8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES AND EXCHANGE ACT OF 1934

Date of Report (Date of Earliest Event Reported): June 23, 2006 (June 22, 2006)

MGCC INVESTMENT STRATEGIES, INC.

(Exact name of registrant as specified in its charter)

Nevada	0-508003	88-0495105
(State of Incorporation)	(Commission File No.)	(IRS Employer ID No.)

No. 56 Lingxi Street

Taihe District

Jinzhou City, Liaoning

People’s Republic of China, 121013

(Address of Principal Executive Offices)

(86) 0416-5186632

Registrant’s Telephone Number, Including Area Code:

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

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

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

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

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

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This document contains forward-looking statements, which reflect our views with respect to future events and financial performance. These forward-looking statements are subject to certain uncertainties and other factors that could cause actual results to differ materially from such statements. These forward-looking statements are identified by, among other things, the words “anticipates,” “believes,” “estimates,” “expects,” “plans,” “projects,” “targets” and similar expressions. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Important factors that may cause actual results to differ from those projected include the risk factors specified below.

ITEM 1.01ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.

Except as otherwise indicated by the context, references in this document to “MGCC,” “Company,” “we,” “us,” or “our” are references to the combined business of MGCC Investment Strategies, Inc. and its wholly-owned subsidiary, Wonder Auto Limited, along with Wonder Auto Limited’s wholly-owned subsidiaries which include Man Do Auto Technology Co. Ltd., a British Virgin Islands corporation and Jin Zhou Halla Electrical Equipment Co., Ltd., a corporation organized under the laws of the People’s Republic of China. References to “Wonder Auto” are references to Wonder Auto Limited and its subsidiaries listed above. References to “Halla” are references to Jinzhou Halla Electrical Equipment Co., Ltd. References to “China” and “PRC” are references to “People’s Republic of China.” References to “BVI” are references to “British Virgin Islands.” References to "RMB" are to Renminbi, the legal currency of China, and all references to “$” are to the legal currency of the United States.

On June 22, 2006, we entered into a Share Exchange Agreement with Wonder Auto Limited and its stockholders, pursuant to which we issued to the stockholders of Wonder Auto Limited 8,627,858 shares of our common stock in exchange for all of the issued and outstanding capital stock of Wonder Auto Limited. Wonder Auto Limited thereby became our wholly owned subsidiary and the former stockholders of Wonder Auto Limited became our controlling stockholders. We plan to amend our Articles of Incorporation to change our name to Wonder Auto Technology, Inc. and expect the name change to become effective in or before August 2006.

A copy of the Share Exchange Agreement is filed as Exhibit 2.1 to this report.

ITEM 2.01COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS

On June 22, 2006, we completed an acquisition of Wonder Auto Limited pursuant to the Share Exchange Agreement. The acquisition was accounted for as a recapitalization effected by a share exchange, wherein Wonder Auto Limited is considered the acquirer for accounting and financial reporting purposes. The assets and liabilities of the acquired entity have been brought forward at their book value and no goodwill has been recognized.

FORM 10 DISCLOSURE

As disclosed elsewhere in this report, on June 22, 2006, we acquired Wonder Auto Limited in a reverse acquisition transaction. Item 2.01(f) of Form 8-K states that if the registrant was a shell company like we were immediately before the transaction disclosed under Item 2.01 (i.e., the reverse acquisition), then the registrant must disclose the information that would be required if the registrant were filing a general form for registration of securities on Form 10 or, as in our case, Form 10.

Accordingly, we are providing below the information that would be included in a Form 10 if we were to file a Form 10. Please note that the information provided below relates to the combined Company after the acquisition of Wonder Auto Limited, except that information relating to periods prior to the date of the reverse acquisition only relate to MGCC unless otherwise specifically indicated.

DESCRIPTION OF BUSINESS

Overview

We are a holding company whose primary business operations are conducted through our subsidiary, Wonder Auto Limited, and its subsidiary Halla. Wonder Auto is a China-based manufacturer of automotive electrical parts, specifically, starters and alternators. Wonder Auto’s business is focused on designing, developing, manufacturing and selling automotive electrical parts. Until our acquisition of Wonder Auto in June 2006, our operations were limited and our business strategy and ownership changed several times as a result of several acquisitions of our stock that are discussed in the section below entitled “Our Corporate History.”

Our Corporate History

We were incorporated on June 8, 2000 in the State of Nevada as MGCC. From inception until March 16, 2004, MGCC’s primary business strategy was to provide corporate finance consulting and management advisory services to emerging companies, but it never had any meaningful business operations during this period.

On March 16, 2004, MyTop purchased 1,025,000 shares of the common stock of MGCC existing shareholders thereby becoming the owner of approximately 96% of the issued and outstanding capital stock of MGCC. After the stock acquisition, MyTop intended for MGCC to engage in business of developing hi-tech product manufacturing and services including, digital precision machinery product, telecommunication products, and other hi-tech products and services through the acquisition of interests in one or more entities currently operating in these fields. MyTop entered into informal discussions with potential acquisition targets in China, but no agreements were reached.

On August 1, 2005, MyTop changed its name to Hisonic International, Inc. or Hisonic and continued to own approximately 96% of the issued and outstanding capital stock of MGCC.

On December 19, 2005, Hisonic, as the principal stockholder of MGCC, entered into a stock purchase agreement with Halter Financial Investments, L.P. or Halter, pursuant to which Hisonic sold 1,000,000 shares of the common stock of MGCC to HFI for $300,000. As a result, HFI became the owner of approximately 86.4% of the issued and outstanding common stock of MGCC.

In connection with the sale of common stock to HFI, Timothy P. Halter was elected as MGCC’s Chairman of the Board, President, Chief Financial Officer and Secretary and MGCC effected a 20-for-1 reverse stock split in February 2006.

From the date of HFI’s stock acquisition until the reverse acquisition of Wonder Auto on June 22, 2006, discussed in the next section, MGCC engaged in no active operations.

Background and History of Wonder Auto and its Operating Subsidiaries

Wonder Auto Limited was incorporated in British Virgin Islands in March 2004. Its wholly owned subsidiary Man Do Auto Technology Co. Ltd. was incorporated under the law of British Virgin Islands in 2003. Neither Wonder Auto Limited nor Man Do Auto Technology Co. Ltd. has any active business operations other than their ownership of Halla, which is the primary company that manufactures our products. Halla was incorporated in March 1996 with a registered capital of $12 million. Over the years, Halla went through several ownership changes and is now 61% owned by Wonder Auto and 39% owned by Man Do Auto Technology Co. Ltd.

Acquisition of Wonder Auto and Related Financing

On June 22, 2006, Wonder Auto Limited completed a private placement pursuant to which Wonder Auto Limited issued to certain accredited investors 45.277236 shares of its common stock for $12,000,000, such shares were subsequently exchanged for 1,592,669 shares of the common stock of MGCC Investment Strategies in connection with the reverse acquisition transaction as discussed below.

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In connection with the private placement, Wonder Auto Limited's two stockholders, Choice Inspire Limited and Empower Century Limited, entered into an escrow agreement with the private placement investors.  Pursuant to the escrow agreement, such stockholders agreed to certain “make good” provisions.  In the escrow agreement, Wonder Auto Limited established minimum net income thresholds of $8,140,000 for the fiscal year ending December 31, 2006 and $12,713,760 for the fiscal year ending December 31, 2007.  Choice Inspire Limited and Empower Century Limited deposited a total of 1,347,644 shares, to be equitably adjusted for stock splits, stock dividends and similar adjustments, of the common stock of MGCC Investment Strategies into escrow with Securities Transfer Corporation under the escrow agreement. If the 2006 net income threshold is not achieved, then the escrow agent must deliver 673,822 of such shares to the investors on a pro rata basis (based upon the total number of shares purchased by the investors in connection with the private placement transaction) and if the 2007 net income threshold is not achieved, the escrow agent must deliver the second 673,822 shares to the investors on a pro rata basis. However, only those private placement investors who remain our stockholders at the time the escrow shares become deliverable are entitled to their pro rata portion of such escrow shares.

In addition, on June 22, 2006, Empower Century Limited transferred 30.184824 shares of the common stock of Wonder Auto Limited to certain accredited investors in exchange for $8,000,000. Such shares were subsequently exchanged for 1,061,780 shares of the common stock of MGCC Investment Strategies in connection with the reverse acquisition transaction as discussed below.

On June 22, 2006, we also completed a reverse acquisition transaction with Wonder Auto Limited whereby we issued to the stockholders of Wonder Auto Limited 8,627,858 shares of our common stock in exchange for all of the issued and outstanding capital stock of Wonder Auto Limited. Wonder Auto Limited thereby became our wholly owned subsidiary and the former stockholders of Wonder Auto Limited became our controlling stockholders. We plan to amend our Articles of Incorporation to change our name to Wonder Auto Technology, Inc. and expect the name change to become effective in or before August 2006.

Upon the closing of the reverse acquisition, Timothy Halter, our sole director, submitted his resignation letter pursuant to which he resigned from all offices of MGCC Investment Strategies, Inc. that he holds effective immediately and from his position as our director that will become effective upon the tenth day following the mailing by us to our stockholders of an information statement that complies with the requirements of Rule 14f-1 under the Securities Exchange Act of 1934, which information statement was mailed out on or about the date of the closing of the reverse acquisition. Qingjie Zhao will be appointed to our board of the directors at the effective time of the resignation of Timothy Halter. In addition, our executive officers were replaced by the Wonder Auto executive officers upon the closing of the reverse acquisition as indicated in more detail below.

For accounting purposes, the share exchange transaction is treated as a reverse acquisition with Wonder Auto as the acquirer and MGCC Investment Strategies, Inc. as the acquired party. When we refer in this prospectus to business and financial information for periods prior to the consummation of the reverse acquisition, we are referring to the business and financial information of Wonder Auto on a consolidated basis unless the context suggests otherwise.

Our Products and Market Presence

We mainly engage in the design, development, manufacture and sale of automotive electrical parts, specifically, alternators and starters in the PRC through its wholly owned subsidiary, Halla. We primarily manufacture and sell two types of automotive electrical components: alternators and starters.

· Alternators. An alternator is part of a car engine’s electrical system which is connected to the engine belt of a vehicle and converts mechanical energy into electricity to recharge the battery. The battery, in turn, provides power to all electrical devices in the vehicle, such as the radio, power steering, headlights and windshield wipers. We have developed, manufactured and sold five series of alternators, which are represented by different sizes and output rates, in over 150 models. Our alternators’ current electrical current flows range in size and output from 65A to 115A. Larger alternators, as determined by their diameters, have more electrical field coils and can produce stronger currents. Our alternators have dual integrated fans and built-in integrated circuit regulators. Our alternators are designed to produce high outputs while remaining small and lightweight. The size and weight parameters result in the improved cooling performance of integrated fans and higher output from the integrated circuit regulators.

· Starters. A starter is part of a car engine’s starting system, along with the starter solenoid. At ignition, the starter solenoid is activated and provides power for the starter. The starter then spins the engine a few revolutions to begin the internal combustion process. The starters produced by our company are known as planetary type starters. These starters are small and lightweight due to their high speed motors combined with speed reduction systems. We produce five series of starters in terms of diameters (ø), namely ø70, ø74, ø76, ø81, ø90 and ø100, which produce between 0.85kW to 5.5kW of power.

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The table below shows our main product lines:

Alternator 5 series with over 150 models	Diameter of Stator	114mm	118mm	128mm	135mm	142mm
	Power	65A	75A	85A	90A	115A
Starter 5 series with over 70 models	Diameter of Shell	Φ70	Φ74	Φ76	Φ81	Φ90	Φ100
	Power	0.85KW
		0.9KW
		1.2KW
		1.4KW
		3.2KW
		2.5KW
		5.0-5.5KW

In 2005, we were ranked second in both sales revenue and sales volume in the Chinese alternators and starters market for automobiles according to the 2005 Economic Analysis of the Automotive and Electrical Component Industry.

Our products are suitable for use in various types of automobiles. However, we currently have more market presence in the sedan cars, especially those with smaller engines, with displacement typically below 1.6L. The sales of alternators and starters for use in cars with displacement below 1.6L accounted for approximately 80% of our total sales in 2005. In terms of the market for our products, the OEM market accounts for more than 90%, the replacement market accounts for approximately 7% and export accounts for approximately 1.36%.

We strive to produce high quality products and have established a quality control system to ensure that we achieve this goal. We have obtained the ISO9002, QS9000, and TS 16949 certificates for our quality management system.

Our Industry

Overview of Global Auto Industry

According to statistics published by the PRC State Information Center, global sales of automobiles in 2005 exceeded 68 million units. This 2005 sales figure represents a 23.41% growth over the 55.4 million units sold in 2001. Different regions recorded different growth rates in 2005 with the U.S. and Western European markets recording slight gains and the Mercosur countries, Central and Eastern Europe and the Asian markets showing strong growth. We believe that global competition from the emerging markets has put pressure on the mature auto markets and will shift automobile production to areas with lower production cost, such as China and other developing countries.

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Overview of Chinese Auto Industry

In China, the total output of autos in China reached 5.7 million units in 2005, representing a 12.56% increase over 2004 according to the China Automotive Industry Yearbook (1955-2005). Based on the unit sales volume in 2005, China is the second largest market in the world, following the United States which produced approximately 12 million units during the same period (Source: China Association of Automobile Manufacturers). According to that same study, sales of automobiles in China during the first quarter in 2006 reached 1.78 million units, up 36.3% from the first quarter of 2005 on a year over year basis. In addition, the study also shows that sales in the first quarter of the automobiles made in China rose by 36.9% over the prior year period to 1.73 million units. The output and sales of passenger cars surged by 54% and 54.3% to 1.27 million units and 1.25 million units, and sales of cars with engine capacity between 1 and 1.6 liters more than doubled to 533,000 units. We believe that the global automotive industry is focusing closely on China as nearly all global automobile manufacturers are now represented there.

We believe China’s auto industry will continue to grow. According to the research report published by Nomura Research Institute on April 10, 2006, the auto sales volume in China is expected to reach 10.08 million units in 2010. The sustained growth of the auto industry in China is mainly driven by the following factors:

· GDP Per Capita of China has risen to the critical point for auto ownership. The PRC’s GDP per capita in 2005 was $1700, a 9.9% increase as compared to that in 2004, and is approaching the critical vehicle ownership level of $2,000. The GDP per capital in some more developed areas, such as Shanghai and Beijing, reached over $5000 in 2005 according to the National Bureau of Statistics of China. The rising GDP per capita indicates the increase of purchasing power, which, combined with a fall in automobile prices, will lead to a higher private automobile ownership.

· Huge population but low saturation level in China. Despite the fact that private vehicle ownership has continually increased over the past 10 years, the average auto ownership in China is only 19 per 1000 inhabitants which is very low as compared to the world average of 125 per 1000 inhabitants according to a Deutsche Bank research study issued on January 6, 2006. (780 in US, 500 in EU, 568 in Japan, 588 in Germany, 313 in South Korea and 198 in Russian Federation in 2004) The PRC National Commerce Department predicted that the auto ownership in China will increase to 40 per 1000 inhabitants by 2010.

· Dramatic increase of the urbanization rate. According to the National Bureau of Statistics of China, the urbanization rate in China grew from 26% in 1990 to 43% in 2003, an increase of 65%. More people moving to the cities will lead to a rising demand for car ownership.

· Growth of highway infrastructure. The statistics of the PRC Ministry of Communicationshows that the total length of expressways and class I-IV highways in China increased from 1.07 million km in 1998 to 1.9 million km in 2005, a growth of 77.6%. The growth of highway infrastructure will benefit the Chinese auto industry.

· Favorable governmental policies. As explained in more details below, the Chinese government adopted a number of legislative measures to facilitate the development of the Chinese automotive industry.

Small Engine Car Market in China

The sales of cars with engine capacity between 1 and 1.6 liters more than doubled to 533,000 units in the first quarter of 2006 as compared to the same period last year. We believe the sales for small engines cars will continue to grow rapidly because the rising oil prices will make energy efficient small engine cars more attractive to consumers. In addition, small engine cars have price advantages over large engine cars and are more environmentally friendly which makes them more suitable in China which currently has a relatively low income per capita and faces significant environmental issues. The Chinese government promulgated a regulation in April 2006 that further encourages the consumption of small engine vehicles. The regulation provides for an upward adjustment of the tax rate applicable to larger vehicles in order to encourage consumers to purchase smaller engine vehicles. The top tax rate applicable to vehicles with engine displacements larger than 2 liters will be raised to as high as 20% from 8%, while the tax rates for vehicles with engine displacements less than 2 liters will be 3-5%.

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Overview of Chinese Auto Parts Industry

Due to the high growth of the auto industry, the Chinese auto parts industry has experienced rapid growth over the past several years. According to CCID Consulting, a professional market research and management consulting company, the sales of auto parts industry reached $ 68.77 billion in 2005, up 26.13% from $54.52 billion in 2004.

The auto parts industry is generally divided into three segments: OEM market, replacement market and export market, which accounted for approximately 67.94%, 18.55% and 13.51% of the market share in 2005, respectively, according to the statistics of CCID Consulting.

In 2005, the sales of auto parts in the OEM market and replacement market were about $46.72 billion and $12.76 billion, up 21.63% and 23.29% from the previous year, respectively. Since the number of China’s automobiles has reached 32 million by the end of 2005 and is expected to increase in the future, we believe the replacement market will become more and more important for auto parts manufacturers. Export of auto parts is also a dynamic part of the auto parts industry in China. The export sales of auto parts were about $9.29 billion in 2005, an increase of 61.28% over 2004. Currently, China is the fourth largest exporter of auto parts in the world, following Mexico, Canada and Japan. Although China’s auto parts export volume is still relatively small as compared to some developed markets, it has been growing at an annual rate of more than 60% between 2002 and 2005. (Source: CCID Consulting)

According to China Association of Social Economic System, the total sales of auto parts industry will reach $175 billion by 2010, representing a compounded annual growth rate of 20.54% between 2005 and 2010. We believe that China’s auto parts industry will maintain its high growth momentum due to several important factors. First, the growth of auto industry will lay a solid foundation for growth in the OEM auto parts industry. Second, the increased levels of car ownership by Chinese residents will also lead to the growth of the replacement part market. In addition, in order to achieve cost reduction, it is the growing tendency on the part of Chinese and international auto manufacturers to reduce cost by sourcing components directly from low cost manufacturing regions, such as China. Many view this development as prompting increased demand for the low cost and high quality products provided by Chinese leading automotive parts manufacturers. We believe that the regulatory measures recently adopted by the Chinese government will also contribute to the growth in demand for Chinese auto part products. The Measures for the Administration of Import of Automobile Components and Parts Featuring Complete Vehicles issued by the National Development and Reform Commission of the PRC Ministry of Finance and the Ministry of Commerce encourages automakers to use parts manufactured by local Chinese auto parts manufacturers. Pursuant to this regulation which becomes effective on July 1, 2006, the Chinese government will charge automakers a tariff up to 25% if more than 40% of the components and parts of an automobile are imported.

Our Strategy - How We Plan to Succeed

Our strategic plan includes the following components:

Increase production capacity. We currently manufacture our product out of a single facility located in Jinzhou, Liaoning Province of China. We plan to use approximately $6 million of the net proceeds raised in the private placement closed in June 2006 to expand our production capacity.

Strengthen our research and development capabilities. We believe that as China's market opens to more competition, the auto parts industry will be affected by a surge of new industry specific software and other technology and the subsequent development of more technologically advanced products. We plan to invest about $2 million to purchase testing equipment to further improve our R&D capability in the next twelve months. We expect that this investment will significantly contribute to the development of new high quality products with higher output power, smaller size and weight, longer duration and higher endurance to harsh environment.

Expand sales to existing customers and actively market to new customers. We plan to expand sales to the existing clients by providing high quality products and services to them and developing new products to meet their future demand for new models of automobiles and engines. We also intend to develop new OEM customers in China, increase our presence in the international trade shows to increase our brand recognition and promote our products, and increase our sales to the replacement markets in the future by investing more human resources and promotion efforts in this segment.

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Our Intellectual Property

We currently have the following issued patents.

Patent	Patent Type	Patent No.	Expiration Date	Country
Configuration of End Bearing Bracket of Starter	Utility Model	ZL03212000.1	March 16, 2013	China
Speed Reduction Gear to Start Electromotor	Utility Model	ZL032119992	March 16, 2013	China
Auto AC Electricity Generator	Utility Model	ZL03211998.4	March 16, 2013	China
Rotor of Auto AC electricity generator	Utility Model	ZL03212001.X	March 16, 2013	China
Starter Hull Connection and Location Configuration	Utility Model	ZL200320105993.6	December 9, 2013	China

We have filed 19 patent applications with the Patent Office of the State Intellectual Property Office of China which are pending approval.

We have registered the trademark for the logo "" with the Trademark office of the State Administration for Industry and Commerce of China. We use our trademark for the sales and marketing of our products. Our trademark expires in April 2010.

In 2004, we signed a licensing agreement with a well-known Japanese automotive component manufacturer pursuant to which the Japanese manufacturer granted us a license to use its patented technologies to manufacture and sell certain alternators and starters on a non-assignable and non-exclusive basis. The license agreement has a three-year effective term which expires in September 2007.We are under a contractual obligation to keep the identity of our Japanese licensor confidential.

Our Internal and Strategic Research and Development Efforts - How We Create New Products and Enhance Existing Ones

Overview

We believe that the development of new products and production methodologies is critical to our success. We currently operate two research and development centers, each performing different research and development activities. Our first research and development center is located at our headquarters in Jinzhou, Liaoning Province of China. In June 2004, we set up a new center in Beijing, China. As of April 2006, we have 32 research and development personnel, five of them are experts we hired from South Korea, 23 of them hold bachelor degrees from Chinese universities.

Through our research and development centers, we are able to accommodate joint development programs with our OEM customers. As a result, we are often invited by our customers to jointly develop new engines and manage the development program tailored to our customers’ specific requirements. In 2005, we had 29 joint development programs (16 for alternators and 13 for starters) used in popular models of sedans. These OEM customers include XiaLi, Chery, South Korea Doosan and Beijing Benz DaimlerChrysler. Upon the successful completion of the joint development project, we often become the supplier of the developed products. In the past three years, we were engaged as the supplier in approximately 76.5% of the successful joint development projects.

