pledgor shall not donate or transfer rights and obligations herein without prior consent from the Pledgee.
9.1	未经质权人的事先允许，出质人不得捐赠及转让本协议项下的权利和义务。

9.2	This Agreement shall be binding upon each of the Pledgor and his, her or its successors and be binding on the Pledgee and his each successor and assignee.
9.2	本协议对出质人及其继承者，质权人及其继承者及受让人均有约束力。

9.3	The Pledgee may transfer or assign his all or any rights and obligations under the Service Agreement to any individual specified by it (natural person or legal entity) at any time.
9.3	质权人可随时转让其在服务协议中的所有或任何权利和义务给其指定的任何个人（自然人或法人实体）。

9.4	In the event of a change in control of the Pledgee’s resulting in the transfer or assignment of this agreement, the successor parties to the pledge shall execute a new pledge contract.
9.4	若由于质权人的控制权发生变更导致本协议转让，质押担保的承继方应签署新的质押合同。

10.	Fees and Other Charges
10.	费用及其他支出

10.1	The Pledgor shall be responsible for all the fees and actual expenses in relation to this Agreement including but not limited to legal fees, stamp tax and any other taxes and charges.
10.1	出质人应承担所有费用和实际开支，包括但不限于：法律费用和印花税及其它税金及花费。

11.	Dispute Resolution
11.	争议的解决

11.1	This Agreement shall be governed by and construed in accordance with the PRC laws.
11.1	本协议的应适用中国的法律并根据其解释。

11.2

Arbitration. Any dispute arising from, out of or in connection with this Agreement shall be settled through friendly consultations between the Parties. In the event the Parties fail to reach an agreement on the dispute within 30 days after either Party's request to the other Parties for resolution of the dispute through negotiations, either Party may submit the relevant dispute to the China International Economic and Trade Arbitration Commission for arbitration, in accordance with its Arbitration Rules. The arbitration shall be conducted in Shanghai, and the language used in arbitration shall be Chinese. The arbitration award shall be final and binding on all Parties..

11.2

仲裁。各方应尽量通过友好协商解决与本协议解释或履行相关的任何争议。如果在一方向其他方发出要求协商解决的书面通知后30天之内争议仍然得不到解决，则任何一方均可将有关争议提交给中国国际经济贸易仲裁委员会，由该会按照其仲裁规则仲裁解决。仲裁应在上海进行，使用之语š 28;为中文。仲裁裁决是终局性的，对各方均有约束力。

12.	NOTICES
12.	通知

Notices or other communications required to be given by any party pursuant to this Agreement shall be written in English and Chinese and delivered personally or sent by registered mail or postage prepaid mail or by a recognized courier service or by facsimile transmission to the address of relevant each party or both parties set forth below or other address of the party or of the other addressees specified by such party from time to time. The date when the notice is deemed to be duly served shall be determined as the follows: (a) a notice delivered personally is deemed duly served upon the delivery; (b)a notice sent by mail is deemed duly served the tenth(10th)day after the date when the air registered mail with postage prepaid has been sent out (as is shown on the postmark),or the fourth(4th)day after the delivery date to the internationally recognized courier service agency; and(c)a notice sent by facsimile transmission is deemed duly served upon the receipt time as is shown on the transmission confirmation of relevant documents.

任何一方根据本协议要求发出的通知或其他函件应以英文和中文制作，在以专人递送、或挂号信或邮资预付邮件、或知名邮件服务机构或传真方式等送达到下列相关各方的地址或者各方不时通知的地址。通知有效送达的日期应当由以下条件决定：(a)由专人递送的通知，在递交时视 0316;有效送达；(b)通过邮递送达的，在邮资预付的航空挂号邮件投递后（见邮戳）的第十天视为有效送达如果通过国际知名快递公司邮寄的，在投递后的第四天视为有效送达；(c)如果一份邮件是通过传真递送的，在相关文件传真件上显示的接受时间应当视作有效送达日期。

