0001262463-08-000186.txt : 20081118 0001262463-08-000186.hdr.sgml : 20081118 20081118122618 ACCESSION NUMBER: 0001262463-08-000186 CONFORMED SUBMISSION TYPE: S-1 PUBLIC DOCUMENT COUNT: 17 FILED AS OF DATE: 20081118 DATE AS OF CHANGE: 20081118 FILER: COMPANY DATA: COMPANY CONFORMED NAME: S3 INVESTMENT COMPANY, INC. CENTRAL INDEX KEY: 0001161647 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-GROCERIES & RELATED PRODUCTS [5140] IRS NUMBER: 980336674 STATE OF INCORPORATION: CA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: S-1 SEC ACT: 1933 Act SEC FILE NUMBER: 333-155425 FILM NUMBER: 081197572 BUSINESS ADDRESS: STREET 1: 4115 BLACKHAWK PLAZA CIRCLE, SUITE 20 CITY: DANVILLE STATE: CA ZIP: 94506 BUSINESS PHONE: (925) 736-2861 MAIL ADDRESS: STREET 1: 4115 BLACKHAWK PLAZA CIRCLE, SUITE 20 CITY: DANVILLE STATE: CA ZIP: 94506 FORMER COMPANY: FORMER CONFORMED NAME: S3I HOLDINGS INC DATE OF NAME CHANGE: 20011030 S-1 1 sivcs1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-1

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

S3 INVESTMENT COMPANY, INC.

(Exact name of small business issuer as specified in its charter)


California	6719	33-0906297
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(IRS Employer Identification No.)

4115 Blackhawk Plaza Circle, Suite 100

Danville, CA 94506

(Address of principal executive offices)

(925) 736-2861

(Issuer’s telephone number)

James Bickel

President and Chief Executive Officer

4115 Blackhawk Plaza Circle, Suite 100

Danville, CA 94506

(925) 736-2861
(Name, address, and telephone number of agent for service)

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act Registration Statement number of the earlier effective Registration Statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act Registration Statement number of the earlier effective Registration Statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act Registration Statement number of the earlier effective Registration Statement for the same offering. ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.


Large accelerated filer ¨	Accelerated filer ¨
Non-accelerated filer ¨	Smaller reporting company x

CALCULATION OF REGISTRATION FEE


Title of Securities to be Registered	Amount of Shares to be Registered	Proposed Maximum Offering Price Per Share	Proposed Maximum Aggregate Offering Price⁽¹⁾	Amount of Registration Fee

Common Stock	1,541,535,311	$.002	$3,083,070.62	$121.16

(1)

The offering price has been estimated solely for the purpose of computing the amount of the registration fee in accordance with Rule 457(o). Our common stock is traded on the Pink Sheets under the symbol SIVC; the offering price was determined by our approximate last trading price. The price of $0.002 is a price at which the selling security holders may sell their shares until our common stock is quoted on the OTC Bulletin Board at which time the shares may be sold at prevailing market prices or privately negotiated prices. There can be no assurance that a market maker will agree to file the necessary documents with the Financial Industry Regulatory Authority, which operates the OTC Electronic Bulletin Board, nor can there be any assurance that such an application for quotation will be approved.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell our shares until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell our shares, and it is not soliciting an offer to buy our shares in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED November 14, 2008

PRELIMINARY PROSPECTUS

S3 Investment Company, Inc.

1,541,535,311 Shares of Common Stock

Price per share: $.002

Total cash proceeds if all shares are sold: $0

This is a public offering of 1,541,535,311 shares of our common stock. All shares are being offered for resale by selling security holders identified in this prospectus. The selling security holders may, from time to time, sell, transfer or otherwise dispose of any or all of their shares of common stock on any stock exchange, market or trading facility on which the shares are traded or quoted or in private transactions. These dispositions may be at prevailing market prices at the time of sale, or at privately negotiated prices. However, because there is no trading market in our common stock as of the date of this prospectus, the selling security holders will only sell shares at $.002 per share until shares of our common stock are traded on the OTC Bulletin Board. Once our common stock trades on the OTC Bulletin Board, the selling security holders may sell their shares of common stock in the manner set forth above and as described in " Plan of Distribution." We will not receive any of the proceeds from the sale of shares by the selling security holders.

Prices of our common stock currently are quoted on the Pink Sheets under the symbol "SIVC." On November 14, 2008, the most recent date on which shares of our common stock were traded, the closing sale price for a share of our common stock was $.002.

Our principal offices are located at 4115 Blackhawk Plaza Circle, Suite 100, Danville, CA 94506 and our telephone number is (925) 736-2861.

INVESTING IN OUR SHARES OF COMMON STOCK INVOLVES SUBSTANTIAL RISKS. SEE "RISK FACTORS" BEGINNING ON PAGE 8 FOR FACTORS YOU SHOULD CONSIDER BEFORE BUYING SHARES OF OUR COMMON STOCK.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

The purchase of our shares involves substantial risk. See "risk factors" beginning on page 3 for a discussion of risks to consider before purchasing our common stock.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of the prospectus. Any representation to the contrary is a criminal offense.


	Price to Public	Underwriting Discounts and Commissions	Proceeds to S3 Investment Company, Inc.
Per Share	$0.002	$0	$0
Total	$3,083,070.62	$0	$0

Any investment in the shares offered herein involves a high degree of risk. You should only purchase shares if you can afford a loss of your investment. Our independent auditor has issued an audit opinion which includes a statement expressing substantial doubt as to our ability to continue as a going concern.

As of the date of this prospectus, our stock is presently not traded on any market or securities exchange and there is no assurance that a trading market for our securities will ever develop.

THE PURCHASE OF THE SECURITIES OFFERED THROUGH THIS PROSPECTUS INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD CAREFULLY READ AND CONSIDER THE SECTION OF THIS PROSPECTUS ENTITLED "RISK FACTORS" ON PAGES 3 THROUGH 9 BEFORE BUYING ANY SHARES OF S3 INVESTMENT COMPANY’S COMMON STOCK.

NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE WILL NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE U.S. SECURITIES COMMISSION HAS BEEN CLEARED OF COMMENTS AND IS DECLARED EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OF SALE IS NOT PERMITTED.

THE DATE OF THIS PROSPECTUS IS NOVEMBER 14, 2008.

TABLE OF CONTENTS


Prospectus Summary	1
Risk Factors	3
Special Note Regarding Forward-Looking Information	8
Use of Proceeds	8
Determination of Offering Price	8
Dilution	9
Plan of Distribution and Terms of the Offering	10
Legal Proceedings	11
Director, Executive Officers, Promoters and Control Persons	12
Security Ownership of Certain Beneficial Owners and Management	14
Description of Securities	15
Interest of Named Experts and Counsel	17
Disclosure of Commission Position on Indemnification for Securities Act Liabilities	18
Description of Business	18
Reports to Stockholders	20
Management’s Discussion and Analysis or Plan of Operation	20
Facilities	34
Certain Relationships and Related Party Transactions	35
Market for Common Equity and Related Stockholders Matters	35
Dividends	35
Executive Compensation	36
Shares Eligible for Future Sale	40
Index to Financial Statements	41
Report of Independent Certified Public Accountant	F-1
Balance Sheets	F-2
Statements of Operations	F-3
Statements of Changes in Stockholders’ Equity (Deficit)	F-4
Statements of Cash Flows	F-5
Notes to Financial Statements	F-6

Prospectus Summary

This summary contains basic information about us and the offering. Because it is a summary, it does not contain all the information that you should consider before investing. You should read the entire prospectus carefully, including the risk factors and our financial statements and the related notes to those statements included in this prospectus. Except as otherwise required by the context, references in this prospectus to “we,” “our,” “us,” and “S3” refer to S3 Investment Company, Inc.

S3 Investment Company, Inc.’s address and phone number is:

4115 Blackhawk Plaza Circle, Suite 100

Danville, CA 94506

(925) 736-2861

THE OFFERING


Common Stock Offered for Sale	1,541,535,311
Price to the Public	$0.002 per share in cash
Use of Proceeds	The company shall not receive any proceeds
Number of Shares Outstanding Prior to the Offering	1,541,535,311
Plan of Distribution	This is a direct public offering with no commitment by anyone to purchase any shares.

Management may not, and will not purchase any shares in this offering.

SUMMARY FINANCIAL INFORMATION

The following financial data should be read in conjunction with the financial statements and related notes thereto and our "Management's Discussion and Analysis or Plan of Operation" discussions, all of which are included elsewhere in this prospectus.

The statements of operations data for the years ended June 30, 2008 and 2007 and the balance sheet data at June 30, 2008 and 2007 are derived from our audited financial statements and related notes thereto included elsewhere in this prospectus.


	June 30,
	2008	2007
STATEMENTS OF OPERATIONS DATA:
Net revenues	$ 2,318,670	$ 186
Cost of sales	$ 637,825	$ -
Gross profit	$ 1,680,845	$ 186
Operating expenses	$ 2,551,338	$ 2,616,052
(Loss) income from operations	$ (1,284,759)	$ (2,615,866)
Net (loss) income	$ (1,094,455)	$ (3,402,499)
Basic (loss) income per share $	$ (0.00)	$ (0.09)
Shares used in computing:	847,791,275	36,591,502

	June 30,
	2008	2007
BALANCE SHEET DATA:
Cash and cash equivalents	$ 112,326	$ 21,895
Investments in securities	$ 1,643,617	$ 52,074
Working capital	$ 185,384	$ (104,259)
Total assets	$ 1,923,166	$ 327,060
Total shareholders' (deficit) equity	$ 232,611	$ (56,481)

RISK FACTORS

There are several risks related to our business, this offering, and ownership of our common stock that you should consider before you decide to buy our common stock in this offering. You should read this "Risk Factors" section as well as other cautionary statements throughout this prospectus before investing in shares of our common stock.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. As defined in Exchange Act Rule 13a-15(f), internal control over financial reporting is a process designed by, or under the supervision of, the principal executive and principal financial officer and effected by the board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that: (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of S3 Investment Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financi al statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of S3 Investment Company are being made only in accordance with authorizations of management and directors of S3 Investment Company, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of S3 Investment Company’s assets that could have a material effect on the financial statements.

We Will Need to Raise Additional Capital to Finance Operations

Past operations have relied on monies generated from external financing to fund our operations. However, we anticipate that we will generate profits in the coming year so that we will not need to rely entirely on external financing to fund our anticipated operating expenses. External financing may be required for future expansion, however. We cannot assure you that financing whether from external sources or related parties will be available if needed or on favorable terms. The sale of our common stock to raise capital may cause dilution to our existing shareholders. Our inability to obtain adequate financing may result in the need to curtail business operations. Any of these events would be materially harmful to our business and may result in a lower stock price.

There is Substantial Doubt About Our Ability to Continue as a Going Concern Due to Recurring Losses and Working Capital Shortages, Which Means That We May Not Be Able to Continue Operations Unless We Obtain Additional Funding

The report of our independent accountants on our June 30, 2008 financial statements included an explanatory paragraph indicating that there is substantial doubt about our ability to continue as a going concern due to recurring losses and working capital shortages. Our ability to continue as a going concern will be determined by our ability to obtain additional funding. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.

We Are Not Likely to Succeed Unless We Can Overcome the Many Obstacles We Face.

As an investor, you should be aware of the difficulties, delays and expenses we encounter, many of which are beyond our control, including unanticipated market trends, employment costs, and administrative expenses. We cannot assure our investors that our proposed business plans as described in this report will materialize or prove successful, or that we will ever be able to finalize development of our products or services or operate profitably. If we cannot operate profitably, you could lose your entire investment.

Our Revenues Are Difficult To Predict

For a variety of reasons, our revenues are difficult to predict and may vary significantly from year to year. Our ability to achieve our goal depends on a number of factors, many of which are outside of our control, including changes in our customers’ strategic and financial plans, competitive factors and overall market conditions. The difficulty in forecasting revenues increases the difficulty in forecasting our working capital requirements.

We Could Fail to Retain or Attract Key Personnel

Our future success depends, in significant part, on the continued services of James Bickel our Chief Executive Officer. We cannot assure you that we would be able to find an appropriate replacement for him or other key personnel. Any loss or interruption of our key personnel's services could adversely affect our ability to develop our business plan. We have an employment agreement with Mr. Bickel, but no life insurance on the life of Mr. Bickel.

We Will Incur Increased Costs as a Result of Becoming a Reporting Company, and Given Our Limited Capital Resources, Such Additional Costs May Have an Adverse Impact on Our Profitability.

Following the effectiveness of this S-1 Registration Statement, we will be a Securities and Exchange Commission (“SEC”) reporting company. Previously, we reported to the SEC but ceased reporting at December 31, 2006 due to the uncertainty of our continuing operations and pursuant to Rule 12h-3 of the Securities and Exchange Act of 1934. In addition, the Sarbanes- Oxley Act of 2002, as well as a variety of related rules implemented by the SEC, have required changes in corporate governance practices and generally increased the disclosure requirements of public companies. For example, as a result of becoming a reporting company, we will be required to file periodic and current reports and other information with the SEC and we must adopt policies regarding disclosure controls and procedures and regularly evaluate those controls and procedures. As a reporting company, we will incur significant additional legal, accounting and other ex penses in connection with our public disclosure and other obligations. The additional costs we will incur in connection with becoming a reporting company will serve to further stretch our limited capital resources. In other words, due to our limited resources, we may have to allocate resources away from other productive uses in order to pay any expenses we incur in order to comply with our obligations as an SEC reporting company. Further, there is no guarantee that we will have sufficient resources to meet our reporting and filing obligations with the SEC as they come due.

Our Officers and Directors Have the Ability to Exercise Significant Influence Over Matters Submitted for Stockholder Approval and Their Interests May Differ From Other Stockholders

Our executive officers and directors have the opportunity, whether acting alone or together, to have significant influence in determining the outcome of any corporate transaction or other matter submitted to

our Board for approval, including appointing officers, which could have a material impact on mergers, acquisitions, consolidations and the sale of all or substantially all of our assets. The interests of these board members may differ from the interests of the other stockholders.

There Are Risks Associated With Conducting Business Operations With Foreign Countries, Including Political and Social Unrest, Which May Adversely Affect Our Operations and Consequently Our Profitability.

Our primary operations are located in China. Accordingly, we are subject to risks not typically associated with ownership of U.S. companies and therefore should be considered more speculative than investments in the U.S. Our operations could be affected in varying degrees by political instability, social unrest and changes in government regulation relating to foreign investment, and the import and export of goods and services. Operations may also be affected in varying degrees by possible terrorism, military conflict, crime, fluctuations in currency rates and high inflation.

Fluctuations in the Chinese Yuan to U.S. Dollar Exchange Rate May Adversely Affect Our Reported Operating Results.

Our operations take place mostly in China. A decline in the value of the dollar relative to this foreign currency could negatively affect our actual operating costs in U.S. Dollars and our reported results of operations, since we may have to pay more for the same products and services. We do not currently engage in any currency hedging transactions intended to reduce the effect of fluctuations in foreign currency exchange rates on our results of operations. We cannot guarantee that we will enter into any such currency hedging transactions in the future or, if we do, that these transactions will successfully protect us against currency fluctuations.

Our Stock is Thinly Traded, Which May Make it More Difficult For Investors to Resell Their Shares Due to Suitability Requirements.

We have been recently cleared for quotation on the Pink Sheets. Shares of our common stock could be thinly traded on the Pink Sheets electronic trading platform, meaning that the number of persons interested in purchasing our common shares at or near bid prices at any given time may be relatively small or non-existent. This situation is attributable to a number of factors, including the fact that we are a small company which is relatively unknown to stock analysts, stock brokers, institutional investors and others in the investment community that generate or influence sales volume, and that even if we came to the attention of such persons, they tend to be risk-averse and would be reluctant to follow an unproven company such as ours or purchase or recommend the purchase of our shares until such time as we became more seasoned and viable. As a consequence, there may be periods of several days or more when trading activity in our shares is mi nimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on share price. We cannot give you any assurance that a broader or more active public trading market for our common shares will develop or be sustained, or that current trading levels will be sustained. Due to these conditions, we can give you no assurance that you will be able to sell your shares at or near bid prices or at all if you need money or otherwise desire to liquidate your shares.

Our Common Stock May Be Affected By Limited Trading Volume and May Fluctuate Significantly.

There has been a limited public market for our common stock and there can be no assurance that an active trading market for our common stock will develop. As a result, this could adversely affect our shareholders' ability to sell our common stock in short time periods, or possibly at all. Our common stock has experienced, and is likely to experience in the future, significant price and volume fluctuations that could adversely affect the market price of our common stock without regard to our operating performance. In addition, we believe that factors such as quarterly fluctuations in our financial results and changes in the overall economy or the condition of the financial markets could cause the price of our common stock to fluctuate substantially.

Obtaining Additional Capital Through the Sale of Common Stock Will Result in Dilution of

Shareholder Interests.

We may raise additional funds in the future by issuing additional shares of common stock or other securities, which may include securities such as convertible debentures, warrants or preferred stock that are convertible into common stock. Any such sale of common stock or other securities will lead to further dilution of the equity ownership of existing holders of our common stock.

We Are Unlikely to Pay Dividends on Our Common Stock in the Foreseeable Future, Therefore You May Not Derive Any Income Solely From Ownership of Our Stock.

We have never declared or paid dividends on our stock. We currently intend to retain all available funds and any future earnings for use in the operation and expansion of our business. We do not anticipate paying any cash dividends in the foreseeable future, and it is unlikely that investors will derive any current income from ownership of our stock. This means that your potential for economic gain from ownership of our stock depends on appreciation of our stock price and will only be realized by a sale of the stock at a price higher than your purchase price.

Our Common Stock is Subject to the “Penny Stock” Rules of the SEC and the Trading Market in Our Securities is Limited, Which Makes Transactions in Our Stock Cumbersome and May Reduce the Value of an Investment in Our Stock.

The SEC has adopted Rule 15g-9 which establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. Inasmuch as that the current bid and ask price of common stock is less than $5.00 per share, our shares are classified as “penny stock” under the rules of the SEC. For any transaction involving a penny stock, unless exempt, the rules require:

That a broker or dealer approve a person’s account for transactions in penny stocks; and

The broker or dealer receives from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.

In order to approve a person’s account for transactions in penny stocks, the broker or dealer must:

Obtain financial information and investment experience objectives of the person; and

Make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the Commission relating to the penny stock market, which, in highlight form:

Sets forth the basis on which the broker or dealer made the suitability determination; and

That the broker or dealer received a signed, written agreement from the investor prior to the transaction.

Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock.

Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

About this Prospectus

You should only rely on the information contained in this prospectus. We have not authorized anyone to provide information different from that contained in this prospectus. We are offering to sell, and seeking offers to buy, shares of our common stock on a “direct public offering,” “best efforts” basis only in jurisdictions where offers and sales are permitted. Offers and sales of our securities are only permitted in those jurisdictions where statutes exist, “blue sky statutes” allowing for such offers and sales.

Available Information

We are not subject to the informational requirements of the Securities Exchange Act of 1934, as amended. Once our securities are registered under the Securities Act of 1933, we will file reports and other information with the SEC. Once our registration statement becomes effective we shall file supplementary and periodic information, documents and reports that are required under section 13(a) of the Exchange Act, as amended.

All of our reports can be reviewed through the SEC’s Electronic Data Gathering Analysis and Retrieval System (EDGAR) which is publicly available through the SEC’s website (http://www.sec.gov).

We intend to furnish to our stockholders annual reports containing financial statements audited by our independent certified public accountants and quarterly reports containing reviewed unaudited interim financial statements for the first three-quarters of each fiscal year. You may contact the SEC at 1-(800) SEC-0330 or you may read and copy any reports, statements or other information that S3 Investment Company files with the SEC at the their public reference room at the following location:

Public Reference Room

100 F. Street, N.W.

Washington, D.C. 20549-0405

Telephone 1(800)-SEC-0330

We have filed with the SEC a registration statement on Form SB-2 under the Securities Act of 1933, as amended with respect to the securities offered in this prospectus. This prospectus does not contain all the information set forth in the registration statement, certain parts of which are omitted in accordance with the rules and regulations of the SEC. For further information, with respect to us and the common stock offered in this prospectus, reference is made to such registration statement, exhibits and schedules. Statements contained in this prospectus as to the contents of any contract or other document referred to are not necessarily complete and in each instance reference is made to the copy of such contract or other document filed as an exhibit to the registration statement, each such statement being qualified in all respects by such reference. A copy of the registration statement, including the exhibits and schedules can be reviewe d through EDGAR.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Some of the statements under “Prospectus Summary”, “Risk Factors”, “Plan of Operation”, “Our Business”, and elsewhere in this prospectus constitute forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimated”, “predicts”, “potential”, or “continue” or the negative of such terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by such forward-looking statements. These factors include, amo ng other things, those listed under “Risk Factors” and elsewhere in this prospectus. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. We undertake no obligation to update or revise any of the forward-looking statements after the date of this prospectus to conform forward-looking statements to actual results, except as required by the Federal securities laws or as required to meet our obligations set forth in the undertakings to this registration statement.

USE OF PROCEEDS

We will not receive any of the proceeds from the sale of the shares of common stock offered under this prospectus by the selling security holders. Rather, the selling security holders will receive those proceeds directly.

DETERMINATION OF OFFERING PRICE

In determining the initial public offering price of the shares we considered several factors including the following:


	•	our start up status;
	•	prevailing market conditions, including the history and prospects for the industry in which we compete;
	•	our future prospects; and
	•	our capital structure.

Therefore, the public offering price of the shares does not necessarily bear any relationship to established valuation criteria and may not be indicative of prices that may prevail at any time or from time to time in the public market for the common stock. You cannot be sure that a public market for any of our securities will develop and continue or that the securities will ever trade at a price at or higher than the offering price in this offering.

DILUTION

The common stock to be sold by the selling shareholders is common stock that is currently issued. Accordingly, there will be no dilution to our existing shareholders.

SELLING SECURITY HOLDERS

The shares being offered for resale by the selling stockholders consist of the 1,541,535,311 shares of our common stock held by 204 holders of record.

The following table sets forth the name of the selling stockholders, the number of shares of common stock beneficially owned by each of the selling stockholders as of November 14, 2008 and the number of shares of common stock being offered by the selling stockholders. The shares being offered hereby are being registered to permit public secondary trading, and the selling stockholders may offer all or part of the shares for resale from time to time. However, the selling stockholders are under no obligation to sell all or any portion of such shares nor are the selling stockholders obligated to sell any shares immediately upon effectiveness of this prospectus. All information with respect to share ownership has been furnished by the selling stockholders.

Except as listed below, to our knowledge, none of the selling shareholders or their beneficial owners:


-	has had a material relationship with us other than as a shareholder at any time within the past three years; or
-	has ever been one of our officers or directors or an officer or director of our predecessors or affiliates
-	are broker-dealers or affiliated with broker-dealers.

PLAN OF DISTRIBUTION AND TERMS OF THE OFFERING

The selling security holders may sell some or all of their shares at a fixed price of $0.002 per share until our shares are quoted on the OTC Bulletin Board and thereafter at prevailing market prices or privately negotiated prices. Prior to being quoted on the OTCBB, shareholders may sell their shares in private transactions to other individuals. Although our common stock is not listed on a public exchange, we will be filing to obtain a listing on the Over the Counter Bulletin Board (OTCBB) when this Registration Statement is declared effective by the SEC. In order to be quoted on the Bulletin Board, a market maker must file an application on our behalf in order to make a market for our common stock. There can be no assurance that a market maker will agree to file the necessary documents with FINRA, which operates the OTC Electronic Bulletin Board, nor can there be any assurance that such an application for quotation will be approved. Howe ver, sales by a selling security holder must be made at the fixed price of $0.002 until a market develops for the stock.

Once a market has been developed for our common stock, the shares may be sold or distributed from time to time by the selling stockholders directly to one or more purchasers or through brokers or dealers who act solely as agents, at market prices prevailing at the time of sale, at prices related to such prevailing market prices, at negotiated prices or at fixed prices, which may be changed. The distribution of the shares may be effected in one or more of the following methods:


	· ordinary brokers transactions, which may include long or short sales,
	· transactions involving cross or block trades on any securities or market where our common stock is trading, market where our common stock is trading,
	· through direct sales to purchasers or sales effected through agents,
	· through transactions in options, swaps or other derivatives (whether exchange listed of otherwise), or exchange listed or otherwise), or
	· any combination of the foregoing.

In addition, the selling stockholders may enter into hedging transactions with broker-dealers who may engage in short sales, if short sales are permitted, of shares in the course of hedging the positions they assume with the selling stockholders. The selling stockholders may also enter into option or other transactions with broker-dealers that require the delivery by such broker-dealers of the shares, which shares may be resold thereafter pursuant to this prospectus.

Brokers, dealers, or agents participating in the distribution of the shares may receive compensation in the form of discounts, concessions or commissions from the selling stockholders and/or the purchasers of shares for whom such broker-dealers may act as agent or to whom they may sell as principal, or both (which compensation as to a particular broker-dealer may be in excess of customary commissions). Neither the selling stockholders nor we can presently estimate the amount of such compensation. We know of no existing arrangements between the selling stockholders and any other stockholder, broker, dealer or agent relating to the sale or distribution of the shares. We will not receive any proceeds from the sale of the shares of the selling security holders pursuant to this prospectus. We have agreed to bear the expenses of the registration of the shares, including legal and accounting fees, and such expenses are estimated to be approx imately $18,300.

LEGAL PROCEEDINGS

There are a number of cases pending involving S3 Investment Company, Inc. and or Securesoft Systems, Inc. S3I Holdings, Inc. (the former name of S3 Investment Company, Inc.) acquired all of the issued and outstanding capital stock of Securesoft Systems, Inc., a Delaware corporation, making Securesoft Systems, Inc. (“Securesoft”) a wholly-owned subsidiary of the Company.

The following is a complete list:

S3I Holdings, Inc. and Securesoft were named defendants in a case entitled Radford v. Yamamoto, Berlandier, S3I, Securesoft and Grant. Radford filed complaint on February 10, 2004 alleging nonpayment of back wages. Defendants answered the complaint on July 9, 2004. Stipulated mediation before an arbitrator was to have been completed on November 17, 2004. However, Radford filed a motion to have the case moved to state court for adjudication. On June 7, 2005 the Company filed a motion with the Court of Appeal of the State of California Fourth Appellate District, Division One, to compel mediation before an arbitrator. On June 15, 2006, the Company agreed to settle the suit for $42,000, which was completely paid by the Company prior to June 30, 2008.

S3 Investment Company, Inc., S3I Holdings, Inc. and Securesoft were named defendants in a case entitled Villella V. Yamamoto, Berlainder, et al. Villella filed the complaint on April 13, 2005. Notice of service was not properly given to us until August of 2005. We filed a cross-complaint for damages against Villella on September 20, 2005. We agreed to a settlement in the amount of $183,000, of which $150,000 remains at June 30, 2008.

On October 1, 2006, we entered into a Consulting Agreement with Merriman Curhan Ford & Co. (“Merriman”). The Consulting Agreement set forth, among other things, the circumstances under which we would make certain scheduled payments to Merriman and described certain other financial obligations of us in consideration for Merriman’s financial advisory services. On September 7, 2007, we filed an action against Merriman in the Superior Court of the State of California, for the City and County of San Francisco, titled S3 Investment Company, Inc., a California corporation v. Merriman Curhan Ford & Co., et al., Case No. CGC-07-466952 (“Complaint”). The Complaint alleged causes of action against Merriman for breach of contract, fraud, negligent misrepresentation, intentional and negligent interference with prospective economic relations. This case was settled in July 2008. Terms of the settlement agreement are confidential, but the settlement did not have a material effect on our financial position, financial results or cash flows as of June 30, 2008.

On March 15, 2007, we entered into a Settlement Agreement with Sequoia International, Inc., which had purchased a $100,000 note payable from a third party lender to us. We agreed to settle by issuing a total of 15,000,000 shares of its common stock to satisfy this transaction. These shares were issued pursuant to Section 3(a)(10) of the Securities Act of 1933, as amended. As a result of this transaction, we recorded settlement costs of $525,000 representing the difference between the amount of debt and the value of the securities issued. We agreed with Sequoia that the shares would be issued into an escrow account to prevent their immediate resale into the market. Under the terms of the escrow, Sequoia may not obtain any shares from escrow if the release of such escrow shares would result in Sequoia becoming the beneficial owner of more than 4.9% of our common stock.

Effective March 1, 2008, we entered into a Settlement Agreement with Luce, Forward, Hamilton & Scripps, LLP, whom had previously provided legal services to us on a number of different matters, in the amount of $38,607. We agreed to pay this amount in monthly installments of $2,000. There remains $32,607 unpaid at June 30, 2008.

On October 14, 2005, Securesoft filed a Voluntary Bankruptcy Petition under Chapter 7. The Petition was entered by the Central District Bankruptcy Court of California on October 20, 2005. The case number was 6:05−bk−25627−DN. On December 15, 2005, the 341 meeting of creditors was held. After which, no creditors filed a Complaint to Deny Dischargability under §523 or under §727. 20 creditors were notified. On March 8, 2006, the case was closed.

To settle a dispute of $175,000, on June 3, 2008, we entered into a settlement agreement with Magellen Financial Media whereby S3 delivered to Magellen 25,000,000 shares of its common stock as a settlement.

DIRECTOR, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

The executive officers and directors of the Company as of June 30, 2008 are as follows:


Name	Age	Position
James Bickel	71	Chief Executive Officer, President and Chairman of the Board of Directors
Gary Nerison	71	Secretary, Treasurer and Director
Manhong Liu	57	Director

Duties, Responsibilities and Experience

James Bickel, Chief Executive Officer, President and Chairman of the Board of Directors - Mr. Bickel has over 40 years experience in sales and senior management positions with manufacturing based companies, serving as the president of Allison Spring and Manufacturing from 1968 to 1973, Bicor Machinery and Manufacturing from 1974 to 1979, and Keel Corporation from 1980 to 1986, all California based manufacturing companies of high tech metal parts and assemblies. From 1986 to 2002, Mr. Bickel served as vice president of Uniglobe USA and president of Uniglobe Midpacific, assisting in building a national travel franchise system with over 900 locations and later built golf retail franchise system. From 2002 to 2003, Mr. Bickel acted as vice president and secretary of World Health and Education Foundation and as vice chairman of MedChannel LLC, a medical device company serving radiology and surgical markets. Mr. Bickel served as Chief Operating Officer and Director of Green Globe International, Inc. from 2005 to 2008, a member of the Board of Directors of Sovereign Exploration Associates International Inc. during 2005 and a member of the Board of Directors of Aero Performance Products during 2007. Mr. Bickel has served on the Board of Directors of CLX Medical, Inc. since 2005. Mr. Bickel has served as Chief Executive Officer and President of S3 Investment Company since January 2006 and Chairman of the Board of Directors since January 2007.

Gary Nerison, Secretary, Treasurer and Director – Mr. Nerison is an experienced entrepreneur in commercial real estate and loan brokerage companies. With his rich business commercial real estate background, over the last 36 years, Mr. Nerison has initiated and led to growth several commercial real estate and loan brokerage companies. In 1998, he founded a loan brokerage firm placing venture loans for new business, which he still currently manages. Since 2002, he has been the Co-founder and President of World Health and Education Foundation, a charitable organization. Mr. Nerison attended Augustana College in Sioux Falls, South Dakota with Major in Economics. Mr. Nerison served as a member of the Board of Directors of Aero Performance Products during 2007. Mr. Nerison has served as Secretary and Treasurer of S3 Investment Company since August 2007 and a member of the Board of Directors since Decemb er 2005. Mr. Nerison has also served on the Board of Directors of Green Globe International, Inc. since 2005 and Global Travel Exchange since 2006.