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Although the top five alternator and starter manufacturers in China all have joint-development capacities, we believe that we have an advantage over our competitors because our development period is about three months shorter than our competitors due to our dedicated R&D resources. We also believe that the products we develop generally have a price advantage over those developed by our competitors.

Strategic Alliance with Hivron

In addition to our own research and development capabilities, we have entered into a strategic alliance with Hivron, a South Korean company which has specialized in the design and manufacturing of microchips since 2002. Through this strategic alliance, we are able to access South Korean expertise and actively participate in the research and development of technologies that are critical to our products. During the past three years of this strategic alliance with Hivron, we have jointly conducted research to develop microchips for use in our alternator rectifiers and regulators. This strategic alliance is important to our business because it provides us source of microchips that are suitable for our alternators from PRC manufacturers.

Under the terms of our June 7, 2004 long-term strategic cooperation agreement, Hivron will design and manufacture microchips according to our specifications and then sell these chips to our designated suppliers. Hivron is obligated to sell these chips at competitive prices and cannot sell chips developed pursuant to this agreement to our competitors. In return, we will provide specifications and information on our new products to Hivron and instruct our rectifier and regulator suppliers to purchase chips from Hivron.

Strategic Alliance with Japanese automotive component manufacturer

In 2004, we entered into a licensing agreement with a well-known Japanese automotive component manufacturer which has three-year effective term.Under the terms of the licensing agreement, we license the technology and products developed by our Japanese licensor for a period of three years, ending in September 2007. Through this licensing agreement, we are able to integrate patented Japanese technologies into our alternators and starters. We can also produce and sell products that are more suitable for Japanese vehicles utilizing this technology. In return, we pay a royalty of 0.55% of net sales revenue from the sales of the products that incorporate the licensed technology. The licensorretains ownership of all intellectual property licensed under the agreement. For the year ended December 31, 2005, sales of the licensed products amounted to approximately $38.71 million and the amount of royalties paid was approximately $0.21 million. We are under a contractual obligation to keep the identity of our Japanese licensor confidential.

Research and Development Expenditures

For the fiscal years ended December 31, 2003, 2004 and 2005, our research and development expenses, which were principally related to the development of new products for our customers and continuous enhancement of our existing products, were approximately $0.33 million, $1.35 million and $1.47 million, representing approximately 0.82%, 2.9% and 3.04% of our sales for those years, respectively. On average, research and development expense accounts for about 1% or lower for most of the Chinese private auto parts manufacturers according to the report of No. 1 Financial Daily. Our research and development costs are much higher than most of our domestic competitors and we expect that our research and development costs will continue to increase in the future periods.

Our Sales and Marketing Efforts - How We Sell Our Products

We market our products directly to our customers though our sales department which, as of March 31, 2006, consisted of 11 employees. Each member of our sales department receives one month of training in both the business and technical aspects that they will need to perform their job functions. In addition, we periodically provide continuing training for our sales personnel. Members of our sales department generate sales leads by contacting auto manufacturers directly and by attending industry trade shows and exhibitions. Since we have established our status as one of the leading suppliers of alternators and starters, our clients may also contact us for new projects. Although most of our business is developed by direct personal contact and referrals from our customers, we also advertise our products in industry trade journals and other industry media.

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In order to attract international customers, we also attend international trade shows, such as the automobile shows in Hanover, Frankfurt and Las Vegas, to raise our brand recognition and promote our products to the international market. We started selling our products directly to foreign customers in 2003. In both 2003 and 2004, our overseas sales accounted for less than 1% of our total sales. In 2005, our overseas sales increased to approximately 1.36% of the total sales. As of April 2006, we have entered into non-binding letters of intent or agreements with several overseas companies, including Ampac (U.S.), SWT (South Korea), South Korea Hyundai, Doosan and Lucas (Turkey). We also plan to open a new branch in Detroit to facilitate our efforts to enter the replacement market in the U.S. by the end of 2006.

Our sales and marketing department also performs customer service functions. We also employ outside representatives whose primary function is to understand our customers’ needs and promote services that best meet their requirements. These representatives also help our customers resolve installation problems and provide general customer service. As of March 31, 2006, we had seven representatives stationed at different major customers.

Raw Materials for our Products and our Supplier Arrangements

Nature of the raw materials used in our products.

The raw materials we use to produce our starters and alternators fall into four general categories: metal parts, semiconductors, chemical and packaging materials. The prices of these raw materials are determined based upon prevailing market conditions, supply and demand. Supply and demand for these raw materials is generally affected by the cyclical nature of the automobile industry as well as the auto parts industry itself and the characteristic over/under capacity of these industries. Supply and demand is also affected by macroeconomic conditions in China, including levels of consumer disposable income and spending patterns.

Our Suppliers and Supplier Arrangements.

We purchase the majority of the raw materials from suppliers located in China. If we continue to see improvement in the quality of domestically produced parts, we intend to increase our use of these local suppliers in order to take advantage of the lower costs. We believe that utilizing local suppliers also provides us with other benefits because we are able to supervise local suppliers, we can easily provide technical training and our technical department can also provide technical improvement suggestions to them.

We use a dual supplier system to source the raw materials that we use in our products and we maintain absolute exclusive supplier arrangements, relatively exclusive supplier arrangements and non-exclusive supplier arrangements. About 70% of all of the raw materials that we use to manufacture our products are purchased from a handful of select suppliers. These select or primary suppliers consist of both local Chinese manufacturers and foreign manufacturers based in South Korea and Japan, including NMB, NSK, NTN, KBC, Pacific Metal and Suzhou Techno System, etc. Our priority suppliers have long-term relationships with us, but we do not rely on them exclusively. Instead, as part of our dual vendor system, we also purchase about 30% of the total raw materials that we need to produce our products from other vendors. As a result, if our priority suppliers cannot supply us for any reasons, we are able to rely on these other suppliers to satisfy our raw material requirements. All of our suppliers must meet our quality standards and delivery requirements consistently in order to remain on our approved supplier list. We require local suppliers within 300 km of our production facility to deliver goods within six hours from the time when orders are placed. If a supplier is repeatedly late in deliveries, it is removed from our approved supplier list. We have entered into written agreements with our major suppliers and these agreements generally have a one-year term. The terms and nature of our arrangements with suppliers are as follows:

· Absolute Exclusive Supplier Arrangements. Under the exclusive supplier arrangements, our suppliers are obligated to provide all of their products to us and cannot sell any of their products to any third party in the Chinese automotive electrical equipment industry. In 2005, we had absolute exclusive supplier arrangements with three vendors, Jinzhou HanHua Electrical Equipment Co., Ltd., JinZhou ChangZe Precision Machinery Plant and JinZhou DongYou Precision Technology. These suppliers provided us with approximately 6.5% of the materials used in our products.

· Relatively Exclusive Supplier Arrangements. Under the relatively exclusive supplier arrangements, our suppliers cannot provide any of their products made based on the specifications provided by us to any other automotive electrical equipment manufactures in PRC. In 2005, we had relatively exclusive supplier arrangements with 31 vendors who supplied us with approximately 67.4% of the materials used in our products.

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· Non-Exclusive Supplier Arrangement. Under this arrangement, there is no restriction on the vendors’ ability to sell their products to other parties. In 2005, we had non-exclusive supplier arrangements with 12 vendors who supplied us with approximately 26.1% of the materials used in our products.

These flexible sourcing arrangements are designed to provide sourcing stability for us and promote competition among our suppliers. We believe our supplier arrangements incentivize suppliers to provide to us technologically advanced and high quality products. We systematically assess our vendors to determine whether they should remain as select vendors, be promoted to select vendors or be demoted to the other vendor category.

We typically purchase the raw materials that we use to produce our products from our suppliers on credit. Credit terms usually permit payment up to 90 days following the delivery of the raw materials. When we purchase raw materials from domestic Chinese suppliers, we are able to pay in Chinese Yuan Renminbi. When we purchase raw materials from foreign suppliers, we usually pay in U.S. Dollars. Our account payables above six months accounted for 0.05%, 0.22% and 0.06% of our total account payables in 2003, 2004 and 2005, respectively.

Our top ten suppliers in 2005.

The following table provides information regarding our top 10 suppliers of products and services during 2005.

TOP TEN SUPPLIERS IN 2005
Supplier	Location	Products	Percentage of Total Materials Cost
S.W.T	South Korea	Brush Holder	14%
YingKou Die-Casting Products Co., Ltd	YingKou, PRC	Bracket	10%
TianJin Showa Enamelled Wire Co., Ltd	TianJin, PRC	Magnet Wire	9%
JinZhou HanHua Electrical Systems Co., Ltd	Jin Zhou, PRC	Armature	8%
Zhejiang Yuhuan Putian Starter Drive Co. Ltd	Zhejiang,, PRC	P-shaft and O.R.C.	7%
Zhejiang Huanfang Automobile Electrical Appliances Co. Ltd	Zhejiang,, PRC	M/switch Ass’y	5%
JinZhou Dongwoo Precision Co. Ltd	Jin Zhou, PRC	Regulator and Rectifier	20%
Jinzhou Changze Macinery plant	Jinzhou P.R.C.	Pole and shaft	7%
JinZhou Automobile Parts Factory	Jin Zhou, PRC	Yoke Assy	4%
Ningbo Huateng Electrical Co. Ltd	Zhejiang, PRC	Armatur	4%

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Our Major Customers

Large automobile manufacturers and automotive engine suppliers are our primary and most desirable customers. Our customers include Beijing Hyundai, Dongfeng Yueda Kia Motors, Daimler Chrysler, SAIC GM WuLing, Chery, Geely, Tianjin XiaLi Automobile Co. and Shenyang Aerospace Mitsubishi Motors Engine Manufacturing Co. We have also entered into technical cooperation agreements or letters of intent with new OEM customers, including Shanghai GM, Fiat, Nan King MG, Beijing Benz, South Korea Hyundai and Korean Doosan. The number of our clients has increased about 194% in the past five years. As we continue to build sales in the domestic market, we intend to grow by developing overseas sales. We focus on maintaining long-term relationships with our customers. We have enjoyed recurring orders from most of our customers for periods of four to ten years. Our typical contract has a one-year term and is usually renewable.

For the fiscal years ended December 31, 2005 and 2004, our top ten largest customers accounted for approximately 76% and 68% of our total revenues, respectively, while our largest customer accounted for approximately 14% and 16%, respectively.

The following table shows the revenues generated and percentage of total revenues received from our ten largest customers during the years ended December 31, 2005 and 2004:

FY 2004
Rank	Clients Name	Units	Sales (US$)	%
1	Harbin Dongan Auto-Engine Co. Ltd.	203,876	6,681,493	16%
2	Shanghai Wulong Atuo Components Investment Co. Ltd.	148,276	5,621,017	13%
3	Shengyang Aerospace Mitsubishi Motors Engine Manufacturing Co. Ltd.	98,644	3,715,043	9%
4	Beijing Hyundai Mobis Automotive Parts Co. Ltd.	66,886	2,617,770	6%
5	Greatwall Baoding Interal Combustion Engine Manufacturing Co. Ltd.	73,572	2,502,267	6%
6	Dongfeng Yueda Kia Motors Co., Ltd.	49,458	1,849,984	4%
7	Jiasu Mobis Automotive Parts Co. Ltd.	69,291	1,825,813	4%
8	Beijing Foton Environmental Engine Co. Ltd.	42,894	1,737,215	4%
9	FAW Car Co. Ltd.	24,137	1,295,365	3%
10	Tianjin Automotive Xia Li Co. Ltd Internal Combustion Engine Manufacturing Branch Co.	49,262	1,274,701	3%

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FY 2005
Rank	Clients Name	Units	Sales (US$)	%
1	Beijing Hyundai Motor Company	207,206	6,926,159	14%
2	Shenyang Aerospace Mitsubishi Motors Engine Manufacturing Co. Ltd.	144,028	5,451,367	11%
3	Dongfeng Yueda Kia Motors Co., Ltd.	173,639	5,346,827	11%
4	Harbin Dongan Auto Engine Co. Ltd.	145,998	4,511,073	9%
5	Tianjin Automotive Xia Li Co. Ltd Internal Combustion Engine Manufacturing Branch Co.	114,762	3,562,069	7%
6	Mianyang Xinchen Engine Co. Ltd.	97,932	3,367,093	7%
7	Greatwall Baoding Interal Combustion Engine Manufacturing Co. Ltd.	84,793	2,876,763	6%
8	Shenyang Aearospace Xinguang Automotive Engine Co. Ltd.	67,463	2,313,308	5%
9	Harbin Dongan Mitsubishi Automotive Engine Manufacturing Co. Ltd.	50,313	1,403,102	3%
10	Beijing Foton Environmental Engine Co. Ltd.	35,323	1,385,654	3%

Our Competition

The automobile parts market in China is very competitive. We compete based upon the price and quality of our products, product availability and customer service. There are approximately 10 major competitors in this market trying to sell the same products that we sell to the same group of target customers. Our primary competitors are located in China and include Shanghai Valeo Automotive Electrical Systems Co. Ltd , Hubei Shendian Auto Motor Co., Ltd. and Zhongqi Changdian Co., Ltd.

With China’s entry into the WTO and China’s agreement to lift its protections to infant industries, we believe that competition will increase in the China auto parts industry segment. Our primary international competitors include VALEO (France), BOSCH (German), RAMY (U.S.), Mitsubishi Motor (Japan) and Denso (Japan). Some of our competitors have greater financial resources, larger staff, and more established market recognition in both domestic Chinese and international markets than we have.

Regulation

We do not face any significant government regulation of our business or in connection with the production of our products. We do not require any special government permits to produce our products other than those permits that are required of all corporations in China.

Our Employees

As of March 31, 2006, we employed 296 full-time employees.

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Our Chinese subsidiary has trade unions which protect employees’ rights, aim to assist in the fulfillment of our economic objectives, encourage employee participation in management decisions and assist in mediating disputes between us and union members. We believe that we maintain a satisfactory working relationship with our employees and we have not experienced any significant labor disputes or any difficulty in recruiting staff for our operations.

As required by applicable Chinese law, we have entered into employment contracts with all of our officers, managers and employees.

Our employees in China participate in a state pension scheme organized by Chinese municipal and provincial governments. We are required to contribute to the scheme at the rates of 24% of the average monthly salary. The compensation expenses related to this scheme was approximately $417,824, $388,416 and $196,010 for the fiscal year 2005, 2004 and 2003, respectively.

In addition, we are required by Chinese law to cover employees in China with various types of social insurance. We have purchased social insurance for all of our employees.

Our Facilities

All land in China is owned by the State. Individuals and companies are permitted to acquire rights to use land or land use rights for specific purposes. In the case of land used for industrial purposes, the land use rights are granted for a period of up to 50 years. This period may be renewed at the expiration of the initial and any subsequent terms. Granted land use rights are transferable and may be used as security for borrowings and other obligations.

We were granted land use rights from the Chinese government for 42,169 square meters of land located at No. 16 Yulu Street, Jinzhou High Technology Industrial Park, Jinzhou, China. The land use rights have a 30-year term and will expire on August 15, 2026. Our headquarters are located at this site. This site houses our office building, a research and development center, as well as our production facilities.

In addition to the land use rights, we also have ownership of eleven other properties, four of which are located at No. 16 Yulu Street and the other seven are residential properties located at Huianli Guta District of Jinzhou. We have placed mortgages on the four properties located at No. 16 Yulu Street to secure certain bank loan from Jinzhou Commercial Bank City Development Branch in the amount of approximately $5 million (RMB 40 million).

We also lease 169 square meters of office space at Wangjing Tower, No. 9 Zhong Huan Nan Lu, Wangjing, Chaoyang District, Beijing where our Beijing Representative Office is located. The lease has a 2-year term which runs from November 15, 2005 to November 14, 2007. The monthly rent is RMB 17,000.

We currently have established three alternator assembly line facilities and one starter assembly line facility. The total annual production capacity of these production lines is approximately 1.56 million units of alternators and 0.46 million units of starters, assuming two work shifts per day with eight hours each.

Our 207 production workers currently work in two work shifts of eight hours, each to maximize the capabilities of our assembly lines. For each year from 2003 to 2005, the utilization rates of our alternator production lines were approximately 73%, 74% and 81%, respectively, while those of the starter production lines were approximately 63%, 96.3%, and 140%, respectively.

We believe that all our properties have been adequately maintained, are generally in good condition, and are suitable and adequate for our business. We plan to utilize a portion of the $12 million that we raised in our private placement that closed in June 2006 to construct additional production lines to expand our production capacity for alternators and starters. Upon the completion of the additional production lines, it is expected that our production capacity for alternators and starters will reach approximately 2.01 million and 1.54 million units, respectively. We expect that these new production lines will be completed by approximately the beginning of 2007.

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Legal Proceedings

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

RISK FACTORS

The shares of our common stock being offered for resale by the selling stockholders are highly speculative in nature, involve a high degree of risk and should be purchased only by persons who can afford to lose the entire amount invested in the common stock. Before purchasing any of the shares of common stock, you should carefully consider the following factors relating to our business and prospects. If any of the following risks actually occurs, our business, financial condition or operating results will suffer, the trading price of our common stock could decline, and you may lose all or part of your investment.

RISKS RELATED TO OUR BUSINESS

A large percentage of our revenues are derived from sales to a limited number of customers and our business will suffer if sales to these customers decline.

A significant portion of our revenues historically have been derived from a limited number of customers. Four customers - Beijing Hyundai, Shenyang AeroSpace Mitsubishi, Dongfeng YueDa Kia Motors Co., Ltd. and Harbin Dongan - accounted for approximately 45% of our sales in 2005. Any significant reduction in demand for vehicles manufactured by any of these major customers for which we produce parts and any decrease in their demand for our products could harm our sales and business operations. The loss of one or more of these customers could damage our business, financial condition and results of operations.

Our revenues will decrease if there is less demand for vehicles in which our products are installed

We sell our products primarily to manufacturers of sedans and passenger vehicles. If sales of sedans and passenger vehicles decrease, demand for our products and our revenues would likewise decrease.

If the pricing and terms on which we purchase raw materials and component parts from our suppliers unfavorably change, we may become unable to produce and market our products on favorable terms.

We purchase from over 40 suppliers located primarily in Asia the raw materials and component parts which we use to manufacture our products. The raw materials that we use are mainly divided into four categories: metal parts, semiconductors, chemicals and packaging materials. Our primary vendors and suppliers include YingKou Die-Casting Co., Ltd., JinZhou Dongwoo Precision Co. Ltd, S.W.T., JinZhou ChangZe Machinery Plant, JinZhou HunHua Electrical Equipment Co., Ltd. and TianJin Showa Enamelled Wire Co. Ltd. If these or any other important suppliers are unable or unwilling to provide us with such raw materials and/or component parts on terms favorable to us, we may be unable to produce certain products, which could result in a decrease in revenue and damage to our reputation in our industry. If the prices of raw materials needed for our products increase, and we cannot pass these price increases on to our customers, our profit margins and operating results will suffer.

If our customers and/or the ultimate consumers of the vehicles which use our products successfully assert product liability claims against us due to defects in our products, our operating results may suffer and our reputation may be harmed.

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Our products are used primarily on sedans and passenger vehicles. Significant property damage, personal injuries and even death can result from malfunctioning vehicles. If our products are not properly designed, built or installed and/or if people are injured as a result of our products, we could be subject to claims for damages based on theories of product liability and other legal theories. The costs and resources to defend such claims could be substantial and, if such claims are successful, we could be responsible for paying some or all of the damages. We do not have product liability insurance. The publicity surrounding these sorts of claims is also likely damage our reputation, regardless of whether such claims are successful. Any of these consequences resulting from defects in our products would hurt our operating results and stockholder value.

We face strong competition from both Chinese and international competitors in the auto parts manufacturing industry.

We compete worldwide with a number of other global and PRC-based manufacturers and distributors that produce and sell products similar to ours. Price, quality, and technological innovation are the primary elements of competition. Our main competitors are located in China, including Shanghai Valeo Automotive Electrical Systems Co. Ltd , Hubei Shendian Auto Motor Co. Ltd. (a joint venture of Hubei Shendian and U.S. Ramy) and Zhongqi Changdian Co. Ltd. After China lifted its protections to infant industries, we have seen an increasing competition from multinational auto parts manufacturers and expect this trend to continue. Currently, our primary international competitors include VALEO (France), BOSCH (German), RAMY (U.S.), Mitsubishi Motor (Japan) and Denso (Japan). We are not as large as a number of our competitors and do not have the brand recognition or substantial financial or other resources of some of our competitors.

Our business may adversely change due to the cyclical nature of the vehicular markets we serve.

Our financial performance depends, in large part, on the varying conditions in the automotive markets that we serve. The volume of automotive production in Asia, North America, Europe and the rest of the world has fluctuated, sometimes significantly, from year to year, and such fluctuations give rise to fluctuations in demand for our products. These fluctuations in demand in the automotive industry often are in response to overall economic conditions, but also are a reaction to certain external factors, such as changes in interest rate levels, vehicle manufacturer incentive programs, changes in fuel costs, consumer spending and confidence and environmental issues. If the automotive market experiences a downturn due to poor overall economic conditions or adverse changes in the external influences upon our business, our results of operations and business will suffer.

Our products are subject to recall for performance related issues.

Like many other participants in the automotive industry, we are at risk for product recall costs. Product recall costs are costs incurred when we decide, either voluntarily or involuntarily, to recall a product through a formal campaign to solicit the return of specific products due to a known or suspected performance issue. Costs typically include the cost of the product, part or component being replaced, customer cost of the recall and labor to remove and replace the defective part or component. When a recall decision is made, we estimate the cost of the recall and record a charge to earnings in that period. In making this estimate, judgment is required as to the quantity or volume to be recalled, the total cost of the recall campaign, the ultimate negotiated sharing of the cost between us and the customer and, in some cases, the extent to which the supplier of the part or component will share in the recall cost. As a result, these estimates are subject to change. Excessive recall costs or our failure to adequately estimate these costs may negatively affect our operating results. As of June 20, 2006, our products have not been the subject of an open recall.

We might fail to adequately protect our intellectual property and third parties may claim that our products infringe upon their intellectual property.