13.	GENERAL
13.	一般条款

13.1	The failure to exercise or de]ay in exercising a right or remedy under this Agreement shall not constitute a waiver of the right or remedy or waiver of any other rights or remedies and no single or partial exercise of any right or remedy under this Agreement shall prevent any further exercise of the right or remedy or the exercise of any other right or remedy.
13.1	未主张权利或者救济不能被视作对于本协议下其他权利和救济的放弃并且对于部分权利和救济的主张不能阻止对其他权利和救济的进一步主张。

13.2	Should any Clause or any part of any Clause contained in this Agreement be declared invalid or unenforceable for any reason whatsoever, all other Clauses or parts of Clauses contained in this Agreement shall remain in full force and effect.
13.2	如果本协议任何条款或者部分条款因为任何原因被宣布为无效或者无执行力，所有其他的条款或者条款的其他部分仍保持完全的效力和强制力。

13.3	This Agreement constitutes the entire agreement between the Parties relating to the subject matter of this Agreement and supersedes all previous agreements.
13.3	本协议构成各方针对本协议标的的完整协议并且取代所有之前的协议。

13.4	No amendment or variation of this Agreement shall be valid unless it is in writing and signed by or on behalf of each of the Parties.
13.4	除非通过书面的方式并由各方或者各方代表签署，任何修正或者更改均无效。

13.5	This Agreement shall be executed in three (3) duplicate originals in English and Chinese. Each Party has received one (1) duplicate original, and all originals shall be equally valid.
13.5	本协议用英文和中文制作三份。每方各持有一份，每份具有同等效力。

[SIGNATURE PAGE, FOLLOWS]

12

SIGNATURE PAGE

IN WITNESS WHEREOF each party hereto has caused this Agreement duly executed by itself or a duly authorized representative on its behalf as of the date first written above.
特此证明，本协议各方或其授权代表签署本协议。

PARTY A: Dake (Fujian) Sports Goods Co., Ltd
甲方:          达克（福建）体育用品有限公司

Legal/Authorized Representative: ___________________________
 法定代表人/或被授权人（签字）:
Name: Ding Yuxi
姓名：丁玉希

PARTY B: Ding Yuxi
乙方： 丁玉希

By: Ding Yuxi
丁玉希
(PRC Passport No. G24616229 )
中华人民共和国护照编号

PARTY C: Fujian Jinjiang Aierda Shoe Plastic Co., Ltd
丙方:          福建省晋江爱尔达鞋塑有限公司

Legal/Authorized Representative:___________________________
法定代表人/或被授权人（签字）:
Name: Ding Yuxi
姓名: 丁玉希

13

EX-10.25

Exhibit 10.25

Share Transfer Agreement

This Share Transfer Agreement (“the Agreement”) is made in Jinjiang City, Fujian Province, PRC on this day of December 30, 2010 between:

Transferor: Ding Yuxi, holds Philippines Alien Registration Certificate (No. F0000032444).

Transferee: DK International Group Ltd., a limited liability company duly established and existing under the laws of British Virgin Islands.

Whereas,

Dake (Fujian) Sports Goods CO., LTD. (“Dake”), a limited liability company duly established and existing under the laws of PRC, with its registered address at Henggoutou Industrial District, Chendai Town, Jinjiang City, Fujian Province, China; Legal Representative: Ding Yuxi.

The registered capital of Dake is USD 1,800,000 structured as below:

	Subscription
Name of Shareholder			Paid-up Capital
	Amount	Percentage
Ding Yuxi	U.S. Dollar	100%	U.S. Dollar
	1,800,000		1,800,000

By friendly negotiation, Transfer and Transferee agree the following:

1. Share Transfer

Subject to the terms and conditions of the Agreement, Transferor agrees to transfer 100% of the equity interests owned by him in to Transferee. Transferee agrees to purchase the equity interests above.