Manhong Liu, Director - is the founder (2000), and current chairman and chief economist of VCChina Ltd, a global investment and consultation firm based in Beijing, China. VCChina, Ltd’s operations include venture capital investment advisory services, venture capital investment, consulting services, and educational services. Under Ms. Liu’s leadership, VCChina, Ltd has become one of the leading companies in China's venture capital market. Ms. Liu has a doctoral degree of economics of Cornell University. She served as research faculty of Harvard University from 1993 to 1997 and is currently professor and Ph. D. student mentor of Renmin University of China. She is also Financial Advisor to Beijing Municipal Government, Director of Boston China Finance Research Center in USA, Director of VC Research Center of Renmin University of China, and Honorary Vice Director of VC Association of China. Ms. Liu has served as a member of the Board of Directors of S3 Investment Company since February 2007.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of November 14, 2008, information about the beneficial ownership of our capital stock with respect to each person known by S3 Investment Company, Inc. to own beneficially more than 5% of the outstanding capital stock, each director and officer, and all directors and officers as a group.


	Number of Shares Beneficially Owned		Percentage of Class ^{(2) (3)}
Name and Address⁽¹⁾	Number of Shares Beneficially Owned	Class	Percentage of Class ^{(2) (3)}
James Bickel	284,764,406	Common	18%
CEO, President and Chairman	6,655,000	Series B Preferred ⁽³⁾	55%

Gary Nerison	31,000,000	Common	2%
Secretary, Treasurer and Director	-0-	Series B Preferred	*

Mannie Liu	28,000,000	Common	2%
Director	-0-	Series B Preferred	*
All directors and executive officers(3 persons)	350,419,406 6,655,000	Common Series B Preferred	23% 55%

Chris Bickel	2,000,000	Series B Preferred	17%

Christopher Berlandier	1,000,000	Series B Preferred	8%

Chris Wang	1,000,000	Series B Preferred	8%

Wu Xiaoxin	106,000,000	Common	7%

*Denotes less than 1%

Unless noted otherwise, the address for all persons listed is c/o the Company at 4115 Blackhawk Plaza Circle, Suite 100, Danville, California, 94506.

The above percentages are based on 1,541,523,135 shares of common stock and 12,000,000 shares of Series B Preferred Stock outstanding as of November 14, 2008.

We have fifteen million (15,000,000) shares of Series B Preferred Stock designated. The voting rights of the Series B Preferred Stock are limited in that the Series B Preferred Stock is not entitled to vote on matters presented to the common stock shareholders for approval and can be converted into shares of common stock on a 1:1 basis. In lieu of voting rights, the Holders of the Series B Preferred Stock are entitled to elect two persons to the Board of Directors.

“Beneficial ownership” means the sole or shared power to vote or to direct the voting of, a security, or the sole or shared investment power with respect to a security (i.e., the power to dispose of or to direct the disposition of, a security). In addition, for purposes of this table, a person is deemed, as of any date, to have “beneficial ownership” of any security that such person has the right to acquire within 60 days from the date of this prospectus.

DESCRIPTION OF SECURITIES

Common Stock

We have 9,900,000,000 shares of common stock authorized, of which 1,541,535,311 shares were issued and outstanding as of November 14, 2008.

On January 26, 2007, the Company declared a reverse stock split of one-for-one hundred fifty shares of all outstanding and authorized common stock. Accordingly, all figures have been restated retroactively.

During the fiscal year ended June 30, 2007, we had the following stock transactions:

86,376,666 shares were issued for services totaling $1,323,464. The shares were issued based upon the exemption from registration found in Section 4(2) of the Securities Act.

666,667 shares of common stock were issued for $110,000 in services under a Registration Statement on Form S-8 filed on August 9, 2006.

666,667 shares of common stock were issued for $90,000 in services under a Registration Statement on Form S-8 filed on October 6, 2006.

42,500,000 shares were issued for cash totaling $250,914. These shares were issued in reliance on the exemption from registration provided by Rule 504 of Regulation D.

We agreed to the cancellation of 4,000,000,000 warrants that were issued on June 2, 2006. As consideration to the holder of the warrants, we agreed to repay $100,000 that the warrant holder had advanced to us under the warrant contract and issue 666,667 shares of restricted common stock. As a result of this transaction, we recorded financing costs of $70,000 representing the fair market value of the securities issued. We executed a promissory note for the $100,000 that was due in four equal monthly payments of $25,000 starting on February 1, 2007 and ending on May 1, 2007. In addition, the warrant holder retained the 666,667 shares of common stock previously issued as collateral against the monies advanced. On March 15, 2007, we entered into a Settlement Agreement with Sequoia International, Inc., which had purchased the $100,000 past due note payable from the warrant holder. We agreed to settle by issuing a total of 15,000,000 shares of its common stock to satisfy this transaction. These shares were issued pursuant to Section 3(a)(10) of the Securities Act of 1933, as amended. As a result of this transaction, we recorded settlement costs of $525,000 representing the difference between the amount of debt and the value of the securities issued. We agreed with Sequoia that the shares would be issued into an escrow account to prevent their immediate resale into the market. Under the terms of the escrow, Sequoia may not obtain any shares from escrow if the release of such escrow shares would result in Sequoia becoming the beneficial owner of more than 4.9% of our common stock.

During the fiscal year ended June 30, 2008, we had the following common stock transactions:

458,500,000 shares were issued for services totaling $1,483,250. The shares were issued based upon the exemption from registration found in Section 4(2) of the Securities Act.

On June 12, 2008, James Bickel, Chief Executive Officer, transferred 25,000,000 shares of his seasoned stock to Magellan Financial Group to satisfy $111,599 in past due debt. On June 19, 2008, we reissued 25,000,000 shares to James Bickel to replace the shares he transferred. These shares were valued at $175,000 and issued in reliance on the exemption from registration found in Section 4(2) of the Securities Act.

472,392,571 shares were issued for cash totaling $172,000. These shares were issued in reliance on the exemption from registration provided by Rule 504 of Regulation D.

272,391,430 shares were issued for finance costs totaling $459,879. Prior to the realization of loss of control of the Sino UJE entity, the Board of Directors had authorized us to issue common shares to minority interest owners of Sino UJE. It was discovered subsequent to the purchase of Sino UJE, and prior to the realization of loss of control of Sino UJE, that these minority interest owners had not received an equitable share of the purchase of Sino UJE by us. This issuance was made to correct the oversight. The shares were issued based upon the exemption from registration found in Section 4(2) of the Securities Act

49,041,310 shares were issued to satisfy the non-dilutive interests related to the purchase of Sino UJE, Ltd., totaling $181,453. The shares were issued based upon the exemption from registration found in Section 4(2) of the Securities Act.

Preferred Stock

We have 100,000,000 shares of preferred stock authorized, of which 15,000,000 shares are designated in one series.

Series B Preferred Stock, of which 15,000,000 shares are designated and 12,000,000 shares are outstanding, does not have voting rights and can be converted into shares of common stock on a 1:1 basis. In lieu of voting rights, the Series B Preferred Stock is entitled to elect two directors at each shareholder meeting.

Our Board of Directors, subject to the provisions of our Articles of Incorporation and limitations imposed by law, is authorized to:


	•	adopt resolutions
	•	issue shares
	•	fix the number of shares
	•	change the number of shares constituting any series
	•	provide for or change the following:


		· the voting powers
		· Designations
		· Preferences
		· relative, participating, optional or other special rights, qualifications, limitations or restrictions, including the following:
		o dividend rights (including whether dividends are cumulative)
		o dividend rates
		o Terms of redemption (including sinking fund provisions)
		o redemption prices
		o conversion rights
		o liquidation preferences of the shares constituting any class or series of the preferred stock

In each of the listed cases, we will not need any further action or vote by the stockholders.

One of the effects of undesignated preferred stock may be to enable the Board of Directors to render it more difficult to change control of the Company or to discourage an attempt to obtain control of us by means of a tender offer, proxy contest, merger or otherwise, and thereby to protect the continuity of our management. The issuance of shares of preferred stock pursuant to the Board of Director’s authority described above may adversely affect the rights of holders of common stock. For example, preferred stock issued by us may rank prior to the common stock as to dividend rights, liquidation preference or both, may have full or limited voting rights and may be convertible into shares of common stock. Accordingly, the issuance of shares of preferred stock may discourage bids for the common stock at a premium or may otherwise adversely affect the market price of the common stock.

Notes Payable with Conversion Rights

We do not presently have any options authorized or any other securities that may be convertible into common stock other than that herein discussed.

INTEREST OF NAMED EXPERTS AND COUNSEL

Jillian Ivey Sidoti issued an opinion that the shares being issued pursuant to this offering, upon issuance, will have been duly authorized and validly issued, fully paid, and non-assessable.

The audited financial statements of as of June 30, 2008 and 2007 are included in this prospectus and have been audited by Chisholm, Bierwolf and Nilson, LLC independent auditors, as set forth in their audit report thereon appearing elsewhere herein and are included in reliance upon such reports given upon the authority of such individual as an expert in accounting and auditing.

DISCLOSURE OF COMMISSION’S POSITION ON INDEMNIFICATION FOR

SECURITIES ACT LIABILITIES

Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the “Act”) may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable.

No director of S3 Investment Company will have personal liability to us or any of our stockholders for monetary damages for breach of fiduciary duty as a director involving any act or omission of any such director since provisions have been made in our Articles of Incorporation limiting such liability.

DESCRIPTION OF BUSINESS

General

S3 Investment Company, Inc. was incorporated under the laws of the State of California. We originally incorporated with the name of Retail Windows, Inc. on April 19, 2000 to engage in any lawful activity as shall be appropriate under laws of the State of California. On June 30, 2001 we amended our Articles of Incorporation to change our name to Axtion Foods, Inc. Prior to April 2003, Axtion Foods, Inc. was engaged in the development, manufacturing and distribution of health bars and health drinks. The business plan was not fully implemented and on April 16, 2003 we changed our name to S3I Holdings, Inc. and acquired 100% of the issued and outstanding capital stock of Securesoft Systems, Inc., a Delaware corporation, making Securesoft Systems, Inc (Securesoft) our wholly-owned subsidiary.

Securesoft Systems, Inc., was incorporated in September 1999. It developed and marketed enterprise compliance and risk management software solutions, but discontinued operations in the last quarter of the fiscal year ended June 30, 2005. It subsequently filed for bankruptcy protection under Chapter 7.

On April 12, 2004 our Board of Directors elected to be regulated as a business development company under the Investment Company Act of 1940. As a business development company ("BDC"), we were required to maintain at least 70% of our assets invested in "eligible portfolio companies", which are loosely defined as any domestic company which is not publicly traded or that has assets less than $4 million. Based on the BDC format, Securesoft became our first portfolio company. We added two new portfolio Investments in November, 2004: Sino UJE, Ltd. (‘Sino’), a Hong Kong company, and Redwood Capital, Inc., a privately held investment advisory group.

In August 2005, the Board of Directors determined that our continued focus on operations outside the United States, and the limited nature of our portfolio, did not lend itself to the structure of a business development company nor require reporting under the Investment Company Act of 1940. Further, our management had several discussions with the Securities and Exchange Commission during which the Commission expressed the opinion that our capital structure was in violation of certain provisions of the Investment Company Act of 1940; namely, that our preferred stock was issued in violation of Section 18 and convertible debentures were issued in violation of Section 61. On August 26, 2005, the Board of Directions approved a motion to withdraw our election to be treated as Business Development Company under the 1940 Act and on April 5, 2006 our shareholders approved the withdrawal petition. On April 6 , 2006, we filed an N-54C, which formally withdrew our BDC election.

As mentioned above, we acquired 51% of the common stock of Sino during November, 2004. Utilizing an extensive distribution network in China, Sino distributed medical and industrial supplies for a group of Original Equipment Manufacturers (OEM’s) in Europe and the US that were exclusively represented in China by Sino. In November 2004, Sino was acquired from the Ya-Sheng Group for 4.9% of our outstanding stock. According to the terms of the acquisition, the 4.9% non-dilutive provision was effective through July 2008. As a result, during the fiscal years ending June 30, 2007 and 2008, we issued 49,041,310 additional shares to the Ya-Sheng Group. During the third quarter of 2007 we lost control of Sino UJE, Ltd. Accordingly, we recorded a loss of $(726,925) from the abandonment of Sino for the fiscal year ending June 30, 2007. Separately, we recorded a loss of $(79,759) from the discontinued operations of Sino for the fiscal year ended June 30, 2007 and a recovery of $190,304 for the fiscal year ended June 30, 2008.

Our sole operating subsidiary, Redwood Capital, is a full-service investment banking advisory firm that offers a wide range of U.S. corporate finance and investment banking services to growing, private companies in China. Redwood’s services are designed to assist its client companies before, during and after their public offerings.

Redwood Capital relies upon its highly experienced management professionals focused on financing the emerging presence of Chinese corporations in the global capital markets.

Redwood Capital is a specialist in providing Alternative Public Offerings “APOs” for private Chinese companies through the simultaneous listing on a U.S. or other stock market and PIPE (Private Investment in Public Equity) financing. Its services are designed to prepare, assist and manage client companies through the various stages of the process of a reverse merger into a publicly-traded shell, concurrent capital funding, a progression to a U.S. national market listing (NASDAQ, AMEX, or NYSE) and multiple Registered Follow-On Offerings for additional growth capital.

Like its Chinese client companies, Redwood Capital management is made up of individuals with a proven track record of business success and deep entrepreneurial and financial experience. Leveraging collective financial expertise and personal contact networks, it offers a broad spectrum of services covering: Accounting/Finance, Audit Management, Mergers & Acquisitions, Corporate & Securities Law, SEC Compliance, Company Structure, US Capital Markets, Strategic Planning, Strategic Partnering, advisory for Management Buy-Outs and Spin-Offs of Chinese SOE’s, Investor Relations, Financial Public Relations, Securities Market Research and Analysis.

Redwood Capital has offices in Beijing, China, and in California, USA. It has partnered with numerous institutional investors and regulated investment banks within North America and China to develop a systematic process for qualifying and effectively preparing target Chinese companies to gain access to the U.S. capital markets. This process ensures that qualified companies – referred to as Redwood’s “Gold Standard” companies， follow an established process to reach their goal of a U.S. national market listing (NASDAQ, AMEX or NYSE).

Redwood has put forth an internal marketing strategy involving our staff and our numerous networks throughout China and the U.S. to build a pipeline of potential clients over the next few years. As a result of our actions over the last year, we have seen an influx of opportunities and have quickly become the “go to” company in China for RTO’s. Our reputation of honesty and integrity has enabled us to sign four new clients this year as of the end of June 30, 2008, and we have additional projects we are currently reviewing. We have approximately 5 projects in process or under review, which could result in more than $2 million in revenues per project over the next 12 months. Redwood continues to seek talent and expand our syndicate group of investors and broker-dealers in preparation of additional growth. Despite the US market turmoil, our business outlook remains strong.

REPORTS TO STOCKHOLDERS

On March 8, 2007 we filed a Form 15 certification and notice of termination of registration under section 12(G) of the securities exchange act of 1934 or suspension of duty to file reports under sections 13 and 15(D) of the securities exchange act of 1934 pursuant to Rule 12g-4(a)(1)(i).

We are not subject to the informational requirements of the Securities Exchange Act of 1934, as amended. Once our registration statement is effective and our securities are registered under the exchange act, we will file supplementary and periodic information, documents and reports that are required under section 13 of the Securities Act of 1933, as amended, with the Securities and Exchange Commission. Such reports, proxy statements and other information will be available through the Commission’s Electronic Data Gathering Analysis and Retrieval System which is publicly available through the Commission’s website (http://www.sec.gov).

We intend to furnish annual reports to stockholders, which will include audited financial statements reported on by our Certified Public Accountants. In addition, we will issue unaudited quarterly or other interim reports to stockholders, as we deem appropriate or required by applicable securities regulations.

MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The following discussion and analysis should be read in conjunction with our financial statements and the notes thereto contained elsewhere in this filing.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

The following discussion and analysis should be read in conjunction with our financial statements and notes to financial statements included elsewhere in this prospectus. This prospectus and our financial statements and notes to financial statements contain forward-looking statements, which generally include the plans and objectives of management for future operations, including plans and objectives relating to our future economic performance and our current beliefs regarding revenues we might generate and profits we might earn if we are successful in implementing our business strategies. The forward-looking statements and associated risks may include, relate to or be qualified by other important factors, including, without limitation:

the projected growth or contraction in the industries within which we operate

our business strategy for expanding, maintaining or contracting our presence in these markets

the ability to distinguish ourselves from our current and future competitors.

We do not undertake to update, revise or correct any forward-looking statements.

Any of the factors described above or in the "Risk Factors" section could cause our financial results, including our net income or loss or growth in net income or loss to differ materially from prior results, which in turn could, among other things, cause the price of our common stock to fluctuate substantially.

Overview

Redwood Capital relies upon its highly experienced management professionals focused on financing the emerging presence of Chinese corporations in the global capital markets.

Discussion of the loss of Sino UJE, Ltd.

Since December 31, 2006, we have not received any financial statements from the Hong Kong management of Sino UJE, Ltd. (the “Subsidiary”). James Bickel, our Chief Executive Officer, visited the Subsidiary’s offices in Hong Kong four (4) times throughout 2007 in an attempt to maintain control of our Subsidiary and its operations. During the visits, Mr. Bickel requested all financial statements, cash reports, and bank statements. Throughout 2007, Mr. Bickel was promised that we would receive the above requested documents by November 11, 2007. No documents were received.

After not receiving documents on November 11, 2007, Mr. Bickel, with permission of the Board, attempted to remove the then manager. Mr. Bickel then requested the financial statements to be delivered to our US office no later than December 31, 2007.

Mr. Bickel then visited the Subsidiary’s offices in Hong Kong three (3) times throughout 2008. On every visit, Mr. Bickel requested all financial statements, cash reports, and bank statements.

By April 2, 2008, we still did not receive any financial statements or any other reports necessary for successful or proper management of the Subsidiary as a part of our holdings. During the second quarter of 2008, we discovered that the current management of the Subsidiary had relocated the Subsidiary’s offices and did not inform us where the new offices were. Upon discovering that the Subsidiary’s offices had been moved to a new, unknown location, Mr. Bickel immediately attempted to contact Li Jun and Wellman Liu, two managers of the Subsidiary. After attempting to contact Li Jun and Wellman Liu, we discovered that the principals had been providing false contact information and other vital information for several years.

By mid 2008, it was discovered that Li Jun and Wellman Liu had been moving the assets of the Subsidiary to a new entity owned by Li Jun and Wellman Liu. Unsure of the status of the Subsidiary and its financial condition, we refused to sign any agreements or leases as owner or on behalf of the Subsidiary.

As of August 31, 2008, all of the Subsidiary bank accounts have been closed. Further, all officers and directors have been removed to the extent we have been able to remove them. The Hong Kong Corporation that held the Subsidiary is in a non-active state and the business operations are no longer in existence.

Because of the above events, we no longer are in control of any of the assets of the Subsidiary. Accordingly, we have recorded a loss from discontinued operations of $79,759 and a loss from abandonment of this Subsidiary of $726,925 for the year ended June 30, 2007. We were able to sell a small part of the Subsidiary in which we had retained ownership which resulted in a recover from discontinued operations of $190,304 for the year ended June 30, 2008.

Sino Share Exchange

Prior to the realization of loss of control of the Sino UJE entity, the Board of Directors had authorized us to issue common shares to minority interest owners of Sino UJE. It was discovered subsequent to the purchase of Sino UJE, and prior to the realization of loss of control of Sino UJE, that these minority interest owners had not received an equitable share of the purchase of Sino UJE by us. We issued 272,391,430 shares for finance costs totaling $459,879 to correct this oversight. The shares were issued based upon the exemption from registration found in Section 4(2) of the Securities Act.

CRITICAL ACCOUNTING POLICIES

Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis of making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

We believe that the following critical accounting policies, among others, affect our more significant judgments and estimates used in the preparation of our financial statements:

Revenue recognition

Revenues are recognized from financial services contracts as amounts become billable per their respective contract terms in accordance with Staff Accounting Bulletin (“SAB”) 101, as amended by SAB 104. We consider amounts to be earned once evidence of an arrangement has been obtained, services are delivered, fees are fixed or determinable, and collectability is reasonably assured. Our sole revenue generating operation is through our subsidiary, Redwood Capital. Revenue is generated by providing services to assist private Chinese companies through the various stages of the process of a reverse merger into a publicly-traded shell, and concurrent capital funding (collectively, an Alternate Public Offering, or “APO”). As the total fees to be paid are typically provided as a percentage of the total capital raised from each APO, the fees are typically not fixe d until the completion of such transactions. As such, we recognize revenue from each transaction upon the successful closing of each APO.

Deferred Transaction Costs

Once a contractual agreement has been reached, any contractual advances we make on behalf of our clients to certain third parties are deferred during the contractual period and expensed once each transaction has closed. Once expensed, these deferred costs are included in cost of sales.

Deferred amounts are monitored regularly for impairment. Impairment losses are recorded when projected undiscounted operating cash flows of the related contract are not sufficient to recover the carrying amount of contract assets. Deferred transition costs were $119,698 and $204,343 as of June 30, 2008 and 2007, respectively, and are included in current assets.

Cash and cash equivalents

We consider all liquid investments with a maturity of three months or less from the date of purchase that are readily convertible into cash to be cash equivalents.

We maintain our cash in bank deposit accounts which, at times, may exceed federally insured limits. We have not experienced any losses in such accounts and believe we are not exposed to any significant credit risk on cash and cash equivalents.

Concentration of Risk

All of our revenues are derived from transactions in foreign countries. The economic and political instability of some foreign countries may affect our ability and our customers to complete any Alternative Public Offerings currently in progress. Such circumstances could cause a possible loss of sales, which would affect operating results adversely.

During the year ended June 30, 2008 one single customer, Dalian Chuming Group, Ltd., represented more than 10% of total net sales for the years then ended.

Marketable Securities

Pursuant to Statement of Financial Accounting Standard No. (“SFAS”) 115 “Accounting for Certain Investments in Debt and Equity Securities” we determine the appropriate classification of investment securities at the time they are acquired and we evaluate the appropriateness of such classification at each balance sheet date. At June 30, 2008 and at June 30, 2007, all marketable securities were classified as available-for-sale-securities and appropriately stated at fair value based on quoted market prices and other observable market data, with any unrealized holding gains and losses, net of the related deferred tax effect, reported as a separate component of stockholders' equity. Realized gains and losses from sales of securities available for sale are determined on a specific identification basis and are included in other income and expense.

Property – office equipment

Office equipment is depreciated on a straight-line basis over the estimated useful life of the asset of three to five years. Office equipment is stated at cost net of accumulated depreciation and is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable.

Long-Lived Assets

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or group of assets may not be recoverable. Recoverability of long-lived assets or groups of assets is assessed based on a comparison of the carrying amount to the estimated future net cash flows. If estimated future undiscounted net cash flows are less than the carrying amount, the asset is considered impaired and expense is recorded at an amount required to reduce the carrying amount to fair value.

Basic and Diluted Net Income per Share

Basic earnings per share is calculated using the weighted-average number of common shares outstanding during the period without consideration of the dilutive effect of stock warrants and convertible notes. The basic weighted-average number of common shares outstanding was 847,791,275 and 36,591,502 for the years ended June 30, 2008 and 2007, respectively. All common shares presented are reflective of a reverse common stock split of one-to-one hundred and fifty. Common stock equivalents related to beneficial conversion features embedded in certain Notes Payable (146,034,247) have not been included in the

calculation of loss per share for the fiscal years ending June 30, 2008 nor 2007 due to their anti-dilutive effect.


		Income (Loss)	Shares	Per Share
		(numerator)	(denominator)	Amount
Basic EPS
For the year ended June 30, 2008
Net loss from continuing operations per share	$	(1,284,759.00)	847,791,275	($0.00)
Net loss from discontinued operations per share	$	190,304.00	847,791,275	$0.00
Net loss per share	$	(1,094,455.00)	847,791,275	($0.00)
For the year ended June 30, 2007
Net loss from continuing operations per share	$	(2,595,815.00)	36,591,502	($0.07)
Net loss from discontinued operations per share	$	(806,684.00)	36,591,502	($0.02)
Net loss per share	$	(3,402,499.00)	36,591,502	($0.09)

Stock-based compensation

In December 2004, the Financial Accounting Standards Board (FASB) issued SFAS No. 123(R), “Share-Based Payment”. This pronouncement amends SFAS No. 123, “Accounting for Stock-Based Compensation”, and supersedes APB Opinion No. 25, “Accounting for Stock Issued to Employees”. SFAS No. 123(R) requires that companies account for awards of equity instruments issued to employees under the fair value method of accounting and recognize such amounts in their statements of operations. Under SFAS No. 123(R), the Company is required to measure compensation cost for all stock-based awards at fair value on the date of grant and recognize compensation expense in the consolidated statements of operations over the service period that the awards are expected to vest.

We account for stock-based compensation issued to non-employees and consultants in accordance with the provisions of SFAS 123(R) and the Emerging Issues Task Force consensus in Issue No. 96-18 ("EITF 96-18"), "Accounting for Equity Instruments that are Issued to Other Than Employees for Acquiring or in Conjunction with Selling, Goods or Services". Common stock issued to non-employees in exchange for services is accounted for based on the fair value of the services received.

We have no outstanding stock options nor warrants at June 30, 2008 or at June 30, 2007.

Fair value of financial instruments

SFAS No. 107, “Disclosures about Fair Value of Financial Instruments”, requires that we disclose estimated fair values of financial instruments. The carrying amounts reported in the statements of financial position for current assets and current liabilities qualifying as financial instruments are a reasonable estimate of fair value.

Income Taxes

We accounts for income taxes using the liability method as required by SFAS No. 109, “Accounting for Income Taxes”. Under this method, deferred tax assets and liabilities are determined based on differences between their financial reporting and tax basis of assets and liabilities. We were not required to provide for a provision for income taxes for the periods ended June 30, 2008 and 2007, as a result of net operating losses incurred during the periods. As of June 30, 2008, we have available approximately $1,941,000 of net operating losses ("NOL") available for income tax purposes that may be carried forward to offset future taxable income, if any. These carryforwards expire in various years through 2028. No tax benefit will be recorded until we generate taxable income.

Deferred tax assets and the valuation account are as follows at June 30, 2008 and 2007:


	June 30,
		2008		2007
NOL Carryforward	$	660,000	$	982,600
Valuation Allowance		(660,000)		(982,600)
Total	$	-	$	-

The components of current income tax expense as of June 30, 2008 and 2007 respectively are as follows:


		As of June 30,
		2008		2007
Current federal tax expense	$	-	$	-
Current state tax expense		-		-
Change in NOL benefits		(322,600)		346,700
Change in valuation allowance		322,600		(346,700)
Income tax expense	$	-	$	-

The income tax provision differs from the amount of income tax as determined by applying the U.S federal income tax rate of 34% to pretax income from operations due to the following:


		For the years ended June 30,
		2008		2007
Net Loss	$	(372,114)	$	(1,156,849)
NOL used		(322,688)		-
Permanent effects		694,804		810,154
Taxable temporary differences		-		-


Deductible temporary differences		-		-
Change in deferred tax asset valuation		-		(346,695)

Net tax provision	$	-	$	-

Research and development costs

During the last two fiscal years, we did not spend any funds on research and development activities.

Derivative Financial Instruments

Our derivative financial instruments consist of embedded derivatives related to the Convertible Notes Payable (“the Notes”) entered into in January, 2008. These Notes contain interrelated embedded derivatives, which include a variable conversion feature, a variable interest feature, and a fixed-price put feature.

Based on the complex nature of the terms of the variable conversion and interest features, we chose to employ a Black-Scholes model to value these features. Due to the less complex nature of the fixed-price put feature, we are accreting the put feature based upon the number of days the Note is outstanding.

Under the provisions of EITF 00-19 "Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company's Own Stock" and SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”, as a result of entering into the Notes, we are required to record the derivatives at their fair values as of the inception date of the agreement and at a fair value of each subsequent balance sheet date and to classify all other non-employee stock options and warrants as derivative liabilities and mark them to market at each reporting date. Any change in the fair value will be recorded as non-operating, non-cash income or expense at each reporting date. If the fair value of the derivatives is lower at the subsequent balance sheet date, we will record a non-operating, non-cash income. In the event that we are required to convert the debentures into common stock, we are required to eliminat e the pro rata portion of the derivative liability associated with the conversion, with a corresponding entry recorded to additional paid-in-capital

Recently Issued Accounting Pronouncements

In December 2007, the FASB issued SFAS No. 141(R), “Business Combinations”. This Statement provides greater consistency in the accounting and financial reporting of business combinations. It requires the acquiring entity in a business combination to recognize all assets acquired and liabilities assumed in the transaction, establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed, and requires the acquirer to disclose the nature and financial effect of the business combination. SFAS No. 141(R) is effective for fiscal years beginning after December 15, 2008. We will adopt SFAS No. 141(R) no later than the first quarter of fiscal 2010 and are currently assessing the impact the adoption will have on its financial position and results of operations.

In December 2007, the FASB issued SFAS No. 160, ”Noncontrolling Interests in Consolidated Financial Statements”. This Statement amends Accounting Research Bulletin No. 51, Consolidated Financial Statements, to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. SFAS No. 160 is effective for fiscal years beginning after December 15, 2008. We will adopt SFAS No. 160 no later than the first quarter of fiscal 2010 and are currently assessing the impact the adoption will have on its financial position and results of operations.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities”, which permits entities to choose to measure at fair value eligible financial instruments and certain other items that are not currently required to be measured at fair value. The standard requires that unrealized gains and losses on items for which the fair value option has been elected be reported in earnings at each subsequent reporting date. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. We will adopt SFAS No. 159 no later than the first quarter of fiscal 2009. We are currently assessing the impact the adoption of SFAS No. 159 will have on its financial position and results of operations.

In September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans”, an amendment of FASB Statements No. 87, 88, 106, and 132(R). SFAS No. 158 requires company plan sponsors to display the net over- or under-funded position of a defined benefit postretirement plan as an asset or liability, with any unrecognized prior service costs, transition obligations or actuarial gains/losses reported as a component of other comprehensive income in shareholders’ equity. SFAS No. 158 is effective for fiscal years ending after December 15, 2006. We adopted the recognition provisions of SFAS No. 158 as of the end of fiscal 2007. The adoption of SFAS No. 158 did not have an effect on our financial position or results of operations.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”. SFAS No. 157 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America, clarifies the definition of fair value and expands disclosures about fair value measurements. SFAS No. 157 does not require any new fair value measurements. However, the application of SFAS No. 157 may change current practice for some entities. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. We will adopt SFAS No. 157 in the first quarter of fiscal 2009. We are currently assessing the impact that the adoption of SFAS No. 157 will have on its financial position and results of operations.

In July 2006, the FASB issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109” (FIN 48). This interpretation clarifies the application of SFAS No. 109, “Accounting for Income Taxes”, by defining a criterion that an individual tax position must meet for any part of the benefit of that position to be recognized in an enterprise’s financial statements and also provides guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006, but earlier adoption is permitted. The adoption will not have an impact on our financial position and results of operations.

RESULTS OF OPERATIONS

Our auditors have expressed that our financial statements raise substantial doubt about our ability to continue as a going concern we have accumulated deficit of $10,641,685 as of June 30, 2008 including losses of $1,094,455 and $3,402,499 for the years ended June 30, 2008 and 2007, respectively. In addition, we are in default on some of our notes payable.

In order to continue as a going concern and achieve a profitable level of operations, we will require, among other things, additional capital resources. We plan to raise additional capital through the sale of common stock and continuing the practice of issuing common stock as consideration for certain employee and marketing services. We are unable to provide any assurances that we will be successful in accomplishing any of these plans.

NET REVENUES

From June 30, 2007 to June 30, 2008 our net revenues increased from $186 to $2,318,670, representing an increase in $2,318,484. The increase in revenues was attributed to the closing of the Dalian Chuming Group, Co’s reverse merger by Redwood Capital. Redwood Capital received in excess of $2 million from the transaction, which closed on December 31, 2007. We expect to grow sales to $11.5 million ending June 30, 2009 as a result of the current projects in process and those which we are currently closing. Based on our pipeline of future business we are comfortable projecting $15 million in revenues ending June 30, 2010. The significant increases are mainly due to our increased marketing efforts and deal referrals from current clients.