As part of our business strategy, we intend to accelerate our investment in new products and process technologies in an effort to strengthen and differentiate our product portfolio. As a result, we believe that the protection of our intellectual property will become increasingly important to our business. Currently, Wonder Auto holds five patents and has 19 pending patent applications. We will continue to rely on a combination of patents, trade secrets, trademarks and copyrights to provide protection in this regard, but this protection might be inadequate. For example, our pending or future patent applications might not be approved or, if allowed, they might not be of sufficient strength or scope. Conversely, third parties might assert that our technologies infringe their proprietary rights. In either case, litigation could result in substantial costs and diversion of our resources, and whether or not we are ultimately successful, the litigation could hurt our business and financial condition.

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Expansion of our business may strain our management and operational infrastructure and impede our ability to meet any increased demand for our automotive electrical component products.

Our business plan is to significantly grow our operations by meeting the anticipated growth in demand for existing products, and by introducing new product offerings. Our planned growth includes the construction of new production lines to be put into operation over the next twelve months. Growth in our business may place a significant strain on our personnel, management, financial systems and other resources. Our business growth also presents numerous risks and challenges, including:

· our ability to successfully and rapidly expand sales to potential customers in response to potentially increasing demand;

· the costs associated with such growth, which are difficult to quantify, but could be significant; and

· rapid technological change.

To accommodate this growth and compete effectively, we may need to obtain additional funding to improve information systems, procedures and controls and expand, train, motivate and manage existing and additional employees. Funding may not be available in a sufficient amount or on favorable terms, if at all. If we are not able to manage these activities and implement these strategies successfully to expand to meet any increased demand, our operating results could suffer.

We depend heavily on key personnel, and turnover of key employees and senior management could harm our business.

Our future business and results of operations depend in significant part upon the continued contributions of our key technical and senior management personnel, including Qingjie Zhao, our sole director, Chief Executive Officer, President and Secretary, Yuncong Ma, our Chief Operating Officer, Seuk Jun Kim, our Vice President of Research and Development, Meirong Yuan, our Chief Financial Officer, Yuguo Zhao, our Vice President of Sales and Yongdong Liu, our Vice President of Production. They also depend in significant part upon our ability to attract and retain additional qualified management, technical, marketing and sales and support personnel for our operations. If we lose a key employee, if a key employee fails to perform in his or her current position, or if we are not able to attract and retain skilled employees as needed, our business could suffer. Significant turnover in our senior management could significantly deplete our institutional knowledge held by our existing senior management team. We depend on the skills and abilities of these key employees in managing the manufacturing, technical, marketing and sales aspects of our business, any part of which could be harmed by turnover in the future.

Mr. Qingjie Zhao’s association with other businesses could impede his ability to devote ample time to our business and could pose conflicts of interest.

Mr. Qingjie Zhao, our CEO, President, Secretary and director, serves as an executive director of China Wonder Limited, a company listed on the Alternative Investment Market of the London Stock Exchange (which is principally engaged in the manufacture and sale of specialty packaging machinery to the Chinese pharmaceutical market), and an executive director of Jinheng Holdings (which is principally engaged in the manufacture and sale of automotive airbag safety systems in China). As a result, conflicts of interest may arise from time to time. We will attempt to resolve any such conflicts of interest in our favor. Our officers and directors are accountable to us and our shareholders as fiduciaries, which requires that such officers and directors exercise good faith and integrity in handling our affairs. However, their existing responsibilities to other entities may limit the amount of time they can spend on our affairs. Mr. Zhao devotes approximately 85% of his business time to the affairs of Wonder Auto and approximately 15% of his business time to the affairs of other companies. Mr. Zhao’s decision making responsibilities for these three companies are similar in the areas of public relations, management of human resources, risk management and strategic planning. Mr. Zhao works about 75 hours per week altogether.

We do not have any independent directors and there is no assurance that any independent directors will be appointed or what their qualifications may be if they are appointed.

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We currently have only one director, Qingjie Zhao, who is also our CEO, President, Secretary and the beneficial owner of 28.04% of our common stock. Therefore, we do not have any independent directors. We plan to appoint independent directors before our common stock is listed on a national securities exchange or Nasdaq, but we may not be able to identify independent directors qualified to be on our board.

We bear the risk of loss in shipment of our products and have no insurance to cover such loss.

Under the shipping terms of our standard customer contracts, we bear the risk of loss in shipment of our products. We do not insure this risk. While we believe that the shipping companies that we use carry adequate insurance or are sufficiently solvent to cover any loss in shipment, there can be no assurance that we will be adequately reimbursed upon the loss of a significant shipment of our products.

We may be exposed to potential risks relating to our internal controls over financial reporting and our ability to have those controls attested to by our independent auditors.

As directed by Section 404 of the Sarbanes-Oxley Act of 2002 or SOX 404, the Securities and Exchange Commission adopted rules requiring public companies to include a report of management on the company’s internal controls over financial reporting in their annual reports, including Form 10-K. In addition, the independent registered public accounting firm auditing a company’s financial statements must also attest to and report on management’s assessment of the effectiveness of the company’s internal controls over financial reporting as well as the operating effectiveness of the company’s internal controls. We were not subject to these requirements for the fiscal year ended December 31, 2005, accordingly, we have not evaluated our internal control systems in order to allow our management to report on, and our independent auditors to attest to, our internal controls as required by these requirements of SOX 404. Under current law, we will be subject to these requirements beginning with our annual report for the fiscal year ending December 31, 2007. We can provide no assurance that we will comply with all of the requirements imposed thereby. There can be no assurance that we will receive a positive attestation from our independent auditors. In the event we identify significant deficiencies or material weaknesses in our internal controls that we cannot remediate in a timely manner or we are unable to receive a positive attestation from our independent auditors with respect to our internal controls, investors and others may lose confidence in the reliability of our financial statements.

Our holding company structure may limit the payment of dividends.

We have no direct business operations, other than our ownership of our subsidiaries. While we have no current intention of paying dividends, should we decide in the future to do so, as a holding company, our ability to pay dividends and meet other obligations depends upon the receipt of dividends or other payments from our operating subsidiaries and other holdings and investments. In addition, our operating subsidiaries, from time to time, may be subject to restrictions on their ability to make distributions to us, including as a result of restrictive covenants in loan agreements, restrictions on the conversion of local currency into U.S. dollars or other hard currency and other regulatory restrictions as discussed below. If future dividends are paid in Renminbi, fluctuations in the exchange rate for the conversion of Renminbi into U.S. dollars may reduce the amount received by U.S. stockholders upon conversion of the dividend payment into U.S. dollars.

Chinese regulations currently permit the payment of dividends only out of accumulated profits as determined in accordance with Chinese accounting standards and regulations. Our subsidiaries in China are also required to set aside a portion of their after tax profits according to Chinese accounting standards and regulations to fund certain reserve funds. Currently, our subsidiaries in China are the only sources of revenues or investment holdings for the payment of dividends. If they do not accumulate sufficient profits under Chinese accounting standards and regulations to first fund certain reserve funds as required by Chinese accounting standards, we will be unable to pay any dividends.

RISKS RELATED TO DOING BUSINESS IN CHINA

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

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

• Level of government involvement in the economy;

• Control of foreign exchange;

• Methods of allocating resources;

• Balance of payments position;

• International trade restrictions; and

• International conflict.

The Chinese economy differs from the economies of most countries belonging to the Organization for Economic Cooperation and Development, or OECD, in many ways. As a result of these differences, we may not develop in the same way or at the same rate as might be expected if the Chinese economy were similar to those of the OECD member countries.

Our business is largely subject to the uncertain legal environment in China and your legal protection could be limited.

The Chinese legal system is a civil law system based on written statutes. Unlike common law systems, it is a system in which precedents set in earlier legal cases are not generally used. The overall effect of legislation enacted over the past 20 years has been to enhance the protections afforded to foreign invested enterprises in China. However, these laws, regulations and legal requirements are relatively recent and are evolving rapidly, and their interpretation and enforcement involve uncertainties. These uncertainties could limit the legal protections available to foreign investors, such as the right of foreign invested enterprises to hold licenses and permits such as requisite business licenses. In addition, all of our executive officers and our directors are residents of China and not of the U.S., and substantially all the assets of these persons are located outside the U.S. As a result, it could be difficult for investors to effect service of process in the U.S., or to enforce a judgment obtained in the U.S. against our Chinese operations and subsidiaries.

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

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

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

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

In recent years, the Chinese economy has experienced periods of rapid expansion and highly fluctuating rates of inflation. During the past ten years, the rate of inflation in China has been as high as 20.7% and as low as -2.2%. These factors have led to the adoption by the Chinese government, from time to time, of various corrective measures designed to restrict the availability of credit or regulate growth and contain inflation. High inflation may in the future cause the Chinese government to impose controls on credit and/or prices, or to take other action, which could inhibit economic activity in China, and thereby harm the market for our products.

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Any recurrence of severe acute respiratory syndrome, or SARS, or another widespread public health problem, could harm our operations.

A renewed outbreak of SARS or another widespread public health problem in China, where our operations are conducted, could have a negative effect on our operations.

Our operations may be impacted by a number of health-related factors, including the following:

·      quarantines or closures of some of our offices which would severely disrupt our operations,

·      the sickness or death of our key officers and employees, and

·       a general slowdown in the Chinese economy.

Any of the foregoing events or other unforeseen consequences of public health problems could damage our operations.

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

The majority of our revenues will be settled in Renminbi and U.S. Dollars, and any future restrictions on currency exchanges may limit our ability to use revenue generated in Renminbi to fund any future business activities outside China or to make dividend or other payments in U.S. dollars. Although the Chinese government introduced regulations in 1996 to allow greater convertibility of the Renminbi for current account transactions, significant restrictions still remain, including primarily the restriction that foreign-invested enterprises may only buy, sell or remit foreign currencies after providing valid commercial documents, at those banks in China authorized to conduct foreign exchange business. In addition, conversion of Renminbi for capital account items, including direct investment and loans, is subject to governmental approval in China, and companies are required to open and maintain separate foreign exchange accounts for capital account items. We cannot be certain that the Chinese regulatory authorities will not impose more stringent restrictions on the convertibility of the Renminbi.

The value of our securities will be affected by the foreign exchange rate between U.S. dollars and Renminbi.

The value of our common stock will be affected by the foreign exchange rate between U.S. dollars and Renminbi, and between those currencies and other currencies in which our sales may be denominated. For example, to the extent that we need to convert U.S. dollars into Renminbi for our operational needs and should the Renminbi appreciate against the U.S. dollar at that time, our financial position, the business of the company, and the price of our common stock may be harmed. Conversely, if we decide to convert our Renminbi into U.S. dollars for the purpose of declaring dividends on our common stock or for other business purposes and the U.S. dollar appreciates against the Renminbi, the U.S. dollar equivalent of our earnings from our subsidiaries in China would be reduced.

RISKS RELATED TO THE MARKET FOR OUR STOCK

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

Our common stock is quoted on the OTC Bulletin Board. The OTC Bulletin Board is a significantly more limited market than the New York Stock Exchange or Nasdaq system. The quotation of our shares on the OTC Bulletin Board may result in a less liquid market available for existing and potential stockholders to trade shares of our common stock, could depress the trading price of our common stock and could have a long-term adverse impact on our ability to raise capital in the future.

We are subject to penny stock regulations and restrictions.

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The SEC has adopted regulations which generally define so-called “penny stocks” to be an equity security that has a market price less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exemptions. As of June 20, 2006, the closing bid and asked prices for our common stock were $3.00 per share and therefore, it is designated a “penny stock.” Although since June 22, 2006, we have met the net worth exemption from the “penny stock” definition, no assurance can be given that such exemption will be maintained. As a “penny stock,” our common stock may become subject to Rule 15g-9 under the Exchange Act of 1934, or the “Penny Stock Rule.” This rule imposes additional sales practice requirements on broker-dealers that sell such securities to persons other than established customers and “accredited investors” (generally, individuals with a net worth in excess of $1,000,000 or annual incomes exceeding $200,000, or $300,000 together with their spouses). For transactions covered by Rule 15g-9, a broker-dealer must make a special suitability determination for the purchaser and have received the purchaser’s written consent to the transaction prior to sale. As a result, this rule may affect the ability of broker-dealers to sell our securities and may affect the ability of purchasers to sell any of our securities in the secondary market.

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

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

Certain of our stockholders hold a significant percentage of our outstanding voting securities.

Mr. Qingjie Zhao, our sole director, CEO, President and Secretary, is the beneficial owner of approximately 28% of our outstanding voting securities. In addition, Mr. Zhao also owns 37.67% of Empower Century Limited which owns approximately 33% of our outstanding common stock. As a result, he possesses significant influence, giving him the ability, among other things, to elect a majority of our Board of Directors and to authorize or prevent proposed significant corporate transactions. His ownership and control may also have the effect of delaying or preventing a future change in control, impeding a merger, consolidation, takeover or other business combination or discourage a potential acquirer from making a tender offer.

Certain provisions of our Articles of Incorporation may make it more difficult for a third party to effect a change- in-control.

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

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

Overview

We are a holding company whose primary business operations are conducted through our subsidiary, Wonder Auto and its subsidiary Jinzhou Halla Electrical Equipment Co., Ltd. Through Halla, Wonder Auto is a China-based manufacturer of automotive electrical parts, specifically, starters and alternators. Wonder Auto’s business is focused on designing, developing, manufacturing and selling of these automotive electrical parts. Until our acquisition of Wonder Auto on June 22, 2006, our business strategy and ownership changed over the years as a result of several acquisitions of our stock that are discussed in the section below entitled “Our Background and History.”

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Our Background and History

MGCC, was incorporated in the State of Nevada on June 8, 2000. From inception until March 16, 2004, MGCC’s primary business strategy was to provide corporate finance consulting and management advisory services to emerging companies. In particular, its plan was to focus its business in the areas of corporate finance consulting services, business consulting services, broker-client relation services and public relations services. MGCC had no business operations during this period.

On March 16, 2004, MyTop purchased 1,025,000 shares of the common stock of MGCC and became the owner of approximately 96% of the issued and outstanding capital stock of MGCC

After the stock acquisition, MyTop intended for MGCC to engage in business of developing hi-tech product manufacturing and services including, digital precision machinery product, telecommunication products, and other hi-tech products and services through the acquisition of interests in one or more entities currently operating in these fields. MyTop entered into informal discussions with potential acquisition targets in China, but no agreements were reached.

On August 1, 2005, MyTop changed its name to Hisonic International, Inc., and continued to own approximately 96% of the issued and outstanding capital stock of MGCC

On December 19, 2005, Hisonic, as the principal stockholder of MGCC, entered into a stock purchase agreement with Halter Financial Investments, L.P., pursuant to which Hisonic sold 1,000,000 shares of the common stock of MGCC to HFI for $300,000. As a result, HFI became the owner of approximately 86.4% of the issued and outstanding common stock of MGCC

In connection with the sale of common stock to HFI, Timothy P. Halter was elected as MGCC’s Chairman of the Board, President, Chief Financial Officer and Secretary and MGCC effected a 20-for-1 reverse stock split in February 2006.

From the date of HFI’s stock acquisition until the reverse acquisition of Wonder Auto on June 22, 2006, MGCC engaged in no active operations. In connection with the reverse acquisition transaction, Wonder Auto became the wholly owned subsidiary of MGCC and is the holding company for all current commercial operations, which are conducted through a variety of subsidiary companies whose business operations originally commenced business in May 1996.

Background and History of Wonder Auto and its Operating Subsidiaries

Wonder Auto Limited was incorporated in British Virgin Islands in March 2004. Its wholly owned subsidiary Man Do Auto Technology Co. Ltd. was incorporated under the law of British Virgin Islands in 2003. Neither Wonder Auto Limited nor Man Do Auto Technology Co. Ltd. has any active business operations other than their ownership of Halla, which is the operating company that primarily manufactures our products. Halla was incorporated in March 1996 with a registered capital of $12 million. Over the years, Halla went through several ownership changes and is now 61% owned by Wonder Auto Limited and 39% owned by Man Do Auto Technology Co. Ltd.

Acquisition of Wonder Auto and Related Financing

On June 22, 2006, Wonder Auto Limited completed a private placement pursuant to which Wonder Auto Limited issued to certain accredited investors 45.277236 shares of its common stock for $12,000,000, such shares were subsequently exchanged for 1,592,669 shares of the common stock of MGCC Investment Strategies in connection with the reverse acquisition transaction as discussed below.

In connection with the private placement, Wonder Auto Limited's two stockholders, Choice Inspire Limited and Empower Century Limited, entered into an escrow agreement with the private placement investors.  Pursuant to the escrow agreement, such stockholders agreed to certain “make good” provisions.  In the escrow agreement, Wonder Auto Limited established minimum net income thresholds of $8,140,000 for the fiscal year ending December 31, 2006 and $12,713,760 for the fiscal year ending December 31, 2007.  Choice Inspire Limited and Empower Century Limited deposited a total of 1,347,644 shares, to be equitably adjusted for stock splits, stock dividends and similar

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adjustments, of the common stock of MGCC Investment Strategies into escrow with Securities Transfer Corporation under the escrow agreement. If the 2006 net income threshold is not achieved, then the escrow agent must deliver 673,822 of such shares to the investors on a pro rata basis (based upon the total number of shares purchased by the investors in connection with the private placement transaction) and if the 2007 net income threshold is not achieved, the escrow agent must deliver the second 673,822 shares to the investors on a pro rata basis. However, only those private placement investors who remain our stockholders at the time the escrow shares become deliverable are entitled to their pro rata portion of such escrow shares.

In addition, on June 22, 2006, Empower Century Limited transferred 30.184824 shares of the common stock of Wonder Auto Limited to certain accredited investors in exchange for $8,000,000. Such shares were subsequently exchanged for 1,061,780 shares of the common stock of MGCC Investment Strategies in connection with the reverse acquisition transaction as discussed below.

On June 22, 2006, we also completed a reverse acquisition transaction with Wonder Auto Limited whereby we issued to the stockholders of Wonder Auto Limited 8,627,858 shares of our common stock in exchange for all of the issued and outstanding capital stock of Wonder Auto Limited. Wonder Auto Limited thereby became our wholly owned subsidiary and the former stockholders of Wonder Auto Limited became our controlling stockholders. We plan to amend our Articles of Incorporation to change our name to Wonder Auto Technology, Inc.and expect the name change to become effective in or before August 2006.

Upon the closing of the reverse acquisition, Timothy Halter, our sole director, submitted his resignation letter pursuant to which he resigned from all offices of MGCC that he holds effective immediately and from his position as our director that will become effective upon the tenth day following the mailing by us to our stockholders of an information statement that complies with the requirements of Rule 14f-1 under the Securities Exchange Act of 1934, which information statement was mailed out on or about the date of the closing of the reverse acquisition. Qingjie Zhao will be appointed to the board of the directors at the effective time of the resignation of Timothy Halter. In addition, our executive officers were replaced by the Wonder Auto executive officers upon the closing of the reverse acquisition as indicated in more detail below.

For accounting purposes, the share exchange transaction is treated as a reverse acquisition with Wonder Auto as the acquirer and MGCC as the acquired party. When we refer in this prospectus to business and financial information for periods prior to the consummation of the reverse acquisition, we are referring to the business and financial information of Wonder Auto on a consolidated basis unless the context suggests otherwise.

Because MGCC’s recent operations have been limited to the operations of Wonder Auto, the discussion below of our performance is based upon the unaudited financial statements of Wonder Auto as of and for the three-month periods ended March 31, 2006 and March 31, 2005 and the audited financial statements of Wonder Auto for the years ended December 31, 2005, 2004 and 2003 included in this prospectus.

Industry Wide Factors that are Relevant to Our Business

Management believes that the Chinese auto parts industry is expanding. According to the China Council for the Promotion of International Trade, individual vehicle ownership more than doubled to 13.65 million units in 2004 from 6.25 million units in 2000. According to the China Automotive Industry Yearbook (1955-2005), the Chinese automobile market maintained an average growth rate of 10% to 15% over the past 15 years. Estimated sales of automobiles are expected to be 6.4-6.6 million units in 2006 (Source: China Auto Industrial Association). Average growth of car sales in China is anticipated to be between 10 percent to 15 percent per year over the medium term (Source: Xinhua News Agency, March 17, 2006). Management believes that the increasing number of automobile sales will also increase the size of the automotive aftermarket. As the automotive aftermarket increases and vehicle owners use older automobiles, the need for replacement parts and maintenance increases. We believe this trend will create an increasing demand for our products.

Another important trend that has an effect on our financial condition is the increasing demand for automobiles that utilize small engines and automobiles that can be sold at a lower cost. Management believes that a variety of factors contribute to this increasing demand. The first factor is rising fuel prices. As fuel costs increase, consumers seek automobiles that utilize less fuel to save money and our products are designed for use in these fuel efficient vehicles. In addition, the Chinese government promulgated regulations in April 2006 that further encourage the consumption of small engine vehicles. These regulations provide for an upward adjustment of the tax rate applicable to larger vehicles in order to encourage consumers to purchase smaller engine vehicles. The top tax rate applicable to vehicles with engine displacements larger than 2 liters will be raised to as high as 20% from 8%. Since we manufacture auto parts for vehicles that do not fall within the category of vehicles subject to the increased taxes, we anticipate that we will benefit from this regulation because as more smaller engine vehicles are sold and the aftermarket in these vehicles increases, we believe there will be an increased demand for parts and maintenance for these vehicles.

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We believe that other regulatory measures by the Chinese government will also contribute to the growth in demand for our products. The Measures for the Administration of Import of Automobile Components and Parts Featuring Complete Vehicles issued by the National Development and Reform Commission of the PRC Ministry of Finance and the Ministry of Commerce is a regulation that encourages automakers to use parts manufactured by local Chinese auto parts manufacturers. Pursuant to this regulation, which will become effective on July 1, 2006, the Chinese government will charge automakers a tariff of up to 25% if more than 40% of the components and parts of an automobile are imported. We believe that this regulation will have a positive impact on the sales of our products.

We also believe that sales to foreign markets may represent an opportunity for us and we plan to enhance our sales efforts to foreign markets, which only account for a total of approximately 1.4% of our total sales in 2005. In 2003, we began to sell a small quantity of products directly to overseas customers. For the year ended December 31, 2005, we sold our products to consumers in South Korea, US and Turkey. At the end of April 2006, we entered into a non-binding letter of intent with several foreign companies including HJR (Iran), SWT (South Korea), Lucas (Turkey), Hyundai Mobis (South Korea) which if finalized, will result in total sales in 2006 of approximately RMB 50 million.