2. Transfer Price

Both parties agree the Transfer Price regarding the equity interests above as follows:

All of Transfer’s equity interests in Dake will be transferred thereof at the price of USD 1,800,000;

3. Payment of Transfer Price

Within 30 days after the Agreement signed, Transferee shall pay the Transfer Price to the bank account(s) appointed by the Transferor.

4. Representations and Warrants of the Transferor

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The transferor hereby warrants that:

4.1	The Transferor is a Chinese citizen.
4.2	The Transferor has lawfully owned the equity interests under the Agreement, and can lawfully transfer the equity interests to Transferee pursuant to the laws of PRC. In addition, there is no mortgage, pledge or third-party interest over the equity interests. The equity interests thereof should not be recovered back by any other third party.
4.3	For the purpose of the execution and performance of the Agreement, the Transferor has authority to carry on the proposed transaction thereof from his shareholders meeting or board of directors and approved by related competent authorities, respectively.
4.4	The execution and performance of the Agreement will not result in breaching or conflicting with any terms of Dake’s articles of association or violating any laws, regulation or any relevant agreement.
4.5	The evaluation report of the Share Value under the Agreement has been properly registered in appropriate authorities under the laws of PRC.
5.	Representations and Warranties of Transferee

The Transferee hereby warrants that:

5.1	Transferee is a limited liability company duly established and existing under the laws of British Virgin Islands.
5.2	For the purpose of the execution and performance of this Agreement, Transferee has authority to carry on the proposed purchase from its board of directors.
5.3	The execution and performance of the Agreement will not result in breaching or conflicting with any terms of its articles of association or violating any laws, regulation or any relevant agreement.

6. Undertakings

Both parties undertake that they will provide or execute all related documents that they should provide and execute for the completion of the Share Transfer.

7. Default Liabilities

Any party that breaches any of its representations and warrants or its obligations under the Agreement shall assume to be liable for compensation.

8. Governing Law and Dispute Resolution

8.1 This Agreement shall be governed and construed by the PRC laws.

2

8.2 Any dispute arising out of the performance of the Agreement or in connection with the Agreement shall be settled through friendly consultation between the relevant parties. If the dispute cannot be settled by friendly consultation, any party may submit the dispute to any competent courts of the PRC.

9. Effectiveness

The Agreement shall come into force after signed by the authorized representatives of all parties thereon, as well as approved by related competent authorities.

10. Miscellaneous

10.1 Both parties shall bear their taxations, costs and fees concerning the share transfer in accordance to the relevant PRC laws. Unless provided in the Agreement, each party shall bear its own costs and fees concerning the transaction under the Agreement.

10.2 The Agreement is written in Chinese and English in counterparts in each language, and should there be any discrepancy between the two language versions, the Chinese version shall prevail. One counterpart of each language text shall be retained by each Party.

In witness, this Agreement has been signed by representatives duly authorized by the parties on the day and year first written above.

3

(Execution Page)

Transferor: Ding Yuxi

(Signature): ________________________

Transferee: DK International Group Ltd. (Seal)

Authorized Representative: ________________________

(Signature) ________________________

4

EX-14

Exhibit 14

CODE OF ETHICS
OF
LANSDOWNE SECURITY, INC.

I. Objectives

Lansdowne Security, Inc. and its subsidiaries (together, the “Company”) is committed to the highest level of ethical behavior. The Company’s business success depends upon the reputation of the Company and its directors, officers and employees to perform with the highest level of integrity and principled business conduct.

This Code of Ethics (“Code”) applies to all directors, officers and employees of the Company, including the Company’s principal executive officer and principal financial officer, (collectively, the “Covered Persons”). This Code is designed to deter wrongdoing and to promote all of the following:

• honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

• full, fair, accurate, timely, and understandable disclosure in reports and documents that the Company files with, or submits to, the Securities and Exchange Commission (the “Commission”), and in other public communications made by the Company;

• compliance with applicable governmental laws, rules and regulations;

• the prompt internal reporting to an appropriate person or persons identified herein for receiving notice of violations or potential violations of this Code; and

• accountability for adherence to this Code.