GROSS PROFIT

From June 30, 2007 to June 30, 2008 our gross profit increased from $186 to $1,680,845, representing an increase in $1,680,659. These costs consist of professional fees associated with the closing process of the Dalian Chuming Co’s reverse merger by Redwood Capital. These include legal, accounting, broker-dealer and related expenses to prepare the client company for a U.S. listing and PIPE investment. We expect cost of sales to increase incrementally to $1.55 million in 2009 as a result of the expended project volume. These expenses are fixed costs associated with each project.

GENERAL AND ADMINISTRATIVE EXPENSES

General and Administrative Expenses increased by $256,621 from $141,774 to $398,395 in 2007 to 2008, respectively. General and administrative expenses consist primarily of administrative personnel costs, professional and consulting fees, local taxes as well as facilities expenses, travel and entertainment expenses, supplies expense and land use rights amortization.

The year-over-year increase in general and administrative expenses in 2007 and 2008 were due to an increase in hiring of management staff and frequent traveling between San Francisco and our China headquarters in Beijing, as well as travel to and from current and potential clients. Additionally, the increase was due to an increase in legal activity, most notably the Magellan settlement and the Merriman lawsuit.

PROFESSIONAL EXPENSES

Professional expenses decreases by $480,655 from $643,508 to $162,853 in 2007 and 2008, respectively. The decrease was due to certain stock awards which were made to the Board of Directors in the year ended June 30, 2007.

DERIVATIVE CHARGES

Derivative charges of $450,564 were recognized in 2008 resulting from the change in the fair value measured in the derivative liability of certain beneficial conversion features embedded in our notes payable. The borrowings provided working capital for SIVC as well as Pre-RTO investments into the client companies for the fiscal year ended June 30, 2008. In 2009, after an initial increase in the first quarter, we expect to reduce these charges as we have arranged more favorable lending terms with other investors and we plan to finance our projects internally as our equity positions become free trading, which should increase overall margins significantly.

FINANCING COSTS

Financing costs increased by $23,833 from $635,000 to $658,833 in 2007 and 2008, respectively, as we issued 272,391,430 shares of our common stock to previous Sino UJE shareholders to ensure that each received a retro-active equitable share of the purchase of Sino UJE in the year ended June 30, 2008. During the year ended June 30, 2007 we issued 15,666,667 shares to satisfy certain debts outstanding.

CONSULTING

Consulting costs decreased by $294,658 from $901,207 to $606,549 in 2007 and 2008, respectively, due to several stock awards presented to various independent contractors, as well as the managing director of Redwood Capital and Jim Bickel, CEO. To conserve as much operating capital as possible, we have issued common stock to enable the continued use of independent services and anticipate continuing this practice into 2009.

LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 2008, we had net working capital of $185,381 and cash of $112,326 compared to net working capital of ($104,259) and cash of $21,895 for the year ending June 30, 2007. The increase in working capital largely had to do with the receipt of cash and marketable securities worth $2,318,670 from advisory services provided by Redwood Capital to the Dalian Chuming Group, Ltd for its Alternative Public Offering in the year ended June 30, 2008. For its services provided, Redwood received both cash and securities. These securities are restricted from sale for a period of one year from the date of receipt. This restriction should lift in January 2009.

OPERATING ACTIVITIES

Net cash used in operating activities was $608,181 for the year ended June 30, 2008, compared to $954,757 for the year ended June 30, 2007. The primary reason for the decrease in cash used was due to the receipt of cash and marketable securities worth $2,318,670 from Redwood Capital’s advisory services provided to the Dalian Chuming Group Co., Ltd in its Alternative Public Offering during the year ended June 30, 2008. We anticipate utilizing the proceeds from sales of these securities held as available-for-sale to fund our operations in the fiscal year ending June 30, 2009.

INVESTING ACTIVITIES

Net cash provided by investing activities was $56,507 for the year ended June 30, 2008 compared to net cash provided by investing activities of $493,828 for the year ended June 30, 2007. The primary reason for the decrease in cash provided is that the cash proceeds from sales of marketable securities decreased in the eyar ended June 30, 2008. While we have securities with a fair market value of approximately $1.6 million at June 30, 2008, these marketable securities held as available-for-sale have restrictions surrounding the tradability of the marketable securities which will be lifted in January 2009.

FINANCING ACTIVITIES

Cash for financing activities was at $642,105 for the year ending June 30, 2008. For the year ending June 30, 2007, our cash for financing activities totaled $291,405. Such an increase had much to do with two notes payable we entered into in January and February of 2008. We borrowed a total of $470,105 to fund our operations as well as to provide bridge financing to cover costs associated with Redwood Capital’s current agreements with private Chinese companies which are in-progress at June 30, 2008. We anticipate increasing the total amount borrowed in the first half of the fiscal year ending June 30, 2009, and then re-paying all of the notes payable in the second half of the fiscal year ending June 30, 2009.

EFFECTS OF INFLATION

The impact of inflation and changing prices has not been significant on the financial condition or results of operations of either our company or our operating subsidiary.

IMPACTS OF NEW ACCOUNTING PRONOUNCEMENTS

In June 2008, the Financial Accounting Standards Board, or FASB, issued FASB Staff Position, or FSP, EITF 03-6-1, "Determining Whether Instruments Granted in Share-based Payment Transactions are Participating Securities." FSP EITF 03-6-1 addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting, and therefore need to be included in the earnings allocation in computing earnings per share under the two-class method as described in SFAS No. 128, EARNINGS PER SHARE. Under the guidance of FSP EITF 03-6-1, unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings-per-share pursuant to the two-class method. FSP EITF 03-6-1 is effective for financial statements issued for fiscal years beginning after December 15, 2008 and all prior-period earnings per share data presented shall be adjusted retrospectively. Early application is not permitted. We are assessing the potential impact of this FSP on our earnings per share calculation.

In June 2008, the FASB ratified EITF No. 07-5, "Determining Whether an Instrument (Or an Embedded Feature) is Indexed to an Entity's Own Stock." EITF 07-5 provides that an entity should use a two-step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument's contingent exercise and settlement provisions. EITF 07-5 is effective for financial statements issued for fiscal years beginning after December 15, 2008. Early application is not permitted. We are assessing the potential impact of this EITF on our financial condition and results of operations.

In June 2008, the FASB ratified EITF 08-4, "Transition Guidance for Conforming Changes to EITF Issue No. 98-5, "Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios." This issue applies to the conforming changes made to Issue 98-5 that resulted from Issue 00-27 and Statement 150. Conforming changes made to Issue 98-5 that resulted from Issue 00-27 and Statement 150 shall be effective for financial statements issued for fiscal years ending after December 15, 2008. Earliery application is permitted. The impact effect, if any, of applying the conforming changes, if any, shall be presented retrospectively with the cumulative-effect of the change being reported in retained earnings in the statement of financial position as of the beginning of the first period presented. We are assessing the potential impact of this EITF on our financial condi tion and results of operations.

In March 2008, the FASB issued SFAS No. 161, ”Disclosures About Derivative Instruments and Hedging Activities”, an amendment of FASB Statement No. 133, which requires additional disclosures about the objectives of the derivative instruments and hedging activities, the method of accounting for such instruments under SFAS No. 133 and its related interpretations, and a tabular disclosure of the effects of such instruments and related hedged items on our financial position, financial performance, and cash flows. SFAS No. 161 is effective for us beginning January 1, 2009. We are currently assessing the potential impact that adoption of SFAS No. 161 may have on our financial statements.

In December 2007, the FASB, issued SFAS No. 141 (revised 2007), "Business Combinations," which replaces SFAS No. 141. The statement retains the purchase method of accounting for acquisitions, but requires a number of changes, including changes in the way assets and liabilities are recognized in the purchase accounting. It also changes the recognition of assets acquired and liabilities assumed arising from contingencies, requires the capitalization of in-process research and development at fair value, and requires the expensing of acquisition-related costs as incurred. SFAS No. 141R is effective for us beginning July 1, 2009 and will apply prospectively to business combinations completed on or after that date.

In December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB 51," which changes the accounting and reporting for minority interests. Minority interests will be recharacterized as noncontrolling interests and will be reported as a component of equity separate from the parent's equity, and purchases or sales of equity interests that do not result in a change in control will be accounted for as equity transactions. In addition, net income attributable to the noncontrolling interest will be included in consolidated net income on the face of the income statement and, upon a loss of control, the interest sold, as well as any interest retained, will be recorded at fair value with any gain or loss recognized in earnings. SFAS No. 160 is effective for us beginning July 1, 2009 and will apply prospectively, except for the presentation and disclosu re requirements, which will apply retrospectively. We are currently assessing the potential impact that adoption of SFAS No. 160 would have on our financial position, cash flows, or results of operations.

In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities," which permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. SFAS No. 159 will apply to us on January 1, 2008. The adoption of SFAS No. 159 has not had a material impact on our financial position, cash flows, and results of operations.

In September 2006, the SEC issued SAB No. 108, "Considering the Effects of Prior Year Misstatements When Quantifying Misstatements in Current Year Financial Statements," which provides interpretive guidance on how the effects of the carryover or reversal of prior year misstatements should be considered in quantifying a current year misstatement. SAB No. 108 was effective for our fiscal year ended December 31, 2006. The adoption of SAB No. 108 has not had a material impact on our financial position, cash flows, or results of operations.

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements." SFAS No. 157 establishes a common definition for fair value to be applied to GAAP guidance requiring use of fair value, establishes a framework for measuring fair value, and expands disclosure about such fair value measurements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. The adoption of SFAS No. 157 has not had a material impact on our financial position, cash flows, or results of operations.

In July 2006, the FASB released FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes," or FIN 48. FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented, and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken in the course of preparing our tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax benefits of positions not deemed to meet the "more-likely-than-not" threshold would be booked as a tax expense in the current year and recognized as: a liability for unrecognized tax benefits; a reduction of an income tax refund receivable; a reduction of deferred tax asset; an increase in deferred tax liability; or a combination thereof. We adopted FIN 48 for the year ending December 31, 2007.

In February 2006, the FASB issued SFAS No. 155, "Accounting for Certain Hybrid Financial Instruments," an amendment of SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," and SFAS No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities." SFAS No. 155 permits fair value re-measurement for any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation. SFAS No. 155 is effective for us for all financial instruments acquired or issued after July 1, 2007. The adoption of SFAS No. 155 has not had a material effect on our financial position, results of operations or cash flows.

FACILITIES

Our headquarters are located in Danville, CA, where we rent an office at 4115 Blackhawk Plaza Circle, Suite 100 as our principal place of business. Rent is $1,250 due before the 5^th of each month and expires on September 30, 2009.

We currently maintain an office at Jianwai SOHO Building 10, Suite 1605 in the city of Dong San Huan Zhong Lu in the province of Beijing, China. Our costs are CNY 9,000 payable in the US dollar equivalent (approximately $1,305) in accordance to that day's rate at the Bank of China. Rent is due monthly before the 5^th of the month and the lease expires on March 9, 2009.

We also maintain a leased housing facility in Beijing. The landlord is Dabei Property Management Company, Ltd. of Sun Thirsty International Apartment Project. Rent is approximately $1,014 payable in cash (CNY 7,000). Rent is due quarterly and a deposit of CNY 28,000 was made on April 28, 2008. The lease expires on May 1, 2009.

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

The Company’s officers and directors are subject to the doctrine of corporate opportunities only insofar as it applies to business opportunities in which the Company has indicated an interest, either through its proposed business plan or by way of an express statement of interest contained in the Company’s minutes. If directors are presented with business opportunities that may conflict with business interests identified by the Company, such opportunities must be promptly disclosed to the Board of Directors and made available to the Company. In the event the Board shall reject an opportunity that was presented to it and only in that event, any of the Company’s officers and directors may avail themselves of such an opportunity. Every effort will be made to resolve any conflicts that may arise in favor of the Company. There can be no assurance, however, that these efforts will be successful.

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS

We intend to file for inclusion of our common stock on the Over-the-Counter Bulletin Board; however, there can be no assurance that FINRA or NASDAQ will approve the inclusion of the common stock. Prior to the effective date of this offering, our common stock was not traded. We are currently traded on the Pink Sheets under the symbol SIVC but are not a reporting company.

DIVIDENDS

The payment of dividends is subject to the discretion of our Board of Directors and will depend, among other things, upon our earnings, our capital requirements, our financial condition, and other relevant factors. We have not paid or declared any dividends upon our common stock since our inception and, by reason of our present financial status and our contemplated financial requirements, do not anticipate paying any dividends upon our common stock in the foreseeable future.

We have never declared or paid any cash dividends. We currently do not intend to pay cash dividends in the foreseeable future on the shares of common stock. We intend to reinvest any earnings in the development and expansion of our business. Any cash dividends in the future to common stockholders will be payable when, as and if declared by our Board of Directors, based upon the Board’s assessment of:


	•	our financial condition;
	•	earnings;
	•	need for funds;
	•	capital requirements;
	•	prior claims of preferred stock to the extent issued and outstanding; and
	•	other factors, including any applicable laws.

Therefore, there can be no assurance that any dividends on the common stock will ever be paid.

Executive Compensation

The following table provides certain summary information concerning the compensation earned by the named executive officers for the fiscal years ended June 30, 2008 and 2007, for services rendered in all capacities to S3 Investment Company, Inc.:


Name & Principal Position	Year	Salary ($)	Bonus ($)	Stock Awards ($)	Option Awards ($)	Non-Equity Incentive Plan Compensation ($)	Nonqualified Deferred Compensation Earnings ($)	All Other Compensation ($)	Total ($)
James Bickel, President and Chief Executive Officer(1)	2008	$96,000	-	$160,000(5)	-	-	-	-	$256,000
	2007	$83,000	-	$910,000(5)	-	-	-	-	$993,000
Gary Nerison, Secretary and Treasurer (2)	2008	$2,000	-	$23,000(5)	-	-	-	-	$25,000
	2007	$20,000	-	$28,000(5)	-	-	-	-	$48,000
Bruce Ruberg, Secretary and Treasurer(3)	2008	$30,000	-	$4,000(5)	-	-	-	-	$34,000
	2007	$30,000		$11,000(5)					$41,000
Kenneth Weidrich(4)	2007	-	-	-	-	-	-	-	$-

(1)

James Bickel was appointed as the Company’s Chief Executive Officer and President on January 26, 2006

(2)

Gary Nerison was appointed as the Company’s Secretary and Treasurer on August 16, 2007.

(3)

Bruce Ruberg served as Secretary and Treasurer from March 15, 2007 to August 16, 2007.

(4)

Kenneth Weidrich served as Secretary and Treasurer from October 1, 2004 to March 15, 2007. Mr. Wiedrich received compensation from Javelin Advisory Group, which had an administrative service contract with the Company.

(5)

Amount represents the estimated total fair market value of stock granted to Mr. Bickel and Mr. Nerison pursuant to SFAS 123R, as discussed in Note 3 to our audited financial statements for the year ended June 30, 2008. Additionally, Mr. Bickel and Mr. Nerison received stock compensation for serving as a member of the board of directors, which is shown in the Director Compensation below.

Employment Agreements

On January 26, 2007, we entered into an Employment Agreement with James Bickel, President. Pursuant to the Employment Agreement, Mr. Bickel will serve as President for an employment term through January 26, 2009. Mr. Bickel is entitled to an annual base salary of $96,000. Mr. Bickel is also Chairman of the Board of Directors of the Company. Mr. Bickel is responsible for the remittance of any appropriate withholding taxes as a result of this Employment Agreement.

Director Compensation

The following table provides compensation summary concerning the compensation earned by the named directors for the years ended June 30, 2007 and 2008:


DIRECTOR COMPENSATION
Name	Fees Earned or Paid in Cash	Stock Awards	Option Awards	Non-Equity Incentive Plan Compensation	Non-Qualified Deferred Compensation Earnings	All Other Compensation	Total
James Bickel 2008(1)	$24,000	-	-	-	-	-	$24,000
James Bickel 2007	$18,000	-	-	-	-	-	$18,000
Gary Nerison 2008(2)	$24,000	-	-	-	-	-	$24,000
Gary Nerison 2007	$17,000	-	-	-	-	-	$17,000
Manhong Liu 2008(3)	$24,000	$23,000	-	-	-	-	$47,000
Manhong Liu 2007	$6,000	$14,000	-	-	-	-	$20,000
Chris Bickel 2007(4)	-	-	-	-	-	-	-
Douglas Perkins 2007(5)	$11,000	-	-	-	-	-	$11,000

James Bickel was appointed Chairman of the Board of Directors on January 5, 2007.

Gary Nerison was appointed as a member of the Board of Directors on December 5, 2005.

Manhong Liu was appointed as a member of the Board of Directors on February 26, 2007.

Chris Bickel served as Chairman of the Board of Directors from September 11, 2004 to January 5, 2007.

Douglas Perkins served as a member of the Board of Directors from January 25, 2006 to February 21, 2007.

Directors' Agreements

On March 1, 2008, the Company entered into an agreement with James Bickel, whereby Mr. Bickel would serve as Chairman of the Company’s Board of Directors for a twelve-month term, subject to renewal upon agreement of the parties. During the term of this agreement, the Company will compensate Mr. Bickel $2,000 per month. Mr. Bickel will also be reimbursed for pre-approved expenses incurred on behalf of the Company including, but not limited to, travel expenses incurred to attend Board meetings.

On March 1, 2008, the Company entered into an agreement with Gary Nerison, whereby Mr. Nerison would serve on the Company’s Board of Directors for a twelve-month term, subject to renewal upon agreement of the parties. During the term of this agreement, the Company will compensate Mr. Nerison $2,000 per month. Mr. Nerison will also be reimbursed for pre-approved expenses incurred on behalf of the Company including, but not limited to, travel expenses incurred to attend Board meetings.

On March 1, 2008, the Company entered into an agreement with Manhong Liu, whereby Ms. Liu would serve on the Company’s Board of Directors for a twelve-month term, subject to renewal upon agreement of the parties. During the term of this agreement, the Company will compensate Ms. Liu $2,000 per month. Ms. Liu will also be reimbursed for pre-approved expenses incurred on behalf of the Company including, but not limited to, travel expenses incurred to attend Board meetings.

Stock Option Grants

S3 Investment Company did not grant any stock options to the executive officer during the most recent fiscal period ended June 30, 2008. S3 Investment Company has also not granted any stock options to the Executive Officers since incorporation.

Employee Stock Compensation Plans

On October 6, 2006, the Company registered 200,000,000 shares of common stock in accordance with their employee stock compensation plan on a form S-8. Since then, all 200,000,000 of those shares have been issued.

Board Committees

We do not currently have any committees of the Board of Directors, as our Board consists of three members. Additionally, due to the nature of our intended business, the Board of Directors does not foresee a need for any committees in the foreseeable future.

Indemnification

Section 317 of the California General Corporations Law authorizes a court to award, or a corporation's board of directors to grant, indemnity to directors and officers who are parties or are threatened to be made parties to any proceeding (with certain exceptions) by reason of the fact that the person is or was an agent of the corporation, against expenses, judgments, fines, settlements and other amounts actually and reasonably incurred in connection with the proceeding if that person acted in good faith and in a manner the person reasonably believed to be in the best interests of the corporation. Section 204 of the law provides that this limitation on liability has no effect on a director's liability (a) for acts or omissions that involve intentional misconduct or a knowing and culpable violation of law, (b) for acts or omissions that a director believes to be contrary to the best interests of the corporation or its shareholders or that i nvolve the absence of good faith on the part of the director, (c) for any transaction from which a director derived an improper personal benefit, (d) for acts or omissions that show a reckless disregard for the director's duty to the corporation or its shareholders in circumstances in which the director was aware, or should have been aware, in the ordinary course of performing a director's duties, of a risk of a serious injury to the corporation or its shareholders, (e) for acts or omissions that constitute an unexcused pattern of inattention that amounts to an abdication of the director's duty to the corporation or its shareholders, (f) under Section 310 of the law (concerning contracts or transactions between the corporation and a director), or (g) under Section 316 of the law (directors' liability for improper dividends, loans and guarantees). Section 317 does not extend to acts or omissions of a director in his capacity as an officer. Further, Section 317 has no effect on claims arising under federal or state securities laws and does not affect the availability of injunctions and other equitable remedies available to our shareholders for any violation of a director's fiduciary duty to us or our shareholders. Although the validity and scope of the legislation underlying Section 317 have not yet been interpreted to any significant extent by the California courts, Section 317 may relieve directors of monetary liability to us for grossly negligent conduct, including conduct in situations involving attempted takeovers of our company.

In accordance with Section 317, our articles of incorporation eliminate the liability of each of our directors for monetary damages to the fullest extent permissible under California law. Our articles further authorize us to provide indemnification to our agents (including our officers and directors), subject to the limitations set forth above. The articles and bylaws further provide for indemnification of our corporate agents to the maximum extent permitted by California law. Additionally, we maintain insurance policies which insure our officers and directors against certain liabilities.

The foregoing summaries are necessarily subject to the complete text of the statute, our articles, our bylaws and the agreements referred to above and are qualified in their entirety by reference thereto.

ANTI-TAKEOVER EFFECTS OF CALIFORNIA LAW AND OUR ARTICLES OF INCORPORATION AND BYLAWS

Certain provisions of California law, our articles of incorporation and our bylaws contain provisions that could have the effect of delaying, deferring and discouraging another party from acquiring control of us. These provisions, which are summarized below, are expected to discourage coercive takeover practices and inadequate takeover bids. These provisions are also designed to encourage persons seeking to acquire control of us to first negotiate with our board of directors. We believe that the benefits of increased protection of our potential ability to negotiate with an unfriendly or unsolicited acquiror outweigh the disadvantages of discouraging a proposal to acquire us because negotiation of these proposals could result in an improvement of their terms.

The ability to authorize undesignated preferred stock makes it possible for our board of directors to issue preferred stock with voting or other rights or preferences that could impede the success of any attempt to acquire us. These provisions may have the effect of deferring hostile takeovers or delaying changes in control or management of S3. In addition, the preferred stock could have the effect of delaying, deferring and discouraging another party from acquiring control of S3.

The provisions of California law, our articles of incorporation and our bylaws could have the effect of discouraging others from attempting hostile takeovers and, as a consequence, they may also inhibit temporary fluctuations in the market price of our common stock that often result from actual or rumored hostile takeover attempts. These provisions may also have the effect of preventing changes in our management. It is possible that these provisions could make it more difficult to accomplish transactions that stockholders may otherwise deem to be in their best interests.

Transfer Agent

The transfer agent for the common stock will be Transfer Online, Inc, 317 SW Alder Street, 2nd Floor, Portland, OR 97204, phone: 503.227.2950, fax: 503.227.6874.

SHARES ELIGIBLE FOR FUTURE SALE

Future sales of substantial amounts of common stock in the public market could adversely affect market prices prevailing from time to time.

Upon completion of this offering, we will have outstanding an aggregate of 1,541,535,311 of common stock will be outstanding. Of these shares, 1,541,535,311 will be freely tradable without restriction or further registration under the Securities Act, unless such shares are purchased by individuals who become “affiliates” as that term is defined in Rule 144 under the Securities Act, as the result of the securities they acquire in this offering which provide them, directly or indirectly, with control or the capacity to control us.

The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in “penny stocks.” Penny stocks generally are equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver to the prospective purchaser a standardized risk disclosure document prepared by the Securities and Exchange Commission that provides information about penny stocks and the nature and level of risks in the penny stock market. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from such rules, the broker-dealer m ust make a special written determination that the penny stock is a suitable investment for the prospective purchaser and receive the purchaser’s written agreement to the transaction. Furthermore, subsequent to a transaction in a penny stock, the broker-dealer will be required to deliver monthly or quarterly statements containing specific information about the penny stock. It is anticipated that our common stock will be traded on the OTC Bulletin Board at a price of less than $5.00. In this event, broker-dealers would be required to comply with the disclosure requirements mandated by the penny stock rules. These disclosure requirements will likely make it more difficult for investors in this offering to sell their common stock in the secondary market.

INDEX TO FINANCIAL STATEMENTS


Report of Independent Certified Public Accountant	F-1
Balance Sheets	F-2
Statements of Operations	F-3
Statements of Changes in Stockholders’ Equity	F-4
Statements of Cash Flows	F-5
Notes to Financial Statements	F-6 – F-25

FINANCIAL STATEMENTS

S3 INVESTMENT COMPANY, INC.

FOR THE FISCAL YEARS ENDED JUNE 30, 2008 and 2007

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of S3 Investment Company, Inc.

We have audited the accompanying balance sheet of S3 Investment Company, Inc. as of June 30, 2008 and 2007, and the related statements of operations and comprehensive income, stockholders’ equity, and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits 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 audit 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 includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant es timates 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 financial statements referred to above present fairly, in all material respects, the financial position of S3 Investment Company, Inc. at June 30, 2008 and 2007, and the results of its operations and cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that S3 Investment Company, Inc. will continue as a going concern. As discussed in Note 2 to the financial statements, S3 Investment Company, Inc. has suffered recurring losses from operations and has a net capital deficiency that raises substantial doubt about the company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/Chisholm, Bierwolf & Nilson

Chisholm, Bierwolf & Nilson, LLC

Bountiful, UT

November 13, 2008

F-1


S3 Investment Company, Inc.
Consolidated Balance Sheets
ASSETS
			June 30,		June 30,
			2008		2007
Current Assets
	Cash	$	112,326	$	21,895
	Prepaid expense		298		970
	Marketable Securities - available for sale		1,643,617		52,074
	Deferred Transaction Costs		119,698		204,343
Total Current Assets			1,875,939		279,282
Property - office equipment net of depreciation			2,227		2,778
Other Assets
	Goodwill		45,000		45,000
Total Other Assets			45,000		45,000
	Total Assets	$	1,923,166	$	327,060
LIABILITIES AND STOCKHOLDERS' EQUITY/(DEFICIT)
Current Liabilities
	Accounts payable	$	169,393	$	79,944
	Accrued interest		36,442		4,876
	Accrued Expenses		23,872		6,410
	Judgments Payable		152,717		262,611
	Notes Payable (see Note 8)		29,700		29,700
	Convertible Notes Payable, net of unamortized discount (see Note 9)		376,404		-
	Derivative Liability (see Note 10)		902,027
Total Current Liabilities			1,690,555		383,541
	Total Liabilities		1,690,555		383,541
Commitments (see Note 12)
Stockholders' Equity/(Deficit)
	Preferred Stock, Authorized 100,000,000 Shares, $0.001 Par Value, 13,000,000		13,000		13,000
	Common Stock, Authorized 9,900,000,000 Shares, $0.001 Par Value, 1,436,535,311 Shares Issued and Outstanding, (retroactively stated) (see Note 5)		1,436,535		159,210
	Additional Paid in Capital		9,424,761		9,287,254
	Accumulated Comprehensive Income		-		31,285
	Accumulated Deficit		(10,641,685)		(9,547,230)
Total Stockholders' Equity/(Deficit)			232,611		(56,481)
	Total Liabilities and Stockholders' Equity/(Deficit)	$	1,923,166	$	327,060
The accompanying notes are an integral part of these consolidated financial statements.

F-2


S3 Investment Company, Inc. Consolidated Statements of Operation and Comprehensive Income
		For the Twelve Months Ended June 30,
		2008		2007
Revenues	$	2,318,670	$	186
Total Revenues		2,318,670		186
Project-Related Costs		637,825		-
Gross Profit		1,680,845		186

Operating Expenses
Administrative fees		30,129		215,638
Consulting		606,549		901,207
Depreciation expense		1,632		2,980
Financing costs		658,833		635,000
Interest expense		637,068		2,433
Investor relations		55,879		73,512
Professional fees		162,853		643,508
General & Administrative expense		398,395		141,774
Total Operating Expenses		3,001,902		2,616,052
Net Gain (Loss) from operations		(1,321,057)		(2,615,866)
Other Income (Expense)
Derivative charges		(450,564 )		-
Loss on sale of asset		(500)		(2,365)
Realized gain on sale of stock		36,798		22,416
Total Other Income (Expense )		(414,266)		20,051
Net Gain (Loss) from Continuing Operations		(1,284,759)		(2,595,815)
Discontinued Operations
Loss on abandonment of entity				(726,925)
Recovery/(Loss) from discontinued operations		190,304		(79,759)
Total Gain (Loss) from Discontinued Operations		190,304		(806,684)

Income (Loss) Before Income Taxes		(1,094,455)		(3,402,499)
Income Tax Expense		-		-
Net Gain (Loss)	$	(1,094,455)	$	(3,402,499)
Net loss from continuing operations per share	$	(0.00)	$	(0.07)
Net loss from discontinued operations per share	$	0.00	$	(0.02)
Net loss per share	$	(0.00)	$	(0.09)
Weighted Average Shares Outstanding		847,791,275		36,591,502
Comprehensive Income (Loss)


Net Gain (Loss)	$	(1,094,455)	$	(3,402,499)
Unrealized gain (loss) from investments held for sale		-		31,285
Net Accumulated Other Comprehensive Income	$	(1,094,455)	$	(3,371,214)
The accompanying notes are an integral part of these consolidated financial statements.

F-3


S3 Investment Company, Inc. Consolidated Statements of Stockholders' Equity (Deficit)
												Accumulated
	Preferred Stock			Common Stock				Additional Paid in		Subscription		Other Comprehensive		Minority		Retained Earnings
	Shares		Amount	Shares		Amount		Capital		Receivable		Income (Loss)		Interest		(Deficit)
Balance June 30, 2006	13,000,000	$	13,000	13,333,333	$	13,333	$	7,048,086	$	(40,491)	$	207,707	$	585,849	$	(6,144,731)
Cash received for stock subscription	-		-	-		-		-		40,491		-				-
Stock issued for services	-		-	87,710,000		87,710		1,435,754		-		-		-		-
Common stock issued for cash	-		-	42,500,000		42,500		208,414		-		-		-		-
Common stock issued for cancellation of debt	-		-	15,666,667		15,667		595,000		-		-		-		-
Net unrealized loss from investments held for sale for the period ended June 30, 2007	-		-	-		-		-		-		(176,422)		-		-
Net Loss for the period ended June 30, 2007	-		-	-		-		-		-		-		(585,849)		(3,402,499)
Balance June 30, 2007	13,000,000	$	13,000	159,210,000	$	159,210	$	9,287,254	$	-	$	31,285	$	-		(9,547,230)
Common stock issued for services	-		-	458,500,000		458,500		43,000		-		-		-		-
Common stock issued for cash	-		-	472,392,571		472,393		(300,393)		-		-		-		-
Common stock issued in compliance with anti-dilutive provisions	-		-	49,041,310		49,041		132,412		-		-		-		-
Common stock issued for litigation settlement (see Note 5)	-		-	25,000,000		25,000		75,000		-		-		-		-
Common stock issued for financing	-		-	272,391,430		272,391		187,488		-		-		-		-
Net unrealized loss from investments held for sale for the period ended June 30, 2008	-		-	-		-		-		-		(31,285)		-		-
Net Loss for the period ended June 30, 2008	-		-	-		-		-		-		-		-		(1,094,455)
Balance June 30, 2008	13,000,000	$	13,000	1,436,535,311	$	1,436,535	$	9,424,761	$	-	$	-		-	$	(10,641,685)
The accompanying notes are an integral part of these consolidated financial statements.