Uncertainties that Affect our Financial Condition

Our primary challenge is our potential inability to produce enough of our products to satisfy the increased demand for our products. In order to increase our capacity, we will be required to make investments that improve the efficiency and capacity of our properties, plant and equipment. The utilization rates of our alternator and starter production lines as of December 31, 2005, were approximately 81% and 140%, respectively, assuming two work shifts per day of eight hours and five days per week. In order to meet the projected demand for our products in 2006, we need to build additional manufacturing lines. We have raised a total of $12 million in the private placement that we closed in June, 2006. We expect to use approximately $6 million of these funds to build additional production lines. We expect that these production lines will be operational by the beginning of 2007 and shall be able to satisfy the projected demands for our products for the foreseeable future.

Results of Operations

The following tables set forth key components of our results of operations for the periods indicated, both in dollars and as a percentage of net revenues and key components of our revenue for the period indicated in dollars. 

All amounts, other than percentages, in thousands of U.S. dollar

		Year Ended December 31,									Three Months Ended March 31,
		2003			2004			2005			2005			2006
In thousands
Sales Revenues	$	39,791		$	42,266		$	48,063		$	9,817		$	14,793
Cost of goods sold		(31,193	)		(33,074	)		(36,787	)		(7,771	)		(11,916	)
Gross profit		8,598			9,192			11,276			2,046			2,877
Expenses
Administrative expenses		593			732			1,011			234			274
Amortization and depreciation		112			111			128			31			35
Other operating expenses		27			49			16			-			-
Provision for doubtful debt		23			2			-			-			-
Selling expenses		1,523			1,510			2,148			355			695
Total Expenses		2,278			2,404			3,303			620			1,004
Income from continuing operations before taxes		5,883			6,306			7,298			1,368			1,628
Income taxes		(665	)		(718	)		(897	)		(187	)		(219	)
Net income	$	5,218		$	5,588		$	6,401		$	1,181		$	1,409

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	Year Ended December 31,									Three Months Ended March 31,
	2003			2004			2005			2005			2006
As a percentage of Net Revenues
Sales Revenues		100	%		100	%		100	%		100	%		100	%
Cost of goods sold		78.39	%		78.25	%		76.54	%		79.16	%		80.55	%
Gross profit		21.61	%		21.75	%		23.46	%		20.84	%		19.45	%
Expenses
Administrative expenses		1.49	%		1.73	%		2.10	%		2.38	%		1.85	%
Amortization and depreciation		0.28	%		0.26	%		0.27	%		0.32	%		0.24	%
Other operating expenses		0.07	%		0.12	%		0.03	%		-			-
Provision for doubtful debt		0.06	%		-			-			-			-
Selling expenses		3.83	%		3.57	%		4.47	%		3.62	%		4.70	%
Total Expenses		5.73	%		5.68	%		6.87	%		6.32	%		6.79	%
Income from continuing operations before taxes		14.78	%		14.92	%		15.18	%		13.94	%		11.01	%
Income taxes		1.67	%		1.70	%		1.87	%		1.90	%		1.48	%
Net income		13.11	%		13.22	%		13.32	%		12.03	%		9.52	%

		Year Ended December 31,						Three Months Ended March 31,
		2003		2004		2005		2005		2006
Components of Revenue In thousands
Total Revenues	$	39,791	$	42,266	$	48,063	$	9,817	$	14,793
Revenues by Product or Product line
alternator		26,430		28,119		30,118		6,444		9,131
starter		13,361		14,147		17,945		3,373		5,662

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Three Months Ended March 31, 2006 Compared to Three Months Ended March 31, 2005

Sales Revenues. Sales revenues increased $4.98 million, or 50.69% to $14.79 million for the three months ended March 31, 2006 from $9.82 million for the same period in 2005. This increase was mainly attributable to the increased market demand for our products due to growth in the small and medium engine sedan market.

Cost of Goods Sold. Our cost of goods sold increased $4.15 million to $11.92 million for the three months ended March 31, 2006 from $7.77 million during the same period in 2005. This increase was due to the increase of the sales revenue. As a percentage of net revenues,the cost of goods sold increased to 80.55% during the three months ended March 31, 2006 from 79.16% in the same period of 2005 because several of our customers adopted new models of cars which requires us to import certain key components of our products which produces higher costs. We expect that we will be able to replace the imported raw materials with raw materials manufactured in China in a few months and our gross profit margin will increase accordingly.

Gross Profit. Our gross profit increased $0.83 million to $2.88 million for the three months ended March 31, 2006 from $2.05 million for the same period in 2005. Gross profit as a percentage of net revenues was 19.45% for the three-month period ended March 31, 2006 from 20.84% during the same period in 2005.

Administrative Expenses. Our administrative expenses increased $40,000, or 17.09 %, to $274,000 for the three months ended March 31, 2006 from $234,000 for the same period in 2005. As a percentage of net revenues, administrative expenses decreased to 1.85 % for the three months ended March 31, 2006 from 2.38 % for the same period in 2005. This percentage decrease was primarily attributable to more efficient controls of our administrative expenses.

Amortization and depreciation. Our amortization and depreciation expenses increased $4,000, or 12.90%, to $35,000 for the three months ended March 31, 2006 from $31,000 for the same period in 2005. As a percentage of net revenues, expenses associated with amortization and depreciation decreased to 0.24 % for the three months ended March 31, 2006 from 0.32 % for the same period in 2005.

Provision for doubtful debts. We had no provision for doubtful debts for the three months ended March 31, 2006 and 2005.

Selling expenses. Our selling expenses increased $0.34 million to $0.70 million for the three months ended March 31, 2006 from $0.36 million for the same period in 2005. As a percentage of net revenues, our selling expenses increased to 4.70% for the three months ended March 31, 2006 from 3.62% for the same period in 2005. This dollar increase was primarily attributable to the increased marketing efforts, the expansion of our customer bases and the increase of sales revenue.

Total expenses. Our total expenses increased $0.38 million to $1.00 million for the three months ended March 31, 2006 from $0.62 million for the same period in 2005. As a percentage of net revenues, our total expenses increased to 6.79 % for the three months ended March 31, 2006 from 6.32 % for the same period in 2005. This dollar increase was primarily attributable to the increase of the sales volume and the expansion of our customer base. We believe such increase is consistent with the increase of sales revenue.

Income from operations before taxes. Income from operations before taxes increased $0.26 million, or 19.01%, to $1.63 million during the three months ended March 31, 2006 from $1.37 million during the same period in 2005. Income from operations before taxes as a percentage of net revenues decreased to 11.01% during the three months ended March 31, 2006 from 13.94% during the same period in 2005.

Provision for income taxes. Our subsidiary Halla is subject to Chinese enterprises income tax (“EIT”) at a rate of 27% of the assessable profits, consisting of a 24% national tax and a 3% local tax. As approved by the local tax authority in the PRC, Halla was entitled to a two-year exemption from EIT followed by 50% tax exemption for the next three years, commencing from the first cumulative profit-making year in the fiscal financial year of 2001. Accordingly, Halla was subject to a tax rate of 13.5% for 2003, 2004 and 2005. Furthermore, Halla, as a Foreign Investment Enterprise (“FIE”), is engaged in advanced technology industry, Halla was approved to enjoy a further 50% tax exemption for 2006, 2007 and 2008.

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In addition, as a FIE, Halla was entitled to another two special tax concessions. First, equivalent to 40% of the purchase price of qualifying domestic capital expenditure as defined and approved under the relevant PRC income tax rule can be used to offset against EIT. Second, if there is a 10% increase in the one year’s domestic development expenses over the prior year, amount equivalent to 50% of the current year’s expenses can be used to offset against EIT.

Provision for income taxes increased $32,000 to $219,000 during the three months ended March 31, 2006 from $187,000 during the same period in 2005. Our effective tax rate for the three months ended March 31, 2006, was 13.5%. Our 2006 effective tax rate is expected to be 13.5%

Net income. Net income increased $0.23 million, or 19.33%, to $1.41 million during the three months ended March 31, 2006 from $1.18 million during the same period in 2005, as a result of the factors described above.

Year Ended December 31, 2005 Compared to Year Ended December 31, 2004

Sales Revenues. Sales revenues increased $5.79 million, or 13.72% to $48.06 million in 2005 from $42.27 million in 2004. This increase was mainly attributable to the increased market demand for our products due to growth in the small and medium engine sedan market. We expect the auto parts market in China will continue to increase in the near future.

Cost of Goods Sold. Our cost of goods sold increased $3.71 million, or 11.23% to $36.79 million in 2005 from $33.08 million in 2004. This increase was mainly attributable to the increase of sales volumes. As a percentage of net revenues, our cost of goods sold in 2005 decreased 1.71% from 2004 mainly because the sale of products with higher profit margins constituted a higher percentage of our sales revenue in 2005 as compared with 2004.

Gross Profit. Our gross profit increased $2.08 million, or 22.67% to $11.27 million in 2005 from $9.19 million in 2004. Gross profit as a percentage of net revenues increased 1.71% in 2005 as compared with 2004 for the reason stated above.

Administrative Expenses. Our administrative expenses increased approximately $279,000, or 38.11%, to $1.01 million in 2005 from approximately $732,000 in 2004. As a percentage of net revenues, administrative expenses increased 0.37 % in 2005 as compared with 2004. This dollar increase was primarily attributable to salary increase resulting from the establishment of three new Vice President positions and the increase cost for repairing our facilities.

Amortization and depreciation. Our amortization and depreciation expenses increased $17,000, or 15.32 %, to approximately $128,000 in 2005 from approximately $111,000 in 2004. As a percentage of net revenues, expenses associated with amortization and depreciation increased 0.01 % in 2005 as compared with 2004.

Other operating expenses. Other operating expenses decreased from $49,000 in 2004 to $16,000 in 2005. This decrease was primarily attributable to more efficient cost controls and management.

Provision for doubtful debts. Our provision for doubtful debts decreased from $2,000 in 2004 to $0 in 2005. This decrease was primarily attributable to the improvement of the management of accounts receivable.

Selling expenses. Our selling expenses increased $638,000, or 42.25 %, to $2.15 million in 2005 from $1.51 million in 2004. As a percentage of net revenues, our selling expenses in 2005 increased 0.90% as compared with 2004. This dollar increase was primarily attributable to our increased marketing efforts and the increase of the sales volumes. We believe the increase of selling expenses is generally in line with the increase of sales revenue.

Total expenses. Our total expenses increased $899,000, or 37.40%, to $3.30 million in 2005 from $2.40 million in 2004. As a percentage of net revenues, our total expenses increased 1.19 % in 2005 as compared with 2004. This dollar increase was primarily attributable to the factors described above.

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Income from operations before taxes. Income from operations before taxes increased $0.99 million, or 15.73%, to $7.29 million in 2005 from $6.31 million in 2004. Income from operations before taxes as a percentage of net revenues increased 0.26% in 2005 as compared to 2004. This increase was primarily a result of increase of the sales revenue and gross margin.

Income taxes.We incurred income taxes of $897,000 in 2005. This is an increase of 24.93% from the taxes we incurred in 2004, which amounted to $718,000. We paid more taxes in 2005 mostly because of higher income in 2005 compared to 2004.

Net income. Net income increased $813,000, or 14.55%, to $6.40 million in 2005 from $5.59 million in 2004, as a result of the factors described above.

Year Ended December 31, 2004 Compared to Year Ended December 31, 2003

Sales Revenues. Sales revenues increased $2.48 million, or 6.22% to $42.27 million in 2004 from $39.79 million in 2003. This increase is mainly attributable to the increased market demand for our products and the continuing growth of the auto parts market in China.

Cost of Goods Sold. Our cost of goods sold increased $1.88 million, or 6.03% to $33.07 million in 2004 from $31.19 million in 2003. This increase was due to increased sales volumes. As a percentage of net revenues, our cost of goods sold in 2004 decreased 0.14% from 2003 due to increased gross margin.

Gross Profit. Our gross profit increased $0.59 million, or 6.91% to $9.19 million in 2004 from $8.59 million in 2003. Gross profit as a percentage of net revenues increased 0.14% in 2004 as compared with 2003. This increase in gross margin was primarily driven by the sale of a higher percentage of products with higher gross margin.

Administrative Expenses. Our administrative expenses increased $139,000, or 23.44 %, to $732,000 in 2004 from $593,000 in 2003. As a percentage of net revenues, administrative expenses increased 0.24 % in 2004 as compared with 2003. This dollar increase was primarily attributable to the increase of staff salary and traveling expenses in connection with the expansion of our client base and sales volume.

Amortization and depreciation. Our amortization and depreciation expenses decreased $1,000, or 0.89 %, to $111,000 in 2004 from $112,000 in 2003. As a percentage of net revenues, amortization and depreciation expenses decreased 0.02% in 2004 as compared with 2003. This dollar decrease was primarily attributable to the expiration of the depreciation term of part of our equipments.

Other operating expenses. Other operating expenses increased from $27,000 in 2003 to $49,000 in 2004.

Provision for doubtful debts. Our provision for doubtful debts decreased from $23,000 in 2003 to $2,000 in 2004. This decrease was primarily attributable to the more efficient management of accounts receivable.

Selling expenses. Our selling expenses decreased $13,000, or 0.85%, to $1.51 million in 2004 from $1.52 million in 2003. As a percentage of net revenues, our selling expenses in 2004 decreased 0.26% as compared with 2003. We believe the decrease accords with the increase of our sales revenue.

Total expenses. Our total expenses increased $126,000, or 5.55% to $2.40 million in 2004 from $2.28 million in 2003. As a percentage of net revenues, our total expenses decreased 0.03% in 2004 as compared with 2003. This dollar increase was primarily attributable to the factors described above.

Income from operation before taxes. Income from operations before taxes increased $0.42 million, or 7.19% to $6.31 million in 2004 from $5.88 million in 2003. Income from operations before taxes as a percentage of net revenues increased 0.14% in 2004 as compared to 2003. This increase was primarily a result of the increased average gross margin.

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Income taxes.We incurred income taxes of $718,000 in 2004. This is an increase of 7.97% from the taxes we incurred in 2003, which amounted to $665,000. We paid more taxes in 2004 mostly because of the higher income in 2004 compared to 2003.

Net income. Net income increased $370,000, or 7.09%, to $5.59 million in 2004 from $5.22 million in 2003, as a result of the factors described above.

Liquidity and Capital Resources

As of December 31, 2005 and March 31, 2006, we had cash and cash equivalents (including restricted cash) of $7.97 million and $5.70 million, respectively.

Our debt to equity ratio was 63% as of March 31, 2006 and we expect such ratio will decrease dramatically after the recapitalization of $12 million in June, 2006. We plan to maintain our debt to equity ratio below 60%, increase the long-term loans, decrease the short-term loans and increase of the ratio of the borrowing in foreign currency to take advantage of the expected increase of the value of RMB against the U.S. dollar. We believe we currently maintain a good business relationship with many banks.

As of March 31, 2006, the maturities for these bank loans are as follows.

All amounts, other than percentages, in millions of U.S. dollars

Banks	Amounts	Beginning	Ending	Duration
Jinzhou City Commercial Bank	$4.98 (RMB 40)	Sep 30,2005	Sep 27,2008	3 years
China Construction Bank	$4.98 (RMB 40)	July 8, 2005	July 7, 2006	1 year
China Construction Bank	$2.49 (RMB 20)	Oct 18, 2005	Oct 17, 2006	1 year
Total	$12.45

As shown in the above table, we have $7.47 million in loans maturing in or before November 2006. We plan to either repay this debt as it matures or refinance this debt with other debt.

In June 2006, prior to the consummation of the share exchange with us, Wonder Auto Limited completed a private placement of its common shares to certainaccredited investors who are among the selling stockholders listed in this registration statement. As a result of this private placement, Wonder Auto raised $12 million in gross proceeds, which left Wonder Auto Limited with approximately $10 million in net proceeds after the deduction of offering expenses in the amount of approximately $2 million.

As of March 31, 2006, we have no material capital expenditure requirements.We believe that our currently available working capital, after receiving the aggregate proceeds of Wonder Auto’s capital raising activities and the credit facilities referred to above, should be adequate to sustain our operations at our current levels through at least the next twelve months.

Obligations Under Material Contracts

Below is a brief summary of the payment obligations under materials contracts to which we are a party.

On May 15, 2006, we entered into an assignment and assumption agreement with Wonder Auto Group and HFG International, Limited, each a Hong Kong Corporation, pursuant to which Wonder Auto Group assigned to Wonder Auto Limited all its rights and obligations under a Financial Advisory Agreement with HFG International, Limited. Under the Financial Advisory Agreement, as assigned, HFG International, Limited agreed to provide Wonder Auto Limited with financial advisory and consulting services in implementing a restructuring plan and facilitating Wonder Auto Limited’s going public transaction. In consideration for these services, HFG International, Limited was paid a fee of $450,000 upon the closing of the going public transaction. Our director Timothy Halter is the principal stockholder and an executive officer of HFG International, Limited. At the time when the assignment and assumption agreement was entered, Wonder Auto Group and Wonder Auto Limited were under common control. Wonder Auto Group was later sold to a unrelated third party.

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On April 22, 2006, our subsidiary Wonder Auto Limited entered into an one year consulting agreement with Heritage Management Consultants, Inc. pursuant to which Heritage Management Consultants, Inc. will assist us in meeting our obligations as a U.S. publicly traded company in exchange for an annual compensation of $175,000.

On January 1, 2006, our subsidiary Halla entered into an equipment purchase contract with Suzhou Tenuo Automation Co. Ltd. pursuant to which we will purchase a PMC starter assembly line and a commercial starter assembly line for approximately $390,000 (RMB 3,120,000). Suzhou Tenuo Automation Co. Ltd. is under contractual obligation to deliver the equipments before May 31, 2006.

On October 18, 2005, our subsidiary Halla entered into a loan agreement with China Construction Bank (Jinzhou Linghe Branch) whereby the bank agreed to make a loan in the amount of approximately $2.49 million (RMB 20 million). The annual interest of the loan is 7.254%. The agreement has an one-year term and expires on October 17, 2006.

On September 30, 2005, our subsidiary Halla entered into a loan agreement with Jinzhou Commercial Bank whereby the bank agreed to make a loan in the amount of approximately $4.98 million (RMB 40 million). The monthly interest of the loan is 0.624%. The agreement has a three-year term and expires on September 27, 2008.

On July 8, 2005, our subsidiary Halla entered into a loan agreement with China Construction Bank (Jinzhou Linghe Branch) whereby the bank agreed to make a loan in the amount of approximately $4.98 million (RMB 40 million). The annual interest of the loan is 7.254%. The agreement has an one-year term and expires on July 7, 2006.

On May 19, 2005, our subsidiary Halla entered into an equipment purchase agreement with DMG Meccanica Italy pursuant to which we purchased a winder/inserting machine for € 293,000 (CIF Dalian).

On June 7, 2004, our subsidiary Halla entered into a strategic cooperation agreement with Hivron pursuant to which the parties agreed to jointly design and manufacture microchips according to our specifications and then sell these chips to our designated suppliers.

On July 25, 2003, our subsidiary Halla entered into a 5-year technical cooperation agreement with Meister, Korea pursuant to which Meister provided us staff to serve as the head of research and development department and the head of financial planning department in exchange for $140,000 per year.

Critical Accounting Policies

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

· Use of estimates: In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. These accounts and estimates include, but are not limited to, the valuation of accounts receivable, inventories, deferred income taxes, provision for warranty and the estimation on useful lives of property, plant and equipment. Actual results could differ from those estimates.

· Allowance of doubtful accounts: The Company establishes an allowance for doubtful accounts based on management’s assessment of the collectibility of trade receivables. A considerable amount of judgment is required in assessing the realization of these receivables, including the current creditworthiness of each customer and the related ageing analysis.

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Based on the above assessment, during the reporting periods, the management establishes the general provisioning policy to make allowance equivalent to 100% of gross amount of trade receivables due over 1 year. Additional specific provision is made against trade receivables aged less than 1 year to the extent which they are considered to be doubtful.

Bad debts are written off when identified. The Company extends unsecured credit to customers ranging from three to six months in the normal course of business. The Company does not accrue interest on trade accounts receivable.

· Inventories: Inventories are stated at the lower of cost or market. Cost is determined on a weighted average basis and includes all expenditures incurred in bringing the goods to the point of sale and putting them in a saleable condition. In assessing the ultimate realization of inventories, the management makes judgments as to future demand requirements compared to current or committed inventory levels. Our reserve requirements generally increase as our projected demand requirements; decrease due to market conditions, product life cycle changes. The Company’s policy is to make a 50% general provision for inventories aged over 1 year.

· Property, plant and equipment: Property, plant and equipment are stated at cost less accumulated depreciation. Cost represents the purchase price of the asset and other costs incurred to bring the asset into its existing use.

Depreciation is provided on straight-line basis over their estimated useful lives. The principal depreciation rates are as follows :

	Annual rate		Residual value
Buildings	3	%	10	%
Plant and machinery	9	%	10	%
Motor vehicles	9	%	10	%
Furniture, fixtures and equipment	15	%	10	%
Tools and equipment	15	%	0 to 10	%
Leasehold improvements	20	%	0

Maintenance or repairs are charged to expense as incurred. Upon sale or disposition, the applicable amounts of asset cost and accumulated depreciation are removed from the accounts and the net amount less proceeds from disposal is charged or credited to income.

· Revenue recognition: Revenue from sales of the Company’s products is recognized when the significant risks and rewards of ownership have been transferred to the buyer at the time when the products are put into use by its customers, the sales price is fixed or determinable and collection is reasonably assured.

· Warranty: It is the policy of the Company to provide after sales support by way of a warranty programme. The Company provided warranties to certain customers with warranty periods ranging from two years or 50,000 km to three years or 60,000 km, whichever comes first.

Based on the past experience, the Company sets up a policy of making a general provision for warranty such that the closing balance of this provision equal to 2% of sales during the reporting periods.

· Recently issued accounting pronouncements

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In November 2004, the FASB issued SFAS No. 151, “Inventory costs - an amendment of ARB No. 43, Chapter 4” (“SFAS 151”). SFAS 151 amends ARB 43, Chapter 4 to clarify that “abnormal” amount of idle freight, handling costs and spoilage should be recognized as current period charges. SFAS 151 is effective for inventory costs incurred during fiscal years beginning after June 15, 2005.