Current versions of the Code will be maintained on the Company’s Website and distributed periodically to all Covered Persons. Compliance with the Code is, first and foremost, the individual responsibility of every Covered Person.

This Code is not intended to cover every applicable law, or to provide answers to all questions that might arise; for such, the Company relies on each person’s sense of what is right, including a sense of when it is appropriate to seek guidance from others on an appropriate course of conduct.

II. Honest And Ethical Conduct

Each Covered Person must always conduct himself or herself in an honest and ethical manner. Each Covered Person must act with the highest standards of personal and professional integrity and must not tolerate others who attempt to deceive or evade responsibility for actions. Honest and ethical conduct must be a driving force in every decision made by a Covered Person while performing his or her duties for the Company. When in doubt as to whether an action is honest and ethical, each Covered Person shall seek advice from his or her immediate supervisor or senior management, as appropriate.

III. Conflicts Of Interest

The term “conflict of interest” refers to any circumstance that would cast doubt on a Covered Person’s ability to act objectively when representing the Company’s interest. Covered Persons should not use their position or association with the Company for their own or their family’s personal gain, and should avoid situations in which their personal interests (or those of their family) conflict or overlap, or appear to conflict or overlap, with the Company’s best interests.

The following are examples of activities that give rise to a conflict of interest. These examples do not in any way limit the general scope of the Company’s policy regarding conflicts of interest.

• Where a Covered Person’s association with (or financial interest in) another person or entity would reasonably be expected to interfere with the Covered Person’s independent judgment as to the Company’s best interest, that association or financial interest creates a conflict of interest.

• The holding of a financial interest by a Covered Person in any present or potential competitor, customer, supplier, or contractor of the Company creates a conflict of interest, except where the business or enterprise in which the Covered Person holds such financial interest is publicly owned, and the financial interest of the Covered Person in such public entity constitutes less than one percent (1%) of the ownership of that business or enterprise.

• The acceptance by a Covered Person of a membership on the board of directors, or serving as a consultant or advisor to any board or any management, of a business that is a present or potential competitor, customer, supplier, or contractor of the Company, creates a conflict of interest, unless such relationship is pre-approved in writing by the principal executive officer of the Company.

• Engaging in any transaction involving the Company, from which the Covered Person can benefit financially or otherwise, apart from the usual compensation received in the ordinary course of business, creates a conflict of interest. Such transactions include lending or borrowing money, guaranteeing debts, or accepting gifts, entertainment, or favors from a present or potential competitor, customer, supplier, or contractor of the Company.

• The use or disclosure of any unpublished information regarding the Company, obtained by a Covered Person in connection with his or her employment for personal benefit, creates a conflict of interest.

It is our policy and it is expected that all Covered Persons should endeavor to avoid all situations that present an actual or apparent conflict of interest. All actual or apparent conflicts of interest must be handled honestly and ethically. If a Covered Person suspects that he or she may have a conflict of interest, that Covered Person is required to report the situation to, and to seek guidance from, his or her immediate supervisor or senior management, as appropriate. For purposes of this Code, directors, the principal executive officer, and the principal financial officer shall report any such conflict or potential conflict situations to the chairman of the audit committee, if one is created, and in the absence of an audit committee, to chairman of the board of directors. Officers (other than the principal executive officer and principal financial officer) and employees of the Company shall report any such situations to their immediate supervisor. It is the responsibility of the audit committee chairman or the chairman of the board, as applicable, to determine if a conflict of interest exists or whether such situation is likely to impair the Covered Persons ability to perform his or her assigned duties with the Company, and if such situation is determined to present a conflict, to determine the necessary resolution.

IV. Compliance With Applicable Laws, Rules And Regulations

Full compliance with the letter and the spirit of all applicable governmental laws, rules and regulations, and applicable rules and listing standards of any national securities exchange on which the Company’s securities may be listed, is one of the foundations on which this Company’s ethical policies are built. All directors and executive officers of the Company must understand and take responsibility for the Company’s compliance with the applicable governmental laws, rules and regulations of the cities, states and countries in which the Company operates, and for complying with the applicable rules and listing standards of any national securities exchange on which the Company’s securities may be listed.