F-4


S3 Investment Company, Inc.
Consolidated Statements of Cash Flows
		For the Twelve Months Ended June 30,
		2008		2007

Cash Flows from Operating Activities:
Net Gain (Loss)	$	(1,094,455)	$	(3,402,499)
Adjustments to Reconcile Net Loss to Net Cash Provided by Operations:
Depreciation and amortization		1,632		(2,980)
Accretion of interest		435,996		-
Change in fair value of derivative liability		612,331		-
Abandonment of entity		-		1,202,191
Stock issued for services		501,500		1,523,464
Stock issued for litigation settlement		100,000		-
Issuance of common stock for financing activities		459,879		500,667
Issuance of stock in accordance with prior-year litigation settlement		181,453		-
Marketable securities received for services		(1,883,618)		-
Realized gain on investments		(36,798)		(22,416)
Minority interest		-		(585,849)
Changes in Operating Assets and Liabilities:
Decrease in prepaid expenses		672		51,922
Increase in receivables		-		538,194
Increase (decrease) in deferred transaction costs		84,641		(204,343)
Increase (decrease) in accounts payable and accrued liabilities		28,586		(553,108)
Net Cash Provided (Used) by Operating Activities		(608,181)		(954,757)
Cash Flows from Investing Activities:
Proceeds from sale of marketable securities		57,587		477,920
Purchase of office equipment		(1,580)		-
Retirement of office equipment		500		15,908
Net Cash Provided by Investing Activities		56,507		493,828
Cash Flows from Financing Activities:
Payments made on accrued expenses		-		40,491
Issuance of notes payable		590,105		-
Repayment of note payable		(120,000)		-
Proceeds from sale of common stock for cash		172,000		250,914
Net Cash Provided by Financing Activities		642,105		291,405
Increase (decrease) in Cash		90,431		(169,524)
Cash and Cash Equivalents at Beginning of Period		21,895		191,419


Cash and Cash Equivalents at End of Period	$	112,326	$	21,895
Supplemental cash flow information:
Cash Paid For:
Interest	$	6,945	$	2,433
Income Taxes	$	-	$	-
Non-Cash Investing and Financing Activities:
Stock issued for Services	$	501,500	$	1,523,464
Stock issued for litigation settlements	$	281,453	$	-
Stock issued for financing activities	$	459,879	$	500,667
Marketable securities transferred for interest payment	$	240,000	$	-

F-5

S3 INVESTMENT COMPANY, INC.

Notes to the Consolidated Financial Statements

June 30, 2008 and 2007

Note 1 – Organization and Business Activities

This summary of significant accounting policies of S3 Investment Company, Inc. is presented to assist in understanding the Company's financial statements. The financial statements and notes are representations of the Company's management who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the consolidated financial statements.

S3 Investment Company, Inc. was incorporated under the laws of the State of California. The Company originally incorporated with the name of Retail Windows, Inc. on April 19, 2000 to engage in any lawful activity as shall be appropriate under laws of the State of California. On June 30, 2001 it amended its Articles of Incorporation to change name to Axtion Foods, Inc. Prior to April 2003, Axtion Foods, Inc. was engaged in the development, manufacturing and distribution of health bars and health drinks. The business plan was not fully implemented and on April 16, 2003 it changed its name to S3I Holdings, Inc. and acquired 100% of the issued and outstanding capital stock of Securesoft Systems, Inc., a Delaware corporation, making Securesoft Systems, Inc (Securesoft) a wholly-owned subsidiary of the Company.

On April 12, 2004 the Company's Board of Directors elected to be regulated as a business development company under the Investment Company Act of 1940. As a business development company ("BDC"), the Company was required to maintain at least 70% of its assets invested in "eligible portfolio companies", which are loosely defined as any domestic company which is not publicly traded or that has assets less than $4 million. Based on the BDC format, Securesoft became the first portfolio company. The Company added two new portfolio Investments in November, 2004: Sino UJE, Ltd. (‘Sino’), a Hong Kong company, and Redwood Capital, Inc., a privately held investment advisory group.

In August 2005, the Board of Directors determined that the Company’s continued focus on operations outside the United States, and the limited nature of the Company’s portfolio, did not lend itself to the structure of a business development company nor require reporting under the Investment Company Act of 1940. Further, the Company’s management had several discussions with the Securities and Exchange Commission during which the Commission expressed the opinion that the Company’s capital structure was in violation of certain provisions of the Investment Company Act of 1940; namely, that the Company’s preferred stock was issued in violation of Section 18 and convertible debentures were issued in violation of Section 61. On August 26, 2005, the Board of Directions approved a motion to withdraw the Company’s election to be treated as Business Development Company under the 1940 Ac t and on April 5, 2006 the Company’s shareholders approved the withdrawal petition. On April 6, 2006, the Company filed an N-54C, which formally withdrew the Company’s BDC election.

As mentioned above, the Company acquired 51% of the common stock of Sino during November, 2004. Utilizing an extensive distribution network in China, Sino distributed medical and industrial supplies for a group of Original Equipment Manufacturers (OEM’s) in Europe and the US that were exclusively represented in China by Sino. In November 2004, Sino was acquired from the Ya-Sheng Group for 4.9% of the outstanding stock of the company. According to the terms of the acquisition, the 4.9% non-dilutive provision was effective through July 2008. As a result, during the fiscal years ending June 30, 2007 and 2008, the Company issued 49,041,310 additional shares to the Ya-Sheng Group. During the third quarter of 2007 the Company lost control of Sino UJE, Ltd. Accordingly, the Company recorded a loss of $(726,925) from the abandonment of Sino for the fiscal year ending June 30, 2007. S eparately, the Company recorded a loss of $(79,759) from the discontinued operations of Sino for the fiscal year ended June 30, 2007 and a recovery of $190,304 for the fiscal year ended June 30, 2008.

F-6

The Company’s sole operating business is its wholly-owned subsidiary, Redwood Capital, Inc., which was acquired during November, 2004. Redwood Capital, Inc. provides specialized advisory and capital market services primarily to clients in China. The Company’s focus is to introduce private companies in China to the American capital markets through its extensive investment banking relationships.

Note 2 - Going Concern

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the company as a going concern. However, the Company has an accumulated deficit of $(10,641,685) as of June 30, 2008 including losses of $(1,094,455) and $(3,402,499) for the years ended June 30, 2008 and 2007, respectively. In addition, the Company is in default on its promissory notes. These conditions raise substantial doubt as to the Company’s ability to continue as a going concern.

In order to continue as a going concern and achieve a profitable level of operations, the Company will require, among other things, additional capital resources. Management’s plans to obtain such resources for the Company include raising additional capital through the sale of common stock and continuing the practice of issuing common stock as consideration for certain employee and marketing services. Management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraphs and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Note 3 - Summary of Significant Accounting Policies

Principles of Consolidation

The accompanying consolidated financial statements for the years ended June 30, 2008 and 2007 include the accounts of S3 Investment Company, Inc. and Redwood Capital, Inc. (collectively the “Company”). All significant inter-company accounts and transactions have been eliminated in consolidation.

Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

F-7

Revenue recognition

Revenues are recognized from financial services contracts as amounts become billable per their respective contract terms in accordance with Staff Accounting Bulletin (“SAB”) 101, as amended by SAB 104. The Company considers amounts to be earned once evidence of an arrangement has been obtained, services are delivered, fees are fixed or determinable, and collectability is reasonably assured. The Company’s sole revenue generating operation is through its subsidiary, Redwood Capital. Revenue is generated by providing services to assist private Chinese companies through the various stages of the process of a reverse merger into a publicly-traded shell, and concurrent capital funding (collectively, an Alternate Public Offering, or “APO”). As the total fees to be paid are typically provided as a percentage of the total capital raised from each APO, the fe es are typically not fixed until the completion of such transactions. As such, the Company recognizes revenue from each transaction upon the successful closing of each APO.

Deferred Transaction Costs

Once a contractual agreement has been reached, any contractual advances the Company makes on behalf of its clients to certain third parties are deferred during the contractual period and expensed once each transaction has closed. Once expensed, these deferred costs are included in cost of sales.

Cash and cash equivalents

The Company considers all liquid investments with a maturity of three months or less from the date of purchase that are readily convertible into cash to be cash equivalents.

The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents.

Concentration of Risk

All of the Company’s revenues are derived from transactions in foreign countries. The economic and political instability of some foreign countries may affect the ability of the Company and its customers to complete any Alternative Public Offerings currently in progress. Such circumstances could cause a possible loss of sales, which would affect operating results adversely.

During the year ended June 30, 2008 one single customer, Dalian Chuming Group, Ltd., represented more than 10% of total net sales for the years then ended.

Marketable Securities

F-8

Pursuant to Statement of Financial Accounting Standard No. (“SFAS”) 115 “Accounting for Certain Investments in Debt and Equity Securities” management determines the appropriate classification of investment securities at the time they are acquired and evaluates the appropriateness of such classification at each balance sheet date. At June 30, 2008 and at June 30, 2007, all marketable securities were classified as available-for-sale-securities and appropriately stated at fair value based on quoted market prices and other observable market data, with any unrealized holding gains and losses, net of the related deferred tax effect, reported as a separate component of stockholders' equity. Realized gains and losses from sales of securities available for sale are determined on a specific identification basis and are included in other income and expense.

Property – office equipment

Long-Lived Assets

Basic and Diluted Net Income per Share

F-9


		Income (Loss)	Shares	Per Share
		(numerator)	(denominator)	Amount
Basic EPS
For the year ended June 30, 2008
Net loss from continuing operations per share	$	(1,284,759.00)	847,791,275	($0.00)
Net loss from discontinued operations per share	$	190,304.00	847,791,275	$0.00
Net loss per share	$	(1,094,455.00)	847,791,275	($0.00)
For the year ended June 30, 2007
Net loss from continuing operations per share	$	(2,595,815.00)	36,591,502	($0.07)
Net loss from discontinued operations per share	$	(806,684.00)	36,591,502	($0.02)
Net loss per share	$	(3,402,499.00)	36,591,502	($0.09)

Stock-based compensation

The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of SFAS 123(R) and the Emerging Issues Task Force consensus in Issue No. 96-18 ("EITF 96-18"), "Accounting for Equity Instruments that are Issued to Other Than Employees for Acquiring or in Conjunction with Selling, Goods or Services". Common stock issued to non-employees in exchange for services is accounted for based on the fair value of the services received.

The Company had no outstanding stock options or warrants at June 30, 2008 or at June 30, 2007.

Fair value of financial instruments

SFAS No. 107, “Disclosures about Fair Value of Financial Instruments”, requires that the Company disclose estimated fair values of financial instruments. The carrying amounts reported in the statements of financial position for current assets and current liabilities qualifying as financial instruments are a reasonable estimate of fair value.

Income Taxes

The Company accounts for income taxes using the liability method as required by SFAS No. 109, “Accounting for Income Taxes”. Under this method, deferred tax assets and liabilities are determined based on differences between their financial reporting and tax basis of assets and liabilities. The Company was not required to provide for a provision for income taxes for the periods ended June 30, 2008 and 2007, as a result of net operating losses incurred during the periods. As of June 30, 2008, the Company has available approximately $1,941,000 of net operating losses ("NOL") available for income tax purposes that may be carried forward to offset future taxable income, if any. These carryforwards expire in various years through 2028. No tax benefit will be recorded until the Company generates taxable income.

F-10

Deferred tax assets and the valuation account is as follows at June 30, 2008 and 2007:


	June 30,
		2008		2007
NOL Carryforward	$	660,000	$	982,600
Valuation Allowance		(660,000)		(982,600)
Total	$	-	$	-

The components of current income tax expense as of June 30, 2008 and 2007 respectively are as follows:


		As of June 30,
		2008		2007
Current federal tax expense	$	-	$	-
Current state tax expense		-		-
Change in NOL benefits		(322,600)		346,700
Change in valuation allowance		322,600		(346,700)
Income tax expense	$	-	$

The income tax provision differs from the amount of income tax as determined by applying the U.S federal income tax rate of 34% to pretax income from operations due to the following:


		For the years ended June 30,
		2008		2007
Net Loss	$	(372,114)	$	(1,156,849)
NOL used		(322,688)		-
Permanent effects		694,804		810,154
Taxable temporary differences		-		-
Deductible temporary differences		-		-
Change in deferred tax asset valuation		-		(346,695)

Net tax provision	$	-	$	-

F-11

Research and development costs

During the last two fiscal years, the Company did not spend any funds on research and development activities.

Derivative Financial Instruments

The Company’s derivative financial instruments consist of embedded derivatives related to the Convertible Notes Payable (“the Notes”) entered into in January, 2008. These Notes contain interrelated embedded derivatives, which include a variable conversion feature, a variable interest feature, and a fixed-price put feature.

Based on the complex nature of the terms of the variable conversion and interest features, the Company chose to employ a Black-Scholes model to value these features. Due to the less complex nature of the fixed-price put feature, the Company is accreting the put feature based upon the number of days the Note is outstanding

Under the provisions of EITF 00-19 "Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company's Own Stock" and SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”, as a result of entering into the Notes, the Company is required to record the derivatives at their fair values as of the inception date of the agreement and at a fair value of each subsequent balance sheet date and to classify all other non-employee stock options and warrants as derivative liabilities and mark them to market at each reporting date. Any change in the fair value will be recorded as non-operating, non-cash income or expense at each reporting date. If the fair value of the derivatives is lower at the subsequent balance sheet date, the Company will record a non-operating, non-cash income. In the event that the Company is required to convert the debentur es into common stock, the Company is required to eliminate the pro rata portion of the derivative liability associated with the conversion, with a corresponding entry recorded to additional paid-in-capital

Recently Issued Accounting Pronouncements

In December 2007, the FASB issued SFAS No. 141(R), “Business Combinations”. This Statement provides greater consistency in the accounting and financial reporting of business combinations. It requires the acquiring entity in a business combination to recognize all assets acquired and liabilities assumed in the transaction, establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed, and requires the acquirer to disclose the nature and financial effect of the business combination. SFAS No. 141(R) is effective for fiscal years beginning after December 15, 2008. The Company will adopt SFAS No. 141(R) no later than the first quarter of fiscal 2010 and are currently assessing the impact the adoption will have on its financial position and results of operations.

In December 2007, the FASB issued SFAS No. 160, ”Noncontrolling Interests in Consolidated Financial Statements”. This Statement amends Accounting Research Bulletin No. 51, Consolidated Financial Statements, to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. SFAS No. 160 is effective for fiscal years beginning after December 15, 2008. The Company will adopt SFAS No. 160 no later than the first quarter of fiscal 2010 and are currently assessing the impact the adoption will have on its financial position and results of operations.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities”, which permits entities to choose to measure at fair value eligible financial instruments and certain other items that are not currently required to be measured at fair value. The standard requires that unrealized gains and losses on items for which the fair value option has been elected be reported in earnings at each subsequent reporting date. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. The Company will adopt SFAS No. 159 no later than the first quarter of fiscal 2009. The Company is currently assessing the impact the adoption of SFAS No. 159 will have on its financial position and results of operations.

F-12

In September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans”, an amendment of FASB Statements No. 87, 88, 106, and 132(R). SFAS No. 158 requires company plan sponsors to display the net over- or under-funded position of a defined benefit postretirement plan as an asset or liability, with any unrecognized prior service costs, transition obligations or actuarial gains/losses reported as a component of other comprehensive income in shareholders’ equity. SFAS No. 158 is effective for fiscal years ending after December 15, 2006. The Company adopted the recognition provisions of SFAS No. 158 as of the end of fiscal 2007. The adoption of SFAS No. 158 did not have an effect on the Company’s financial position or results of operations.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”. SFAS No. 157 establishes a framework for measuring fair value in accounting principles generally accepted in the United States, clarifies the definition of fair value and expands disclosures about fair value measurements. SFAS No. 157 does not require any new fair value measurements. However, the application of SFAS No. 157 may change current practice for some entities. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. the Company will adopt SFAS No. 157 in the first quarter of fiscal 2009. The Company is currently assessing the impact that the adoption of SFAS No. 157 will have on its financial position and results of operations.

Note 4 – Fixed Assets

Provision for depreciation of property and equipment is computed on the straight-line method for financial reporting purposes. Depreciation is based upon estimated useful lives as follows:


Fixed Asset Schedule	June 30, 2008	June 30, 2007
Fixed Assets:
Equipment	$ 5,185	$ 4,605
Less Depreciation	(2,958)	(1,827)

Net Equipment	$ 2,227	$ 2,778

Depreciation for the periods ending June 30, 2008 and 2007 was $1,632 and $2,980, respectively.

Maintenance, repairs, and renewals which neither materially add to the value of the property and equipment nor appreciably prolong its life are charged to expense as incurred.

Note 5 - Stockholders’ Equity (Deficit)

F-13

Common Stock

During the fiscal year ended June 30, 2007, the Company had the following common stock transactions:

86,376,666 shares were issued for services totaling $1,323,464. The shares were issued based upon the exemption from registration found in Section 4(2) of the Securities Act.

666,667 shares of common stock were issued for $110,000 in services under a Registration Statement on Form S-8 filed on August 9, 2006.

666,667 shares of common stock were issued for $90,000 in services under a Registration Statement on Form S-8 filed on October 6, 2006.

42,500,000 shares were issued for cash totaling $250,914. These shares were issued in reliance on the exemption from registration provided by Rule 504 of Regulation D.

The Company agreed to the cancellation of 4,000,000,000 warrants that were issued on June 2, 2006. As consideration to the holder of the warrants, the Company agreed to repay $100,000 that the warrant holder had advanced to the Company under the warrant contract and issue 666,667 shares of restricted common stock. As a result of this transaction, the Company recorded financing costs of $110,000 representing the fair market value of the securities issued. The Company executed a promissory note for the $100,000 that was due in four equal monthly payments of $25,000 starting on February 1, 2007 and ending on May 1, 2007. In addition, the warrant holder retained the 666,667 shares of common stock previously issued as collateral against the monies advanced. On March 15, 2007, the Company entered into a Settlement Agreement with Sequoia International, Inc., which had purchased the $100,000 past due note payable fro m the warrant holder. The Company agreed to settle by issuing a total of 15,000,000 shares of its common stock to satisfy this transaction. These shares were issued pursuant to Section 3(a)(10) of the Securities Act of 1933, as amended. As a result of this transaction, the Company recorded settlement costs of $525,000 representing the difference between the amount of debt and the value of the securities issued. The Company and Sequoia agreed that the shares would be issued into an escrow account to prevent their immediate resale into the market. Under the terms of the escrow, Sequoia may not obtain any shares from escrow if the release of such escrow shares would result in Sequoia becoming the beneficial owner of more than 4.9% of the Company’s common stock.

During the fiscal year ended June 30, 2008, the Company had the following common stock transactions:

458,500,000 shares were issued for services totaling $1,483,250. The shares were issued based upon the exemption from registration found in Section 4(2) of the Securities Act.

On June 12, 2008, James Bickel, Chief Executive Officer, transferred 25,000,000 shares of his seasoned stock to Magellan Financial Group to satisfy $111,599 in past due debt. On June 19, 2008, the Company reissued 25,000,000 shares to James Bickel to replace the shares he transferred. These shares were valued at $175,000 and issued in reliance on the exemption from registration found in Section 4(2) of the Securities Act.

F-14

472,392,571 shares were issued for cash totaling $172,000. These shares were issued in reliance on the exemption from registration provided by Rule 504 of Regulation D.

272,391,430 shares were issued for finance costs totaling $459,879. Prior to the realization of loss of control of the Sino UJE entity, the Board of Directors had authorized the Company to issue common shares to minority interest owners of Sino UJE. It was discovered subsequent to the purchase of Sino UJE, and prior to the realization of loss of control of Sino UJE, that these minority interest owners had not received an equitable share of the purchase of Sino UJE by the Company. This issuance was made to correct the oversight. The shares were issued based upon the exemption from registration found in Section 4(2) of the Securities Act.

Preferred Stock

The Company has 100,000,000 shares of preferred stock authorized, of which 13,000,000 shares were outstanding in two different designated series as of June 30, 2008 and 2007.

Series C Preferred Stock, of which 1,000,000 shares are designated and 1,000,000 shares are outstanding, was issued to James Bickel, Chief Executive Officer, in May 2006 as consideration for personally guaranteeing an advance on a warrant purchase agreement. The Series C Preferred shares entitle the holder to 1,000 votes per share on all shareholder matters. Subsequent to the fiscal year ended June 30, 2008, the Board of Directors unanimously voted and approved to cancel the Series C Preferred Stock, as such action was in the best interest of the Company.

Stock Subscription

During the year ended June 30, 2006, there were 115,687,568 shares issued into escrow pending the receipt of $40,491 payment, during the year ended June 30, 2007 the Company received payment in full.

Warrants

F-15

During the year ended June 30, 2007, the Company issued 100,000,000 shares of restricted common stock as part of the consideration for the cancellation of 4,000,000,000 warrants the Company had issued the previous year. As a result of this transaction, the Company recorded financing costs of $110,000 representing the fair market value of the securities issued.

The following table summarizes the warrant activity during the years ended June 30, 2008 and 2007:


	For the Year Ended June 30,
	2008		2007
	Shares	Weighted Average Exercise Price	Shares	Weighted Average Exercise Price
Outstanding at the beginning of the year	-	-	4,000,000,000	$ 0.00072
Granted	-	-	-	-
Exercised	-	-	-	-
Cancelled	-	-	-	-
Expired	-	-	(4,000,000,000)	$ 0.00072

Outstanding at the end of the year	-	-	-	-

Note 6 – Marketable Securities

The Company’s wholly-owned subsidiary, Redwood Capital, provides investment banking services to Chinese companies seeking access to U.S. and foreign capital. Redwood receives, as payment for services, both cash consideration and common shares of stock in the respective entities. The stock received is carried as an investment and reflects the fair market value of the stock on the date received.

At June 30, 2008, the Company held an investment in Energroup Holdings (OTC BB: ENHD), a Company which reversed merged with the Dalian Chuming Group, a pork processing company based in China. As part of the reverse merger, the Company was issued shares which are restricted from sale for a period of 365 days, which is due to expire on January 1, 2009. The Company has classified these securities as available-for-sale and accounts for them at fair value, which was determined at the date of the reverse merger. No unrealized gains or losses have been recorded as no trading activity has occurred since the closing of the reverse merger. Of the $1,643,618 market value reported on the June 30, 2008 consolidated balance sheets, approximately $750,105 is held in an escrow account as collateral for the Company’s Notes Payable (see Note 9) and is restricted from sale. Management has conducted an impairment analysis on the value of the stock and has determined that the fair market value, based upon market conditions present at June 30, 2008, accurately depicts the value of the shares at that date.

F-16

At June 30, 2007, the Company’s investment consisted of common shares of Fushi International, Inc. (OTC: FSIN), which had a cost of $20,789. The Company recorded $31,285 in unrealized gains as a component of other comprehensive income to bring the fair market value of the securities to $52,074 at June 30, 2007. These shares were all sold during the fiscal year ended June 30, 2008 to fund the Company’s operations.

The following table summarizes the equity investments held by the Company:


	Equity Securities Classified as Available-for-Sale
	Amortized Cost	Unrealized Gain	Unrealized Loss	Fair Value
June 30, 2008	$ 1,643,618	$ -	$ -	$ 1,643,618
June 30, 2007	$ 20,789	$ 31,285	$ -	$ 52,074

The Company realized $36,798 from the sales of its equity securities during the fiscal year ended June 30, 2008 and $22,416 during the fiscal year ended June 30, 2007.

Note 7 - Goodwill

Goodwill represents the excess of cost over fair value of net assets acquired through acquisitions. In accordance with SFAS No. 142 issued in June 2001, goodwill recorded by the Company has not been amortized and will be evaluated on an annual basis, or sooner if deemed necessary, in connection with other long-lived assets, for potential impairment.

During the fiscal year ending Jun 30, 2005, the Company acquired the business and all related assets of Redwood Capital, Inc. The purchase price of $120,000 was satisfied by the Company issuing common and preferred stock. The acquisition was an arm’s length transaction and has been accounted for using the purchase method.

The following table summarizes the estimated fair value of the assets acquired and equity assumed at the date of acquisition. The purchase price allocation is based upon management’s best estimate of the relative fair values of the identifiable assets acquired and liabilities assumed.


Net assets acquired:
Goodwill	$	45,000
Net assets acquired		45,000

Net liabilities assumed:
Common stock	$	75,000

Net liabilities assumed	$	75,000

F-17

Note 8 – Notes Payable

The Company executed a note payable with a private third party for $95,000 during May 2000. The note bears interest at 8% per year and matured May 2001. The Company has made ongoing payments against the note and presently has a balance owed of $29,700, which is shown as a current liability in the accompanying consolidated financial statements. The Company is in default on this convertible debenture as it has not repaid the outstanding amount at June 30, 2008. The Company has accrued $22,222 in interest on this note at June 30, 2008.

ActionView Bridge Note

In August of 2007, the Company entered into a Bridge Financing arrangement with Action View International, Inc. whereby the Company would have access to up to $130,000. The financing arrangement had a maturity date of March 31, 2008 and interest rate of 5.7%. The Company borrowed a total of $120,000 during the fiscal year ending June 30, 2008 and paid interest of approximately $6,945. The financing arrangement also included a guaranteed return of principal equal to twice the borrowed principal amount. To satisfy the terms of the agreement, the Company transferred shares of common stock it had held as investment securities with an equivalent value of $240,000 in March of 2008 to Action View’s purchaser, Hybristic Equity Partners, Ltd., which was recognized as additional interest expense during the fiscal year ended June 30, 2008.

Note 9 – Convertible Notes Payable

Sequoia Note Payable

During the fiscal year ended June 30, 2007, the Company agreed to repay $100,000 as part of the consideration for the cancellation of 4,000,000,000 warrants held by La Jolla Cove Investors, Inc. The Company executed a promissory note for the $100,000 that was due in four equal monthly payments of $25,000 starting on February 1, 2007 and ending on May 1, 2007. On March 15, 2007, the Company entered into a Settlement Agreement with Sequoia International, Inc., which had purchased the $100,000 past due note payable from La Jolla Cove Investors, Inc. The Company agreed to settle by issuing a total of 15,000,000 shares of its common stock to satisfy this transaction. These shares were issued pursuant to Section 3(a)(10) of the Securities Act of 1933, as amended. As a result of this transaction, the Company recorded settlement costs of $525,000 representing the difference between the amount of debt and the value of the securities issued. The Company and Sequoia agreed that the shares would be issued into an escrow account to prevent their immediate resale into the market. Under the terms of the escrow, Sequoia may not obtain any shares from escrow if the release of such escrow shares would result in Sequoia becoming the beneficial owner of more than 4.9% of the Company’s common stock.

Senior Convertible Notes A & B

Senior Note A: To obtain funding for the Company's ongoing operations, the Company entered into a note payable with four accredited investors in January, 2008 of up to $600,000. The terms of the note are such that the Company could borrow an initial $100,000 and have the ability to draw down $60,000 per month based upon certain milestones, including the completion of its annual audit and filing of a subsequent registration statement.

F-18

At June 30, 2008 the Company had borrowed $280,000 from the Note, which bears interest at 10% per annum from the date of issuance. Both principal and interest on the note are convertible into common stock at the rate of 60% of the lowest daily closing bid price of the Company’s common stock during the 5 trading days prior to the conversion date, but in no event less than $0.0006 per share. The Company determined that the beneficial conversion feature of both the principal and interest represents derivative liabilities which must be bifurcated from the Note and separately stated. Due to their complex nature, the Company used the Black-Scholes model to value the beneficial variable principal and interest conversion features (see Note 10). The initial fair value assigned to the variable principal conversion feature of Note A was $161,766, which was recorded as a discount to the Note. This disco unt is amortized to interest expense over the term of the Note. Accordingly, the Company has recognized $68,605 in amortized interest expense, bringing the total net value of the Note discount to $93,701 at June 30, 2008. As no interest had accrued at the date of issuance, the Company did not assign a value to this conversion feature at the date of issuance. It has; however assigned a value to this feature to the extent that its value exceeds or is less than the total accrued interest at June 30, 2008 (see Note 10). At June 30, 2008, the Company had accrued $8,469 in interest relating to this Note.

The Note matures one year from the date of issuance and can be ‘put’, or sold back to the Company for a value of 200% of the face value of the note, payable in marketable securities (Energroup Holdings, or ‘ENHD’ stock) owned by the Company at June 30, 2008. Accordingly, the Company has placed marketable securities in ENHD with a market value of $560,000 into an escrow account as collateral. The Company has determined this put-feature to be derivative in nature, which requires bifurcation and separate statement. Due to the fixed nature of the put value, the Company has accreted a liability of $117,814 based upon the anticipated future value of the put option at maturity, which is recorded in the derivatives liability section of the consolidated balance sheets at June 30, 2008 (see Note 10).

. The call option provides the Company with the right to prepay the outstanding note at any time, provided that the Company provides three days advance written notice. An event of default includes the failure by the Company to become listed on a stock exchange such as the OTC:BB by July 1, 2008. As a result of default, the Lenders may accelerate the obligation of the Company to pay the principal or interest on the notes when due. As of July 1, 2008, the Company is in default on this Note.

Senior Convertible Note B – To obtain bridge funding for reverse merger transactions which Redwood Capital has currently in-progress, the Company entered into a note payable with four accredited investors in February, 2008 for up to $800,000. The terms of the note are such that the Company could borrow an initial $115,000 and have the ability to draw down amounts ranging from $100,000 to $150,000 based upon certain milestones, most notably subsequent stages of such reverse merger transactions.

At June 30, 2008 the Company had borrowed $190,105 from the Note, which bears interest at 10% per annum from the date of issuance. Interest on the note is convertible into common stock at the rate of 60% of the of the monthly closing bid price of the Common Stock on the last trading day of such month. The Company determined that this beneficial conversion feature represents a derivative liability which must be bifurcated from the Note and separately stated. As no interest had accrued at the date of issuance, the Company determined that no discount related to this beneficial conversion feature had occurred (see Note 10) at the date of issuance. The Company values this feature at each reporting date and, to the extent that it exceeds or is less than the total accrued interest, records a value to derivative liability (see Note 10). At June 30, 2008, the Company had accrued $5,751 in interest related to this Note.

F-19

The Note matures on December 19, 2008 and can be ‘put’, or sold back to the Company for a value of 300% of the face value of the note, which is payable as 100% of the face value in cash and 200% payable in marketable securities which Redwood Capital is anticipated to receive upon closing its reverse merger transactions which are currently in-progress. The Company has determined this put-feature to be derivative in nature, which requires bifurcation and separate statement. Due to the fixed nature of the put value, the Company has accreted a liability of $165,091 based upon the anticipated future value of the put option at maturity, which is recorded in the derivatives liability section of the consolidated balance sheets at June 30, 2008 (see Note 10).

The Note is secured by marketable securities held by the Company, ‘ENHD’ stock. Accordingly, the Company has issued shares of ENHD stock equal to $190,105 or 100% of the face value of the Note into an escrow account. The Company has a call option under the terms of the notes. The call option provides the Company with the right to prepay all of the outstanding note at any time, provided that the Company provides an additional 200% return payable in cash to each Lender. An event of default includes the failure by the Company to complete subsequent stages of Redwood Capital’s current reverse merger transactions in-progress. As a result of default, the interest rate on the Note accelerates to 18% per annum. As of the date of this report, the Company is not in default of this Note.

The following table describes the total net value of current notes payable held by the Company at June 30, 2008:


		June 30.
		2008
		Note A		Note B		Total Notes Payable
Principal Value	$	280,000	$	190,105	$	470,105
Discount		(93,701)		-		(93,701)
Net Value of Notes Payable	$	186,299	$	190,105	$	376,404

The Company has recorded $68,605 in interest expense related to the accretion of the discount on Note A in the consolidated statements of operation and comprehensive income during the fiscal year ended June 30, 2008.

Note 10 – Derivative Liabilities

Both Senior Note A and B include certain beneficial conversion features and put options. The features, described below, are as follows:

The variable principal conversion feature, which allows the investor to convert Note A into common stock at the rate of 60% of the lowest daily closing bid price of the Company’s common stock during the 5 trading days prior to the conversion date, but in no event less than $0.0006 per share. The variable interest rate provision which allows the investor to convert the interest accrued on Note AA into common stock at the rate of 60% of the lowest daily closing bid price of the Company’s common

F-20

stock during the 5 trading days prior to the conversion date, but in no event less than $0.0006 per share;

The variable interest rate provision which allows the investor to convert the interest accrued on Note B into common stock at the rate of 60% of the of the monthly closing bid price of the Common Stock on the last trading day of such month

The put features, which allows the investor to convert the face value of each Note into securities held, or to be earned, by Redwood Capital and/or cash at each Notes’ maturity.