In December 2004, the FASB issued SFAS No. 123R, "Share-Based Payment" ("SFAS 123R"), which revises SFAS No. 123, "Accounting for Stock Based Compensation", and supersedes APB 25. Among other items, SFAS 123R eliminates the use of APB 25 and the intrinsic value method of accounting, and requires companies to recognize in the financial statements the cost of employee services received in exchange for awards of equity instruments, based on the grant-date fair value of those awards. This cost is to be recognized over the period during which an employee is required to provide service in exchange for the award (typically the vesting period). SFAS 123R also requires that benefits associated with tax deductions in excess of recognized compensation cost be reported as a financing cash inflow, rather than as an operating cash flow as required under current literature.

SFAS 123R permits companies to adopt its requirements using either a "modified prospective" method, or a "modified retrospective" method.

Under the "modified prospective" method, compensation cost is recognized in the financial statements beginning with the effective date, based on the requirements of SFAS 123R for all share-based awards granted or modified after that date, and based on the requirements of SFAS 123 for all unvested awards granted prior to the effective date of SFAS 123R. Under the "modified retrospective" method, the requirements are the same as under the "modified prospective" method, but this method also permits entities to restate financial statements of previous periods based on proforma disclosures made in accordance with SFAS 123.

In May 2005, the FASB issued SFAS No. 154, "Accounting Changes and Error Corrections" ("SFAS 154"), which changes the requirements for the accounting for and reporting of a change in accounting principle. The statement requires retrospective application to prior period financial statements of changes in accounting principle, unless impracticable to do so. It also requires that a change in the depreciation, amortization, or depletion method for long-lived non-financial assets be accounted as a change in accounting estimate, effected by a change in accounting principle. Accounting for error corrections and accounting estimate changes will continue under the guidance in APB Opinion 20, "Accounting Changes," as carried forward in this pronouncement. The statement is effective for fiscal years beginning after December 15, 2005.

In November 2005, the FASB issued FSP Nos. FAS 115-1 and 124-1, "The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments". This FSP addresses the determination as to when an investment is considered impaired, whether the impairment is 'other-than-temporary', and the measurement of an impairment loss. The investment is impaired if the fair value is less than cost. The impairment is 'other-than-temporary' for equity securities and debt securities that can contractually be prepaid or otherwise settled in such a way that the investor would not recover substantially all of its cost. If 'other-than-temporary', an impairment loss shall be recognized in earnings equal to the difference between the investment's cost and its fair value. The guidance in this FSP is effective in reporting periods beginning after December 15, 2005.

The Company has adopted all the above accounting procurements effective January 1, 2006 and considers that they have no material impact on these consolidated financial statements.

Off-Balance Sheet Arrangements

We do not have any off-balance arrangements.

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QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Interest Rate Risk

We are exposed to interest rate risk primarily with respect to our short-term bank loans. Although the interest rates are fixed for the terms of the loans, the terms are typically twelve months and interest rates are subject to change upon renewal. There were no changes in interest rates for short-term bank loans during the three months ended March 31, 2006. A hypothetical 1.0% increase in the annual interest rates for all of our credit facilities at March 31, 2006 would decrease net income before provision for income taxes by approximately $0.03 million for the three months ended March 31, 2006. Management monitors the banks’ interest rates in conjunction with our cash requirements to determine the appropriate level of debt balances relative to other sources of funds. We have not entered into any hedging transactions in an effort to reduce our exposure to interest rate risk.

Foreign Exchange Risk

While our reporting currency is the U.S. Dollar, all of our consolidated revenues and consolidated costs and expenses are denominated in Renminbi. All of our assets are denominated in RMB except for cash. As a result, we are exposed to foreign exchange risk as our revenues and results of operations may be affected by fluctuations in the exchange rate between U.S. Dollars and RMB. If the RMB depreciates against the U.S. Dollar, the value of our RMB revenues, earnings and assets as expressed in our U.S. Dollar financial statements will decline. We have not entered into any hedging transactions in an effort to reduce our exposure to foreign exchange risk.

Inflation

Inflationary factors such as increases in the cost of our product and overhead costs may adversely affect our operating results. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, a high rate of inflation in the future may have an adverse effect on our ability to maintain current levels of gross margin and selling, general and administrative expenses as a percentage of net revenues if the selling prices of our products do not increase with these increased costs.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information regarding beneficial ownership of our common stock as of June 22, 2006 (i) by each person who is known by us to beneficially own more than 5% of our common stock; (ii) by each of our officers and directors; and (iii) by all of our officers and directors as a group.

Unless otherwise specified, the address of each of the persons set forth below is in care of Wonder Auto No. 56 Lingxi Street, Taihe District, Jinzhou City, Liaoning, People’s Republic of China, 121013.

Title of Class	Name & Address of Beneficial Owner	Office, If Any	Amount & Nature of Beneficial Ownership1	Percent of Class2
Common Stock	Qingjie Zhao3	CEO, President, Secretary	2,743,724	28.04%
Common Stock	Yuncong Ma	Chief Operating Officer	0	*
Common Stock	Seuk Jun Kim	Vice President of Research and Development	0	*
Common Stock	Yuguo Zhao	Vice President of Sales and Marketing	0	*

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Common Stock	Yongdong Liu	Vice President of Production	0	*
Common Stock	Meirong Yuan	Chief Financial Officer	0	*
Common Stock	Empower Century Limited 4		3,229,685	33.01%
Common Stock	Choice Inspire Limited 5		2,743,724	28.04%
Common Stock	Pinnacle China Fund, L.P. 6 4965 Preston Park Blvd. Suite 240, Plano, Texas 75093		968,878	9.9%
Common Stock	Timothy Halter 7 12890 Hill Top Road Argyle, TX 76226	Director	464,093	4.74%
Common Stock	All officers and directors as a group (7 persons named above)		3,207,817	32.78%

* Less than 1%

¹Beneficial Ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Each of the beneficial owners listed above has direct ownership of and sole voting power and investment power with respect to the shares of our common stock.

²A total of 9,784,708 shares of our Common Stock are considered to be outstanding pursuant to SEC Rule 13d-3(d)(1). For each Beneficial Owner above, any options exercisable within 60 days have been included in the denominator.

³ Including 2,743,724 shares owned by Choice Inspire Limited of which Mr. Zhao is a 75% shareholder.

⁴ Qingjie Zhao, our CEO, President and Secretary owns 37.67% Empower Century Limited.

⁵ Qingjie Zhao, our CEO, President and Secretary owns 75% Choice Inspire Limited.

⁶ Barry Kitt is the sole officer of Pinnacle China Advisors, L.P. which is the general partner of Pinnacle China Fund, L.P.

⁷ Including 464,093 shares owned by Halter Financial Investments, L.P. Timothy Halter is the sole member of TPH GP, LLC which is the sole general partner of TPH, L.P. which is a limited partner of Halter Financial Investments, L.P.

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DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

The following sets forth the name and position of each of our current executive officers and directors.

Name	Age		Position
Timothy Halter		39	Director (1)
Qingjie Zhao		49	Chief Executive Officer, President, Secretary and Director (2)
Yuncong Ma		60	Chief Operating Officer
Seuk Jun Kim		50	Vice President of Research and Development
Yuguo Zhao		50	Vice President of Sales and Marketing
Yongdong Liu		37	Vice President of Production
Meirong Yuan		34	Chief Financial Officer and Treasurer

(1) Former Chief Executive Officer, Chief Financial Officer and Secretary prior to June 22, 2006 and current director until the 10^th day following the mailing of an information statement complying with Rule 14f-1 of the Securities Exchange Act.

(2) Will become a director upon the effective date of the resignation of Timothy Halter.

TIMOTHY HALTER. Mr. Halter has been our Chairman of the Broad of Directors, President, Chief Financial Officer and Secretary since December 2005. On June 22, 2006, Mr. Halter resigned from all offices he held with us. On the same date, Mr. Halter submitted his resignation as our sole director, which will become effective upon the 10th day following the mailing of an information statement complying with Rule 14f-1 of the Securities Exchange Act. Since 1995, Mr. Halter has been the President and the sole stockholder of Halter Financial Group, Inc., a Texas based consulting firm specializing in the area of mergers, acquisitions and corporate finance. He currently serves as a director of DXP Enterprise, Inc., a public corporation (Nasdaq: DXPE), an officer and director of Nevstar Corporation and RTO Holdings, Inc., each a Nevada Corporation, and an officer and director of Robcor Properties, Inc., a Florida corporation.

QINGJIE ZHAO. Mr. Zhao has been our Chief Executive Officer, President and Secretary since June 22, 2006 and will become our director upon the resignation of Timothy Halter which is expected to become effective on or about July 7, 2006. Mr. Zhao became the Chairman of our subsidiary Halla in October 1997. Mr. Zhao is also currently an executive director of China Wonder Limited, a company listed on the Alternative Investment Market of the London Stock Exchange (which is principally engaged in the manufacture and sale of specialty packaging machinery to the Chinese pharmaceutical market), and an executive director of Jinheng Holdings (which is principally engaged in the manufacture and sale of automotive airbag safety systems in China). Wonder Auto, China Wonder and Jinheng Holdings do not directly compete with each other. Mr. Zhao devotes approximately 85% of his business time to our affairs and approximately 15% of business time to the affairs of other companies. Mr. Zhao’s decision making responsibilities for these three companies are similar in the areas of public relations, management of human resources, risk management and strategic planning. Mr. Zhao works about 75 hours per week altogether. Mr. Zhao graduated from the Liaoning Industry Academy in 1982. He thereafter became a faculty at the Liaoning Industry Academy from 1982 to 1989. After leaving his post at the Liaoning Industry Academy, Mr. Zhao joined Jinzhou Shock Absorber Co. (which is principally engaged in the manufacture and sale of suspension systems for automobiles and was a subsidiary of Jinzhou Wonder) in January 1989 as an engineer and the head of the research department. He became its chief executive officer in 1991 and remained in this position until 1997. Mr. Zhao joined Halla as its Chairman in October 1997.

YUNCONG MA. Mr. Ma became our Chief Operating Officer on June 22, 2006. He has been the General Manager of our subsidiary Halla since 1997 and is responsible for Halla’s overall operations. He has over 30 years of production experience and over 16 years of management experience in the automotive industry. Mr. Ma graduated from the Harbin Institute of Technology in 1970 specializing in machine crafting. After graduation, Mr. Ma worked for Jinzhou Huaguang Electron Tube Factory from 1970 to 1989. During that time, he worked in various posts in its production, technology and corporate structuring departments and was promoted to the post of production manager in 1984. Mr. Ma joined Jinzhou Shock Absorber Co., Ltd. in 1989 as its chief engineer and vice factory manager. He joined our subsidiary Halla in October 1997 as a director and general manager.

MEIYONG YUAN became our Chief Financial Officer and Treasurer on June 22, 2006 and he has been the Vice President of Jinzhou Wonder Industrial Co., Ltd. since June 2005. Mr. Yuan also served as a director of Halla since January 2002 and has been studying for his Ph.D in management at the University of Southern California. From July 2003 to June 2005, Mr. Yuan served as the Vice President of Shenzhen Luante Asphalt Advanced Technology Co. Ltd. and was in charge of accounting and financing. Between October 2000 to October 2001, Mr. Yuan studied at ISMA Center in England.

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SEUK JUN KIM. Mr. Kim became our Vice President of Research and Development on June 22, 2006. Mr. Kim joined Wonder Auto in October 1997 and has served as its Vice President of Research and Development since January 2005. Mr. Kim is responsible for Wonder Auto’s research and development and quality control functions. In 1981, Mr. Kim graduated from Pohang University of Science and Technology in Korea with a bachelor’s degree in automotive electrical engineering. Prior to formally joining Wonder Auto in 1997, Mr. Kim was sent by Mando to work at the Korea Qingzhou Electrical Machinery Factory where he was in charge of the technical support. Mando is Wonder Auto’s former foreign shareholder and used to help overseeing the research and development operations of Wonder Auto. Mr. Kim was retained by Wonder Auto to continue his service after Mando disposed of its interest in Wonder Auto.

YUGUO ZHAO. Mr. Zhao became our Vice President of Sales and Marketing on June 22, 2006 and he has been the Head of Wonder Auto’s Sales and Marketing Group since June 1996 and became an Assistant General Manager in January 2005. Mr. Zhao is responsible for the Group's sales and after-sales operations. In 1979, Mr. Zhao graduated from the Jinzhou Agriculture Academy (formerly known as Jinzhou Agriculture Automotive School). Between 1980 and 1996, he worked for Jinzhou Electrical as its production department manager, chief of production and chief of operations, among other posts. He joined Wonder Auto in June 1996 as the head of the sales department. Mr. Zhao was promoted to assistant general manager in January 2005.

YONGDONG LIU. Mr. Liu became our Vice President of Production on June 22, 2006 and he has been the Head of Production of Wonder Auto since May 2001 and an Assistant General Manager of Wonder Auto since January 2005. Mr. Liu oversees production, purchasing, human resources and administration functions of Wonder Auto. Mr. Liu graduated from the Suzhou Institute of Silk Textile Technology with a degree in weaving mechanical design in 1992. Between 1992 and 1996, Mr. Liu worked in Jinzhou Electrical and was responsible for its production technologies. He joined Wonder Auto in June 1996 as a division head in the production department. He later became its department head in May 2001. Mr. Liu was promoted to assistant general manager in January 2005.

There are no agreements or understandings for any of our executive officers or directors to resign at the request of another person and no officer or director is acting on behalf of nor will any of them act at the direction of any other person.

Directors are elected until their successors are duly elected and qualified.

Board Composition and Committees

The board of directors is currently composed of one member Timothy Halter. Mr. Halter has submitted his resignation as our director on June 22, 2006 and his resignation will become effective upon the mailing of an information statement to our stockholders in compliance with Rule 14f-1 of the Exchange Act of 1934. Mr. Qingjie Zhao will be appointed as our director upon the resignation of Mr. Halter. All Board action requires the approval of a majority of the directors in attendance at a meeting at which a quorum is present.

We currently do not have standing audit, nominating or compensation committees. Currently, our entire board of directors is responsible for the functions that would otherwise be handled by these committees. We intend, however, to establish an audit committee and a compensation committee of our board of directors as soon as practicable. We envision that the audit committee will be primarily responsible for reviewing the services performed by our independent auditors, evaluating our accounting policies and our system of internal controls. The compensation committee will be primarily responsible for reviewing and approving our salary and benefits policies (including stock options) and other compensation of our executive officers.

Our board of directors has not made a determination as to whether any member of our board is an audit committee financial expert. Upon the establishment of an audit committee, the board will determine whether any of the directors qualify as an audit committee financial expert.

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Director Compensation

We have not paid our directors fees in the past for attending scheduled and special meetings of our board of directors. In the future, we may adopt a policy of paying independent director a fee for their attendance at board and committee meetings. We do reimburse each director for reasonable travel expenses related to such director's attendance at board of directors and committee meetings.

Family Relationships

There are no family relationships among our directors or officers.

Code of Ethics

We have adopted a Code of Ethics or Code pursuant to Section 406 of the Sarbanes-Oxley Act of 2002. This Code is designed to deter wrongdoing and to promote:

· Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

· Full, fair, accurate, timely and understandable disclosure in reports and documents that we file with, or submit to, the SEC, and in other public communications that we made;

· Compliance with applicable government laws, rules and regulations;

· The prompt internal reporting of violations of this Code to the appropriate person or persons; and

· Accountability for adherence to this Code.

This Code requires the highest standard of ethical conduct and fair dealing of its Senior Financial Officers or SFO, defined as the Chief Executive Officer and Chief Financial Officer. While, per Sarbanes-Oxley, this policy is intended to only cover the actions of the SFO, we expect our other officers, directors and employees will also review this Code and abide by its provisions. We believe that our reputation is a valuable asset and must continually be guarded by all associated with us so as to earn the trust, confidence and respect of our suppliers, customers and stockholders.

Our SFO are committed to conducting business in accordance with the highest ethical standards. The SFO must comply with all applicable laws, rules and regulations. Furthermore, SFO must not commit an illegal or unethical act, or instruct or authorize others to do so.

EXECUTIVE COMPENSATION

The following table sets forth information concerning all cash and non-cash compensation awarded to, earned by or paid to Timothy Halter, our director and prior CEO, and Qingjie Zhao, our Chief Executive Officer, President and Secretary for services rendered in all capacities during the noted periods. No other executive officers received total annual salary and bonus compensation in excess of $100,000.

Name And Principal Position	Year	Annual Compensation			Long-Term Compensation
		Salary ($)	Bonus ($)	Other Annual Compensation ($)	Awards		Payouts	All Other Compensation ($)
					Restricted Stock Awards ($)	Securities Underlying Options/ SARs (#)	LTIP Payouts ($)
Timothy Halter, Director, CEO and CFO (2)	2005	-	-	-	-	-	-	-
	2004	-	-	-	-	-	-	-
	2003	-	-	-	-	-	-	-
Qingjie Zhao Chairman, CEO and President (1)	2005	15,000 (3)	-	-	-	-	-	-
	2004	15,000 (3)	-	-	-	-	-	-
	2003	15,000 (3)	-	-	-	-	-	-

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(1) On June 22, 2006, MGCC acquired Wonder Auto in a reverse acquisition transaction that was structured as a share exchange and in connection with that transaction, Mr. Zhaobecame the Chief Executive Officer, President and Secretary of MGCC. Prior to the effective date of the reverse acquisition, Mr. Zhao served at Wonder Auto as the Chairman. The annual, long term and other compensation shown in this table include the amount Mr. Zhao received from Wonder Auto prior to the consummation of the reverse acquisition.

(2) Timothy P. Halter tendered his resignation to MGCC upon the closing of the reverse acquisition of Wonder Auto on June 22, 2006. Mr. Halter resigned from all offices he held with MGCC on June 22, 2006 and his resignation from his position as our director will become effective upon the 10^th day following the mailing of an information statement complying with Rule 14f-1 of the Securities Exchange Act, which is expected to be on or about July 7, 2006.

(3) Mr. Zhao received an annual salary of RMB 120,000 (approximately $15,000) from Jinzhou Wonder Industry (Group) Co., Ltd. which owned 61% of equity interests in Halla before it transferred all of its equity interests in Halla to Wonder Auto Limited in April 2004. Halla paid a dividend of $2.85 million to Jinzhou Wonder Industry (Group) Co., Ltd. in 2003.

Bonuses and Deferred Compensation

We do not have any bonus, deferred compensation or retirement plan. We do not have a compensation committee; all decisions regarding compensation are determined by our entire board of directors.

Stock Option and Stock Appreciation Rights

We do not currently have a Stock Option Plan or Stock Appreciation Rights Plan. No stock options or stock appreciation rights were awarded during the fiscal year ended December 31, 2005.

Employment Agreements

Our subsidiary Wonder Auto Limited has employment agreements with the following executive officers.

Qingjie Zhao, our CEO, President and Secretary’s employment agreement became effective as of June 21, 2006. Mr. Zhao is an employee-at-will and is receiving an annual salary of $90,000 under the agreement.

Yuncong Ma, our COO’s employment agreement became effective as of June 21, 2006. Mr. Ma is an employee-at-will and is receiving an annual salary of $60,000 under the agreement.

Meirong Yuan, our CFO’s employment agreement became effective as of June 21, 2006. Mr. Yuan is an employee-at-will and is receiving an annual salary of $60,000 under the agreement.

Our subsidiary Halla has employment agreements with the following executive officers.

Yuguo Zhao, our Vice President of Sales and Marketing’s employment agreement became effective as of December 1, 2003. The agreement is for a term of three years. Mr. Zhao is receiving an annual salary of approximately $15,000 under the agreement.

Yongdong Liu, our Vice President of Production’s employment agreement became effective as of December 1, 2003. The agreement is for a term of three years. Mr. Liu is receiving an annual salary of approximately $15,000 under the agreement.

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Seuk Jun Kim, our Vice President of Research and Development’s employment agreement became effective as of December 1, 2003. The agreement is for a term of three years. Mr. Kim is receiving an annual salary of approximately $28,500 under the agreement.

Our executive officers are not entitled to severance payments upon the termination of their employment agreements. They are subject to the customary non-competition and confidentiality covenants.

Indemnification of Directors and Executive Officers and Limitation of Liability

Our bylaws provide for the indemnification of our present and prior directors and officers or any person who may have served at our request as a director or officer of another corporation in which we own shares of capital stock or of which we are a creditor, against expenses actually and necessarily incurred by them in connection with the defense of any actions, suits or proceedings in which they, or any of them, are made parties, or a party, by reason of being or having been director(s) or officer(s) of us or of such other corporation, in the absence of negligence or misconduct in the performance of their duties. This indemnification policy could result in substantial expenditure by us, which we may be unable to recoup.

Insofar as indemnification by us for liabilities arising under the Securities Exchange Act of 1934 may be permitted to our directors, officers and controlling persons pursuant to provisions of the Articles of Incorporation and Bylaws, or otherwise, we have been advised that in the opinion of the SEC, such indemnification is against public policy and is, therefore, unenforceable. In the event that a claim for indemnification by such director, officer or controlling person of us in the successful defense of any action, suit or proceeding is asserted by such director, officer or controlling person in connection with the securities being offered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by us is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

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

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On June 22, 2006, we consummated the transactions contemplated by a share exchange agreement among us and the owners of the issued and outstanding capital stock of Wonder Auto, including Qingjie Zhao, our CEO, President and Secretary. Pursuant to the share exchange agreement, we acquired 100 percent of the outstanding capital stock of Wonder Auto in exchange for 8,627,858 shares of our common stock. As a result of this transaction, Mr. Zhao became the beneficial owner of approximately 28% of our outstanding capital stock and Empower Century Limited became an owner of approximately 33% of our outstanding common stock. Mr. Zhao owns 37.67% of Empower Century Limited.

On May 15, 2006, we entered into an assignment and assumption agreement with Wonder Auto Group and HFG International, Limited, each a Hong Kong Corporation, pursuant to which Wonder Auto Group assigned to Wonder Auto Limited all its rights and obligations under a Financial Advisory Agreement with HFG International, Limited. Under the Financial Advisory Agreement, as assigned, HFG International, Limited agreed to provide Wonder Auto Limited with financial advisory and consulting services in implementing a restructuring plan and facilitating Wonder Auto Limited’s going public transaction. In consideration for these services, HFG International, Limited was paid a fee of $450,000 upon the closing of the going public transaction. Our director Timothy Halter is the principal stockholder and an executive officer of HFG International, Limited. At the time when the assignment and assumption agreement was entered, Wonder Auto Group and Wonder Auto Limited were under common control. Wonder Auto Group was later sold to a unrelated third party.