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V. Rules To Promote Full, Fair, Accurate, Timely and Understandable Disclosure

As a public Company, the Company has a responsibility to report financial information to security holders so that they are provided with accurate information in all material respects about the Company’s financial condition and results of operations. It is the policy of the Company to fully and fairly disclose the financial condition of the Company in compliance with applicable accounting principles, laws, rules and regulations. Further, it is the Company’s policy to promote full, fair, accurate, timely and understandable disclosure in all Company reports required to be filed with or submitted to the Commission, as required by applicable laws, rules and regulations then in effect, and in other public communications made by the Company.

Covered Persons may be called upon to provide or prepare necessary information to ensure that the Company’s public reports are complete, fair and understandable. The Company expects Covered Persons to take this responsibility seriously and to provide accurate information related to the Company’s public disclosure requirements.

All books and records of the Company shall fully and fairly reflect all Company transactions in accordance with accounting principles generally accepted in the United States of America, and any other financial reporting or accounting regulations to which the Company is subject. No entries to the Company’s books and records shall be made or omitted to intentionally conceal or disguise the true nature of any transaction. Covered Persons shall maintain all Company books and records in accordance with the Company’s established disclosure controls and procedures and internal controls for financial reporting, as such controls may be amended from time to time.

The Company is committed to develop and operate a system of internal control policy over financial reporting and accounting record, to ensure all internal transactions are properly authorized and recorded, and are compliant with all applicable laws. The internal controls include but are not limited to written policies and procedures, superior examination and monitoring, budget control and other inspection and settlement. The Company is committed to develop and operate a system of disclosure procedures to ensure that all information is disclosed in accordance with applicable rules and regulations.

All Covered Persons must report any questionable accounting or auditing matters that may come to their attention. This applies to all reports or records prepared for internal or external purposes. If any Covered Person has concerns or complaints regarding questionable accounting or auditing matters of the Company, Covered Person shall report such matters to his or her immediate supervisor. If the immediate supervisor is involved in the questionable accounting or auditing matter, or does not timely resolve the Covered Person’s concern, the Covered Person should submit their concerns to the principal executive officer or the principal financial officer. If the principal executive officer and the principal financial officer are involved in the questionable accounting or auditing matter, or do not timely resolve the Covered Person's concerns, the Covered person should submit his or her concern directly to the audit committee, if one be established, or to the board of directors in the absence of a designated audit committee. The reporting of any such matters may be done on a confidential basis, at the election of the Covered Person making the report.

VI. Competition and Fair Dealing

The Company seeks to outperform its competitors fairly and honestly. The Company does not seek competitive advantages through illegal or unethical business practices. Each Covered Person shall endeavor to deal fairly with the Company’s customers, service providers, suppliers, competitors and employees. No Covered Person shall take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts or any unfair dealing practice.

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The purpose of business entertainment and gifts in a commercial setting is to create good will and sound working relationships, not to gain unfair advantage with customers. No gift or entertainment should ever be offered, given, provided or accepted by any Company employee, family member of an employee or agent unless it: (i) is not a cash gift, (ii) is consistent with customary business practices, (iii) is not excessive in value, (iv) cannot be construed as a bribe or payoff, and (v) does not violate any laws or regulations. Please discuss with the Company’s Human Resource Manager any gifts which you are not certain are appropriate.

VII. Corporate Opportunities

Covered Persons are prohibited from taking for themselves opportunities that are discovered through the use of Company property, information or position, or using Company property, information or position for personal gain. Covered Persons have a duty to the Company to advance its legitimate interest when the opportunity to do so arises.

VIII. Confidentiality

Covered Persons must maintain the confidentiality of non-public, proprietary information regarding the Company, its customers or its suppliers, and shall use that information only to further the business interests of the Company, except where disclosure or other use is authorized by the Company or legally mandated. This includes information disseminated to employees in an effort to keep them informed or in connection with their work activities, but with the instruction, confidential labeling, or reasonable expectation that the information be kept confidential.