The Company determined that the above features represented derivative liabilities which required bifurcation from the Notes. Due to the complexity of the beneficial variable principal and interest conversion features, the Company determined that the Black-Scholes model would be required to value the derivatives at the issuance date and subsequently at each reporting date. The following key assumptions were used to calculate the fair value of the beneficial principal and interest features:

Black Scholes Valuation Model Features

Stock Price: This is the stock price as of the respective valuation date.

Exercise Price: The exercise price used in the valuation analysis was set according to the terms of the Notes. The exercise price is set at a rate of 60% of the lowest daily closing bid price of the Company’s common stock during the 5 trading days prior to the conversion date, but in no event less than $0.0006 per share for one Note, and 60% of the lowest daily closing bid price of the Company’s common stock on the last trading day of the month for Note B

Volatility: Volatility is a measure of the standard deviation of the stocks continuously compounded return over the life of the security. The ideal volatility for an accurate calculation of fair value is the future volatility of the security. This cannot be known with certainty, so an approximation is derived using historical return volatility for a period of time equal to the remaining life of the instrument as a proxy, and professional judgment. As part of our valuation, we performed an analysis of the historical volatility of returns for the Company’s stock. Based on our analysis, we chose a standard deviation of 331% as our best estimate of future volatility.

Risk-Free Rate: The appropriate risk free rate is the interest rate of a U.S. treasury note with a maturity equal to the maturity of the respective security. As of June 30, 2008, the risk free interest rates were approximately 2.135%.

Time to Maturity: The time to maturity is measured based on the remaining term of the security as of the valuation date.

At the issuance date, the variable principle conversion feature was valued at $161,766. At June 30, 2008, the fair value of the variable principle conversion feature was $612,330. Accordingly, the Company recognized additional expenses related to this derivative charge of $450,564.

As no interest had accrued at the issuance of Note A and B, the Company did not value the variable interest conversion feature at the issuance date. At June 30, 2008, the fair value of the variable interest conversion features exceeded the current accrued interest by $6,791. Accordingly, the Company recognized additional interest expense related to this derivative charge of $6,791.

F-21

Due to the fixed-value nature, the put feature for each Note was accreted based upon the known future value of each put. The put feature for Note A provides that the investor that a total value equal to 200% of the face value of the Note may be put at the Note’s maturity. Accordingly, the Company has accreted $117,814 as additional interest expense in the derivatives liability section of the consolidated balance sheets at June 30, 2008. The put feature for Note B provides that the investor that a total value equal to 300% of the face value of the Note may be put at the Note’s maturity. Accordingly, the Company has accreted $165,091 as additional interest expense in the derivatives liability section of the consolidated balance sheets at June 30, 2008.

The following table summarizes the derivative liabilities held by the Company at June 30, 2008:


		June 30.
		2008
		Note A		Note B		Total Derivatives Liability
Derivative Liability, Principal conversion feature	$	612,330	$	-	$	612,330
Derivative Liability, Interest conversion feature		4,744		2,048		6,792
Derivative Liability, Put Option		117,814		165,091		282,905
Net Value Derivative Liabilities	$	734,888	$	167,139	$	902,027

The Company has recorded a total of $450,564 in derivative charges and $289,696 as additional interest expense in the consolidated statements of operation and comprehensive income related to the valuation of the above derivative liabilities during the fiscal year ended June 30, 2008.

Note 11 – Supplemental Disclosure of Cash Flows

The Company prepares its statements of cash flows using the indirect method as defined under the Financial Accounting Standard No. 95.

The Company paid $0 and $0 for income tax and $246,945 and $2,433 in interest for the fiscal years ended June 30, 2008 and 2007.

Note 12 – Commitments & Contingencies

Operating Leases

The Company leases its U.S. office facilities under a lease expiring May 31, 2009 and requiring monthly payments of $1,250 plus common area costs. The Company leases an apartment in Beijing, China expiring on April 30, 2009 for purposes of housing customers, guests and consultants, requiring quarterly payments of 21,000 Chinese Remnibi (CNY). The Company also leases an office in Beijing under a lease expiring March 9, 2009, requiring monthly payments of 9,000 CNY. Rent expense for the Chinese facilities is translated into U.S dollars at the current foreign exchange rate on the date due, in accordance with SFAS No. 52, “Foreign Currency Translation”. Future minimum rental payments under the noncancellable operating leases as of June 30, 2008 are as follows:

F-22


Year Ending June 30,		Amount
2009	$	42,550
Total future minimum payments	$	42,550

Rent expense was $31,786 and $16,884 for the fiscal years ended June 30, 2008 and 2007, respectively. Future annual minimum lease payments total $35,788 (translated using the spot rate at June 30, 2008) in fiscal year ending June 30, 2009.

Legal Proceedings

S3I Holdings, Inc. and Securesoft were named defendants in a case entitled Radford v. Yamamoto, Berlandier, S3I, Securesoft and Grant. Radford filed complaint on February 10, 2004 alleging nonpayment of back wages. Defendants answered the complaint on July 9, 2004. Stipulated mediation before an arbitrator was to have been completed on November 17, 2004. However, Radford filed a motion to have the case moved to state court for adjudication. On June 7, 2005 the Company filed a motion with the Court of Appeal of the State of California Fourth Appellate District, Division One, to compel mediation before an arbitrator. On June 15, 2006, the Company agreed to settle the suit for $42,000, which was completely paid by the Company prior to June 30, 2008.

S3 Investment Company, Inc., S3I Holdings, Inc. and Securesoft were named defendants in a case entitled Villella V. Yamamoto, Berlainder, et al. Villella filed the complaint on April 13, 2005. Notice of service was not properly given to the Company until August of 2005. The Company filed a cross-complaint for damages against Villella on September 20, 2005. The Company agreed to a settlement in the amount of $183,000, of which $150,000 remains at June 30, 2008.

On October 1, 2006, the Company entered into a Consulting Agreement with Merriman Curhan Ford & Co (“Merriman”). The Consulting Agreement set forth, among other things, the circumstances under which the Company would make certain scheduled payments to Merriman and described certain other financial obligations of the Company in consideration for Merriman’s financial advisory services. On September 7, 2007, the Company filed an action against Merriman in the Superior Court of the State of California, for the City and County of San Francisco, titled S3 Investment Company, Inc., a California corporation v. Merriman Curhan Ford & Co., et al., Case No. CGC-07-466952 (“Complaint”). The Complaint alleged causes of action against Merriman for breach of contract, fraud, negligent misrepresentation, intentional and negligent interference with prospective econo mic relations. This case was settled in July 2008. Terms of the settlement agreement are confidential, but the Company does not believe the settlement will have a material effect on our financial position, financial results or cash flows.

On March 15, 2007, the Company entered into a Settlement Agreement with Sequoia International, Inc., which had purchased a $100,000 note payable from La Jolla Cove Investors, Inc. The Company agreed to settle by issuing a total of 15,000,000 shares of its common stock to satisfy this transaction. These shares were issued pursuant to Section 3(a)(10) of the Securities Act of 1933, as amended. As a result of this transaction, the Company recorded settlement costs of $525,000 representing the difference between the amount of debt and the value of the securities issued. The Company and Sequoia agreed that the shares would be issued into an escrow account to prevent their immediate resale into the market. Under the terms of the escrow, Sequoia may not obtain any shares from escrow if the release of such escrow shares would result in Sequoia becoming the beneficial owner of more than 4.9% of the Company’s common stock.& nbsp;

F-23

Effective March 1, 2008, the Company entered into a Settlement Agreement with Luce, Forward, Hamilton & Scripps, LLP, whom had previously provided legal services to the Company on a number of different matters, in the amount of $38,607. The Company agreed to pay this amount in monthly installments of $2,000. The Company has paid $6,000 towards the total amount outstanding as of June 30, 2008.

Employment agreement

On January 26, 2007, the Company entered into an Employment Agreement with James Bickel, President. Pursuant to the Employment Agreement, Mr. Bickel will serve as President for an employment term through January 26, 2009. Mr. Bickel is entitled to an annual base salary of $96,000. Mr. Bickel is also Chairman of the Board of Directors of the Company. Mr. Bickel is responsible for the remittance of any appropriate withholding taxes as a result of this Employment Agreement.

Note 13 – Discontinued Operations

Since December 31, 2006, The Company has not received any financial statements from the Hong Kong management of Sino UJE, Ltd. (the “Subsidiary”). Representatives from the Company have visited the Subsidiary’s offices in Hong Kong four (4) times throughout 2007 in an attempt to maintain control of this Subsidiary and its operations. During the visits, Company representatives requested all financial statements, cash reports, and bank statements. Throughout 2007, the Company was promised that it would receive the above requested documents by November 11, 2007. No documents were received.

After not receiving documents on November 11, 2007, the Company, with permission of the Board, attempted to remove the then manager. The Company then requested the financial statements to be delivered to our US office no later than December 31, 2007.

The Company then visited the Subsidiary’s offices in Hong Kong three (3) times throughout 2008. On every visit, the Company requested all financial statements, cash reports, and bank statements.

By April 2, 2008, the Company had still not received any financial statements or any other reports necessary for successful or proper management of the Subsidiary as a part of its holdings. During the second quarter of 2008, the Company discovered that the current management of the Subsidiary had relocated the Subsidiary’s offices and did not inform the Company where the new offices were. Upon discovering that the Subsidiary’s offices had been moved to a new, unknown location, the Company immediately attempted to contact Li Jun and Wellman Liu, two managers of the Subsidiary. After attempting to contact Li Jun and Wellman Liu, the Company discovered that the principals had been providing false contact information and other vital information during the fiscal year ended June 30, 2007.

By mid 2008, it was discovered that Li Jun and Wellman Liu had been moving the assets of the Subsidiary to a new entity owned by Li Jun and Wellman Liu. Unsure of the status of the Subsidiary and its financial condition, the Company refused to sign any agreements or leases as owner or on behalf of the Subsidiary.

F-24

As of August 31, 2008, all of the Subsidiary bank accounts have been closed. Further, all officers and directors have been removed to the extent the Company has been able to remove them. The Hong Kong Corporation that held the Subsidiary is in a non-active state and the business operations are no longer in existence.

Because of the above events, the Company is no longer in control of any of the assets of the Subsidiary. Accordingly, the Company has recorded a loss from discontinued operations of $79,759 and a loss from abandonment of this Subsidiary of $726,925 for the year ended June 30, 2007. The Company was able to sell a small part of the Subsidiary in which it had retained ownership which resulted in a recovery from discontinued operations of $190,304 for the year ended June 30, 2008.

Note 14 - Subsequent Events

Equity

Subsequent to the fiscal year ended June 30, 2008, the Board of Directors unanimously voted that it would be in the best interest of the Company to cancel the Series C Preferred Stock. As of the date of this report all Series C Preferred Stock has been canceled.

Subsequent to the fiscal year ended June 30, 2008, the Company issued a total of 100,000,000 shares of its common stock to 1 accredited individual for $250,000 in cash received. The shares were issued based upon the exemption from registration found in Section 4(2) of the Securities Act.

Subsequent to the fiscal year ended June 30, 2008, the Company issued a total of 5,000,000 shares of our common stock to 1 individual for $30,000 in services rendered. The shares were issued based upon the exemption from registration found in Section 4(2) of the Securities Act.

F-25

PROSPECTUS

June 30, 2008

S3 Investment Company, Inc.

4115 Blackhawk Plaza Circle, Suite 100

Danville, CA 94506

(925) 736-2861

Until, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

PART II - INFORMATION NOT REQUIRED IN PROSPECTUS

Item 24. Indemnification of Directors and Officers.

The statutes, charter provisions, bylaws, contracts or other arrangements under which controlling persons, directors or officers of the issuer are insured or indemnified in any manner against any liability which they may incur in such capacity are as follows:

1. Section 317 of the California General Corporations Law authorizes a court to award, or a corporation's board of directors to grant, indemnity to directors and officers who are parties or are threatened to be made parties to any proceeding (with certain exceptions) by reason of the fact that the person is or was an agent of the corporation, against expenses, judgments, fines, settlements and other amounts actually and reasonably incurred in connection with the proceeding if that person acted in good faith and in a manner the person reasonably believed to be in the best interests of the corporation. Section 204 of the law provides that this limitation on liability has no effect on a director's liability (a) for acts or omissions that involve intentional misconduct or a knowing and culpable violation of law, (b) for acts or omissions that a dire ctor believes to be contrary to the best interests of the corporation or its shareholders or that involve the absence of good faith on the part of the director, (c) for any transaction from which a director derived an improper personal benefit, (d) for acts or omissions that show a reckless disregard for the director's duty to the corporation or its shareholders in circumstances in which the director was aware, or should have been aware, in the ordinary course of performing a director's duties, of a risk of a serious injury to the corporation or its shareholders, (e) for acts or omissions that constitute an unexcused pattern of inattention that amounts to an abdication of the director's duty to the corporation or its shareholders, (f) under Section 310 of the law (concerning contracts or transactions between the corporation and a director), or (g) under Section 316 of the law (directors' liability for improper dividends, loans and guarantees). Section 317 does not extend to acts or omissions of a director in his capacity as an officer. Further, Section 317 has no effect on claims arising under federal or state securities laws and does not affect the availability of injunctions and other equitable remedies available to our shareholders for any violation of a director's fiduciary duty to us or our shareholders. Although the validity and scope of the legislation underlying

Section 317 have not yet been interpreted to any significant extent by the California courts, Section 317 may relieve directors of monetary liability to us for grossly negligent conduct, including conduct in situations involving attempted takeovers of our company.

The Company shall indemnify to the fullest extent permitted by Section 317 of the California General Corporation Laws, as may be amended from time to time, any director or officer of the Company who is a party or who is threatened to be made a party to any proceeding which is a threatened, pending or completed action or suit brought against said officer or director in his official capacity. This Company shall not indemnify any director or officer in any action or suit, threatened, pending or completed, brought by him against the Corporation, in the event the officer or director is not the prevailing party. Indemnification of any other persons, such as employees or agents of the Corporation, or serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, or other enterprise, shall be determined in the sole and absolute discretion of the Board of Directors of t he Corporation.

2. The Issuer's Certificate of Incorporation limit liability of its Officers and Directors to the full extent permitted by the Florida General Corporation Law. The bylaws provide for indemnification in accordance with the foregoing statutory provisions.

Item 25. Other Expenses of Issuance and Distribution

The following table sets forth all estimated costs and expenses, other than underwriting discounts, commissions and expense allowances, payable by the issuer in connection with the maximum offering for the securities included in this registration statement:


		Amount
SEC registration fee	$	300.00
Blue Sky fees and expenses		500.00
Legal fees and expenses		7,500.00
Accounting fees and expenses		10,000.00
Total	$	18,300.00

Item 26. Recent Sales of Unregistered Securities.

The following sets forth information relating to all previous sales of common stock by the Registrant which sales were not registered under the Securities Act of 1933.

The purchasers listed above represented their intentions to acquire the securities for investment only and not with a view toward distribution. None of the securities were sold through an underwriter and accordingly, there were no underwriting discounts or commissions involved.

Item 27. Exhibits Index.


			Incorporated by reference
Exhibit	Exhibit Description	Filed herewith	Form	Period ending	Exhibit	Filing date
3(i)a	Articles of Incorporation		SB-2		3.1	11/5/2001
3(i)b	Amendment to Articles of Incorporation dated 06/30/01		SB-2		3.3	11/5/2001
3(i)(c)	Amendment to Articles of Incorporation dated 01/16/02		SB-2		3.4	11/5/2001
3(i)(d)	Amendment to Articles of Incorporation dated 07/13/06		8-K		3.3	7/19/06
3(i)(e)	Amendment to Articles of Incorporation dated 02/12/07		8-K		3.2	02/12/07
3(i)(f)	Amendment to Articles of Incorporation dated 04/02/03	X
3(i)(g)	Amendment to Articles of Incorporation dated 09/30/04	X
3(i)(h)	Amendment to Articles of Incorporation dated 04/16/07	X
3(i)(i)	Amendment to Articles of Incorporation dated 08/31/07	X
3(ii)a	Bylaws		SB-2		3.2	11/5/2001
4.1	Specimen Stock Certificate		SB-2		4.1	11/5/2001
5.1	Opinion of Counsel, regarding the legality of the securities registered hereunder.	X
10.1	Employment Agreement with James Bickel dated 01/26/07	X
10.2	Director Agreement with James Bickel dated 03/01/08	X
10.3	Director Agreement with Gary Nerison dated 03/01/08	X
10.4	Director Agreement with Manhong Liu dated 03/01/08	X
10.5	Bridge Loan Agreement dated 01/28/08	X
10.6	Bridge Loan Agreement dated 02/19/08	X
10.7	Amendment No. 1 to Bridge Loan Agreement dated 01/28/08
10.8	Amendment No. 1 to Bridge Loan Agreement dated 02/19/08	X
10.9	Amendment No. 1 to Put Agreement dated 01/28/08	X
10.10	Amendment No. 2 to Bridge Loan Agreement dated 1/28/08	X
23.1	Consent of Independent Auditors	X
23.2	Consent of Counsel (Included as part of Exhibit 5.1)	X

Item 28. Undertakings.

The undersigned registrant undertakes:

(1) To file, during any period in which offer or sales are being made, a post-effective amendment to this registration statement:

I. To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

II. To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post effective amendment) which, individually or in the aggregate, represent a fundamental change in the information in the registration statement;

III. To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to the information in the Registration Statement.

(2) That, for the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of securities at that time shall be deemed to be the initial bona fide offering.

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4) That, if the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

(5) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

(6) The registrant shall request acceleration pursuant to Rule 461 under the Securities Act and there insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant 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 registered, the registrant will, unless in th e opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

Subject to the terms and conditions of Section 15(d) of the Securities Exchange Act of 1934, the undersigned Registrant hereby undertakes to file with the Securities and Exchange Commission any supplementary and periodic information, documents, and reports as may be prescribed by any rule or regulation of the Commission heretofore or hereafter duly adopted pursuant to authority conferred to that section.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers, and controlling persons of the Registrant pursuant to our certificate of incorporation or provisions of Nevada law, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission the indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. If a claim for indemnification against liabilities (other than the payment by the Registrant) of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit, or proceeding is asserted by a director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a co urt of appropriate jurisdiction the question whether the indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of the issue.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-1 and has duly caused this registration statement to be signed on our behalf by the undersigned, in the City of Danville, State of California, on November 14, 2008.

In accordance with the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities and on the dates stated.

S3 Investment Company, Inc.

November 14, 2008

/s/ James Bickel

Date

James Bickel
Chief Executive Officer, President and Chairman of the Board of Directors

/s/ Gary Nerison

Gary Nerison

Secretary, Treasurer, and Member of the Board of Directors

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

EXHIBITS

REGISTRATION STATEMENT

ON FORM S-1

UNDER

THE SECURITIES ACT OF 1933

S3 INVESTMENT COMPANY, INC.

INDEX TO EXHIBITS


			Incorporated by reference
Exhibit	Exhibit Description	Filed herewith	Form	Period ending	Exhibit	Filing date
3(i)a	Articles of Incorporation		SB-2		3.1	11/5/2001
3(i)b	Amendment to Articles of Incorporation dated 06/30/01		SB-2		3.3	11/5/2001
3(i)(c)	Amendment to Articles of Incorporation dated 01/16/02		SB-2		3.4	11/5/2001
3(i)(d)	Amendment to Articles of Incorporation dated 07/13/06		8-K		3.3	7/19/06
3(i)(e)	Amendment to Articles of Incorporation dated 02/12/07		8-K		3.2	02/12/07
3(i)(f)	Amendment to Articles of Incorporation dated 04/02/03	X
3(i)(g)	Amendment to Articles of Incorporation dated 09/30/04	X
3(i)(h)	Amendment to Articles of Incorporation dated 04/16/07	X
3(i)(i)	Amendment to Articles of Incorporation dated 08/31/07	X
3(ii)a	Bylaws		SB-2		3.2	11/5/2001
4.1	Specimen Stock Certificate		SB-2		4.1	11/5/2001
5.1	Opinion of Counsel, regarding the legality of the securities registered hereunder.	X
10.1	Employment Agreement with James Bickel dated 01/26/07	X
10.2	Director Agreement with James Bickel dated 03/01/08	X
10.3	Director Agreement with Gary Nerison dated 03/01/08	X
10.4	Director Agreement with Manhong Liu dated 03/01/08	X
10.5	Bridge Loan Agreement dated 01/28/08	X
10.6	Bridge Loan Agreement dated 02/19/08	X
10.7	Amendment No. 1 to Bridge Loan Agreement dated 01/28/08
10.8	Amendment No. 1 to Bridge Loan Agreement dated 02/19/08	X
10.9	Amendment No. 1 to Put Agreement dated 01/28/08	X
10.10	Amendment No. 2 to Bridge Loan Agreement dated 1/28/08	X
23.1	Consent of Independent Auditors	X
23.2	Consent of Counsel (Included as part of Exhibit 5.1)	X

END OF FILING

EX-3 2 amendmentarticle3312003.htm

EXHIBIT 3(i)(f)

FILED

in the office of the Secretary of State

of the State of California

APR 2 2003

A0594279

CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION OF

AXTION FOODS, INC.

We, the undersigned President and Secretary of Axtion Foods, Inc. do hereby certify:

That the Board of Directors of said corporation at a meeting duly convened and held on March 31, 2003, adopted a resolution to amend the Articles of Incorporation as follows:

Article I is amended to read as follows:

“The name of this corporation is S3I Holdings, Inc.”

The foregoing amendment was duly approved by the board of directors.

This amendment was also approved by a majority of the shareholders of the Corporation by a written consent in lieu of a special meeting. The number of shares outstanding and entitled to vote on the shares authorization amendment to the Articles of Incorporation is 26,982,000; said change and amendment have been consented to by a majority of the stockholders holding at least a majority of each class of stock outstanding and entitled to vote thereon. The percentage vote required was more than 50%.

I declare that the above document is true and correct of my own personal knowledge under penalty of perjury. Executed on March 31, 2003 at San Diego, California.

/s/ Julia Reynolds

Julia Reynolds

President

I declare that the above document is true and correct of my own personal knowledge under penalty of perjury. Executed on March 31, 2003 at San Diego, California.

/s/ Julia Reynolds

Julia Reynolds

Secretary

I declare that the above document is true and correct of my own personal knowledge under penalty of perjury. Executed on March 31, 2003 at San Diego, California.

/s/ Julia Reynolds

Julia Reynolds

Chief Financial Officer

EX-3 3 amendmentarticle9302004.htm

EXHIBIT 3(i)(g)

FILED

in the office of the Secretary of State

of the State of California

OCT 6 2004

A0618392

CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION OF

S3I HOLDINGS, INC.

The below-signed officers of the Corporation hereby certify:

1. They are the president and secretary, respectively, of S3I Holdings, Inc., a California corporation.

2. Article 1 of the Articles of Incorporation shall be amended to read in its entirety as follows:

“Name

The name of the Corporation shall be S3 Investment Company, Inc.”

3. Article IV Section 1 of the Articles of Incorporation shall be amended to read as follows:

“Capital Stock

The authorized capital stock of the Corporation is Two Billion Twenty Million (2,020,000,000), of which 2,000,000,000 shares with a par value of $.001 per share, shall be designated “Common Stock”, and of which Twenty Million (20,000,000) shares with a par value of $.001 per share, shall be designated “Preferred Stock”.

4. A new Article VII of the Articles of Incorporation shall be added and shall read in its entirety as follows:

“Recapitalization Affective Outstanding Shares

The board of directors, without the consent of the stockholders of the corporation, may adopt any recapitalization affecting the outstanding shares of capital stock of the corporation by effecting a forward or reverse split of all of the outstanding shares of any class of capital stock of the corporation, with appropriate adjustments to the corporation’s capital accounts, provided that the recapitalization does not require any amendment to the Articles of Incorporation of the corporation.”

5. A new Article VIII of the Articles of Incorporation shall be added and shall read in its entirety as follows:

“Actions by Written Consent

The stockholders may, by majority written consent in lieu of a meeting of stockholders, take any action that would otherwise require shareholder consent.”

6. The foregoing amendment of Articles of Incorporation has been duly approved by the board of directors.

7. The foregoing amendment of Articles of Incorporation has been duly approved by the required vote of shareholders in accordance with Section 902, California Corporations Code. The total number of outstanding shares of the corporation is 99,989,687. The number of shares voting in favor of the amendment equaled or exceeded the vote required. The percentage vote required was more than 50%.

We further declare under penalty of perjury under the laws of the State of California that the matters set forth in this certificate are true and accurate of our own knowledge. So attested this 30^th day of September, 2004 in Temecula, California:

/s/ Chris Bickel

Chris Bickel

President

/s/ Scott K. Waddell

Scott K. Waddell

Secretary

EX-3 4 amendmentarticle4162007.htm AMENDMENT TO THE ARTICLES OF INCORPORATION OF

EXHIBIT 3(i)(h)

FILED

in the office of the Secretary of State

of the State of California

APR 24 2007

A0660194

CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION

S3 INVESTMENT COMPANY, INC.

The undersigned certify that:

1. They are the president and the secretary, respectively, of S3 Investment Company, Inc., a California corporation.

2. Article IV Section 1 of the Articles of Incorporation of this corporation hereby reads as follows:

The authorized capital stock of the Corporation is One Hundred Sixty Six Million (166,000,000), of which Sixty Six Million (66,000,000) shares with a par value of $.001 par share, shall be designated, “Common Stock,” and of which One Hundred Million (100,000,000) shares with a par value of $.001 per share, shall be designated “Preferred Stock”.

2. Article IV Section 1 of the Articles of Incorporation of this corporation is amended to read as follows:

The authorized capital stock of the Corporation is Six Hundred Million (600,000,000), of which Five Hundred Million (500,000,000) shares with a par value of $.001 par share, shall be designated, “Common Stock,” and of which One Hundred Million (100,000,000) shares with a par value of $.001 per share, shall be designated “Preferred Stock”.

3. The foregoing amendment of Articles of Incorporation has been duly approved by the board of directors.

4. The foregoing amendment of Articles of Incorporation has been duly approved by the required vote of shareholders in accordance with Section 902, California Corporations Code. The total number of outstanding shares of the corporation is Sixty Six Million Shares of Common Stock, Twelve Million Shares of Series B Preferred Stock and One Million Shares of Series C Preferred Stock. The number of shares voting in favor of the amendment equaled or exceeded the vote required. The percentage vote required was more than fifty percent (50%) of all outstanding shares, and more than 50% of the outstanding shares of Common Stock, voting separately.

We further declare under penalty of perjury under the laws of the State of California that the matters set forth in this certificate are true and correct of our own knowledge.

DATE: April 16, 2007

S3 INVESTMENT COMPANY, INC.

By: /s/ James Bickel

James Bickel, President

By: /s/ Bruce Ruberg

Bruce Ruberg, Secretary

EX-3 5 amendmentarticle8312007.htm AMENDMENT TO THE ARTICLES OF INCORPORATION OF

EXHIBIT 3(i)(i)

FILED

in the office of the Secretary of State

of the State of California

SEP 07 2007

A0666568

CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION

S3 INVESTMENT COMPANY, INC.

The undersigned certify that:

1. They are the president and the secretary, respectively, of S3 Investment Company, Inc., a California corporation.

2. Article IV Section 1 of the Articles of Incorporation of this corporation hereby reads as follows:

The authorized capital stock of the Corporation is Six Hundred Million (600,000,000), of which Five Hundred Million (500,000,000) shares with a par value of $.001 per share, shall be designated “Common Stock,” and of which One Hundred Million (100,000,000) shares with a par value of $.001 per share, shall be designated “Preferred Stock”.

2. Article IV Section 1 of the Articles of Incorporation of this corporation is amended to read as follows:

The authorized capital stock of the Corporation is Five Billion (5,000,000,000), of which Four Billion Nine Hundred Million (4,900,000,000) shares with a par value of $.001 par share, shall be designated, “Common Stock,” and of which One Hundred Million (100,000,000) shares with a par value of $.001 per share, shall be designated “Preferred Stock”.

3. The foregoing amendment of Articles of Incorporation has been duly approved by the board of directors.

4. The foregoing amendment of Articles of Incorporation has been duly approved by the required vote of shareholders in accordance with Section 902, California Corporations Code. The total number of outstanding shares of the corporation is One Hundred Fifty Nine Million One Hundred Ninety Seven Thousand Eight Hundred Twenty Five Shares of Common Stock, Twelve Million Shares of Series B Preferred Stock and One Million Shares of Series C Preferred Stock. The number of shares voting in favor of the amendment equaled or exceeded the vote required. The percentage vote required was more than 50%.

We further declare under penalty of perjury under the laws of the State of California that the matters set forth in this certificate are true and correct of our own knowledge.

DATE: August 31, 2007

S3 INVESTMENT COMPANY, INC.

By: /s/ James Bickel

James Bickel, President

By: /s/ Bruce Ruberg

Bruce Ruberg, Secretary

EX-5 6 exhibit51.htm

EXHIBIT 5.1

LAW OFFICE OF JILLIAN SIDOTI

34721 Myrtle Court

Winchester, CA 92596

(323) 799-1342

November 13, 2008

S3 Investment Company, Inc.

Board of Directors

4115 Blackhawk Plaza Circle, Suite 100

Danville, CA 94506

RE:

S3 Investment Company, Inc.

Registration Statement on Form S-1

Gentlemen:

I have been retained by S3 Investment Company, Inc. a California corporation (the "Company"), in connection with the Registration Statement (the "Registration Statement") on Form S-1, to be filed by the Company with the U.S. Securities and Exchange Commission relating to the offering of securities of the Company. You have requested that I render my opinion as to whether or not the securities previously issued on terms set forth in the Registration Statement are validly issued, fully paid, and non-assessable.

In connection with the request, I have examined the following:

1. Certificate of Incorporation of the Company;

2. Bylaws of the Company;

3. The Registration Statement; and

4. Unanimous consent resolutions of the Company's Board of Directors.

I have examined such other corporate records and documents and have made such other examinations, as I have deemed relevant.

Based on the above examination, I am of the opinion that the securities of the Company already issued pursuant to the Registration Statement are validly authorized and are validly issued, fully paid and non-assessable under the corporate laws of the State of California.

I consent to my name being used in the Registration Statement as having rendered the foregoing opinion and as having represented the Company in connection with the Registration Statement.

Sincerely,

/s/ Jillian Ivey Sidoti

Jillian Ivey Sidoti

EX-10 7 exhibit101.htm Exhibit 10.1

EXHIBIT 10.1

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (“Agreement”) is entered into to be effective as of January 26, 2007 by S3 Investment Company, Inc., a California corporation (the “Company”) and James Bickel (the “Executive”).

WHEREAS, the Company desires to retain the services of the Executive as Chief Executive Officer and President of the Company and the Executive desires to render such services on the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the mutual promises contained herein, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

Employment Term. The Company employs the Executive and the Executive accepts employment by the Company, upon the terms and subject to the conditions set forth in this Agreement, until January 26, 2009; provided, however, that such employment may be sooner terminated pursuant to the terms of this Agreement.

Management of the Company. The Executive shall devote the Executive's time, best efforts, attention and skill to, and shall perform faithfully, loyally and efficiently the Executive's duties as President of the Company. Further, the Executive will punctually and faithfully perform and observe any and all rules and regulations which the Company may now or shall hereafter reasonably establish governing the Executive's conduct and the conduct of the Company's business which are consistent with this Agreement.

Compensation; Benefits. In consideration of the services rendered to the Company by the Executive, the Company shall pay the Executive a salary at the annual rate of $96,000 (the “Salary”). The Salary shall be payable in accordance with the normal payroll practices of the Company then in effect. The Salary, and all other forms of compensation paid to the Executive hereunder, shall be subject to all applicable taxes required to be withheld by the Company pursuant to federal, state or local law. The Executive shall be solely responsible for income taxes imposed on the Executive by reasons of any cash or non-cash compensation and benefits provided by this Agreement.