DESCRIPTION OF SECURITIES

Common Stock

We are authorized to issue up to 90,000,000 shares of common stock, par value $0.0001 per share. Prior to the closing the reverse merger transaction, we effected a 20-for-1 reverse split of our common stock in February 2006.

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As a result, the total number of our issued and outstanding common stock on February 13, 2006 was reversed from 23,173,000 shares to 1,156,850 shares. The purposes of the reverse split were to decrease the number of shares of common stock outstanding so as to make us more attractive to a potential merger or acquisition candidate and increase the per share market price for our common stock.

Each outstanding share of common stock entitles the holder thereof to one vote per share on all matters. Our bylaws provide that the persons receiving the greatest number of votes shall be the directors. Stockholders do not have preemptive rights to purchase shares in any future issuance of our common stock. Upon our liquidation, dissolution or winding up, and after payment of creditors and preferred stockholders, if any, our assets will be divided pro-rata on a share-for-share basis among the holders of the shares of common stock.

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

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

Preferred Stock

We may issue shares of non-voting preferred stock in one or more classes or series within a class as may be determined by our board of directors, who may establish, from time to time, the number of shares to be included in each class or series, may fix the designation, powers, preferences and rights of the shares of each such class or series and any qualifications, limitations or restrictions thereof. Any preferred stock so issued by the board of directors may rank senior to the common stock with respect to the payment of dividends or amounts upon liquidation, dissolution or winding up of us, or both. Moreover, under certain circumstances, the issuance of preferred stock or the existence of the un-issued preferred stock might tend to discourage or render more difficult a merger or other change in control.

No shares of preferred stock are currently outstanding. The issuance of preferred stock, while providing desirable flexibility in connection with possible acquisitions and other corporate purposes, could have the effect of making it more difficult for a third party to acquire, or of discouraging a third party from acquiring, a majority of our outstanding voting stock.

Transfer Agent and Registrar

Our independent stock transfer agent is Securities Transfer Corporation, located in Frisco, Texas. Their mailing address is 2591 Dallas Parkway, Suite 102, Frisco, Texas 75034. Their phone number is (469) 633-0100.

Indemnification of Directors and Officers

Our bylaws provide for the indemnification of our directors and officers, past, present and future, under certain circumstance, against attorney’s fees, judgments, fines and other expenses incurred by them in any litigation to which they become a party arising from their association with or activities on behalf of us. We will also bear expenses of such litigation for any of our directors, officers, employees or agents upon such persons promise to repay us therefor if it is ultimately determined that any such person shall not have been entitled to indemnification. This indemnification policy could result in substantial expenditure by us, which we may be unable to recoup.

40

Insofar as indemnification by us for liabilities arising under the Securities Exchange Act of 1934 may be permitted to our directors, officers and controlling persons pursuant to provisions of the Articles of Incorporation and Bylaws, or otherwise, we have been advised that in the opinion of the SEC, such indemnification is against public policy and is, therefore, unenforceable. In the event that a claim for indemnification by such director, officer or controlling person of us in the successful defense of any action, suit or proceeding is asserted by such director, officer or controlling person in connection with the securities being offered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by us is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

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

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

Reference is made to the disclosure set forth under Item 4.01 of this report, which disclosure is incorporated herein by reference.

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Our common stock became eligible for quotation on the OTC Bulletin Board on October 4, 2005 and currently trades under the symbol “MGIS.OB”. The CUSIP number is 552760209.

The following table sets forth, for the periods indicated, the high and low bid prices of our common stock. These prices reflect inter-dealer prices, without retail mark-up, mark-down or commission, and may not represent actual transactions. The high and low quotations for the first quarter of fiscal year 2006 have been adjusted for the above mentioned 20-for-1 reverse stock split.

	Closing Bid Prices (1)
	High	Low
Year Ended December 31, 2006
1st Quarter	$2.75	$2.4
2nd Quarter (through June 12, 2006)	3.0	2.5
Year Ended December 31, 2005
1st Quarter	N/A	N/A
2nd Quarter	N/A	N/A
3rd Quarter	N/A	N/A
4th Quarter	0.30	0.15
Year Ending December 31, 2004
1st Quarter	N/A	N/A
2nd Quarter	N/A	N/A
3rd Quarter	N/A	N/A
4th Quarter	N/A	N/A

________________________

(1)    The above tables set forth the range of high and low closing bid prices per share of our common stock as reported by www.quotemedia.com for the periods indicated.

Reports to Stockholders

We plan to furnish our stockholders with an annual report for each fiscal year ending December 31 containing financial statements audited by our independent certified public accountants. Additionally, we may, in our sole discretion, issue unaudited quarterly or other interim reports to our stockholders when we deem appropriate. We intend to maintain compliance with the periodic reporting requirements of the Securities Exchange Act of 1934.

41

Approximate Number of Holders of Our Common Stock

On June 22, 2006, there were approximately 42 stockholders of record of our common stock.

Dividends

We have never declared or paid cash dividends. Any future decisions regarding dividends will be made by our board of directors. We currently intend to retain and use any future earnings for the development and expansion of our business and do not anticipate paying any cash dividends in the foreseeable future

ITEM 3.02UNREGISTERED SALES OF EQUITY SECURITIES

On June 22, 2006, we issued 8,627,858 shares of our common stock to stockholders of Wonder Auto. The issuance of our shares to these individuals was made in reliance on the exemption provided by Section 4(2) of the Securities Act for the offer and sale of securities not involving a public offering and regulation D promulgated thereunder.

In instances described above where we issued securities in reliance upon Regulation D, we relied upon Rule 506 of Regulation D of the Securities Act. These stockholders who received the securities in such instances made representations that (a) the stockholder is acquiring the securities for his, her or its own account for investment and not for the account of any other person and not with a view to or for distribution, assignment or resale in connection with any distribution within the meaning of the Securities Act, (b) the stockholder agrees not to sell or otherwise transfer the purchased shares unless they are registered under the Securities Act and any applicable state securities laws, or an exemption or exemptions from such registration are available, (c) the stockholder has knowledge and experience in financial and business matters such that he, she or it is capable of evaluating the merits and risks of an investment in us, (d) the stockholder had access to all of our documents, records, and books pertaining to the investment and was provided the opportunity ask questions and receive answers regarding the terms and conditions of the offering and to obtain any additional information which we possessed or were able to acquire without unreasonable effort and expense, and (e) the stockholder has no need for the liquidity in its investment in us and could afford the complete loss of such investment. Management made the determination that the investors in instances where we relied on Regulation D are Accredited Investors (as defined in Regulation D) based upon management’s inquiry into their sophistication and net worth. In addition, there was no general solicitation or advertising for securities issued in reliance upon Regulation D.

In instances described above where we indicate that we relied upon Section 4(2) of the Securities Act in issuing securities, our reliance was based upon the following factors: (a) the issuance of the securities was an isolated private transaction by us which did not involve a public offering; (b) there were only a limited number of offerees; (c) there were no subsequent or contemporaneous public offerings of the securities by us; (d) the securities were not broken down into smaller denominations; and (e) the negotiations for the sale of the stock took place directly between the offeree and us.

ITEM 4.01CHANGES IN REGISTRANT’S CERTIFYING ACCOUNTANT

On June 22, 2006, concurrent with the change in control transaction discussed above, our Board of Directors elected to continue the existing relationship of our new subsidiary Wonder Auto with PKF Hong Kong, Certified Public Accountantsand appointed PKF Hong Kong, Certified Public Accountants as our independent auditor. Additionally, concurrent with the decision to maintain our relationship with PKF Hong Kong, Certified Public Accountants, our Board of Directors approved the dismissal of Meyler & Company, LLC as our independent auditor.

No accountant’s report issued by Meyler & Company, LLC on the financial statements for either of the past two (2) years contained an adverse opinion or a disclaimer of opinion or was qualified or modified as to uncertainty, audit scope or accounting principles, except for a going concern opinion expressing substantial doubt about the ability of us to continue as a going concern.

42

During our two most recent fiscal years (ended December 31, 2005 and 2004) and from January 1, 2006 to the date of this prospectus, there were no disagreements with Meyler & Company, LLC on any matter of accounting principles or practices, financial disclosure, or auditing scope or procedure. There were no reportable events, as described in Item 304(a)(1)(v) of Regulation S-K, during our two most recent fiscal years (ended December 31, 2005 and 2004) and from January 1, 2006 to the date of this prospectus.

We furnished a copy of this disclosure to Meyler & Company, LLC and requested Meyler & Company, LLC to furnish us with a letter addressed to the Securities and Exchange Commission stating whether it agrees with the statements made by us herein in response to Item 304(a) of Regulation S-K and, if not, stating the respect in which it does not agree. A copy of the letter was filed by us as Exhibit 16.1 to our current report on Form 8-K, filed on June 22, 2006.

ITEM 5.01CHANGES IN CONTROL OF REGISTRANT

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

As a result of the closing of the reverse acquisition with Wonder Auto Limited, the former stockholders of Wonder Auto Limited (prior to the private placement transaction as described under Item 2.01) own 61.05% of the total outstanding shares of our capital stock and 61.05% total voting power of all our outstanding voting securities.

ITEM 5.02DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF PRINCIPAL OFFICERS

Upon the closing of the reverse acquisition, Timothy Halter, our sole director, submitted his resignation letter pursuant to which he resigned from all offices of MGCC that he holds effective immediately and from his position as our director that will become effective upon the tenth day following the mailing by us to our stockholders of an information statement that complies with the requirements of Rule 14f-1 under the Securities Exchange Act of 1934, which information statement was mailed out on or about the date of the closing of the reverse acquisition. Qingjie Zhao will be appointed to the board of the directors at the effective time of the resignation of Timothy Halter. In addition, our executive officers were replaced by the Wonder Auto executive officers upon the closing of the reverse acquisition as indicated in more detail below.

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

ITEM 5.03              AMENDMENT TO ARTICLES OF INCORPORATION OR BYLAWS; CHANGE IN FISCAL YEAR

We plan to amend our Articles of Incorporation to change our name to Wonder Auto Technology, Inc.and expect the name change to become effective in or before August 2006.

ITEM 5.06             CHANGE IN SHELL COMPANY STATUS

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

ITEM 9.01              FINANCIAL STATEMENTS AND EXHIBITS

(a)Financial Statements of Business Acquired

Filed herewith are the following:

1. Unaudited financial statements of Wonder Auto Limited for the three months ended March 31, 2005 and 2006.

2. Audited financial statements of Wonder Auto Limited for the fiscal years ended December 31, 2003, 2004 and 2005.

43

3. Unaudited financial statements of MGCC Investment Strategies, Inc. for the three months ended March 31, 2005 and 2006.

4. Audited financial statements of MGCC Investment Strategies, Inc. for the fiscal years ended December 31, 2003, 2004 and 2005.

(b)Pro forma financial information

The unaudited pro forma balance sheet data is not significant because of the lack of operating assets and liabilities of MGCC Investment Strategies, Inc. The pro forma results of operations, assuming the acquisition is completed at the beginning of the reporting period, would have caused our net losses to increase, but not materially, because of the limited operating losses reported by MGCC Investment Strategies, Inc. The effects of stockholders’ equity will be reported as a recapitalization.

(c)Exhibits

Exhibit No.	Description
2.1	Share Exchange Agreement, dated June 22, 2006, among the registrant, Wonder Auto Limited and its stockholders.
10.1	Form of the Stock Purchase and Subscription Agreement, dated June 22, 2006.
10.2	Escrow Agreement, dated June 22, 2006, among the registrant, Sterne Agee & Leach, Inc., Empower Century Limited, Choice Inspire Limited and Securities Transfer Corporation.
10.3	Escrow Agreement, dated June 22, 2006, by and among Wonder Auto Limited, Empower Century Limited, Thelen Reid & Priest LLP and certain purchasers.
10.4	Stock Purchase Agreement, dated April 28, 2004, between Jinzhou Wonder Industry (Group) Co., Ltd and Wonder Auto Limited.
10.5	Technical Cooperation Agreement, dated July 25, 2003, between Jinzhou Halla Electrical Equipment Co., Ltd and MEISTER (Korea) Company Limited.
10.6	Strategic Cooperation Agreement, dated June 7, 2004, between Jinzhou Halla Electrical Equipment Co., Ltd. and HIVRON Inc.
10.7	Form of Purchase Contract with Supplier.
10.8	Equipment Purchase Agreement, dated January 1, 2006, between Jinzhou Halla Electrical Equipment Co., Ltd. and Suzhou Tenuo Automation Co., Ltd.

44

10.9	Equipment Purchase Agreement, dated May 19, 2005, between Jinzhou Halla Electrical Equipment Co., Ltd. and DMG meccanica.
10.10	Equipment Purchase Agreement, dated December 17, 2004, between Jinzhou Halla Electrical Equipment Co., Ltd. and OMT Co., Ltd.
10.11	Loan Agreement, dated October 18, 2005, between Jinzhou Halla Electrical Equipment Co., Ltd. and China Construction Bank (Jinzhou Linghe Branch).
10.12	Loan Agreement, dated September 30, 2005, between Jinzhou Halla Electrical Equipment Co., Ltd. and Jinzhou Commercial Bank (Chengjian Branch).
10.13	Loan Agreement, dated July 8, 2005, between Jinzhou Halla Electrical Equipment Co., Ltd and China Construction Bank (Jinzhou Linghe Branch).
10.14	Mortgage Agreement, dated September 28, 2005, between Jinzhou Halla Electronic Equipment Co., Ltd. and Jinzhou Commercial Bank (Linghe Branch).
10.15	Lease Agreement, dated November 8, 2005, by and among Beijing International Technological Cooperation Center Wang Jing Tower Company, Jinzhou Halla Electrical Equipment Co., Ltd. and Beijing Zhucheng Real Property Management Company.
10.16	Employment Contract, dated June 21, 2006, between Wonder Auto Limited and Qingjie Zhao.
10.17	Employment Contract, dated June 21, 2006, between Wonder Auto Limited and Yuncong Ma.
10.18	Employment Contract, dated June 21, 2006, between Wonder Auto Limited and Meirong Yuan.
10.19	Employment Contract between Jinzhou Halla Electrical Equipment Co., Ltd. and Seuk Jun Kim.
10.20	Employment Contract between Jinzhou Halla Electrical Equipment Co., Ltd. and Yuguo Zhao.
10.21	Employment Contract between Jinzhou Halla Electrical Equipment Co., Ltd. and Yongdong Liu.
10.22	Consulting Agreement, dated April 22, 2006, between Heritage Management Consultants, Inc. and Wonder Auto Limited.
10.23	Financial Advisory Agreement, dated March 15, 2006, between Wonder Auto Group and HFG International, Limited.
10.24	Assignment and Assumption Agreement, dated May 31, 2006, between Wonder Auto Group, HFG International Limited and Wonder Auto Limited.
16.1	Letter from Meyler & Company LLP regarding the change in certifying accountants
99.1	Press Release, dated June 23, 2006.

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SIGNATURES

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

MGCC Investment Strategies, Inc.

Date: June 23, 2006

/s/ Qingjie Zhao

Chief Executive Officer

46

MGCC INVESTMENT STRATEGIES, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2006 AND 2005 - WONDER AUTO LIMITED
Condensed Consolidated Statements of Operations	F-3
Condensed Consolidated Balance Sheets	F-4
Condensed Consolidated Statements of Cash Flows	F-6
Notes to Condensed Consolidated Financial Statements	F-8
AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2005- WONDER AUTO LIMITED
Report of Independent Registered Public Accounting Firm	F-23
Consolidated Statements of Operations	F-24
Consolidated Balance Sheets	F-25
Consolidated Statements of Cash Flows	F-27
Consolidated Statements of Stockholders’ Equity	F-29
Notes to Audited Consolidated Financial Statements	F-30
UNAUDITED QUARTERLY FINANCIAL STATEMENTS - MGCC INVESTMENT STRATEGIES, INC
Balance Sheet	F-52
Statement of Operations	F-53
Statement of Cash Flows	F-54
Notes to Unaudited Quarterly Financial Statements	F-55
AUDITED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003 - MGCC INVESTMENT STRATEGIES, INC
Report of Independent Registered Public Accounting Firm	F-58
Balance Sheets	F-59
Statements of Operations	F-60
Statements of Cash Flows	F-61
Statements of Stockholders’ Equity (Deficit)	F-62
Notes to Financial Statements	F-63

 

Wonder Auto Limited

Condensed Consolidated Financial Statements

For the three months ended

March 31, 2006 and 2005

(Stated in US dollars)

F-1

Wonder Auto Limited

Condensed Consolidated Financial Statements

Three months ended March 31, 2006 and 2005

Index to Condensed Consolidated Financial Statements

	Pages
Condensed Consolidated Statements of Operations	F-3
Condensed Consolidated Balance Sheets	F-4 to F-5
Condensed Consolidated Statements of Cash Flows	F-6 to F-7
Notes to Condensed Consolidated Financial Statements	F-8 to F-20

F-2

Wonder Auto Limited

Condensed Consolidated Statements of Operations

(Unaudited)

(Stated in US Dollars)

	Three months ended March 31
	2006			2005
Revenue
Sales	$	14,793,221		$	9,816,793
Cost of sales		(11,916,456	)		(7,771,249	)
Gross profit		2,876,765			2,045,544
Expenses
Administrative expenses		273,719			233,848
Amortization and depreciation		35,012			30,896
Other operating expenses		36			75
Selling expenses		694,572			355,316
		1,003,339			620,135
Income before the following items and taxes		1,873,426			1,425,409
Interest income		12,861			3,384
Other income		-			98,389
Finance costs		(258,401	)		(159,390	)
Income before income taxes		1,627,886			1,367,792
Income taxes - Note 5		(218,653	)		(187,212	)
Net income	$	1,409,233		$	1,180,580
Earnings per share: basic and diluted	$	7,046		$	5,903
Weighted average number of shares outstanding:
basic and diluted		200			200

See the accompanying notes to condensed consolidated financial statements

F-3

Wonder Auto Limited

Condensed Consolidated Balance Sheets

(Unaudited)

(Stated in US Dollars)

	As of March 31,
	2006		2005
ASSETS
Current assets
Cash and cash equivalents	$	2,142,275	$	1,387,321
Restricted cash		3,561,283		603,751
Marketable securities		37,336		-
Trade receivables (net of allowance of doubtful accounts
of $38,929 in 2006 and $37,748 in 2005)		21,364,391		15,047,133
Bills receivable		4,516,638		1,183,322
Other receivables, prepayments and deposits - Note 7		737,128		293,027
Income tax receivable		-		73,999
Inventories - Note 8		9,267,062		6,000,218
Deferred taxes - Note 5		222,071		169,659
Total current assets		41,848,184		24,758,430
Know-how		1,428,314		1,384,998
Trademarks and patents		1,829		2,112
Property, plant and equipment, net - Note 9		10,774,292		9,542,347
Land use right - Note 10		576,078		584,590
Deposit for acquisition of property, plant and equipment		1,064,966		956,341
Deferred taxes - Note 5		165,203		123,104
TOTAL ASSETS	$	55,858,866	$	37,351,922

See the accompanying notes to condensed consolidated financial statements

F-4

Wonder Auto Limited

Condensed Consolidated Balance Sheets

(Unaudited)

(Stated in US Dollars)

	As of March 31,
	2006		2005
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Current liabilities
Trade payables	$	14,241,503	$	7,067,929
Bills payable		7,093,787		1,206,782
Other payables and accrued expenses - Note 11		505,475		425,871
Provision for warranty		1,133,290		738,688
Dividend payable		-		5,437,398
Income tax payable		78,430		-
Amount due to a stockholder		5,149		5,149
Secured short-term bank loans - Note 12		7,467,145		7,559,090
Total current liabilities		30,524,779		22,440,907
Secured long-term bank loans - Note 12		4,978,096		-
TOTAL LIABILITIES		35,502,875		22,440,907
COMMITMENTS AND CONTINGENCIES - Note 13
STOCKHOLDERS’ EQUITY
Common stock: par value $1 per share
Authorized 50,000 shares in 2006 and 2005; issued
and outstanding 200 shares in 2006 and 2005		200		200
Additional paid-in capital		11,999,900		11,999,900
Statutory and other reserves		2,347,848		1,706,676
Accumulated other comprehensive income		537,896		24,108
Retained earnings		5,470,147		1,180,131
TOTAL STOCKHOLDERS’ EQUITY		20,355,991		14,911,015
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	55,858,866	$	37,351,922

See the accompanying notes to condensed consolidated financial statements

F-5

Wonder Auto Limited

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(Stated in US Dollars)

	Three months ended March 31
	2006			2005
Cash flows from operating activities
Net income	$	1,409,233		$	1,180,580
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation		328,740			289,476
Amortization of trademarks and patents		87			85
Amortization of land use right		6,681			6,495
Deferred taxes		28,485			111,307
Recovery of obsolete inventories		(12,873	)		(497,056	)
Changes in operating assets and liabilities:
Trade receivables		(2,796,781	)		(4,052,434	)
Bills receivable		(968,729	)		2,182,200
Other receivables, prepayments and deposits		(340,268	)		186,605
Inventories		(1,405,824	)		1,507,932
Trade payables		3,882,703			2,267,966
Other payables and accrued expenses		(207,189	)		71,624
Provision for warranty		213,991			(76,810	)
Income tax payable		(83,400	)		(161,934	)
Net cash flows provided by operating activities		54,856			3,016,036
Cash flows from investing activities
Payments to acquire and for deposit for acquisition of
property, plant and equipment		(645,405	)		(511,046	)
Decrease in restricted cash		36,326			30,688
Net cash flows used in investing activities	$	(609,079	)	$	(480,358	)

See the accompanying notes to condensed consolidated financial statements

F-6

Wonder Auto Limited

Consolidated Statements of Cash Flows (Cont’d)

(Unaudited)

(Stated in US Dollars)

	Three months ended March 31
	2006			2005
Cash flows from financing activities
Dividend paid to stockholders	$	(1,704,206	)	$	(1,409,301	)
Repayment of bank loans		-			(1,568,817	)
Net cash flows used in financing activities		(1,704,206	)		(2,978,118	)
Effect of foreign currency translation on cash and
cash equivalents		31,947			-
Net decrease in cash and cash equivalents		(2,226,482	)		(442,440	)
Cash and cash equivalents - beginning of period		4,368,757			1,829,761
Cash and cash equivalents - end of period	$	2,142,275		$	1,387,321
Supplemental disclosures for cash flow information:
Non-cash financing activity:		nil			nil
Cash paid for:
Interest	$	228,022		$	105,206
Income taxes	$	273,567		$	89,841

See the accompanying notes to condensed consolidated financial statements

F-7

Wonder Auto Limited

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(Stated in US Dollars)

1.       Corporate information

The Company was incorporated on March 22, 2004 in the British Virgin Islands (the “BVI”) and acts as an investment holding company. Currently the Company has two wholly owned subsidiaries, Man Do Auto Technology Co., Ltd (“Man Do Auto”) and Jinzhou Halla Electrical Equipment Co., Ltd. (“Jinzhou Halla”). The entire issued and outstanding common stock of Man Do Auto is directly held by the Company. In respect of Jinzhou Halla, 61% of its common stock is directly held by the Company whilst 39% is indirectly held by the Company through Man Do Auto.