IX. Trading on Inside Information

Inside information includes any non-public information, whether favorable or unfavorable, that investors generally consider important in making investment decisions. Examples include financial results not yet released, imminent regulatory approval/disapproval of an alliance or other significant matter such as the purchase or sale of a business unit or significant assets, threatened litigation, or other significant facts about a business. No information obtained as the result of employment at, or a director’s service on the Board of, the Company may be used for personal profit or as the basis for a “tip” to others, unless such information has previously been made generally available to the public, and even in such circumstances, such information may be subject to other duties.

X. Protection and Proper Use of Company Assets

Covered Persons should protect the Company’s assets and ensure their efficient use. Theft, carelessness and waste have an adverse impact on the Company and its profitability. Company assets may only be used for legitimate Company business purposes.

XI. Foreign Corrupt Practices Act (“FCPA”)

The FCPA prohibits the making of a payment and/or the offering of anything of value to any foreign government official, government agency, political party or political candidate in exchange for a business favor or when otherwise intended to influence the action taken by any such individual or agency or to gain any competitive or improper business advantage. Prohibitions of the FCPA apply to actions taken by all Covered Persons and by all outside parties engaged directly or indirectly by the Company (e.g., consultants, professional advisers, etc.). Given the complexity of the FCPA and the severe penalties associated with its violation, all Covered Persons are urged to contact the Company’s Human Resource Manager at any time with any questions concerning the Company’s and their obligations under and in compliance with the FCPA.

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XII. Fair treatment

The Company is firmly committed to providing equal opportunity to all employees and will not tolerate any illegal discrimination or harassment based on nationality, national origin, sex, religion or any other protected class, avoid any discrimination or harassment for psychological or physiological defect.

The Company strives to provide each employee with a safe and healthy work environment. Regardless of the status of the employee, the Company prohibits any sexual harassment to employees of opposite sex through body or language. Violence and threatening behavior are not permitted.

XIII. Compliance with the Code; Discipline

Violation of this Code may result in serious consequences for the Company, its corporate reputation and credibility and the confidence level of its customers and investors. Sanctions against the Company for criminal or civil wrongdoing could include substantial fines and restrictions on future operations. Individual employees could be required to pay significant fines or be sentenced to prison. Therefore, violations will be taken seriously.

Company-imposed disciplinary action will be coordinated with the employee’s supervisor, the human resources department and the Company’s Human Resource Manager. The overall seriousness of the matter will be considered in determining disciplinary action to be taken: which might include consequences up to and including dismissal. Individual cases may require an employee to reimburse the Company for losses or damages. The Company may even refer an employee for criminal prosecution, civil enforcement or a combination of the above.

Disciplinary action may also be taken against Covered Persons who condone, permit or have knowledge of illegal or unethical conduct by subordinates and do not take corrective action, and against Covered Persons who make false statements in connection with investigations of violations of this Code.

All Covered Persons will be held to the standards in this Code. Violating the Code, even if directed to do so by management is not justifiable. If a manager solicits actions in violation of this Code, the Covered Person should contact the Company’s Human Resource Manager.

XIV. Reporting and Compliance procedure

Every Covered Person has the responsibility to ask questions, seek guidance, report suspected violations and express concerns regarding compliance with this Code. The Company’s Human Resource Manager can be reached for explanation, clarification, and guidance of this Code at 86-22-2306-8001 (telephone) or his office. Any employee, officer or director who knows or believes that any other employee or representative of the Company has engaged or is engaging in Company-related conduct that violates applicable law or this Code should report such information to the Human Resource Manager. Covered Persons may report such conduct openly or anonymously without fear of retaliation. The Company will not discipline, discriminate against or retaliate against any employee who reports such conduct, unless it is determined that the report was made with knowledge that it was false, or who cooperates in any investigation or inquiry regarding such conduct. Any supervisor who receives a report of a violation of this Code must immediately inform the Human Resource Manager.