In addition to the Salary, during the Employment Term, the Executive shall be entitled to: (i) all legal and religious holidays and two (2) weeks paid vacation per annum; (ii) participate in all employee benefit plans and/or arrangements adopted by the Company relating to pensions, hospital, medical, dental, disability and life insurance, deferred salary and savings plans, and other similar employee benefit plans or arrangements to the extent that the Executive meets the eligibility requirements for any such plan as in effect from time to time; (iii) payment by the Company directly, or reimbursement by the Company for, reasonable and customary business and out-of-pocket expenses incurred by the Executive in connection with the performance by the Executive of the Executive's duties under this Agreement in accordance with the Company's policies and practices for reimbursement of such expenses, as in effect from time to time , including, without limitation, reasonable and necessary travel, lodging, entertainment and meals incurred by the Executive in furtherance of the Company's business and at the Company's request; and (iv) reimbursement by the Company for cellular phone expenses and car allowance (car allowance shall not exceed $600 monthly).

Termination of Employment. The Executive's employment hereunder shall terminate upon the earliest to occur of any the following events, on the dates and at the times specified below:

(i) the close of business on January 26, 2009 (the “Expiration Date”);

(ii) the close of business on the date of the Executive's death (“Death”);

(iii) the close of business on the Termination Date (as defined below) specified in the Notice of Termination (as defined below) which the Company shall have delivered to the Executive due to the Executive's Disability. “Disability” shall mean if (i) the Executive is absent from work for 30 calendar days in any twelve-month period by reason of illness or incapacity whether physical or otherwise) or (ii) the Company reasonably determines that the Executive is unable to perform his duties, services and responsibilities by reason of illness or incapacity (whether physical or otherwise) for a total of 30 calendar days in any twelve-month period during the Employment Term. The Executive agrees, in the event of any dispute under this Section, and after receipt by the Executive of such Notice of Termination from the Company, to submit to a physical examination by a licensed physician selected by the C ompany. The Executive may seek a second opinion from a licensed physician acceptable to the Company. If the results of the first examination and the second examination are different, a licensed physician selected by the physicians who have performed the first and second examinations shall perform a third physical examination of the Executive, the result of which shall be determinative for purposes of this Section;

(iv) the close of business on the Termination Date specified in the Notice of Termination which the Executive shall have delivered to the Company to terminate his employment (“Voluntary Termination”);

(v) the close of business on the Termination Date specified in the Notice of Termination which the Company shall have delivered to the Executive to terminate the Executive's employment for Cause. “Cause” as used herein means termination based on (i) the Executive's material breach of this Agreement, (ii) conviction of the Executive for (a) any crime constituting a felony in the jurisdiction in which committed, (b) any crime involving moral turpitude whether or not a felony), or (c) any other criminal act against the Company involving dishonesty or willful misconduct intended to injure the Company (whether or not a felony), (iii) substance abuse by the Executive, (iv) the failure or refusal of the Executive to follow one or more lawful and proper directives of the Board of Directors delivered to the Executive in writing, or (v) willful malfeasance or gross misconduct by the Executive which discredits or damages the Company.

Any purported termination by the Company or the Executive (other than by reason of Death or on the Expiration Date) shall be communicated by written Notice of Termination to the other. As used herein, the term “Notice of Termination” shall mean a notice which indicates the specific termination provision in this Agreement relied upon and sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated. After receipt of a Notice of Termination, the Executive shall continue to be available to the Company on a part-time basis at reasonable and customary hourly rates to assist in the necessary transition.

As used herein, the term “Termination Date” shall mean, (i) in the case of Death, the date of the Executive's death, (ii) in the case of expiration of the term hereof, the Expiration Date, or (iii) in all other cases, the date specified in the Notice of Termination.

Employee Covenants.

Trade Secrets and Proprietary Information. The Executive agrees and understands that due to the Executive's position with the Company, the Executive will be exposed to, and has received and will receive, confidential and proprietary information of the Company or relating to the Company's business or affairs collectively, the “Trade Secrets”), including but not limited to technical information, product information and formulae, processes, business and marketing plans, strategies, customer information, other information concerning the Company's services or products, promotions, development, financing, expansion plans, business policies and practices and other forms of information considered by the Company to be proprietary and confidential and in the nature of trade secrets.

Representations and Warranties of the Executive. The Executive represents and warrants to the Company that:

(i) The Executive's employment by the Company as contemplated will not conflict with, and will not be constrained by, any prior or current employment, consulting agreement or relationship, whether written or oral; and

(ii) The Executive does not possess confidential information arising out of any employment, consulting agreement or relationship with any person or entity other than the Company which could be utilized in connection with the Executive's employment by the Company.

Binding Effect or Assignment. This Agreement shall inure to the benefit of and be binding upon the parties and their respective heirs, executors, representatives, states, successors and assigns, including any successor or assign to all or substantially all of the business and/or assets of the Company, whether direct or indirect, by purchase, merger, consolidation, acquisition of stock, or otherwise; provided, however, that the Executive, or any beneficiary or legal representative of the Executive, shall not assign all or any portion of the Executive's rights or obligations under this Agreement without the prior written consent of the Company.

Notices. All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed to have been duly given or made as of the date delivered, mailed or transmitted, and shall be effective upon receipt.

Amendment and Modification. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by each of the Executive and the Company. No such waiver or discharge by either party hereto at any time or any waiver or discharge of any breach by the other party hereto of, or compliance with, any condition or provision of this agreement to be performed by such other party, shall be deemed a waiver or discharge of similar or dissimilar provisions or conditions, or a waiver or discharge of any breach of any provisions, at the same or at any prior or subsequent time.

10.

Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of California without giving effect to the conflict of law principles of that state.

11.

Severability. In the event that any one or more of the provisions of this Agreement shall be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other portion of this Agreement, and this Agreement shall be construed as if such provision had never been contained herein.

12.

Withholding Taxes. Notwithstanding anything contained herein to the contrary, all payments required to be made hereunder by the Company to the Executive, or his estate or beneficiaries, shall be subject to the withholding of such amounts as the Company may reasonably determine it should withhold pursuant to any applicable federal, state or local law or regulation.

13.

Arbitration of Disputes. The parties hereto mutually consent to the resolution by arbitration of all claims and controversies arising out of or relating to this Agreement.

14.

Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.

15.

Entire Agreement. This Agreement constitutes the entire agreement between the parties and supersedes any and all prior agreements, written or oral, understandings and arrangements, either oral or written, between the parties with respect to the subject matter, and shall, as of the date hereof, constitute the only employment agreement between the parties.

16.

Further Assurances. Each party shall do and perform, or cause to be done and performed, all further acts and things and shall execute and deliver all other agreements, certificates, instruments, and documents as any other party reasonably may request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated.

17.

Construction. The headings in this Agreement are for reference purposes only and shall not limit or otherwise affect the meaning or interpretation of this Agreement.

IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date first above written.

“Company”

By: /s/ Gary Nerison

Name: Gary Nerison, Secretary

“Executive”

By: /s/ James Bickel

Name: James Bickel

EX-10 8 exhibit102.htm Director Contract

EXHIBIT 10.2

Agreement to Serve

Board of Directors

This Agreement (the "Agreement") is made as of March 1, 2008 by and between James Bickel ("Individual”) and S3 Investment Company, Inc., a California company (the "Company") in the following factual context:

Recitals

The Company is desirous of the services of Individual by entering into this Agreement and Individual agrees to perform services on behalf of the Company in accordance with the terms and conditions set forth herein.

NOW, THEREFORE, the parties agree as follows:

1. Services. During the term of this Agreement, Individual agrees to serve as the Company’s Chairman of the Board of Directors and to provide such services, as such, in accordance with the terms and conditions of this Agreement. Such services shall include attending the annual shareholder’s meeting, being available for telephonic meetings as necessary and other services that are customary and within the scope as a Director of a public company.

Term. The term of this Agreement shall begin on March 1, 2008 and shall continue for a period of twelve (12) months or longer, if agreed in writing by both parties.

Hold Harmless and Indemnity. During the term of this Agreement and while Individual is acting on behalf of the Company as a Director, Company agrees to hold Individual harmless and to indemnify Individual and to provide legal defense for Individual as to any lawsuit or other action brought against Individual while acting on behalf of Company as a Director.

4. Consideration and Payment. During the term of this Agreement the

Company shall pay Individual the sum of $2,000 per month payable in arrears on the first of each following month, commencing on March 1, 2008 plus any pre-approved expenses incurred on behalf of the Company including but not limited to travel expenses to attend Board meetings.

Non-Disclosure. Individual shall not, during the term of this Agreement and for a period of 2 years thereafter, disclose any confidential or proprietary information of the Company to any person, firm, corporation, partnership, association, or other entity (other than to persons in the Company qualified to receive such information) for any reason or purpose whatsoever nor shall Consultant make use of any such confidential or proprietary information for Individual's purposes or for the benefit of any other person, firm, corporation or other entity except the Company. For purposes of this Agreement, the term "confidential information" shall mean any and all information which is known to Individual which relates to the business operations of the Company, including, without limitation, trade secrets, books and records, pricing policies and information which is not known to others, or readily available to others from sources other than the Company and is not in the public domain.

Return of Records. Upon the expiration of this Agreement, Individual shall deliver to the Company all records, reports, notes, memoranda and equipment of any nature and all copies thereof relating to the business of the Company that may be in the possession or under the control of Individual.

Notices. All notices, requests and other communications which are required or may be given hereunder shall be in writing and shall be delivered personally, or by facsimile, telegram or air courier or sent by registered or certified mail, return receipt requested, postage prepaid and shall be deemed given upon receipt by the party to whom sent, if sent to an address set forth below:

If to Individual:

James Bickel

903 Redwood Drive

Danville, CA 94506

If to Company:

Gary Nerison

S3 Investment Company, Inc.

4115 Blackhawk Plaza Circle, Suite 100

Danville, California, 94506

Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which taken together shall constitute but one and the same instrument.

Governing Law. This Agreement shall be governed by, interpreted under, construed and enforced in accordance with the laws of the State of California applicable to agreements made and to be performed wholly within the State of California.

10.

Entire Agreement. The terms of this Agreement are intended by the parties as a final expression of the agreement with respect to such terms as are included in this Agreement and may not be contradicted by evidence of any prior or contemporaneous agreement.

11.

Third Party Rights. The parties do not intend to confer any benefit hereunder on any person, firm or corporation other than the parties hereto.

12.

Title and Headings. Title and headings of any sections of this Agreement are for convenience of reference only and shall not affect the construction of any provision of this Agreement.

13.

Pronouns. All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine or neuter, singular or plural.

14.

Further Assurances. The parties agree to do such further acts and things and to execute and deliver such additional agreements and instruments as the other may reasonably be required to consummate, evidence or confirm.

15.

Assignment. This Agreement constitutes an agreement for personal services and the rights, duties, and obligations hereunder may not be assigned or delegated by Individual, and any attempted assignment or delegation by Individual is void.

16.

Severability. Should any part of this Agreement for any reason be declared invalid, such decision shall not affect the validity of any remaining provisions, which remaining provisions shall remain in force and effect as if this Agreement had been executed with the invalid portion thereof eliminated, and it is hereby declared that it is the intention of the parties that they would have executed the remaining portion of this Agreement without including any such part, parts, or portions which may, for any reason, be hereafter declared invalid. If any provision of this Agreement is held invalid or unenforceable with respect to particular circumstances, such provisions shall nevertheless remain in full force and effect in all other circumstances.

17.

Attorneys' Fees. In any action in connection with the preservation of the rights of any party hereto or the enforcement of or the breach or threatened breach of any term or covenant of this Agreement brought by any party, the prevailing party hereunder shall be entitled to recover from the other party all reasonable attorneys' fees and expenses incurred in connection with such action.

18.

Authority and Execution. Each person executing this Agreement on behalf of a party hereto represents and warrants that he is duly and validly authorized to do so on behalf of such party, with full right and authority to exercise this Agreement and to bind such party with respect to all of the obligations hereunder.

IN WITNESS WHEREOF, the parties have executed this Agreement on the date first set forth above.

INDIVIDUAL:

S3 INVESTMENT COMPANY, INC.

By: /s/ James Bickel

By: /s/ Gary Nerison

James Bickel

Gary Nerison, Secretary

EX-10 9 exhibit103.htm

EXHIBIT 10.3

Agreement to Serve

Board of Directors

This Agreement (the "Agreement") is made as of March 1, 2008 by and between Gary Nerison ("Individual”) and S3I Investment Company, Inc., a California company (the "Company") in the following factual context:

Recitals

NOW, THEREFORE, the parties agree as follows:

1. Services. During the term of this Agreement, Individual agrees to sit on the Company’s Board of Directors and to provide such services, as such, in accordance with the terms and conditions of this Agreement. Such services shall include attending the annual shareholder’s meeting, being available for telephonic meetings as necessary and other services that are customary and within the scope as a Director of a public company.

Term. The term of this Agreement shall begin on March 1, 2008 and shall continue for a period of twelve (12) months or longer, if agreed in writing by both parties.

4. Consideration and Payment. During the term of this Agreement the

Non-Disclosure. Individual shall not, during the term of this Agreement and for a period of 2 years thereafter, disclose any confidential or proprietary information of the Company to any person, firm, corporation, partnership, association, or other entity (other than to persons in the Company qualified to receive such information) for any reason or purpose whatsoever nor shall Consultant make use of any such confidential or proprietary information for Individual's purposes or for the benefit of any other person, firm, corporation or other entity except the Company. For purposes of this Agreement, the term "confidential information" shall mean any and all information which is known to Individual which relates to the business operations of the Company, including, without limitation, trade secrets, books and records, pricing policies and information which is not known to others, or r eadily available to others from sources other than the Company and is not in the public domain.

If to Individual:

Gary Nerison

9000 Crow Canyon Rd., Suite S -233

Danville, Ca 94506

If to Company:

James Bickel

S3I Investment Company, Inc.

4115 Blackhawk Plaza Circle, Suite 100

Danville, California, 94506

Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which taken together shall constitute but one and the same instrument.

10.

11.

Third Party Rights. The parties do not intend to confer any benefit hereunder on any person, firm or corporation other than the parties hereto.

12.

Title and Headings. Title and headings of any sections of this Agreement are for convenience of reference only and shall not affect the construction of any provision of this Agreement.

13.

Pronouns. All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine or neuter, singular or plural.

14.

15.

16.

17.

18.

IN WITNESS WHEREOF, the parties have executed this Agreement on the date first set forth above.

INDIVIDUAL:

S3I INVESTMENT COMPANY, INC.

By: /s/ Gary Nerison

By:James Bickel

Gary Nerison

James Bickel, Chief Executive Officer

EX-10 10 exhibit104.htm Converted by EDGARwiz

EXHIBIT 10.4

Agreement to Serve

Board of Directors

This Agreement (the "Agreement") is made as of March 1, 2008 by and between Manhong Liu ("Individual”) and S3I Investment Company, Inc., a California company (the "Company") in the following factual context:

Recitals

NOW, THEREFORE, the parties agree as follows:

Term. The term of this Agreement shall begin on March 1, 2008 and shall continue for a period of twelve (12) months or longer, if agreed in writing by both parties.

4. Consideration and Payment. During the term of this Agreement the

Non-Disclosure. Individual shall not, during the term of this Agreement and for a period of 2 years thereafter, disclose any confidential or proprietary information of the Company to any person, firm, corporation, partnership, association, or other entity (other than to persons in the Company qualified to receive such information) for any reason or purpose whatsoever nor shall Consultant make use of any such confidential or proprietary information for Individual's purposes or for the benefit of any other person, firm, corporation or other entity except the Company. For purposes of this Agreement, the term "confidential information" shall mean any and all information which is known to Individual which relates to the business operations of the Company, including, without limitation, trade secrets, books and records, pricing policies and information which is not known to others, or r eadily available to others from sources other than the Company and is not in the public domain.

If to Individual:

Manhong Liu

7 Ivy Lane

Natick, MA 01760

If to Company:

James Bickel

S3I Investment Company, Inc.

4115 Blackhawk Plaza Circle, Suite 100

Danville, California, 94506

Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which taken together shall constitute but one and the same instrument.

10.

11.

Third Party Rights. The parties do not intend to confer any benefit hereunder on any person, firm or corporation other than the parties hereto.

12.

Title and Headings. Title and headings of any sections of this Agreement are for convenience of reference only and shall not affect the construction of any provision of this Agreement.

13.

Pronouns. All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine or neuter, singular or plural.

14.

15.

16.

17.

18.

IN WITNESS WHEREOF, the parties have executed this Agreement on the date first set forth above.

INDIVIDUAL:

S3I INVESTMENT COMPANY, INC.

By:/s/ Manhong Liu

By:/s/ James Bickel

Manhong Liu

James Bickel, Chief Executive Officer

EX-10 11 exhibit105.htm BRIDGE LOAN AGREEMENT

EXHIBIT 10.5

BRIDGE LOAN AGREEMENT

This Bridge Loan Agreement is made as of January 28, 2008 (the “Effective Date”) between S3 Investment Company, Inc., a California corporation (the “Company” or “SIVC”), and the investors listed on the SCHEDULE OF INVESTORS attached hereto (the “Investors”).

The Company is currently in need of funds to help finance its operations until the closing of its next round of financing, but will not be able to complete any such transaction without an immediate infusion of short-term working capital. In order to provide for this need, the Investors and the Company are now entering into a bridge loan in the aggregate amount of up to $600,000 (the “Commitment Amount”), and related transactions, on the terms of this Agreement.

In consideration of the mutual covenants contained in this Agreement, it is agreed as follows:

1. Initial Bridge Transaction.

Concurrently with execution of this Agreement, each Investor will deliver to the Company funds equal to the "Initial Loan Amount" listed on the Schedule of Investors. Upon receipt of the funds, the Company will issue to each Investor a Senior Promissory Note in the form attached as Exhibit A (which, with any notes on substantially the same terms that may be issued to any or all of the Investors, are herein called the “Senior Notes”), in a principal amount equal to the "Initial Loan Amount" listed on the Schedule of Investors. The Investors may, but are under no obligation to, invest additional amounts during each Additional Closing (as defined below) and pursuant to Section 2.2 below.

2. Closing(s).

2.1

The Closing. The purchase and sale of the Senior Notes will take place at the offices of Crone Rozynko, LLP, 101 Montgomery Street, Suite 1950, San Francisco California 94104, at 11:00 a.m. Pacific time, on January 28, 2008, or at such other time and place as the Company and the Investors who have agreed to purchase a majority of the aggregate principal amount of the Senior Notes listed on the Schedule of Investors, mutually agree upon (which time and place are referred to as the “Closing”). At the Closing, each Investor will deliver to the Company payment in full for the Senior Note in the amount set forth opposite such Investor’s name listed on the Schedule of Investors, which such Investor agrees to purchase at the Closing by (i) a check payable to the Company’s order, (ii) wire transfer of funds to the Company, or (iii) any combination of the foregoing. At the Closing, the Company will deliver to each Investor a duly executed Senior Note in the principal amount set forth opposite such Investor’s name on the Schedule of Investors.

2.2

Additional Closing(s).

(a)

Conditions of Additional Closing(s). On the funding dates set forth below, the Company may, at one or more additional closings (each an “Additional Closing”), issue and sell to the Investors additional Senior Notes in proportion to each Investor to the Senior Notes sold at the Closing, and such Senior Notes having an aggregate principal amount of up to $500,000, provided, however, that achievement of the milestone event at each such Additional Closing shall have been previously approved by a majority of the aggregate principal amount of the Senior Notes:


Funded	Funding Date	Funding Amount	Milestone Date	Milestone Event
Yes	February 1, 2008,	$60,000	Feb 1, 08	Execution of a Joint Venture Agreement between Redwood Capital, Inc. and a Chinese reverse takeover (“RTO”) public listing client company
Yes	March 7, 2008	$60,000	Mar 7, 08	Execution of another Joint Venture Agreement between Redwood Capital, Inc. and a Chinese RTO client company
Yes	April, 17 2008	$60,000	April 17, 2008	Hire Compliance Officer and Corporate Controller (Resumes attached)
	July 3, 2008	$60,000	July 3, 08	Engage audit for S3 Investments, Inc.
	Aug 10, 2008	$60,000	Aug 10, 08	Completion of an SEC audit of SIVC for the Two Years ended June 30, 2008
	Sept 5, 2008	$60,000	Sept 5, 08	Redwood Capital, Inc. client company obtaining a term sheet from a lead investor for its RTO funding
	Sept 15, 2008	$80,000	Sept 15, 08	Form 10 Registration Statement Filed Sept. 25^th, ’08.
	Oct 5, 2008	$60,000	Oct 5, 08	Another Redwood Capital, Inc. client company obtaining a term sheet from a lead investor for its RTO funding

(b)

Pre-Closing Delivery of Funds. The Company and the Investors acknowledge that certain Investors may deliver checks or wire transfers to the Company in anticipation of Closing or any Additional Closing hereunder, and the Company agrees that it will hold such hinds in escrow on behalf of the Investors until the Closing conditions in Section 7 of this Agreement have been satisfied with regard to such Closing. If such Closing does not occur within five (5) business days of delivery of such funds, the Company will return on the next business day to any Investor the entire payment.

3. Subordination.

(a) All indebtedness of the Company is hereby made subordinate and junior to the Senior Indebtedness (as defined below). Upon

(1) any distribution of all or substantially all of the assets of the Company, or

all principal and interest due or to become due upon all Senior Indebtedness will first be paid in full before any person will be entitled to receive any payments or retain any assets so paid or distributed; the Investors irrevocably authorize and direct the Company to effect all payments required by this sentence.

(b) For purposes of this Agreement, “Senior Indebtedness” means all principal, premium, interest, costs and other amounts due in respect of the Senior Notes (and all renewals, extensions, refundings, refinancings and replacements of such obligations).

4. Representations and Warranties of The Company.

The Company hereby represents and warrants to each Investor that, except as set forth in the Schedule of Exceptions (the “Schedule of Exceptions”) attached to this Agreement as Exhibit B (which Schedule of Exceptions shall be deemed to be representations and warranties to the Investors by the Company under this Section 4), the statements in the following paragraphs of this Section 4 are all true and complete as of immediately prior to the Closing and Additional Closing:

4.1

Organization, Good Standing, and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of California and has all requisite corporate power and authority to carry on its business as now conducted and as proposed to be conducted. The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure so to qualify would have a material adverse effect on its business or properties. The Company has all requisite corporate power and authority to own its properties, to carry on its business as now conducted, and to enter into and perform its obligations under this Agreement and the agreements and instruments contemplated by it.

4.2

Capitalization. The authorized capitalization of the Company immediately prior to the Closing is as follows:

(a) Common Stock. 5,000,000,000 shares of Common Stock
(the “Common Stock”), 1,300,000,000 of which were issued and outstanding. The Company has reserved 12,000,000 shares of Common Stock for issuance upon conversion of the Preferred Stock.

(b)

Preferred Stock.

100,000,000 shares of Preferred Stock (the
“Preferred Stock”), 12,000,000 of which have been as designated Series A Preferred, all of which are issued and outstanding.

(c)

Other Rights to Acquire Stock. Except for (i) the conversion privileges of the Senior Notes, (ii) the Common Stock issuable on conversion of the Senior Notes or in payment of interest on the Senior Notes, and (iii) the conversion privileges of the Preferred Stock; there are no options, warrants, conversion privileges or other rights (or agreements for any such rights) outstanding to purchase or otherwise obtain from the Company any of the Company’s securities.

4.3

Authorization.

All corporate action on the part of the Company necessary for the authorization, execution and delivery of this Purchase Agreement, the Put Agreement attached hereto as Exhibit C (the “Put Agreement”) and the performance of all obligations of the Company hereunder, and the authorization, issuance and delivery of each Senior Note has been taken or will be taken prior to the relevant Closing. This Purchase Agreement, the Put Agreement and the Senior Notes, when executed and delivered by the Company, shall constitute valid and legally binding obligations of the Company, enforceable in accordance with their terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally, and (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable r emedies.

4.4

Valid Issuance. The Senior Notes and the shares of the Common Stock issuable on conversion of the Senior Notes or in payment of interest on the Senior Notes (the “Shares”, and collectively with the Senior Notes, the “Securities”), when issued, sold, and delivered in accordance with the terms of the this Agreement and Senior Note, will be duly and validly issued, fully paid and non-assessable and, based in part upon the representations of the Investors in this Purchase Agreement, will be issued in compliance with all applicable federal and state securities laws.

4.5

Compliance with Other Instruments. The Company is not in violation or default of any provisions of any instrument, judgment, order, writ, decree or contract to which it is a party or by which it is bound. The execution, delivery and performance of the Purchase Agreement and the Put Agreement, the consummation of the transactions contemplated hereby and the authorization, issuance and delivery of the Securities will not result in any such violation or be in conflict with or constitute, with or without the passage of time and giving of notice, either a default under any such provision, instrument, judgment, order, writ, decree or contract, or an event which results in the creation of any lien, charge or encumbrance upon any assets of the Company. The Company: (a) has entered into the bridge transaction after careful consideration of all alternatives; (b) is aware of the potential return to the Investors pur suant to the bridge transaction; (c) acknowledges that the amount of the potential return to the Investors appropriately reflects the risk inherent in the bridge transaction; and (d) hereby covenants not to assert a defense of usury to any action by an Investor to collect any amount due under a Senior Note.

5. Investors' Representations.

Each Investor represents and warrants to the Company as follows:

(a) the Investor is an "accredited investor" within the meaning of

Regulation D under the Securities Act of 1933, as amended (the “Securities

Act”);

(b) the Investor is acquiring the Securities for its own account for

purposes of investment, and not with a view toward the sale or other

distribution thereof,

deems necessary to make a judgment with respect to the acquisition of the

Securities, including the opportunity to ask questions of and discuss the

Company's business with management of the Company;

(d) the Investor understands that the Securities must be held

indefinitely unless registered under the Securities Act or unless an

exemption from registration exists, that no public market now exists for

the Securities, and that there may never exist a public market for the Securities;

and

(e) the Investor understands that the Securities have not been

registered under the Securities Act (on the ground that the sale of the

Securities is exempt from registration as not involving a public offering),

and that the reliance of the Company on such exemption is based upon the

representations made in this section.

6. Restricted Securities.

The Securities have not been registered under the Securities Act or any state securities law, and are not transferable except pursuant to

(a) a public offering registered under the Securities Act, or

(b) subject to the conditions specified in the following subsection, Rule 144 of the Securities and Exchange Commission (if available), or any other legally available means of transfer.

7. Closing Conditions.

7.1

Conditions to Investors’ Obligations. The obligations of each Investor under Section 2 of this Agreement are subject to the fulfillment or waiver, on or before the Closing and each Additional Closing, of each of the following conditions, the waiver of which shall not be effective against any Investor who does not consent to such waiver, which consent may be given by written or email communication to the Company or its counsel:

(a)

Each of the representations and warranties of the Company contained in Section 4 shall be true and correct on and as of the Closing or Additional Closing, as the case may be, with the same effect as though such representations and warranties had been made on and as of the date of the Closing or Additional Closing, as the case may be.

(b)

The Company shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by it on or before the Closing or Additional Closing, as the case may be, and shall have obtained all approvals, consents and qualifications necessary to complete the purchase and sale described herein.

(c)

The Company and each of the Investors shall have executed this Agreement and the Put Agreement.

(d)

The Company shall have received payment of the Total Purchase Price from all Investors participating in the Closing or Additional Closing, as the case may be, and shall have issued and delivered to each Investor a Senior Note in the principal amount of the Purchase Price.

(e)

The Company shall have entered into an escrow agreement acceptable to investors and deposited shares of Energroup Holdings Corp. (“ENHD”) owned by the Company’s Redwood Capital, Inc. subsidiary in an amount equal to 150% of the Commitment Amount, based on a $4.40 price per share of ENHD.

(f)

The Investors shall have completed to their satisfaction all due diligence review; among other data, the Company shall have provided (i) a projection of cash flows for the life of the Senior Notes, excluding the Interest payments in kind, and (ii) full disclosure of any and all current or pending litigation matters involving the Company, its subsidiaries, officers and directors, including lawsuits and judgments currently in force, pending or threatened.

(g)

The Company shall have entered into lock-up agreements acceptable to Investors with the Company’s insiders (SIVC and Redwood Capital, Inc. Directors, Chairman, President, Managing Director, CEO, CFO and COO) who will be restricted from selling shares in the Company for the first 9 (nine) months unless their sale is above $0.0006 based on the current SIVC pre-split share structure or unless the Notes have been fully redeemed or converted.

(h)

The Company shall have paid the fees and expenses for counsel for the Investors; provided, however, that the Company’s obligation to pay such fees and expenses shall not exceed $5,000.00 in the aggregate.

7.2

Condition to Company’s Obligations. The obligations of the Company to each Investor under this Agreement are subject to the fulfillment or waiver on or before the Closing of the following condition by each Investor:

(a)

Each of the representations and warranties of such Investor contained in Section 5 shall be true and correct on the date of the Closing or Additional Closing, as the case may be, with the same effect as though such representations and warranties had been made on and as of the Closing or Additional Closing, as the case may be.

(b)

Each Investor shall have performed and complied with all agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by it on or before the Closing or Additional Closing, as the case may be, and shall have obtained all approvals, consents and qualifications necessary to complete the purchase and sale described herein.

(c)

The Company and each of the Investors shall have executed this Agreement and the Put Agreement.

Covenants.

8.1

Additional Authorized Shares.

If necessary, the Company shall take all actions reasonably necessary to amend the Company’s Certificate of Incorporation to authorize the additional shares of common stock necessary to accommodate the payment of interest on and any conversion of the Senior Notes.

8.2

Additional Escrow Shares. As necessary to maintain an increased security deposit, 180 days following Closing, the Company shall deposit further shares of ENHD into escrow, if any, such that the value of the total amount of ENHD shares on deposit shall be equal to or greater than 200% of the Commitment Amount, based on the closing bid price per share of ENHD 180 days following the Closing Date.

8.3

Confidentiality.

The Company and each Investor agrees that it will keep the transactions contemplated by this Purchase Agreement strictly secret and confidential, and will not disclose any information concerning this Purchase Agreement or its terms, including the identities of the other Investors, to anyone other than legal counsel and/or financial advisors, who will be informed of and bound by this confidentiality clause.

8.4

No Short Positions.

Each Investor agrees that neither it nor any of its affiliates or assignees shall be short shares of the Company’s common stock during the term of the Senior Notes.

8.5

Financings. For a period beginning at Closing and continuing until all Senior Notes are converted or redeemed (the “Repayment Date”), the Company will suspend any transactions under the current offering under Rule 504 of the Securities Act and with Mazuma Holding Corp. and or Mazuma Corp. or any of their affiliates or related entities or other Rule 504 investors, unless expressly waived by 100% of the Investors, in writing. For a period of up to 12 months from the Repayment Date, the Investors will retain the right to participate in public or private offerings for SIVC of debt or equity or equity linked securities (including debt and any security convertible into equity).

8.6

Use of Proceeds. The Company shall use the net proceeds to be received for the issuance and sale of Senior Notes for working capital purposes.

8.7

No Fundamental Change. Unless otherwise approved by each of the Investors, until the Senior Notes are repaid, and all Shares are sold, the Company will continue to wholly-own its Redwood Capital, Inc. subsidiary, which will continue to be primarily engaged in the structuring and financing of RTO public listing transactions. The Company, its officers, directors, employees and contractors agree to effect all current and future Chinese RTO transactions solely through Redwood Capital, and have any and all amounts earned under such transactions paid exclusively to the Company or Redwood Capital, including equity or cash fees and compensation.

9. Notices.

All notices under this Agreement will be in writing and deemed given upon receipt, by (1) personal delivery, (2) telephonically confirmed fax, (3) receipted courier service or (4) certified or registered mail, return receipt requested, addressed to the principal office of the Company at:

4115 Blackhawk Plaza Circle, Suite 100

Danville, CA 94506

(if to the Company), or to the address shown on the on the Schedule of Investors (if to an Investor). Refusal to accept delivery will be deemed receipt.

10. General.

This Agreement shall be governed by the internal laws of the State of California, without reference to principles of conflict of laws or choice of laws. This Agreement will be binding upon the personal representatives, successors and assigns of the parties hereto, but will not be assignable without the prior written consent of the non-assigning party. This Agreement constitutes the entire agreement between the parties and may not be waived or modified except in writing. This Agreement may be executed in any number of counterparts, each of which will be an original and all of which together will be one instrument. The headings used in this Agreement are for convenience only and will not affect the interpretation hereof.