Man Do Auto is an investment holding company and was incorporated in the BVI on June 5, 2003 with authorized common stock of $50,000 divided into 50,000 ordinary shares of $1 each. At date of inception, all of which were issued. During the reporting periods, Man Do Auto did not have any business activities other than holding 39% equity interest in Jinzhou Halla directly.

Jinzhou Halla was established on March 21, 1996 in the People’s Republic of China (the “PRC”) with registered capital of $12,000,000 (which are not divided into shares). Since its establishment, all the registered capital was issued and fully paid up. For the period from March21, 1996 to July25, 2003, 50% equity interest of Jinzhou Halla was held by a Korean Company (the “Korean Company”). On July 25, 2003, this Korean Company sold its entire 50% equity interest to certain of the current beneficial stockholders of the Company, which are not related to the Korean Company in any way. Following the disposal, the Korean Company is no longer related to the Company. Jinzhou Halla is engaged in the manufacturing and distribution of automotive electrical components, namely starters and alternators in the PRC. More details of the principal activities are set out in note 2.

The companies now comprising the group underwent a reorganization (the “Reorganization”) in March to June of 2004 to rationalize its structure. During that time, the Company acquired the entire equity interests of Jinzhou Halla and Man Do Auto by issuance and allotment of its 200 shares of common stock to the then beneficial stockholders of Jinzhou Halla (the “Then Stockholders”) or at their discretion. Following the Reorganization, the Company became the holding company of Man Do Auto and Jinzhou Halla.

2.       Description of business

The Company is principally engaged in the manufacture and distribution of automotive electrical components, namely starters and alternators, in the PRC.

The products of the Company are suitable for use in various types of automobiles. However, the Company currently has more market presence in the sedan and passenger cars, pickup trucks and sport utility vehicles segments.

The customers include renowned automakers and automotive components suppliers in the PRC. As an integral part of developing customer relationship, the Company also offers to its customers product design and development services for their new car models or automotive components based on customers’ required specifications.

F-8

Wonder Auto Limited

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(Stated in US Dollars)

2.       Description of business (Cont’d)

The raw materials used in production are mainly divided into four groups, namely metal parts, semiconductors, chemical and packaging materials.

It is the Company’s policy to only purchase raw materials from selected suppliers, both locally and overseas from South Korea because management believed that the South Korean suppliers provide the Company with goods that domestic manufacturers cannot produce consistently at a high quality.

3.       Basis of presentation

The accompanying condensed consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with generally accepted accounting principles in the United States of America for interim consolidated financial information. Accordingly, they do not include all the information and notes necessary for comprehensive consolidated financial statements.

In the opinion of the management of the Company, all adjustments, which are of a normal recurring nature, necessary for a fair statement of the results for the three-month periods have been made. Results for the interim periods presented are not necessarily indicative of the results that might be expected for the entire fiscal year. These condensed financial statements should be read in conjunction with the consolidated financial statements and the notes for each of the three years in the period ended December 31, 2005.

4.        Summary of significant accounting policies

Principles of consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant inter-company accounts and transactions have been eliminated in consolidation.

Use of estimates

In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. These accounts and estimates include, but are not limited to, the valuation of accounts receivable, inventories, deferred income taxes, provision for warranty and the estimation on useful lives of property, plant and equipment. Actual results could differ from those estimates.

F-9

Wonder Auto Limited

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(Stated in US Dollars)

4.       Summary of significant accounting policies (Cont’d)

Revenue recognition

Revenue from sales of the Company’s products is recognized when the significant risks and rewards of ownership have been transferred to the buyer at the time when the products are put into use by its customers, the sales price is fixed or determinable and collection is reasonably assured.

Basic and diluted earnings per share

The Company reports basic earnings per share in accordance with SFAS No. 128, “Earnings Per Share”. Basic earnings per share is computed using the weighted average number of shares outstanding during the periods presented. The weighted average number of shares of the Company represents the common stock outstanding during the reporting periods.

Concentrations of credit risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents and trade and bills receivables. As of March 31, 2006 and 2005, substantially all of the Company’s cash and cash equivalents and restricted cash were held by major financial institutions located in the PRC, which management believes are of high credit quality. With respect to trade and bills receivables, the Company extends credit based on an evaluation of the customer’s financial condition. The Company generally does not require collateral for trade receivables and maintains an allowance for doubtful accounts of trade receivables.

Regarding bills receivable, they are undertaken by the banks to honor the payments at maturity and the customers are required to place deposits with the banks equivalent to certain percentage of the bills amount as collateral. These bills receivable can be sold to any third party at a discount before maturity. The Company does not maintain allowance for bills receivable in the absence of bad debt experience and the payments are undertaken by the banks.

During the reporting periods, customers represented 10% or more of the Company’s condensed consolidated sales are :-

	Three months ended March 31,
	2006		2005
Beijing Hyundai Motor Company	$	2,746,915	$	-
Harbin Dongan Automotive Engine Manufacturing Company
Limited		2,349,562		76,722
Shenyang Aerospace Mitsubishi Motors Engine
Manufacturing Company Limited		1,314,560		1,421,375
Harbin Dongan Auto-Engine Company Limited		1,295,310		1,528,879
Tianjin Automotive Xia Li Company Ltd. Internal Combustion
Engine Manufacturing Branch Company		1,123,991		1,128,206
Shenyang Aerospace Xinguang Group Co., Ltd. Automobile
Engine Manufacturing Factory		596,064		989,049
	$	9,426,402	$	5,144,231

F-10

Wonder Auto Limited

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(Stated in US Dollars)

4.       Summary of significant accounting policies (Cont’d)

Allowance of doubtful accounts

The Company establishes an allowance for doubtful accounts based on management’s assessment of the collectibility of trade receivables. A considerable amount of judgment is required in assessing the realization of these receivables, including the current creditworthiness of each customer and the related ageing analysis.

Based on the above assessment, during the reporting periods, the management establishes the general provisioning policy to make allowance equivalent to 100% of gross amount of trade receivables due over 1 year. Additional specific provision is made against trade receivables aged less than 1 year to the extent which they are considered to be doubtful.

Bad debts are written off when identified. The Company extends unsecured credit to customers ranging from three to six months in the normal course of business. The Company does not accrue interest on trade accounts receivable.

Inventories

Inventories are stated at the lower of cost or market. Cost is determined on a weighted average basis and includes all expenditures incurred in bringing the goods to the point of sale and putting them in a saleable condition. In assessing the ultimate realization of inventories, the management makes judgments as to future demand requirements compared to current or committed inventory levels. Our reserve requirements generally increase as our projected demand requirements; decrease due to market conditions, product life cycle changes. The Company’s policy is to make a 50% general provision for inventories aged over 1 year.

Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation. Cost represents the purchase price of the asset and other costs incurred to bring the asset into its existing use.

Depreciation is provided on straight-line basis over their estimated useful lives. The principal depreciation rates are as follows :-

	Annual rate		Residual value
Buildings		3%		10%
Plant and machinery		9%		10%
Motor vehicles		9%		10%
Furniture, fixtures and equipment		15%		10%
Tools and equipment		15%		Nil to 10%
Leasehold improvements		20%		Nil

Maintenance or repairs are charged to expense as incurred. Upon sale or disposition, the applicable amounts of asset cost and accumulated depreciation are removed from the accounts and the net amount less proceeds from disposal is charged or credited to income.

F-11

Wonder Auto Limited

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(Stated in US Dollars)

4.       Summary of significant accounting policies (Cont’d)

Land use right

Land use right is stated at cost less accumulated amortization. Amortization is provided using the straight-line method over the terms of the lease of 30 years obtained from the relevant PRC land authority.

Impairment of long-lived assets

Long-lived assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. The Company recognizes impairment of long-lived assets in the event that the net book values of such assets exceed the future undiscounted cashflows attributable to such assets. During the reporting periods, the Company has not identified any indicators that would require testing for impairment.

Recently issued accounting pronouncements

In February 2006, the Financial Accounting Standards Board issued SFAS No. 155, Accounting for Certain Hybrid Financial Instruments, which amends SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities (“SFAS No. 155”), and SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. SFAS No. 155 simplifies the accounting for certain derivatives embedded in other financial instruments by allowing them to be accounted for as a whole if the holder elects to account for the whole instrument on a fair value basis. SFAS No. 155 also clarifies and amends certain other provisions of SFAS No. 133 and SFAS No. 140. SFAS No. 155 is effective for all financial instruments acquired, issued or subject to a remeasurement event occurring in fiscal years beginning after September 15, 2006. Earlier adoption is permitted, provided the Company has not yet issued financial statements, including for interim periods, for that fiscal year. We do not expect the adoption of SFAS No. 155 to have a material impact on our consolidated financial position, results of operations or cash flows as the Company currently has no financial instruments within the scope of SFAS No. 155.

5.       Income taxes

BVI

The Company and Man Do Auto were incorporated in the BVI and, under the current laws of the BVI, are not subject to income taxes.

F-12

Wonder Auto Limited

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(Stated in US Dollars)

5.        Income taxes (Cont’d)

PRC

Enterprises income tax (“EIT”) to Jinzhou Halla in the PRC is charged at 27%, in which 24% for national tax and 3% for local tax, of the assessable profits. As approved by the local tax authority in the PRC, Jinzhou Halla was entitled to two years’ exemption from EIT followed by three years’ 50% tax reduction, commencing from the first cumulative profit-making year in the fiscal financial year of 2001. Accordingly, Jinzhou Halla was subject to tax rate of 13.5% for 2003, 2004 and 2005. Furthermore, Jinzhou Halla, being a Foreign Investment Enterprise (“FIE”), is engaged in advanced technology industry, Jinzhou Halla was approved to enjoy a further three years’ 50% tax reduction for 2006, 2007 and 2008.

The components of the provision for income taxes from continuing operations are :-

	Three months ended March 31,
	2006		2005
Current taxes - PRC	$	190,168	$	75,905
Deferred taxes - PRC		28,485		111,307
	$	218,653	$	187,212

The expenses differs from the PRC statutory income tax rate of 27% from continuing operations in the PRC as follows :-

	Three months ended March 31,
	2006			2005
Provision for income taxes at statutory income tax rate	$	439,529		$	369,304
Non-deductible items for tax		30			5,119
Income not subject to tax		(2,254	)		-
Tax concessions		(218,652	)		(187,211	)
	$	218,653		$	187,212

F-13

Wonder Auto Limited

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(Stated in US Dollars)

5.       Income taxes (Cont’d)

Deferred tax assets (liabilities) as of March 31, 2006 and 2005 are composed of the following :-

	As of March 31,
	2006			2005
The PRC
Current deferred tax assets:
Allowance for doubtful debts	$	5,255		$	5,096
Provision for obsolete inventories		24,593			33,859
Provision for warranty		152,994			99,723
Accrued liabilities		39,229			30,981
	$	222,071		$	169,659
Non current deferred tax assets(liabilities):
Depreciation of property, plant and equipment	$	315,517		$	250,684
Amortization of land use right		13,585			12,720
Amortization of know-how		(163,899	)		(140,300	)
	$	165,203		$	123,104

6.      Comprehensive income

	Three months ended March 31,
	2006		2005
Net income	$	1,409,233	$	1,180,580
Foreign currency translation adjustments		93,226		(476	)
Total comprehensive income	$	1,502,459	$	1,180,104

7.      Other receivables, prepayments and deposits

	As of March 31,
	2006		2005
Advances to staff	$	258,684	$	89,910
Value added tax and other tax recoverable		350,408		71,864
Prepayments		106,083		75,520
Other receivables		21,953		55,733
	$	737,128	$	293,027

F-14

Wonder Auto Limited

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(Stated in US Dollars)

8.       Inventories

	As of March 31,
	2006			2005
Raw materials	$	2,664,190		$	2,653,362
Work-in-progress		153,658			495,878
Finished goods		6,631,383			3,101,786
		9,449,231			6,251,026
Provision for obsolete inventories		(182,169	)		(250,808	)
	$	9,267,062		$	6,000,218

9.       Property, plant and equipment

	As of March 31,
	2006			2005
Costs:
Buildings	$	4,892,839		$	4,558,155
Plant and machinery		10,851,995			8,933,675
Furniture, fixtures and equipment		347,079			243,581
Tools and equipment		889,436			682,468
Leasehold improvements		24,890			24,135
Motor vehicles		342,960			298,806
		17,349,199			14,740,820
Accumulated depreciation		(6,574,907	)		(5,198,473	)
Net	$	10,774,292		$	9,542,347

An analysis of buildings, plant and machinery pledged to banks for banking loans (note 12a) is as follows :-

	As of March 31,
	2006			2005
Costs:
Buildings	$	3,828,865		$	388,047
Plant and machinery		2,676,629			2,595,456
		6,505,494			2,983,503
Accumulated depreciation		(1,690,288	)		(679,116	)
Net	$	4,815,206		$	2,304,387

	Three months ended March 31,
	2006		2005
Depreciation	$	88,713	$	61,309

F-15

Wonder Auto Limited

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(Stated in US Dollars)

9.       Property, plant and equipment (Cont’d)

During the reporting periods, depreciation is included in :-

	Three months ended March 31,
	2006		2005
Cost of sales and overheads of inventories	$	300,496	$	265,160
Other		28,244		24,316
	$	328,740	$	289,476

10.     Land use right

	As of March 31,
	2006			2005
Right to use land	$	803,830		$	779,453
Accumulated amortization		(227,752	)		(194,863	)
	$	576,078		$	584,590

The Company obtained the right from the relevant PRC land authority for a period from August 1996 to August 2026 to use the land on which the office premises, production facilities and warehouse of the Company are situated. This right was pledged to a bank for the bank loans granted to the Company (Note 12b).

During the three months ended March 31, 2006 and 2005, amortization amounted to $6,681 and $6,495 respectively.

11.    Other payables and accrued expenses

	As of March 31,
	2006		2005
Accrued audit fee	$	124,452	$	67,097
Other accrued expenses		49,706		68,957
Other tax payable		38,060		85,881
Payable for acquisition of property, plant and equipment		118,107		141,091
Staff welfare payable - Note 11a		92,748		62,781
Other payables		82,402		64
	$	505,475	$	425,871

Note :-

a.Staff welfare payable represents accrued staff medical, industry injury claims, labour and unemployment insurances. Such contribution is based on certain percentage of salaries.

F-16

Wonder Auto Limited

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(Stated in US dollars)

12.     Secured bank loans

	As of March 31,
		2006		2005
Bank loans repayable as follows:
Within 1 year	$	7,467,145	$	7,559,090
After 1 year but within 2 years		4,978,096		-
	$	12,445,241	$	7,559,090

As of March 31, 2006, the Company’s banking facilities are composed of the following :-

Facilities granted	Granted		Amount Utilized		Unused
Secured bank loans	$	14,187,575	$	12,445,241	$	1,742,334

The above banking loans were secured by the following :-

(a) Property, plant and equipment with carrying value of $4,815,206 respectively (note 9);

(b) Land use right with carrying value of $576,078 (note 10); and

(c) Guarantees executed by the Company’s sole director who is also a stockholder of the Company and a related company controlled by certain of the Company’s stockholders.

During the reporting periods, there was no covenant requirement under the banking facilities granted to the Company.

13.    Commitments and contingencies

a. Capital commitment

As of March 31, 2006, the Company had capital commitments amounting to $446,055 in respect of the acquisition of property, plant and equipment which were contracted for but not provided in the financial statements.

F-17

Wonder Auto Limited

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(Stated in US dollars)

13.    Commitments and contingencies (Cont’d)

b. Operating lease arrangement

As of March 31, 2006, the Company had two non-cancelable operating leases for its warehouses. The leases will expire in 2006 and 2007 respectively and the expected payments are as follows :-

Year / period
Period from April 1, 2006 to December 31, 2006	$	4,129
2007		1,267
	$	5,396

The rental expense relating to the operating leases was $719 and $932 for the three months ended March 31, 2006 and March 31, 2005 respectively.

14.     Defined contribution plan

The Company has a defined contribution plan for all qualified employees in the PRC. The employer and its employees are each required to make contributions to the plan at the rates specified in the plan. The only obligation of the Company with respect to retirement scheme is to make the required contributions under the plan. No forfeited contribution is available to reduce the contribution payable in the future years. The defined contribution plan contributions were charged to the condensed consolidated statements of operations. The Company contributed $112,490 and $89,720 for the three months ended March 31, 2006 and 2005 respectively.

F-18

Wonder Auto Limited

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(Stated in US dollars)

15.    Segment information

The Company is engaged in the manufacture and distribution of automotive electrical components including alternators and starters in the PRC. The Company has two reportable segments, alternators and starters, based on the type of products. Information for the two segments is disclosed under FAS131, “Disclosures about Segments of an Enterprise and Related Information” as below :-

	Alternators				Starters				Total
	Three months ended March 31,				Three months ended March 31,				Three months ended March 31,
	2006		2005		2006		2005		2006		2005
Revenue from external customers	$	9,131,382	$	6,444,179	$	5,661,839	$	3,372,614	$	14,793,221		9,816,793
Interest income		7,865		2,221		4,876		1,163		12,741		3,384
Interest expenses		140,751		69,062		87,271		36,144		228,022		105,206
Amortization		4,178		4,319		2,590		2,261		6,768		6,580
Depreciation		274,370		236,703		54,370		52,773		328,740		289,476
Segment profit		643,887		676,238		984,041		691,631		1,627,928		1,367,869
Segment assets		37,270,447		26,414,801		18,542,118		10,936,591		55,812,565		37,351,392
Expenditure for segment assets	$	398,409	$	335,474	$	246,996	$	175,572	$	645,405	$	511,046

F-19

Wonder Auto Limited

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(Stated in US dollars)

15.    Segment information (Cont’d)

A reconciliation is provided for unallocated amounts relating to corporate operations which is not included in the segment information.

	Three months ended March 31,
	2006			2005
Total consolidated revenue	$	14,793,221		$	9,816,793
Total profit for reportable segments	$	1,627,928		$	1,367,869
Unallocated amounts relating to operations:
Interest income		120			-
Other general expenses		(162	)		(77	)
Income before income taxes	$	1,627,886		$	1,367,792

	As of March 31,
	2006		2005
Assets
Total assets for reportable segments	$	55,812,565	$	37,351,392
Cash and cash equivalents		8,965		530
Marketable securities		37,336		-
	$	55,858,866	$	37,351,922

All of the Company’s long-lived assets are located in the PRC. Geographic information about the revenues, which are classified based on the customers, is set out as follows :-

	Three months ended March 31,
	2006		2005
PRC	$	14,643,161	$	9,686,353
Others		150,060		130,440
Total	$	14,793,221	$	9,816,793

F-20

Wonder Auto Limited

Consolidated Financial Statements

For each of the three years in the period ended

December 31, 2005

(Stated in US dollars)

F-21

Wonder Auto Limited

Consolidated Financial Statements

For each of the three years in the period ended December 31, 2005

Index to Consolidated Financial Statements

	Pages
Report of Independent Registered Public Accounting Firm	F-23
Consolidated Statements of Operations	F-24
Consolidated Balance Sheets	F-25 to F-26
Consolidated Statements of Cash Flows	F-27 to F-28
Consolidated Statements of Stockholders’ Equity	F-29
Notes to Consolidated Financial Statements	F-30 to F-51

F-22

Report of Independent Registered Public Accounting Firm

To the Sole Director and Stockholders of

Wonder Auto Limited

We have audited the accompanying consolidated balance sheets of Wonder Auto Limited (the “Company”) and its subsidiaries as of December 31, 2005, 2004 and 2003, and the related consolidated statements of operations, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2005. 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 the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. 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 estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company and its subsidiaries as of December 31, 2005, 2004 and 2003, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2005 in conformity with accounting principles generally accepted in the United States of America.