Covered Persons may report violations of this Code on a confidential or anonymous basis, while the Company encourages reporting person to identify himself or herself when reporting violations so that the Company may follow up with the reporting person, as necessary, for additional information. Covered Person may report to the Human Resource Manager through any of the following means:

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By post:  Jiangtou Village, Jinjiang City,
                 Quanzhou, Fujian Province, 362200
                 People’s Republic of China

Telephone: (86) 595 8518 6739
(You can leave a recorded message without identifying yourself)

If the Human Resource Manager receives information regarding an alleged violation of this Code, he or she shall, in consultation with outside counsel, as appropriate, (a) evaluate such information, (b) if the alleged violation involves an executive officer or a director, inform the chief executive officers and Board of Directors of the alleged violation, (c) determine whether it is necessary to conduct an informal inquiry or a formal investigation and, if so, initiate such inquiry or investigation and (d) report the results of any such inquiry or investigation, together with a recommendation as to disposition of the matter, to the chief executive officers for action, or if the alleged violation involves an executive officer or a director, report the results of any such inquiry or investigation to the Board of Directors or a committee thereof. Covered Persons are expected to cooperate fully with any inquiry or investigation by the Company regarding an alleged violation of this Code.

Failure to cooperate with any such inquiry or investigation may result in disciplinary action, up to and including discharge.

The Company shall determine whether violations of this Code have occurred and, if so, shall determine the disciplinary measures to be taken against any employee who has violated this Code. In the event that the alleged violation involves an executive officer or a director, the chief executive officers and the Board of Directors, respectively, shall determine whether a violation of this Code has occurred and, if so, shall determine the disciplinary measures to be taken against such executive officer or director.

Failure to comply with the standards outlined in this Code will result in disciplinary action including, but not limited to, reprimands, warnings, probation or suspension without pay, demotions, reductions in salary, discharge and restitution. Certain violations of this Code may require the Company to refer the matter to the appropriate governmental or regulatory authorities for investigation or prosecution. Moreover, any supervisor who directs or approves of any conduct in violation of this Code, or who has knowledge of such conduct and does not immediately report it, also will be subject to disciplinary action, up to and including discharge.

XV. Waiver of the Code

While some of the policies contained in this Code must be strictly adhered to and no exceptions can be allowed, in other cases exceptions may be possible. Any request for a waiver of any provision of this Code must be in writing and addressed to the Board or the Audit Committee (if one be established), if made by an executive officer or a director, or the Chief Executive Officer of the Company, if made by an employee.

Any waiver of this Code may be made only by the independent directors on the board of directors, or by an authorized committee of the board of directors comprised solely of independent directors, and will be disclosed as required by law, Commission regulations, or the rules and listing standards of any national securities exchange on which the Company’s securities may be listed.

Any waiver of this Code with respect to an officer or director must be approved by the Board or the Audit Committee, after consultation with the Company’s corporate or outside counsel, and will be disclosed as required by law, Commission regulations, or the rules and listing standards of any national securities exchange on which the Company’s securities may be listed.

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XVI. Dissemination and Amendment

This Code shall be distributed to each employee, officer and director of the Company upon commencement of his or her employment or other relationship with the Company. The Company reserves the right to amend, alter or terminate this Code at any time for any reason.

Adopted by the Board of Directors effective as of February 11, 2011.

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EX-21

EXHIBIT 21

SUBSIDIARIES

Name of Subsidiary	Jurisdiction of Incorporation or Organization	Percentage of Ownership
Lansdowne Security, Inc. (“Lansdowne”)	Nevada	100%
DK International Group Ltd. (“DK”)	British Virgin Islands	100% by Lansdowne
Dake (Fujian) Sports Goods Co., Ltd. (“Dake”)	PRC	100% by DK
Fujian Jinjiang Aierda Shoe Plastic Co., Ltd.	PRC	Dake’s VIE