IN WITNESS WHEREOF, the parties have executed this Bridge Loan

Agreement as of the Effective Date.

S3 INVESTMENT COMPANY, INC.

By /s/ James S. Bickel, Sr.

Name: James S. Bickel, Sr.

Title: President

Investors:

ANCORA GREATER CHINA FUND, LP

By /s/John Micklitsch

Name: John Micklitsch

THE BOSPHOROUS GROUP, INC.

By /s/ Daniel J. McClory

Name: Daniel J. McClory

Title: President

/s/ Matthem Hayden

Matthew Hayden

SCHEDULE TO

BRIDGE LOAN AGREEMENT

SCHEDULE OF INVESTORS

NAME AND ADDRESS INITIAL LOAN

AMOUNT

Ancora Greater China Fund, LP

$66,667

One Chagrin Highlands

2000 Auburn Drive No. 300

Cleveland, OH 44122

Attn: John Micklitsch

The Bosphorous Group, Inc.

$20,833

318 North Carson Street, Suite 208

Carson City, NV 89701

attn: Daniel J. McClory, President

EIN: 88-0418148

Matthew Hayden

$12,500

Hayden Communications, Inc.

c/o Jennifer Heady

9734 Anchor Drive

Longs, SC 29568

Office (760) 994-0034

Cell (760) 613-3695

matt@haydenir.com

EXHIBIT A TO BRIDGE LOAN AGREEMETN

FORM OF NOTE

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933 OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT
REQUIRED UNDER SUCH ACT.

SENIOR PROMISSORY NOTE

S3 Investment Company, Inc.

$____[fill in principal amount] ___ [fill in issue date], 2008

S3 Investment Company, Inc., a California corporation ("Maker"), hereby

promises to pay to ----------[fill in Investor name]------------------------------- ("Holder"),

at --------------[fill in Investor address]------------------------------- or at such other address

as may be specified by Holder, the principal sum of --------[ fill in principal amount] --- Thousand Dollars ($ ----[ fill in principal amount] ----,000), together with interest as described below, in lawful money of the United States of America.

Interest. The principal indebtedness evidenced by this Note shall earn interest at the rate of ten percent (10%) per annum. Interest shall be paid in monthly installments of Maker’s common stock (“Common Stock”), commencing on the first day of the month following the issuance of this Note with all unpaid and accrued interest being due and payable on January 28, 2009. The amount of Common Stock to be issued will be calculated based on 60% of the monthly closing bid price of the Common Stock on the last trading day of such month and will be rounded up to the nearest whole share. Holder, at its discretion, may defer receipt of such shares of Common Stock until such time as its total holdings would not exceed 9.9% of the total issued and outstanding shares of Maker.

Default Interest. During any period in which an Event of Default has occurred and is continuing, Maker shall pay interest on the unpaid principal balance hereof at a rate per annum equal to the lesser of eighteen percent (18%) and the maximum rate permitted by applicable law.

Listing Default. In addition to the foregoing, should Maker not be listed on the OTC BB within 180 days of Closing, Maker shall pay to Holder each month until such listing has been achieved as liquidated damages, and not as a penalty, in the form of an additional note substantially in the form of this Note, in an aggregate principal amount of 2% of the aggregate purchase price paid by such Holder pursuant to the Bridge Loan Agreement among Maker, Holder and certain other investors (the “Bridge Loan Agreement”) for any securities of Maker then held by such Holder.

Prepayment. This Note may be prepaid in full, but not in part, at any time, subject to a prepayment penalty equal to 100% of the principal amount of this Note by providing the Holder with three (3) days’ advance written notice.

Voluntary Conversion. The Holder has the right, at the Holder’s option, prior to the repayment of the outstanding balance under the Note by Maker, to convert such outstanding balance of this Note, into Common Stock of the Maker at a 60% discount to the lowest daily closing bid price of the Common Stock during the 5 trading days prior to the conversion date, but in no event less than $0.0006 per share (the “Conversion Price”). Conversion shall occur only upon surrender of this Note for conversion at the principal offices of Maker, accompanied by written notice of election to convert. The Holder, in its sole discretion, shall be able to convert this Note into an amount that would result in the Holder beneficially owning in excess of 9.99% of the outstanding shares of Common Stock of Maker. Alternatively, also at the Holder’s discretion, Holder may elect to defer receipt of stock converted until such time as it does not exceed 9.9% of the total issued and outstanding shares of SIVC.

Acceleration. Upon failure of Maker to pay any installment in full when due, Holder may, by notice to Maker, accelerate the obligation of Maker to pay the entire balance of this Note plus 100% of the principal amount of this Note, and upon such acceleration there shall be due to Holder such amount as would be due if the Note had been prepaid in accordance with the preceding paragraph on the date notice of acceleration was given by Holder.

Priority. The principal amount of this Note is "Senior Indebtedness" as defined in the Bridge Loan Agreement. As between this Note, on the one hand, and the other senior promissory notes issued by Maker to the other investors under the Bridge Loan Agreement, on the other hand, the notes shall rank equally without preference or priority of any kind over one another, and all payments on account of principal and interest with respect to any of the notes shall be applied ratably and proportionately on all outstanding notes on the basis of the original principal amount of outstanding notes.

Transfer. This Note is registered on the books of Maker and is transferable only by surrender thereof at the principal office of Maker, duly endorsed or accompanied by a written instrument of transfer executed by the registered Holder of this Note. Payment of or on account of principal and interest on this Note shall be made only to or upon the order in writing of the registered Holder.

Lawful Payment. The provisions of this Note and of all agreements now or hereafter existing between Maker and Holder are hereby expressly limited so that in no event whatever shall the amount paid or agreed to be paid to Holder for the use, forbearance or detention of the sums evidenced by this Note exceed the maximum amount permissible under applicable law. If from any circumstance whatever the performance or fulfillment of any provision of this Note, or of any other agreement between Maker and Holder, should involve or purport to require any payment in excess of the limit prescribed by law, then the obligation to be performed or fulfilled is hereby reduced to the limit of such validity, and if from any circumstance whatever Holder should ever receive as interest an amount which would exceed the highest lawful rate, then the amount which would be excessive interest shall be applied to the reduction of principal (or, at Maker's option, be paid over to Maker) and shall not be counted as interest.

Adjustment Provisions. The number and character of shares of Common Stock payable as interest on this Note and issuable upon conversion of this Note (or any shares of stock or other securities or property at the time receivable or issuable upon conversion of this Note) and the Conversion Price therefore, are subject to adjustment upon occurrence of the following events between the date this Note is issued and the date it is converted. Upon each adjustment of the applicable Conversion Price pursuant to this Note outstanding prior to the making of the adjustment in the applicable Conversion Price shall thereafter evidence the right to receive upon payment of the adjusted Conversion Price that number of shares of Common Stock (calculated to the nearest hundredth) obtained from the following formula:

N’

----

E’

where:

N’

the adjusted number of shares issuable upon conversion by payment of the adjusted Conversion Price.

the number or shares previously issuable upon conversion by payment of the Conversion Price prior to adjustment.

E’

the adjusted Conversion Price.

the Conversion Price prior to adjustment.

Adjustment for Stock Splits, Stock Dividends, Recapitalizations, etc.
The Conversion Price of this Note and the number of shares of Common Stock issuable upon conversion of this Note (or any shares of stock or other securities at the time issuable upon conversion of this Note) shall each be proportionally adjusted to reflect any stock dividend, stock split, reverse stock split, reclassification, recapitalization or other similar event affecting the number of outstanding shares of Common Stock (or such other stock or securities).

Adjustment for Rights Issue. If Maker distributes any rights, options or warrants to all holders of its Common Stock entitling them to subscribe for shares of Common Stock or securities convertible into, or exchangeable or exercisable for, shares of Common Stock, in either case, at a price per share less than the market price per share, the applicable Conversion Price shall be adjusted in accordance with the formula:

N x P

----------

E’

-----------------------

O + N

where:

E’

the adjusted Conversion Price.

the then current Conversion Price.

the number of shares of Common Stock outstanding on the record date.

the number of shares of additional Common Stock issued pursuant to such rights, options or warrants.

the price per share of the additional shares of Common Stock.

the market value per share of Common Stock on the record date.

The adjustment shall be made successively whenever any such rights, options or warrants are issued and shall become effective immediately after the record date for the determination of stockholders entitled to receive the rights, options or warrants. If at the end of the period during which such rights, options or warrants are exercisable, not all rights, options or warrants shall have been exercised, the applicable Conversion Price shall be promptly readjusted to what it would have been if “N” in the above formula had been the number of shares actually issued.

Adjustment for Other Dividends and Distributions. In case Maker shall make or issue, or shall fix a record date for the determination of eligible holders entitled to receive, a dividend or other distribution payable with respect to the capital stock that is payable in (a) securities of Maker, or (b) assets (other than cash dividends paid or payable solely out of retained earnings), then, and in each such case, the Holder, upon conversion of this Note at any time after the consummation, effective date or record date of such event, shall receive, in addition to the shares of Common Stock issuable upon such conversion prior to such date, the securities or such other assets of Maker to which the

Holder would have been entitled upon such date if the Holder had converted this Note immediately prior thereto (all subject to further adjustment as provided in this Note).

Conversion of Stock. In case all the authorized Common Stock of Maker is convened, pursuant to Maker’s Certificate of Incorporation, into Common Stock or other securities or property. or the Common Stock otherwise ceases to exist, then, in such case, the Holder, upon conversion of this Note at any time after the date on which the Common Stock is so converted or ceases to exist (the “Termination Date”), shall receive, in lieu of the number of shares of Common Stock that would have been issuable upon such conversion immediately prior to the Termination Date (the “Former Number of Shares of Common Stock”), the stock and other securities and property which the Holder would have been entitled to receive upon the Termination Date if the Holder had converted this Note with respect to the Former Number of Shares of Common Stock immediately prior to the Termination Date (all subject to further adjustment a s provided in this Note).

Adjustment for Common Stock Issue. If Maker issues shares of Common Stock for a consideration per share less than the Conversion Price per share on the date Maker fixes the offering price of such additional shares, the applicable Conversion Price shall be adjusted in accordance with the formula:

------

E’

-----------------

where:

E’

the adjusted Conversion Price.

the then current Conversion Price.

the number of shares of Common Stock outstanding immediately prior to the issuance of such additional shares.

the aggregate consideration received for the issuance of such additional shares.

the number of shares outstanding of Common Stock immediately after the issuance of such additional shares of Common Stock.

The adjustment shall be made successively whenever any such issuance is made, and shall become effective immediately after such issuance.

Adjustment for Convertible Securities Issue. If Maker issues any securities convertible into or exchangeable or exercisable for Common Stock for a consideration per share of Common Stock initially deliverable upon conversion, exchange or exercise of such securities less than the Conversion Price per share on the date of issuance of such securities or on the date Maker fixes the offering price of such securities, the applicable Conversion Price shall be adjusted in accordance with the formula:

------

E’

----------------

where:

E’

the adjusted Conversion Price.

the then current Conversion Price.

the number of shares of Common Stock outstanding immediately prior to the issuance of such securities.

the aggregate consideration received for the issuance of such securities.

the maximum number of shares of Common Stock deliverable upon conversion or in exchange for such securities at the initial conversion, exchange or exercise rate.

The adjustment shall be made successively whenever any such issuance is made, and shall become effective immediately after such issuance.

If all of the Common Stock deliverable upon conversion, exchange or exercise of such securities have not been issued when such securities are no longer outstanding, then the applicable Conversion Price shall promptly be readjusted to the applicable Conversion Price which would then be in effect had the adjustment upon the issuance of such securities been made on the basis of the actual number of shares of Common Stock issued upon conversion, exchange or exercise of such securities.

Notice of Adjustments. Maker shall promptly give written notice of each adjustment or readjustment of the Conversion Price or the number of shares of Common Stock or other securities issuable upon conversion of this Note. The notice shall describe the adjustment or readjustment and show in reasonable detail the facts on which the adjustment or readjustment is based

No Change Necessary. The form of this Note need not be changed because of

any adjustment in the Conversion Price or in the number of shares of Common Stock issuable upon its conversion

Reservation of Stock. If at any time the number of shares of Common Stock or other securities issuable upon conversion of this Note shall not be sufficient to effect the conversion of this Note, Maker will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock or other securities issuable upon conversion of this Note as shall be sufficient for such purpose.

No Rights Or Liabilities As Shareholder. This Note does not by itself entitle the Holder to any voting rights or other rights as a shareholder of Maker. In the absence of conversion of this Note, no provisions of this Note, and no enumeration herein of the rights or privileges of the Holder, shall cause the Holder to be a shareholder of Maker for ally purpose

No Impairment. Maker will not, by amendment of its Certificate of Incorporation or Bylaws, or through reorganization, consolidation, merger, dissolution, issue or sale of securities, sale of assets or any other voluntary action, willfully avoid or seek to avoid the observance or performance of any of the terms of this Note, but will at all times in good faith assist in the carrying out of all such terms and in the taking of an such action as may be necessary or appropriate in order to protect the rights of the Holder under this Note against wrongful impairment. Without limiting the generality of the foregoing, Maker will take all such action as may be necessary or appropriate in order that Maker may duly and validly issue fully paid and nonassessable shares of Conversion Stock upon the conversion of this Note

Events of Default. The occurrence of any of the following shall constitute an “Event of Default” under this Note:

(a)

Failure to Pay. Maker shall fail to pay (i) when due any principal or interest payment on the due date hereunder or (ii) any other payment required under the terms of this Note on the date due and such payment shall not have been made within five days of Maker’s receipt of Holder’s written notice to Maker of such failure to pay; or

(b)

Breaches of Covenants. Maker shall fail to observe or perform any other covenant, obligation, condition or agreement contained in this Note, the Bridge Loan Agreement, the Put Agreement among Maker, Holder and certain other investors or the other documents or instruments issued in connection herewith or therewith (collectively the “Transaction Documents”) (other than the obligations specified in paragraph (a) “Failure to Pay” above), including, without limitation, (i) failure to achieve OTB CC listing within 180 days of Closing, (ii) subsequent delisting from the OTC BB, (iii) Maker or its principals engaging in a Chinese RTO transaction outside of Maker or its wholly-owned Redwood Capital subsidiary, (iii) falling below the 150% and 200% Security amount in Escrow for the applicable periods for five consecutive days and (A) such failure shall continue for 15 days, or (B) if such failure is not curable within such 15-day period, but is reasonably capable of cure within 30 days, either (I) such failure shall continue for 30 days or (II) Maker shall not have commenced a cure in a manner reasonably satisfactory to Holder within the initial 15-day period; or

(c)

Representations and Warranties. Any representation, warranty, certificate, or other statement (financial or otherwise) made or furnished by or on behalf of Maker to Holder in writing in connection with this Note or any of the other Transaction Documents, or as an inducement to Holder to enter into this Note and the other Transaction Documents, shall be false, incorrect, incomplete or misleading in any material respect when made or furnished; or

(d)

Other Payment Obligations. Any indebtedness under any bonds, debentures, notes or other evidences of indebtedness for money borrowed (or any guarantees thereof, excluding this Note and the other Transactions Documents) by Maker in an aggregate principal amount in excess of $50,000 is not paid when due either at its stated maturity or upon acceleration thereof, and such indebtedness is not discharged, or such acceleration is not rescinded or annulled; or

(e)

Voluntary Bankruptcy or Insolvency Proceedings. Maker shall (i) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian of itself or of all or a substantial part of its property, (ii) be unable, or admit in writing its inability, to pay its debts generally as they mature, (iii) make a general assignment for the benefit of its or any of its creditors, (iv) be dissolved or liquidated, (v) become insolvent (as such term may be defined or interpreted under any applicable statute), (vi) commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or consent to any such relief or to the appointment of or taking possession of its property by any official in an involuntary case or other proceeding commenced against it, or ( vii) take any action for the purpose of effecting any of the foregoing; or

(f)

Involuntary Bankruptcy or Insolvency Proceedings. Proceedings for the appointment of a receiver, trustee, liquidator or custodian of Maker or of all or a substantial part of the property thereof, or an involuntary case or other proceedings seeking liquidation, reorganization or other relief with respect to Maker or the debts thereof under any bankruptcy, insolvency or other similar law now or hereafter in effect shall be commenced and an order for relief entered or such proceeding shall not be dismissed or discharged within 30 days of commencement; or

(g)

Judgments. A final judgment or order for the payment of money in excess of $50,000 shall be rendered against Maker and the same shall remain undischarged for a period of 30 days during which execution shall not be effectively stayed, or any judgment, writ, assessment, warrant of attachment, or execution or similar process shall be issued or levied against a substantial part of the property of Maker and such judgment, writ, or similar process shall not be released, stayed, vacated or otherwise dismissed within 30 days after issue or levy; or

(h)

Transaction Documents. Any Transaction Document or any material term thereof shall cease to be, or be asserted by Maker not to be, a legal, valid and binding obligation of Maker enforceable in accordance with its; or

Rights of Holder upon Default. Upon the occurrence or existence of any Event of Default (other than an Event of Default described in paragraphs (e) or (f) involving bankruptcy) and at any time thereafter during the continuance of such Event of Default, Holder may, with the consent of a Majority in Interest of the holders of the Notes issued under the Bridge Loan Agreement, by written notice to Maker, declare all outstanding obligations payable by Maker hereunder to be immediately due and payable without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived, anything contained herein or in the other Transaction Documents to the contrary notwithstanding. Upon the occurrence or existence of any Event of Default described in paragraphs (e) or (f) involving bankruptcy, immediately and without notice, all outstanding obligations payable by Maker hereunder shall automatically become immediately due and payable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived, anything contained herein or in the other Transaction Documents to the contrary notwithstanding. In addition to the foregoing remedies, upon the occurrence or existence of any Event of Default, Holder may exercise any other right power or remedy granted to it by the Transaction Documents or otherwise permitted to it by law, either by suit in equity or by action at law, or both.

Waivers. Maker hereby waives presentment, protest, demand or notice of any kind in connection with any failure to pay when due the indebtedness evidenced by this Note.

Attorneys’ Fees. In the event any party is required to engage the

services of any attorneys for the purpose of enforcing this Note, or any provision thereof, the prevailing party shall be entitled to recover its reasonable expenses and costs in enforcing this Note, including attorneys’ fees.

Governing Law. This Note shall be governed by and construed under the internal laws of the State of California, without reference to principles of conflict of laws or choice of laws.

Headings. The headings and captions used in this Note are used only for convenience and are not to be considered in construing or interpreting this Note. All references in this Note to sections and exhibits shall, unless otherwise provided, refer to sections hereof and exhibits attached hereto, all of which exhibits are incorporated herein by this reference.

Severability. If one or more provisions of this Note are held to be unenforceable under applicable law, such provision(s) shall be excluded from this Note and the balance of the Note shall be interpreted as if such provision(s) were so excluded and shall be enforceable in accordance with its terms.

S3 INVESTMENT COMPANY, INC.

By /s/ James S. Bickel, Sr.

Name: James S. Bickel, Sr.

Title: President

EXHIBIT B TO BRIDGE LOAN AGREEMENT

SCHEDULE OF EXCEPTIONS

None.

EXHIBIT C

BRIDGE LOAN AGREEMENT

PUT AGREEMENT

This Put Agreement is made as of January 28, 2008 (the “Effective Date”) between S3 Investment Company, Inc., a California corporation (the "Company"), and the investors who are a signatory hereto (the "Investors").

The Investors have purchased from the Company Senior Promissory Notes due January 28, 2009 (the “Maturity Date”) in an aggregate principal amount of $100,000 (the "Senior Notes") pursuant to the Bridge Loan Agreement between the Investors and the Company dated the date hereof (the "Bridge Loan Agreement") and subject to the conditions set for the Bridge Loan Agreement, the Investors may purchase additional Senior Notes of the Company (the “Additional Notes” and collectively with the Senior Notes, the “Notes”) in an aggregate principal amount of up to $600,000 (the “Commitment Amount”). Interest on the Notes is payable in shares of common stock of the Company (the “Interest Shares”) and the Notes are convertible into shares of common stock of the Company (the “Conversion Shares”). &nbs p;As a condition of the purchase, the Company has agreed to grant the Investors an option to sell all or part of the Notes and Conversion Shares to the Company on the terms of this Agreement. In consideration of the Bridge Loan Agreement, and for other valuable consideration, it is agreed as follows:

1. Grant of Put. The Company grants to the Investors an option (the

"Put"), subject to the conditions of this Agreement, to sell to the Company all of the Notes and Conversion Shares held by the Investors on the Maturity Date, in exchange for shares of ENHD stock being held in Escrow equal to 200% of the Commitment Amount, based on the closing bid price per share of ENHD on the Maturity Date (the “Put Shares”).

2. Exercise of Put.

(b) Within 60 days after the end of the Exercise Period, the Company shall tender payment in full for the Notes and Conversion Shares as to which the Put is exercised (plus any accumulated but unpaid dividends), in Put Shares, against delivery to the principal offices of the Company of certificates representing the Notes and Conversion Shares, free and clear of all liens, claims, and encumbrances.

3. Termination. The Put shall terminate upon completion of the transactions described in the preceding section.

4. Adjustment. In the event of any recapitalization, stock split, combination of shares, or stock dividend, any shares into which the Notes and Conversion Shares are converted shall be subject to the Put, and appropriate adjustment shall be made in the purchase price of the Put.

5. Notices. All notices under this Agreement shall be in writing and deemed given upon receipt, by (1) personal delivery, (2) telephonically confirmed fax, receipted courier service or (4) certified or registered mail, return receipt requested, addressed to the principal office of the Company (if to the Company), or to the address shown on the shareholder records of the Company (if to an Investor). Refusal to accept delivery shall be deemed receipt.

6. General. This Agreement shall be governed by the internal laws of the State of California, without reference to principles of conflict of laws or choice of laws. This Agreement shall be binding upon the personal representatives, successors and assigns of the parties hereto, but shall not be assignable without the prior written consent of the non-assigning party. This Agreement constitutes the entire agreement between the parties and may not be waived or modified except in writing. This Agreement may be executed in any number of counterparts, each of which shall be an original and all of which together shall be one instrument. The headings used in this Agreement are for convenience only and shall not affect the interpretation hereof.

IN WITNESS WHEREOF, the parties have executed this Put Agreement as

of the Effective Date.

S3 INVESTMENT COMPANY, INC.

By /s/ James S. Bickel, Sr.

Name: James S. Bickel, Sr.

Title: President

Investors:

ANCORA GREATER CHINA FUND, LP

By /s/ John Micklitsch

Name: John Micklitsch

THE BOSPHOROUS GROUP, INC.

By /s/ Daniel J. McClory

Name: Daniel J. McClory

Title: President

/s/ Matthew Hayden

Matthew Hayden

EX-10 12 exhibit106.htm BRIDGE LOAN AGREEMENT

EXHIBIT10.6

BRIDGE LOAN AGREEMENT

This Bridge Loan Agreement is made as of February 19, 2008 (the “Effective Date”) among S3 Investment Company, Inc., a California corporation (the “Company” or “SIVC”), and the investors listed on the SCHEDULE OF INVESTORS attached hereto (the “Investors”).

The Company is currently in need of funds to help finance the operations of its Redwood Capital, Inc. subsidiary until the closing of the next round of RTO financings for its Chinese clients, but these clients will not be able to complete any such transaction without monthly infusions of short-term working capital. In order to provide for this need, the Investors and the Company are now entering into a bridge loan in the aggregate amount of up to $800,000 (the “Commitment Amount”), and related transactions, on the terms of this Agreement.

In consideration of the mutual covenants contained in this Agreement,

it is agreed as follows:

1. Initial Bridge Transaction.

Concurrently with execution of this Agreement, each Investor will deliver to the Company funds equal to the "Initial Loan Amount" listed on the Schedule of Investors. Upon receipt of the funds, the Company will issue to each Investor a Class B Senior Promissory Note in the form attached as Exhibit A (which, with any notes on substantially the same terms that may be issued to any or all of the Investors, are herein called the “Class B Notes”), in a principal amount equal to the "Initial Loan Amount" listed on the Schedule of Investors. The Investors may invest additional amounts during each Additional Closing (as defined below) and pursuant to Section 2.2 below.

2. Closing(s).

2.1

The Closing. The purchase and sale of the Class B Notes will take place at the offices of Crone Rozynko, LLP, 101 Montgomery Street, Suite 1950, San Francisco California 94104, at 11:00 a.m. Pacific time, on February 19, 2008, or at such other time and place as the Company and the Investors who have agreed to purchase a majority of the aggregate principal amount of the Class B Notes listed on the Schedule of Investors, mutually agree upon (which time and place are referred to as the “Closing”). At the Closing, each Investor will deliver to the Company payment in full for the Class B Note in the amount set forth opposite such Investor’s name listed on the Schedule of Investors, which such Investor agrees to purchase at the Closing by (i) a check payable to the Company’s order, (ii) wire transfer of funds to the Company, or (iii) any combination of the foregoing. At the Closing, the Company will deliver to each Investor a duly executed Class B Note in the principal amount set forth opposite such Investor’s name on the Schedule of Investors.

2.2

Additional Closing(s).

(a)

Conditions of Additional Closing(s). On each date on which the Company documents to the Investor’s satisfaction the completion of the milestone event set forth below, which dates shall be no less than one month from the previous funding, the Company may, at one or more additional closings (each an “Additional Closing”), issue and sell to the Investors additional Class B Notes in proportion to each Investor to the Class B Notes sold at the Closing, and such Class B Notes having an aggregate principal amount of up to $720,000, provided, however, that achievement of the milestone event at each such Additional Closing shall have been previously approved by a majority of the aggregate principal amount of the Class B Notes:


Funded	Funding Amount	Milestone Event
YES	$115,000	Establishment of the BVI entities to facilitate the Chinese reverse takeover (“RTO”) public listing of Haijie, WITU or other client acceptable to Investors.
	$130,000	Execution of a WOFE Joint Venture Agreement between Redwood Capital, Inc. and Haijie, WITU, Boyuan or other client acceptable to Investors.
	$125,000	Completion of the Business Plan for Haijie, Boyuan (Est. 7/20), WITU or other client acceptable to Investors.
	$150,000	Completion of a PCAOB-approved audit for a Redwood Capital client such as Haijie, Wuhan International Trade University (“WITU”), Boyuan or other client acceptable to Investors.
	$100,000	Another (i) Execution of a WOFE Joint Venture Agreement between Redwood Capital, Inc. and Haijie, WITU or other client acceptable to Investors or (ii) Haijie, WITU, Boyuan or other client acceptable to Investors obtaining a term sheet from a lead investor for its RTO funding.
	$100,000	Haijie, WITU, Boyuan or other client acceptable to Investors obtaining a term sheet from a lead investor for its RTO funding.

(b)

Pre-Closing Delivery of Funds. The Company and the Investors acknowledge that certain Investors may deliver checks or wire transfers to the Company in anticipation of Closing or any Additional Closing hereunder, and the Company agrees that it will hold such funds in escrow on behalf of the Investors until the Closing conditions in Section 7 of this Agreement have been satisfied with regard to such Closing. If such Closing does not occur within five (5) business days of delivery of such funds, the Company will return on the next business day to any Investor the entire payment.

3. Subordination.

(a) All indebtedness (other than Senior Indebtedness (as defined below)) of the Company is hereby made subordinate and junior to the Indebtedness (as defined below). Upon

(1) any distribution of all or substantially all of the assets of the Company, or

(2) any payment or distribution of assets of the Company of any kind or character, whether in cash, property, or securities, to creditors in connection with any dissolution, winding-up, total or partial liquidation or reorganization of the Company, excluding the contemplated stock dividend of ENHD shares which the Company intends to distribute to SIVC shareholders and as allowed for in the milestone events of the Senior Indebtedness, all principal and interest due or to become due upon all Senior Indebtedness and Indebtedness will first be paid in full before any person will be entitled to receive any payments or retain any assets so paid or distributed; the Investors irrevocably authorize and direct the Company to effect all payments required by this sentence.

(b) For purposes of this Agreement, “Senior Indebtedness” means all principal, premium, interest, costs and other amounts due in respect of the Senior Notes due January 28, 2009 (and all renewals, extensions, refundings, refinancings and replacements of such obligations) (the “Senior Notes”) issued pursuant to the Bridge Loan Agreement dated January 28, 2009 among the Company and the investors listed therein; and “Indebtedness” means all principal, premium, interest, costs and other amounts due in respect of the Class B Notes (and all renewals, extensions, refundings, refinancings and replacements of such obligations).

4. Representations and Warranties of The Company.

4.1

4.2

Capitalization. The authorized capitalization of the Company immediately prior to the Closing is as follows:

(a)

Common Stock.

5,000,000,000 shares of Common Stock
(the “Common Stock”), 1,300,000,000 of which were issued and outstanding. The Company has reserved 12,000,000 shares of Common Stock for issuance upon conversion of the Preferred Stock and 1,100,000,000 shares of Common Stock for issuance upon conversion of, and payments of interest on, the Senior Notes.

(b)

Preferred Stock.

100,000,000 shares of Preferred Stock (the
“Preferred Stock”), 12,000,000 of which have been as designated Series A Preferred, all of which are issued and outstanding.

(c)

Other Rights to Acquire Stock. Except for (i) the conversion privileges of the Senior Notes, (ii) the Common Stock issuable on conversion of the Senior Notes or in payment of interest on the Senior Notes and Class B Notes, and (iii) the conversion privileges of the Preferred Stock; there are no options, warrants, conversion privileges or other rights (or agreements for any such rights) outstanding to purchase or otherwise obtain from the Company any of the Company’s securities.

4.3

Authorization.

All corporate action on the part of the Company necessary for the authorization, execution and delivery of this Purchase Agreement, the Put Agreement attached hereto as Exhibit C (the “Put Agreement”) and the performance of all obligations of the Company hereunder, and the authorization, issuance and delivery of each Class B Note has been taken or will be taken prior to the relevant Closing. This Purchase Agreement, the Put Agreement and the Class B Notes, when executed and delivered by the Company, shall constitute valid and legally binding obligations of the Company, enforceable in accordance with their terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally, and (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies

4.4

Valid Issuance. The Class B Notes and the shares of the Common Stock issuable in payment of interest on the Class B Notes (the “Shares”, and collectively with the Class B Notes, the “Securities”), when issued, sold, and delivered in accordance with the terms of the this Agreement and Class B Note, will be duly and validly issued, fully paid and non-assessable and, based in part upon the representations of the Investors in this Purchase Agreement, will be issued in compliance with all applicable federal and state securities laws.

4.5

5. Investors' Representations.

Each Investor represents and warrants to the Company as follows:

(a) the Investor is an "accredited investor" within the meaning of

Regulation D under the Securities Act of 1933, as amended (the “Securities

Act”);

(b) the Investor is acquiring the Securities for its own account for

purposes of investment, and not with a view toward the sale or other

distribution thereof,

deems necessary to make a judgment with respect to the acquisition of the

Securities, including the opportunity to ask questions of and discuss the

Company's business with management of the Company;

(d) the Investor understands that the Securities must be held

indefinitely unless registered under the Securities Act or unless an

exemption from registration exists, that no public market now exists for

the Securities, and that there may never exist a public market for the Securities;

and

(e) the Investor understands that the Securities have not been

registered under the Securities Act (on the ground that the sale of the

Securities is exempt from registration as not involving a public offering),

and that the reliance of the Company on such exemption is based upon the

representations made in this section.

6. Restricted Securities.

The Securities have not been registered under the Securities Act or any state securities law, and are not transferable except pursuant to

(a) a public offering registered under the Securities Act, or

(b) subject to the conditions specified in the following subsection, Rule 144 of the Securities and Exchange Commission (if available), or any other legally available means of transfer.

7. Closing Conditions.

7.1

(a)

(b)

(c)

The Company and each of the Investors shall have executed this Agreement and the Put Agreement.

(d)

The Company shall have received payment of the Total Purchase Price from all Investors participating in the Closing or Additional Closing, as the case may be, and shall have issued and delivered to each Investor a Class B Note in the principal amount of the Purchase Price.

(e)

The Company shall have entered into an escrow agreement acceptable to investors and deposited shares of Energroup Holdings Corp. (“ENHD”) owned by the Company’s Redwood Capital, Inc. subsidiary in an amount equal to 75% of the Commitment Amount, based on a $4.40 price per share of ENHD, with said shares being delivered to escrow free and clear of all encumbrances, including those created by the Senior Notes.

(f)

The Investors shall have completed to their satisfaction all due diligence review; among other data, the Company shall have provided (i) a projection of cash flows for the life of the Class B Notes, excluding the Interest payments in kind, and (ii) full disclosure of any and all current or pending litigation matters involving the Company, its subsidiaries, officers and directors, including lawsuits and judgments currently in force, pending or threatened.

(g)

The Company shall have entered into lock-up agreements acceptable to Investors with the Company’s and Redwood Capital, Inc.’s insiders (SIVC and Redwood Capital, Inc. Directors, Chairman, President, Managing Director, CEO, CFO and COO) who will be restricted from selling shares in the Company, ENHD, Haijie, WITU or other client shares before December 31, 2008 unless their sale is above 200% of such company’s reverse takeover financing price per share or unless the Notes have been fully redeemed.

(h)

The Company shall have paid the fees and expenses for counsel for the Investors; provided, however, that the Company’s obligation to pay such fees and expenses shall not exceed $10,000.00 in the aggregate.

(i)

The Company shall have provided counsel for the Investors copies of its board resolutions approving the sale of the Senior Notes and the Class B Notes and the shares of common stock issuable thereunder.

(j)

James S. Bickel, Sr. shall have entered into a personal guaranty with the Investors for the amount of the difference between the security shares and 100% of the Commitment Amount, which guaranty will be secured by his personally-owned holdings of SIVC shares.

7.2

(a)

(b)

(c)

The Company and each of the Investors shall have executed this Agreement and the Put Agreement.

Covenants.

8.1

Additional Authorized Shares.

8.2

Additional Escrow Shares. As necessary to maintain an increased security deposit, 90 days following Closing, the Company shall deposit further shares required into escrow, if any, such that the value of the total amount of ENHD shares on deposit shall be equal to or greater than 100% of the Commitment Amount, based on the closing bid price per share of ENHD 90 days following the Closing Date. If all of the ENHD shares held by the Company and available for deposit are deposited into escrow and a shortfall nevertheless exists under this Section 8.2, (i) the Company may comply with this Section 8.2 by providing the guaranty described in Section 7.1(j) and (ii) in lieu of such guaranty, additional equity positions in Chinese RTO clients other than ENHD, Haijie and WITU, valued at the offer price of their RTO financings, in full or partial satisfaction of the requirements of this Section 8.2. Regardless of wh ether a shortfall exists, if after the Closing, the Company or Redwood Capital receives shares in a Chinese RTO client, including Haijie and WITU, then upon the closing of such client’s RTO public listing transactions, the Company will deposit such shares into escrow. Any such shares deposited into escrow under this section or under 7.1(e) shall remain in escrow and would only be returned to the Company to the extent remaining after the Investors are paid in full for all accrued interest and the principal amount of the Class B Notes plus the Minimum Guaranteed Return of an additional 200% of the principal amount of the Class B Notes.

8.3

Confidentiality.

8.4

No Short Positions.

Each Investor agrees that neither it nor any of its affiliates or assignees shall be short shares of the Company’s common stock during the term of the Class B Notes.

8.5

Financings. For a period beginning at Closing and continuing up to 12 months after all Class B Notes are fully paid or redeemed under the Put Agreement (the “Repayment Date”), the Investors will retain the right to participate in up to 50% of any and all public or private offerings for SIVC of debt or equity or equity linked securities (including debt and any security convertible into equity) for any and all pre-RTO bridge expense financing of Redwood Capital Chinese RTO clients..

8.6

Use of Proceeds. The Company shall use the net proceeds to be received for the issuance and sale of Class B Notes only for the specific working capital purposes of paying pre-RTO bridge expenses for Redwood Capital clients Haijie, WITU or other pre-RTO clients.

8.7

No Fundamental Change. Unless otherwise approved by each of the Investors, until six months after the maturity date of the Class B Notes, the Company will continue to wholly-own its Redwood Capital, Inc. subsidiary (“Redwood Capital”), which will continue to be primarily engaged in the structuring and financing of RTO public listing transactions. The Company, its officers, directors, employees and contractors agree to effect all current and future Chinese RTO transactions solely through Redwood Capital, and have any and all amounts earned under such transactions paid exclusively to the Company or Redwood Capital, including equity or cash fees and compensation.

8.8

Information. The Company will furnish or cause to be furnished to the Investors the following financial statements, reports, notices and information (all in form reasonably satisfactory to the Investors):

(a) timely notification of developments regarding the Company, Redwood Capital, and existing and future RTO clients; and

(b) periodic, informal, updates on the finances, business prospects, and deal pipeline and progress for the Company and Redwood Capital such other financial and other information related to the Company as the Investors may from time to time reasonably request.

9. Notices.

4115 Blackhawk Plaza Circle, Suite 100

Danville, CA 94506

Fax: 925 648 2081

(if to the Company), or to the address shown on the on the Schedule of Investors (if to an Investor). Refusal to accept delivery will be deemed receipt.

10. General.

IN WITNESS WHEREOF, the parties have executed this Bridge Loan

Agreement as of the Effective Date.

S3 INVESTMENT COMPANY, INC.

By /s/ James S. Bickel, Sr.

Name: James S. Bickel, Sr.

Title: President

Investors:

ANCORA GREATER CHINA FUND, LP

By /s/ John Micklitsch

Name: John Micklitsch

THE BOSPHOROUS GROUP, INC.

By /s/ Daniel J. McClory

Name: Daniel J. McClory

Title: President

By /s/ Matthew Hayden

Matthew Hayden

By /s/ Stephen Taylor

Stephen Taylor

SCHEDULE TO

BRIDGE LOAN AGREEMENT

SCHEDULE OF INVESTORS

NAME AND ADDRESS INITIAL LOAN

AMOUNT

Ancora Greater China Fund, LP

$35,000

One Chagrin Highlands

2000 Auburn Drive No. 300

Cleveland, OH 44122

Attn: John Micklitsch

The Bosphorous Group, Inc.

$15,000

318 North Carson Street, Suite 208

Carson City, NV 89701

attn: Daniel J. McClory, President

EIN: 88-0418148

dan@mcclory.net

Matthew Hayden

$20,000

Hayden Communications, Inc.

c/o Jennifer Heady

9734 Anchor Drive

Longs, SC 29568

Office (760) 994-0034

Cell (760) 613-3695

matt@haydenir.com

Stephen S. Taylor

$10,000

1376 North Doheny Drive

Los Angeles, CA 90069

EXHIBIT A TO

BRIDGE LOAN AGREEMENT
FORM OF NOTE

CLASS B SENIOR PROMISSORY NOTE

S3 Investment Company, Inc.

$____[fill in principal amount] ___ [fill in issue date], 2008

S3 Investment Company, Inc., a California corporation ("Maker"), hereby

promises to pay to ----------[fill in Investor name]------------------------------- ("Holder"),

at --------------[fill in Investor address]------------------------------- or at such other address

Interest. The principal indebtedness evidenced by this Note shall earn interest at the rate of ten percent (10%) per annum. Interest shall be paid in monthly installments of Maker’s common stock (“Common Stock”), commencing on the first day of the month following the issuance of this Note with all unpaid and accrued interest being due and payable on December 19, 2008(the “Maturity Date”). The amount of Common Stock to be issued will be calculated based on 60% of the monthly closing bid price of the Common Stock on the last trading day of such month and will be rounded up to the nearest whole share. Holder, at its discretion, may defer receipt of such shares of Common Stock until such time as its total holdings would not exceed 9.9% of the total issued and outstanding shares of Maker.

Prepayment. This entire principal amount of this Note may be prepaid in full, but not in part, in cash at any time upon 3 days’ advance written notice, subject to a guaranteed additional return equal to 200% of the principal amount of this Note, which additional return , is payable in shares of (i) Changzhou Haijie Metallurgical Machinery Manufacturing Co. Ltd. (“Haijie”) or Wuhan International Trade University (“WITU”) if such shares are issued to the Company or Redwood Capital upon the closing of Haijie’s or WITU’s Chinese reverse takeover (“RTO”) public listing transactions or (ii) Chinese RTO clients other than Haijie and WITU upon the closing of such client’s RTO public listing transactions. Any such payment in shares under (B)(i) or (ii) above shall be valued at the offer price of their RTO financings, and payable to the Holder in proportion to the total equity holdings of Redwood Capital at the time of prepayment. Holder may exercise its election of form of prepayment by providing the Maker with three (3) days’ advance written notice.

Acceleration. Upon failure of Maker to pay any installment in full when due, Holder may, by notice to Maker, accelerate the obligation of Maker to pay the entire balance of this Note plus a guaranteed additional return of 200% of the principal amount of this Note, and upon such acceleration there shall be due to Holder such amount as would be due if the Note had been prepaid in accordance with the preceding paragraph on the date notice of acceleration was given by Holder.

Minimum Return. The principal and all accrued interest under this Note shall be due and payable in full on the Maturity Date. In addition to the value of the shares of Common Stock received as interest, the Holder shall receive a 300% return of the principal amount of this Note on or before the Maturity Date (the “Minimum Guaranteed Return”). If the Holder has not put this Note to the Maker with 10 business days before or after the Maturity Date, the Minimum Guaranteed Return shall be due and payable in full as of the Maturity Date, unless extended, as set forth in the following paragraph. The Minimum Guaranteed Return shall be payable in: (A) cash in the amount of the principal balance owing under this Note; plus (B) shares of (i) Haijie and or WITU if such shares are issued to the Maker or Redwood Capital upon the closing of Haijie’s or WITU’s RTO or (ii) Chinese RTO clients othe r than Haijie and WITU upon the closing of such client’s RTO public listing transactions. Any such payment in shares shall be valued at the offer price of their RTO financings equal to 200% of the principal amount of this Note, based on the price per share of Haijie or WITU paid by the RTO cash investors in the simultaneous capital raise. In the event that Haijie and WITU do not satisfy the Minimum Guaranteed Return and Redwood obtains additional equity positions in Chinese RTO clients other than Haijie and WITU following the Closing Date and prior to the Maturity Date, Investor agrees to accept such additional equity positions, if any. Such positions will be valued at the offer price of their RTO financings, in partial satisfaction of the Minimum Guaranteed Return requirement, should a shortfall exist, and payable to the Holder in proportion to the total equity holdings of Redwood Capital at the time of repayment.

Option to Extend Payment of Minimum Guaranteed Return. In the event that additional Chinese RTO clients of Redwood Capital are funded in whole or in part by the proceeds of this Note, then the Holder reserves the right to extend the related portion of the Minimum Guaranteed Return due at the Maturity Date for up to an additional six months, such that the additional equity positions Redwood Capital are to receive from these additional clients become eligible for proportionate payment to Holder in satisfaction of the Minimum Guaranteed Return. In no event shall the Maker pledge, sell, encumber or otherwise transfer any equity positions it receives for Chinese RTO clients prior to payment of the Minimum Guaranteed Return of all Class B Senior Notes then outstanding.

Priority. The principal amount of this Note is "Indebtedness" as defined in the Bridge Loan Agreement related to this Note among Maker, Holder and certain other investors (the “Bridge Loan Agreement”). As between this Note, on the one hand, and the other senior promissory notes issued by Maker to the other investors under the Bridge Loan Agreement, on the other hand, the notes shall rank equally without preference or priority of any kind over one another, and all payments on account of principal and interest with respect to any of the notes shall be applied ratably and proportionately on all outstanding notes on the basis of the original principal amount of outstanding notes.

Events of Default. The occurrence of any of the following shall constitute an “Event of Default” under this Note:

(a)

(b)

Breaches of Covenants. Maker shall fail to observe or perform any other covenant, obligation, condition or agreement contained in this Note, the Bridge Loan Agreement, the Put Agreement among Maker, Holder and certain other investors or the other documents or instruments issued in connection herewith or therewith (collectively the “Transaction Documents”) (other than the obligations specified in paragraph (a) “Failure to Pay” above), including, without limitation, (i) Maker or its principals engaging in a Chinese RTO transaction outside of Maker or its wholly-owned Redwood Capital subsidiary, or (ii) falling below the 75% or 100% Security amount in Escrow for the applicable periods for five consecutive days and (A) such failure shall continue for 15 days, or (B) if such failure is not curable within such 15-day period, but is reasonably capable of cure w ithin 30 days, either (I) such failure shall continue for 30 days or (II) Maker shall not have commenced a cure in a manner reasonably satisfactory to Holder within the initial 15-day period; or

(c)

(d)

(e)

Voluntary Bankruptcy or Insolvency Proceedings. Maker shall (i) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian of itself or of all or a substantial part of its property, (ii) be unable, or admit in writing its inability, to pay its debts generally as they mature, (iii) make a general assignment for the benefit of its or any of its creditors, (iv) be dissolved or liquidated, (v) become insolvent (as such term may be defined or interpreted under any applicable statute), (vi) commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or consent to any such relief or to the appointment of or taking possession of its property by any official in an involuntary case or other proceeding commenc ed against it, or (vii) take any action for the purpose of effecting any of the foregoing; or

(f)

(g)

(h)

Rights of Holder upon Default. Upon the occurrence or existence of any Event of Default (other than an Event of Default described in paragraphs (e) or (f) involving bankruptcy) and at any time thereafter during the continuance of such Event of Default, Holder may by written notice to Maker, declare all outstanding obligations payable by Maker hereunder to be immediately due and payable without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived, anything contained herein or in the other Transaction Documents to the contrary notwithstanding. Upon the occurrence or existence of any Event of Default described in paragraphs (e) or (f) involving bankruptcy, immediately and without notice, all outstanding obligations payable by Maker hereunder shall automatically become immediately due and payable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived, anything contained herein or in the other Transaction Documents to the contrary notwithstanding. In addition to the foregoing remedies, upon the occurrence or existence of any Event of Default, Holder may exercise any other right power or remedy granted to it by the Transaction Documents or otherwise permitted to it by law, either by suit in equity or by action at law, or both.

Waivers. Maker hereby waives presentment, protest, demand or notice of any kind in connection with any failure to pay when due the indebtedness evidenced by this Note.

Attorneys’ Fees. In the event any party is required to engage the

Governing Law. This Note shall be governed by and construed under the internal laws of the State of California, without reference to principles of conflict of laws or choice of laws.

S3 INVESTMENT COMPANY, INC.

By /s/ James S. Bickel, Sr.

Name: James S. Bickel, Sr.

Title: President

EXHIBIT B TO
BRIDGE LOAN AGREEMENT

SCHEDULE OF EXCEPTIONS

None.

EXHIBIT C

BRIDGE LOAN AGREEMENT

PUT AGREEMENT

This Put Agreement is made as of February 19, 2008 (the “Effective Date”) between S3 Investment Company, Inc., a California corporation (the "Company"), and the investors who are a signatory hereto (the "Investors").

The Investors have purchased from the Company Class B Senior Promissory Notes due December 19, 2008, which date is subject to extension as set forth in Section 2(a) below (the “Maturity Date”) in an aggregate principal amount of $80,000 (the "Class B Notes") pursuant to the Bridge Loan Agreement between the Investors and the Company dated the date hereof (the "Bridge Loan Agreement") and subject to the conditions set for the Bridge Loan Agreement, the Investors may purchase additional Class B Notes of the Company (the “Additional Notes” and collectively with the Class B Notes, the “Notes”) in an aggregate principal amount of up to $800,000 (the “Commitment Amount”). Interest on the Notes is payable in shares of common stock of the Company (the “Interest Shares”). As a condition of the purchase, the Company has agreed to grant the Investors an option to sell all or part of the Notes to the Company on the terms of this Agreement. In consideration of the Bridge Loan Agreement, and for other valuable consideration, it is agreed as follows:

1. Grant of Put. The Company grants to the Investors an option (the

"Put"), subject to the conditions of this Agreement, to sell to the Company all of the Notes held by the Investors on the Maturity Date, in exchange for: (A) cash equal to 100% of the Principal Amount, plus (B) at Investor’s option: (i) shares of Changzhou Haijie Metallurgical Machinery Manufacturing Co. Ltd. (“Haijie”) stock if such shares are issued to the Company or Redwood Capital upon the closing of Haijie’s Chinese reverse takeover (“RTO”) public listing transactions, (ii) shares of Wuhan International Trade University (“WITU”) stock if such shares are issued to the Company or Redwood Capital upon the closing of WITU’s RTO, or (iii) other client shares acceptable to Investor issued to the Company or Redwood Capital upon the closing of such client’s RTO, each equal to 200% of the Commitment Amount (the “Put Shares”). The value p er share of the Put Shares for Haijie, WITU or other client shares selected by Investors will be based on, the price per share of Haijie, or WITU or such other client shares paid by the RTO cash investors in the simultaneous capital raise, and payable to the Investors in proportion to the total equity holdings of Redwood Capital at the time of prepayment.

2. Exercise of Put.

(a) The Put shall be exercisable only by giving notice of exercise to the Company within 10 business days either before or after the Maturity Date (the "Exercise Period"). If not exercised within the Exercise Period, the Put shall expire at 5:00pm Pacific time on the last day of the Exercise Period. In the event that additional Chinese RTO clients of Redwood Capital are funded in whole or in part by the proceeds of the Class B Notes, then the Investors reserve the right to extend the related portion of the Put Shares due at the Maturity Date for up to an additional six months, such that the additional Put Shares Redwood Capital or the Company are to receive from these additional clients become eligible for proportionate payment to Investors in satisfaction of the Put.

(b) Within 60 days after the end of the Exercise Period, the Company shall tender payment in full for the Notes as to which the Put is exercised (plus any accumulated but unpaid dividends), in cash and Put Shares, against delivery to the principal offices of the Company of certificates representing the Notes, free and clear of all liens, claims, and encumbrances.

3. Termination. The Put shall terminate upon completion of the transactions described in the preceding section.

4. Notices. All notices under this Agreement shall be in writing and deemed given upon receipt, by (1) personal delivery, (2) telephonically confirmed fax, receipted courier service or (4) certified or registered mail, return receipt requested, addressed to the principal office of the Company (if to the Company), or to the address shown on the shareholder records of the Company (if to an Investor). Refusal to accept delivery shall be deemed receipt.

5. General. This Agreement shall be governed by the internal laws of the State of California, without reference to principles of conflict of laws or choice of laws. This Agreement shall be binding upon the personal representatives, successors and assigns of the parties hereto, but shall not be assignable without the prior written consent of the non-assigning party. This Agreement constitutes the entire agreement between the parties and may not be waived or modified except in writing. This Agreement may be executed in any number of counterparts, each of which shall be an original and all of which together shall be one instrument. The headings used in this Agreement are for convenience only and shall not affect the interpretation hereof.

IN WITNESS WHEREOF, the parties have executed this Put Agreement as

of the Effective Date.

S3 INVESTMENT COMPANY, INC.

By /s/ James S. Bickel, Sr.

Name: James S. Bickel, Sr.

Title: President

Investors:

ANCORA GREATER CHINA FUND, LP

By /s/ John Micklitsch
Name: John Micklitsch

THE BOSPHOROUS GROUP, INC.

By /s/ Daniel J. McClory

Name: Daniel J. McClory

Title: President

By /s/ Matthew Hayden

Name: Matthew Hayden

By /s/ Stephen Taylor

Name: Stephen Taylor

EX-10 13 exhibit107.htm AMENDMENT NO

EXHIBIT 10.7

AMENDMENT NO. 1 TO THE

BRIDGE LOAN AGREEMENT

This Amendment No. 1 to the Bridge Loan Agreement (this "Amendment") is entered into as of the 9^TH day of July, 2008, by and among S3 Investment Company, Inc., a California corporation (the “Company” or “SIVC”), and the investors listed on the SCHEDULE OF INVESTORS attached to the original Bridge Loan Agreement (the “Investors”).

Investors and the Company have previously entered into that certain Bridge Loan Agreement dated January 28, 2008 (the "Agreement"). Investors and the Company desire to amend the Agreement as provided herein. Terms defined in the Agreement which are used herein shall have the same meanings as set forth in the Agreement, unless otherwise specified.

NOW, THEREFORE, Investors and the Company hereby modify and amend the Agreement as follows:

1. The first sentence of Section 2.2(a) of the Agreement is hereby amended in its entirety to read as follows:

“On the funding dates set forth below, the Company may, at one or more additional closings (each an “Additional Closing”), issue and sell to the Investors additional Senior Notes in the amount set forth opposite such Investor’s name listed on the Schedule of Investors, and such Senior Notes having an aggregate principal amount of up to $500,000, provided, however, that achievement of the milestone event at each such Additional Closing shall have been previously approved by a majority of the aggregate principal amount of the Senior Notes:”

2. The Schedule of Investors to the Agreement is hereby amended in its entirety to read as follows:

SCHEDULE TO

BRIDGE LOAN AGREEMENT

SCHEDULE OF INVESTORS

NAME AND ADDRESS INITIAL LOAN

AMOUNT

Ancora Greater China Fund, LP (“Ancora”)

$66,667

One Chagrin Highlands

2000 Auburn Drive No. 300

Cleveland, OH 44122

Attn: John Micklitsch

The Bosphorous Group, Inc. (“Bosphorous”)

$20,833

318 North Carson Street, Suite 208

Carson City, NV 89701

attn: Daniel J. McClory, President

EIN: 88-0418148

Matthew Hayden (“Hayden”)

$12,500

Hayden Communications, Inc.

c/o Jennifer Heady

9734 Anchor Drive

Longs, SC 29568

Office (760) 994-0034

Cell (760) 613-3695

matt@haydenir.com

Stephen S. Taylor (“Taylor”)

1376 North Doheny Drive

Los Angeles, CA 90069


ADDITIONAL CLOSINGS:
Name	Date	Amount
	1-Feb
Ancora		$40,000
Bosphorous		$12,500
Hayden		$7,500
Taylor		$0
	7-Mar
Ancora		$40,000
Bosphorous		$0
Hayden		$0
Taylor		$20,000
	4-Apr
Ancora		$40,000
Bosphorous		$0
Hayden		$0
Taylor		$20,000
	2-May
Ancora		$40,000
Bosphorous		$2,083
Hayden		$1,250
Taylor		$16,667
	6-June
Ancora		$40,000
Bosphorous		$6,250
Hayden		$3,750
Taylor		$10,000
	3-July
Ancora		$40,000
Bosphorous		$6,250
Hayden		$3,750
Taylor		$10,000
	1-August
Ancora		$40,000
Bosphorous		$6,250
Hayden		$3,750
Taylor		$10,000
	5-September
Ancora		$53,334
Bosphorous		$8,333
Hayden		$5,000
Taylor		$13,333

3. The term “Investors” in the Agreement shall mean the investors listed on the SCHEDULE OF INVESTORS as amended by this Amendment.

4. In the event of a conflict between the terms and provisions of this Amendment and the terms and provisions of the Agreement, the terms and provisions of this Amendment shall govern. In all other respects, the Agreement, as supplemented, amended and modified, shall remain in full force and effect.

IN WITNESS WHEREOF, the Company and Investors have executed this Amendment as of the day and year first written above.

S3 INVESTMENT COMPANY, INC.

By /s/ James S. Bickel, Sr.

Name: James S. Bickel, Sr.

Title: President

Investors:

ANCORA GREATER CHINA FUND, LP

By /s/ John Micklitsch

Name: John Micklitsch

THE BOSPHOROUS GROUP, INC.

By /s/ Daniel J. McClory

Name: Daniel J. McClory

Title: President

By /s/ Matthew Hayden

Name: Matthew Hayden

By his acceptance below this day of July 9, 2008, the undersigned additional Investor hereby agrees to the terms and conditions of the Agreement and consents to the above-stated terms.

/s/ Stephen Taylor

Stephen Taylor

EX-10 14 exhibit108.htm AMENDMENT NO

EXHIBIT 10.8

AMENDMENT NO. 1 TO THE

BRIDGE LOAN AGREEMENT

This Amendment No. 1 to the Class B Bridge Loan Agreement (this "Amendment") is entered into as of the 9^th day of July, 2008, by and among S3 Investment Company, Inc., a California corporation (the “Company” or “SIVC”), and the investors listed on the SCHEDULE OF INVESTORS attached to the original Class B Bridge Loan Agreement (the “Investors”).

Investors and the Company have previously entered into that certain Class B Bridge Loan Agreement dated February 19, 2008 (the "Agreement"). Investors and the Company desire to amend the Agreement as provided herein. Terms defined in the Agreement which are used herein shall have the same meanings as set forth in the Agreement, unless otherwise specified.

NOW, THEREFORE, Investors and the Company hereby modify and amend the Agreement as follows:

Section 2.2(a) of the Agreement is hereby amended in its entirety to read as follows:

2.2

Additional Closing(s).

(a)


Funded	Funding Amount	Milestone Event
YES	$115,000	Establishment of the BVI entities to facilitate the Chinese reverse takeover (“RTO”) public listing of Haijie, WITU or other client acceptable to Investors.
	$130,000	Execution of a WOFE Joint Venture Agreement between Redwood Capital, Inc. and Haijie, WITU, Boyuan or other client acceptable to Investors.
	$125,000	Completion of the Business Plan for Haijie, Boyuan, WITU or other client acceptable to Investors.
	$150,000	Completion PCAOB-approved audit for a Redwood Capital client from Haijie, WITU, Boyuan or other client acceptable to Investors.


	$100,000	Another (i) Execution of a WOFE Joint Venture Agreement between Redwood Capital, Inc. and Haijie, WITU or other client acceptable to Investors or (ii) Haijie, WITU, Boyuan or other client acceptable to Investors obtaining a term sheet from a lead investor for its RTO funding.
	$100,000	Haijie, WITU, Boyuan or other client acceptable to Investors obtaining a term sheet from a lead investor for its RTO funding.

In the event of a conflict between the terms and provisions of this Amendment and the terms and provisions of the Agreement, the terms and provisions of this Amendment shall govern. In all other respects, the Agreement, as supplemented, amended and modified, shall remain in full force and effect.

IN WITNESS WHEREOF, the Company and Investors have executed this Amendment as of the day and year first written above.

S3 INVESTMENT COMPANY, INC.

By /s/ James S. Bickel, Sr.

Name: James S. Bickel, Sr.

Title: President

Investors:

ANCORA GREATER CHINA FUND, LP

By /s/ John Micklitsch

Name: John Micklitsch

THE BOSPHOROUS GROUP, INC.

By /s/ Daniel J. McClory

Name: Daniel J. McClory

Title: President

By /s/ Matthew Hayden

Name: Matthew Hayden

By /s/ Stephen Taylor

Name: Stephen Taylor

EX-10 15 exhibit109.htm AMENDMENT NO

EXHIBIT 10.9

AMENDMENT NO. 1 TO THE

PUT AGREEMENT

This Amendment No. 1 to the Put Agreement (this "Amendment") is entered into as of the 9th day of July, 2008, by and among S3 Investment Company, Inc., a California corporation (the “Company” or “SIVC”), and the investors listed on the SCHEDULE OF INVESTORS attached to the original Put Agreement (the “Investors”).

Investors and the Company have previously entered into that certain Put Agreement dated January 28, 2008 (the "Agreement"). Investors and the Company desire to amend the Agreement as provided herein. Terms defined in the Agreement which are used herein shall have the same meanings as set forth in the Agreement, unless otherwise specified.

NOW, THEREFORE, Investors and the Company hereby modify and amend the Agreement as follows:

1. The term “Investors” in the Agreement shall mean the investors listed on the SCHEDULE OF INVESTORS as amended by Amendment No. 1 the Bridge Loan Agreement dated as of the date of this Amendment.

2. In the event of a conflict between the terms and provisions of this Amendment and the terms and provisions of the Agreement, the terms and provisions of this Amendment shall govern. In all other respects, the Agreement, as supplemented, amended and modified, shall remain in full force and effect.

IN WITNESS WHEREOF, the Company and Investors have executed this Amendment as of the day and year first written above.

S3 INVESTMENT COMPANY, INC.

By /s/ James S. Bickel, Sr.

Name: James S. Bickel, Sr.

Title: President

Investors:

ANCORA GREATER CHINA FUND, LP

By /s/ John Micklitsch

Name: John Micklitsch

THE BOSPHOROUS GROUP, INC.

By /s/ Daniel J. McClory

Name: Daniel J. McClory

Title: President

By /s/ Matthew Hayden

Name: Matthew Hayden

By his acceptance below this day of July 9, 2008, the undersigned additional Investor hereby agrees to the terms and conditions of the Agreement and consents to the above-stated terms.

/s/ Stephen Taylor

Name: Stephen Taylor

EX-10 16 exhibit1010.htm

EXHIBIT 10.10

AMENDMENT NO. 2 TO THE

BRIDGE LOAN AGREEMENT

This Amendment No. 2 to the Bridge Loan Agreement (this "Amendment") is entered into as of the 9^th day of July, 2008, by and among S3 Investment Company, Inc., a California corporation (the “Company” or “SIVC”), and the investors listed on the SCHEDULE OF INVESTORS attached to the original Bridge Loan Agreement, as amended in Amendment No. 1 to the Bridge Loan Agreement (the “Investors”).

NOW, THEREFORE, Investors and the Company hereby modify and amend the Agreement as follows:

1. Section 2.2(a) of the Agreement is hereby amended in its entirety to read as follows:

2.2

Additional Closing(s).

(a)


Funded	Funding Date	Funding Amount	Milestone Date	Milestone Event
Yes	February 1, 2008,	$60,000	Feb 1, 08	Execution of a Joint Venture Agreement between Redwood Capital, Inc. and a Chinese reverse takeover (“RTO”) public listing client company
Yes	March 7, 2008	$60,000	Mar 7, 08	Execution of another Joint Venture Agreement between Redwood Capital, Inc. and a Chinese RTO client company
Yes	April, 17 2008	$60,000	April 17, 08	Hire Compliance Officer and Corporate Controller
	July 3, 2008	$60,000	July 3, 08	Engage auditor PCAOB audit of S3 Investments, Inc.


Aug 10, 2008	$60,000	Aug 10, 08	Completion of an SEC audit of SIVC for the Two Years ended June 30, 2008
Sept 5, 2008	$60,000	Sept 5, 08	Redwood Capital, Inc. client company obtaining a term sheet from a lead investor for its RTO funding
Sept 15, 2008	$80,000	Sept 15, 08	Form 10 Registration Statement Filed.
Oct 5, 2008	$60,000	Oct 5, 08	Another Redwood Capital, Inc. client company obtaining a term sheet from a lead investor for its RTO funding

IN WITNESS WHEREOF, the Company and Investors have executed this Amendment as of the day and year first written above.

S3 INVESTMENT COMPANY, INC.

By /s/ James S. Bickel, Sr.

Name: James S. Bickel, Sr.

Title: President

Investors:

ANCORA GREATER CHINA FUND, LP

By /s/ John Micklitsch

Name: John Micklitsch

THE BOSPHOROUS GROUP, INC.

By /s/ Daniel J. McClory

Name: Daniel J. McClory

Title: President

By /s/ Matthew Hayden

Name: Matthew Hayden

By: /s/ Stephen Taylor

Name: Stephen Taylor

EX-10 17 exhibit231.htm CONSENT OF ACCOUNTANT

EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

November 13, 2008

Board of Directors

S3 Investment Company, Inc.

Danville, California

Chisholm, Bierwolf & Nilson, LLC hereby consents to the use in this Registration Statement on Form S-1 of our report dated November 13, 2008, relating to the financial statements of S3 Investment Company, Inc., a California Corporation, for the periods ended June 30, 2008 and 2007 which appears in such Registration Statement.

Sincerely,

/s/ Chisholm, Bierwolf & Nilson, LLC

Chisholm, Bierwolf & Nilson, LLC