PKF

Certified Public Accountants

Hong Kong

June 6, 2006

F-23

Wonder Auto Limited

Consolidated Statements of Operations

(Stated in US Dollars)

	Year ended December 31,
	2005			2004			2003
Revenue
Sales	$	48,062,805		$	42,265,874		$	39,790,890
Cost of sales		(36,787,115	)		(33,073,766	)		(31,192,770	)
Gross profit		11,275,690			9,192,108			8,598,120
Expenses
Administrative expenses		1,011,123			732,370			593,202
Amortization and depreciation
- Notes 12, 13 and 14		127,998			110,962			111,973
Other operating expenses		16,257			49,169			26,952
Provision for doubtful debts		-			1,906			23,120
Selling expenses		2,148,426			1,510,470			1,522,761
		3,303,804			2,404,877			2,278,008
Income before the following items and taxes		7,971,886			6,787,231			6,320,112
Interest income		28,539			13,554			15,384
Other income		136,711			148,056			96,720
Finance costs - Note 5		(838,954	)		(643,141	)		(549,601	)
Income before income taxes		7,298,182			6,305,700			5,882,615
Income taxes - Note 6		(897,256	)		(718,298	)		(665,260	)
Net income	$	6,400,926		$	5,587,402		$	5,217,355
Earnings per share: basic and diluted - Note 7	$	32,005		$	46,177			n/a
Weighted average number of shares
outstanding: basic and diluted - Note 7		200			121			n/a

See Notes to Consolidated Financial Statements

F-24

Wonder Auto Limited

Consolidated Balance Sheets

(Stated in US Dollars)

	As of December 31,
	2005		2004		2003
ASSETS
Current assets
Cash and cash equivalents	$	4,368,757	$	1,829,761	$	2,223,347
Restricted cash - Note 8		3,597,609		634,439		11,367
Marketable securities		37,159		-		-
Trade receivables (net of allowance of
doubtful accounts of $38,745 in 2005,
$37,748 in 2004 and $35,841 in 2003)		18,472,619		10,994,699		11,836,461
Bills receivable		3,528,649		3,365,522		2,628,897
Other receivables, prepayments and
deposits - Note 9		392,906		479,632		247,076
Inventories - Note 10		7,807,610		7,011,094		9,997,911
Deferred taxes - Note 6		261,548		291,233		175,630
Total current assets		38,466,857		24,606,380		27,120,689
Know-how - Note 11		1,421,556		1,384,999		1,384,965
Trademarks and patents - Note 12		1,907		2,196		2,328
Property, plant and equipment, net - Note 13		10,648,082		9,786,134		7,538,582
Land use right - Note 14		580,020		591,085		617,052
Deposit for acquisition of property, plant and
equipment		819,183		490,984		895,874
Deferred taxes - Note 6		152,316		112,837		83,604
TOTAL ASSETS	$	52,089,921	$	36,974,615	$	37,643,094

F-25

Wonder Auto Limited

Consolidated Balance Sheets (Cont’d)

(Stated in US Dollars)

	As of December 31,
	2005		2004		2003
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Current liabilities
Trade payables	$	10,299,879	$	4,799,963	$	8,067,389
Bills payable - Note 8		7,060,222		1,206,782		-
Other payables and accrued expenses
- Note 15		709,822		354,247		470,177
Provision for warranty - Notes 4 and 16		914,403		815,498		774,149
Dividend payable		1,699,282		2,864,319		2,835,671
Income tax payable		161,277		87,935		47,983
Amount due to a stockholder - Note 18		5,149		5,149		-
Secured short-term bank loans - Note 19		7,431,813		9,127,907		8,628,284
Total current liabilities		28,281,847		19,261,800		20,823,653
Secured long-term bank loans - Note 19		4,954,542		-		-
TOTAL LIABILITIES		33,236,389		19,261,800		20,823,653
COMMITMENTS AND CONTINGENCIES
- Note 20
STOCKHOLDERS’ EQUITY
Common stock: par value $1 per share
- Note 21
Authorized 50,000 shares in 2005 and
2004; issued and outstanding
200 shares in 2005 and 2004		200		200		12,000,000
Additional paid-in capital		11,999,900		11,999,900		-
Statutory and other reserves - Note 22		2,347,848		1,706,679		1,061,191
Accumulated other comprehensive
income - Note 23		444,670		24,584		23,818
Retained earnings		4,060,914		3,981,452		3,734,432
TOTAL STOCKHOLDERS’ EQUITY		18,853,532		17,712,815		16,819,441
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY	$	52,089,921	$	36,974,615	$	37,643,094

See Notes to Consolidated Financial Statements

F-26

Wonder Auto Limited

Consolidated Statements of Cash Flows

(Stated in US Dollars)

	Year ended December 31,
	2005			2004			2003
Cash flows from operating activities
Net income	$	6,400,926		$	5,587,402		$	5,217,355
Adjustments to reconcile net income to net
cash provided by (used in) operating
activities:
Depreciation		1,158,561			986,517			808,874
Amortization of trademarks and patents		342			338			251
Amortization of land use right		26,245			25,980			25,980
Deferred taxes		857			(144,817	)		(59,104	)
Loss on disposal of property, plant and
equipment		-			19,489			9,777
Provision for doubtful debts		-			1,906			23,120
Provision for (recovery of) obsolete
inventories		(186,646	)		126,524			7,416
Changes in operating assets and liabilities:
Trade receivables		(7,073,894	)		840,070			(4,024,745	)
Bills receivable		(73,117	)		(736,499	)		263,874
Other receivables, prepayments and
deposits		96,624			(232,531	)		167,307
Inventories		(415,127	)		2,860,283			(3,806,209	)
Trade payables		5,288,135			(3,267,345	)		(227,671	)
Bills payable		5,729,402			1,206,680			(579,206	)
Other payables and accrued expenses		340,742			(115,934	)		(691,707	)
Provision for warranty		76,155			41,326			336,157
Income tax payable		69,896			39,948			47,980
Net cash flows provided by (used in) operating
activities		11,439,101			7,239,337			(2,480,551	)
Cash flows from investing activities
Payments to acquire trademarks		-			(206	)		(1,715	)
Payments to acquire and for deposit for
acquisition of property, plant and equipment		(2,062,891	)		(2,879,320	)		(1,414,218	)
Proceeds from sales of property, plant and
equipment		-			31,012			2,413
Payment to acquire marketable securities		(36,571	)		-			-
Decrease (increase) in restricted cash		(2,963,170	)		(623,072	)		113,675
Net cash flows used in investing activities	$	(5,062,632	)	$	(3,471,586	)	$	(1,299,845	)

F-27

Wonder Auto Limited

Consolidated Statements of Cash Flows (Cont’d)

(Stated in US Dollars)

	Year ended December 31,
	2005			2004			2003
Cash flows from financing activities
Advance from a stockholder	$	-		$	5,149		$	-
Dividend paid to stockholders		(6,958,197	)		(4,666,033	)		-
Proceeds from bank loans		12,386,355			9,127,907			8,628,284
Repayment of bank loans		(9,416,624	)		(8,628,534	)		(3,680,895	)
Proceeds from issuance of shares		-			100			-
Net cash flows (used in) provided by financing
activities		(3,988,466	)		(4,161,411	)		4,947,389
Effect of foreign currency translation on cash
and cash equivalents		150,993			74			120
Net (decrease) increase in cash and cash
equivalents		2,538,996			(393,586	)		1,167,113
Cash and cash equivalents - beginning of period		1,829,761			2,223,347			1,056,234
Cash and cash equivalents - end of period	$	4,368,757		$	1,829,761		$	2,223,347
Supplemental disclosures for cash flow
information:
Non-cash financing activity:
Issuance of 100 shares of the Company’s
common stock for the acquisition of
entire equity interests in Man Do Auto
and Jinzhou Halla in conjunction with
the Reorganization	$	-		$	100		$	-
Cash paid for:
Interest		611,326			537,958			384,695
Income taxes	$	826,503		$	823,165		$	670,787

See Notes to Consolidated Financial Statements

F-28

Wonder Auto Limited

Consolidated Statements of Stockholders’ Equity

(Stated in US Dollars)

											Accumulated
									Statutory		other
						Additional			and other		comprehensive
	Common stock					paid-in			reserves		income		Retained
	No. of shares		Amount			capital			(Note 22)		(Note 23)		earnings			Total
Balance, January 1, 2003		-	$	12,000,000		$	-		$	453,605	$	22,911	$	1,960,231		$	14,436,747
Comprehensive income
Net income		-		-			-			-		-		5,217,355			5,217,355
Foreign currency translation     adjustments		-		-			-			-		907		-			907
Total comprehensive income																	5,218,262
Appropriation to reserves		-		-			-			607,586		-		(607,586	)		-
Dividend - Note 17		-		-			-			-		-		(2,835,568	)		(2,835,568	)
Balance, December 31, 2003		-		12,000,000			-			1,061,191		23,818		3,734,432			16,819,441
Issuance of shares - Notes 2     and 21		200		200			13,115,285			-		-		-			13,115,485
Reorganization - Notes 2 and 21		-		(12,000,000	)		(1,115,385	)		-		-		-			(13,115,385	)
Comprehensive income
Net income		-		-			-			-		-		5,587,402			5,587,402
Foreign currency translation     adjustments		-		-			-			-		766		-			766
Total comprehensive income																	5,588,168
Appropriation to reserves		-		-			-			645,488		-		(645,488	)		-
Dividend - Note 17		-		-			-			-		-		(4,694,894	)		(4,694,894	)
Balance, December 31, 2004		200		200			11,999,900			1,706,679		24,584		3,981,452			17,712,815
Comprehensive income
Net income		-		-			-			-		-		6,400,926			6,400,926
Foreign currency translation     adjustments		-		-			-			-		420,086		-			420,086
Total comprehensive income																	6,821,012
Appropriation to reserves		-		-			-			641,169		-		(641,169	)		-
Dividend - Note 17		-		-			-			-		-		(5,680,295	)		(5,680,295	)
Balance, December 31, 2005		200	$	200		$	11,999,900		$	2,347,848	$	444,670	$	4,060,914		$	18,853,532

See Notes to Consolidated Financial Statements

F-29

Wonder Auto Limited

Notes to Consolidated Financial Statements

(Stated in US Dollars)

1. Change of company name

    On April 19, 2004, the Company changed its name from Epoch Victory Limited to Wonder Auto Limited.

2. Corporate information

The Company was incorporated on March 22, 2004 in the British Virgin Islands (the “BVI”) and acts as an investment holding company. Currently the Company has two wholly owned subsidiaries, Man Do Auto Technology Co., Ltd (“Man Do Auto”) and Jinzhou Halla Electrical Equipment Co., Ltd. (“Jinzhou Halla”). The entire issued and outstanding common stock of Man Do Auto is directly held by the Company. In respect of Jinzhou Halla, 61% of its common stock is directly held by the Company whilst 39% is indirectly held by the Company through Man Do Auto.

Man Do Auto is an investment holding company and was incorporated in the BVI on June 5, 2003 with authorized common stock of $50,000 divided into 50,000 ordinary shares of $1 each. At date of inception, all of which were issued. During the reporting periods, Man Do Auto did not have any business activities other than holding 39% equity interest in Jinzhou Halla directly.

Jinzhou Halla was established on March 21, 1996 in the People’s Republic of China (the “PRC”) with registered capital of $12,000,000 (which are not divided into shares). Since its establishment, all the registered capital was issued and fully paid up. For the period from March 21, 1996 to July 25, 2003, 50% equity interest of Jinzhou Halla was held by a Korean Company (the “Korean Company”). On July 25, 2003, this Korean Company sold its entire 50% equity interest to certain of the current beneficial stockholders of the Company, which are not related to the Korean Company in any way. Following the disposal, the Korean Company is no longer related to the Company. Jinzhou Halla is engaged in the manufacturing and distribution of automotive electrical components, namely starters and alternators in the PRC. More details of the principal activities are set out in note 3.

The companies now comprising the group underwent a reorganization (the “Reorganization”) in March to June of 2004 to rationalize its structure. During that time, the Company acquired the entire equity interests of Jinzhou Halla and Man Do Auto by issuance and allotment of its 200 shares of common stock to the then beneficial stockholders of Jinzhou Halla (the “Then Stockholders”) or at their discretion. Following the Reorganization, the Company became the holding company of Man Do Auto and Jinzhou Halla.

Details of common stock of the Company are set out in note 21.

F-30

Wonder Auto Limited

Notes to Consolidated Financial Statements

(Stated in US Dollars)

3. Description of business

The Company is principally engaged in the manufacture and distribution of automotive electrical components, namely starters and alternators, in the PRC.

The products of the Company are suitable for use in various types of automobiles. However, the Company currently has more market presence in the sedan and passenger cars, pickup trucks and sport utility vehicles segments.

The customers include renowned automakers and automotive components suppliers in the PRC. As an integral part of developing customer relationship, the Company also offers to its customers product design and development services for their new car models or automotive components based on customers’ required specifications.

The raw materials used in production are mainly divided into four groups, namely metal parts, semiconductors, chemical and packaging materials.

It is the Company’s policy to only purchase raw materials from selected suppliers, both locally and overseas from South Korea because management believed that the South Korean suppliers provide the Company with goods that domestic manufacturers cannot produce consistently at a high quality.

4. Summary of significant accounting policies

Basis of presentation and consolidation

On June 18, 2004, the Reorganization was completed. As the controlling stockholders and the management of the companies comprising the group before and after the Reorganization are the same, accounting for recapitalization is adopted for the preparation of consolidated financial statements, as such these consolidated financial statements are a continuity of Jinzhou Halla.

The accompanying consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America.

The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant inter-company accounts and transactions have been eliminated in consolidation.

Use of estimates

In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. These accounts and estimates include, but are not limited to, the valuation of accounts receivable, inventories, deferred income taxes, provision for warranty and the estimation on useful lives of property, plant and equipment. Actual results could differ from those estimates.

F-31

Wonder Auto Limited

Notes to Consolidated Financial Statements

(Stated in US Dollars)

4. Summary of significant accounting policies (Cont’d)

Concentrations of credit risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents and trade and bills receivables. As of December 31, 2005, 2004 and 2003, substantially all of the Company’s cash and cash equivalents and restricted cash were held by major financial institutions located in the PRC, which management believes are of high credit quality. With respect to trade and bills receivables, the Company extends credit based on an evaluation of the customer’s financial condition. The Company generally does not require collateral for trade receivables and maintains an allowance for doubtful accounts of trade receivables.

Regarding bills receivable, they are undertaken by the banks to honor the payments at maturity and the customers are required to place deposits with the banks equivalent to certain percentage of the bills amount as collateral. These bills receivable can be sold to any third party at a discount before maturity. The Company does not maintain allowance for bills receivable in the absence of bad debt experience and the payments are undertaken by the banks.

During the reporting periods, customers represented 10% or more of the Company’s consolidated sales are :-

	Year ended December 31,
	2005		2004		2003
Beijing Hyundai Motor Company	$	6,926,159	$	70,757	$	14,128
Shenyang Aerospace Mitsubishi Motors
Engine Manufacturing Company Limited		5,451,367		3,715,043		2,885,242
Dongfeng Yueda Kia Motors
Company Limited		5,346,827		1,849,984		991,632
Shanghai WuLong Auto Components Investment
Company Limited		-		5,621,017		6,242,021
Harbin Dongan Auto Engine Company
Limited		4,511,073		6,681,493		5,260,409
	$	22,285,426	$	17,938,294	$	15,393,432

F-32

Wonder Auto Limited

Notes to Consolidated Financial Statements

(Stated in US Dollars)

4. Summary of significant accounting policies (Cont’d)

Cash and cash equivalents

Cash and cash equivalents include all cash, deposits in banks and other highly liquid investments with initial maturities of three months or less to be cash equivalents. As of December 31, 2005, 2004 and 2003, almost all the cash and cash equivalents were denominated in Renminbi (“RMB”) and were placed with banks in the PRC. They are not freely convertible into foreign currencies and the remittance of these funds out of the PRC is subject to exchange control restrictions imposed by the PRC government. The remaining insignificant balance of cash and cash equivalents were denominated in Hong Kong dollars.

Restricted Cash

Deposits in banks pledged as securities for bills payable (note 8) that are restricted in use are classified as restricted cash under current assets.

Marketable securities

Marketable securities represent the available-for-sale securities and are carried at current fair values by reference to their market prices. The change in fair values is taken to other comprehensive income.

During the reporting periods, there was no significant fluctuation on market prices of these securities and accordingly no change in fair value is taken to other comprehensive income.

There is no significant market price risk as there was no significant fluctuation on market prices and the marketable securities are not significant to the Company.

Allowance of doubtful accounts

The Company establishes an allowance for doubtful accounts based on management’s assessment of the collectibility of trade receivables. A considerable amount of judgment is required in assessing the realization of these receivables, including the current creditworthiness of each customer and the related ageing analysis.

Based on the above assessment, during the reporting periods, the management establishes the general provisioning policy to make allowance equivalent to 100% of gross amount of trade receivables due over 1 year. Additional specific provision is made against trade receivables aged less than 1 year to the extent which they are considered to be doubtful.

Bad debts are written off when identified. The Company extends unsecured credit to customers ranging from three to six months in the normal course of business. The Company does not accrue interest on trade accounts receivable.

F-33

Wonder Auto Limited

Notes to Consolidated Financial Statements

(Stated in US Dollars)

4. Summary of significant accounting policies (Cont’d)

Inventories

Inventories are stated at the lower of cost or market. Cost is determined on a weighted average basis and includes all expenditures incurred in bringing the goods to the point of sale and putting them in a saleable condition. In assessing the ultimate realization of inventories, the management makes judgments as to future demand requirements compared to current or committed inventory levels. Our reserve requirements generally increase as our projected demand requirements; decrease due to market conditions, product life cycle changes. The Company’s policy is to make a 50% general provision for inventories aged over 1 year.

Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation. Cost represents the purchase price of the asset and other costs incurred to bring the asset into its existing use.

Depreciation is provided on straight-line basis over their estimated useful lives. The principal depreciation rates are as follows :-

	Annual rate	Residual value
Buildings	3%	10%
Plant and machinery	9%	10%
Motor vehicles	9%	10%
Furniture, fixtures and equipment	15%	10%
Tools and equipment	15%	Nil to 10%
Leasehold improvements	20%	Nil

Maintenance or repairs are charged to expense as incurred. Upon sale or disposition, the applicable amounts of asset cost and accumulated depreciation are removed from the accounts and the net amount less proceeds from disposal is charged or credited to income.

Trademarks and patents

Trademarks and patents are stated at cost less accumulated amortization. Amortization is provided on a straight-line basis over their useful lives of 10 years granted from the relevant PRC authorities.

Know-how

Know-how is determined to have an indefinite useful life pursuant to the purchase contracts as detailed in note 11. It is not subject to amortization until its useful life is determined to be no longer indefinite.

Know-how is stated at cost of purchase less any identified impairment losses in the annual impairment test.

F-34

Wonder Auto Limited

Notes to Consolidated Financial Statements

(Stated in US Dollars)

4. Summary of significant accounting policies (Cont’d)

Land use right

Land use right is stated at cost less accumulated amortization. Amortization is provided using the straight-line method over the terms of the lease of 30 years obtained from the relevant PRC land authority.

Impairment of long-lived assets

Long-lived assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. The Company recognizes impairment of long-lived assets in the event that the net book values of such assets exceed the future undiscounted cashflows attributable to such assets. During the reporting periods, the Company has not identified any indicators that would require testing for impairment.

Revenue recognition

Revenue from sales of the Company’s products is recognized when the significant risks and rewards of ownership have been transferred to the buyer at the time when the products are put into use by its customers, the sales price is fixed or determinable and collection is reasonably assured.

Advertising, transportation, research and development expenses

Advertising, transportation, research and development, and other product-related costs are charged to expense as incurred.

Advertising expenses amounted to $15,992, $12,061 and $15,500 for three years ended December 31, 2005, 2004 and 2003 respectively are included in selling expenses.

Transportation expenses amounted to $342,805, $347,134 and $276,965 for three years ended December 31, 2005, 2004 and 2003 respectively are included in selling expenses.

Research and development expenses amounted to $477,225, $278,784 for two years ended December 31, 2005 and 2004 respectively are included in cost of sales.

F-35

Wonder Auto Limited

Notes to Consolidated Financial Statements

(Stated in US Dollars)

4. Summary of significant accounting policies (Cont’d)

Warranty

It is the policy of the Company to provide after sales support by way of a warranty programme. The Company provided warranties to certain customers with warranty periods ranging from two years or 50,000 km to three years or 60,000 km, whichever comes first.

Based on the past experience, the Company sets up a policy of making a general provision for warranty such that the closing balance of this provision equal to 2% of sales during the reporting periods.

Stock-based compensation

During the reporting periods, the Company did not make any stock-based compensation payments.

Income taxes

The Company uses the asset and liability method of accounting for income taxes pursuant to SFAS No. 109 “Accounting for Income Taxes”. Under the asset and liability method of SFAS 109, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and loss carryforwards and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

Dividends

Dividends are recorded in Company’s financial statements in the period in which they are declared.

Off-balance sheet arrangements

The Company does not have any off-balance sheet arrangements.

Comprehensive income

The Company has adopted SFAS 130, “Reporting Comprehensive Income”, which establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Components of comprehensive income (loss) include net income and foreign currency translation adjustments.

F-36

Wonder Auto Limited

Notes to Consolidated Financial Statements

(Stated in US Dollars)

4. Summary of significant accounting policies (Cont’d)

Foreign currency translation

The functional currency of the Company is RMB and RMB is not freely convertible into foreign currencies. The Company maintains its financial statements in the functional currency. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at rates of exchange prevailing at the balance sheet date. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchanges rates prevailing at the dates of the transaction. Exchange gains or losses arising from foreign currency transactions are included in the determination of net income for the respective periods.

For financial reporting purposes, the financial statements of the Company which are prepared using the functional currency have been translated into United States dollars. Assets and liabilities are translated at the exchange rates at the balance sheet dates and revenue and expenses are translated at the average exchange rates and stockholders’ equity is translated at historical exchange rates. Any translation adjustments resulting are not included in determining net income but are included in foreign exchange adjustment to other comprehensive income, a component of stockholders’ equity. The exchange rates in effect at December 31, 2005, 2004 and 2003 were RMB1 for $0.1239, $0.1207 and $0.1207 respectively. There is no significant fluctuation in exchange rate for the conversion of RMB to US dollars after the balance sheet date.

Fair value of financial instruments

The carrying values of the Company’s financial instruments, including cash and cash equivalents, restricted cash, marketable securities, trade, bills and other receivables, deposits, dividend payable, trade, bills and other payables approximate their fair values due to the short-term maturity of such instruments. The carrying amounts of bank borrowings approximate their fair values because the applicable interest rates approximate current market rates.

It is management’s opinion that the Company is not exposed to significant interest, price or credit risks arising from these financial instruments.

In respect of foreign currency risk, the Company is exposed to this risk arising from import purchase transactions and recognized trade payables as they will affect the future operating results of the Company. The Company did not have any hedging transactions during the reporting periods. As the functional currency of the Company is RMB, the exchange difference on translation to US dollars for reporting purpose is taken to other comprehensive income.

Basic and diluted earnings per share

The Company reports basic earnings per share in accordance with SFAS No. 128, “Earnings Per Share”. Basic earnings per share is computed using the weighted average number of shares outstanding during the periods presented. The weighted average number of shares of the Company represents the common stock outstanding during the reporting periods.

F-37

Wonder Auto Limited

Notes to Consolidated Financial Statements

(Stated in US Dollars)

4. Summary of significant accounting policies (Cont’d)

Recently issued accounting pronouncements

In November 2004, the FASB issued SFAS No. 151, “Inventory costs - an amendment of ARB No. 43, Chapter 4” (“SFAS 151”). SFAS 151 amends ARB 43, Chapter 4 to clarify that “abnormal” amount of idle freight, handling costs and spoilage should be recognized as current period charges. SFAS 151 is effective for inventory costs incurred during fiscal years beginning after June 15, 2005.

In December 2004, the FASB issued SFAS No. 123R, "Share-Based Payment" ("SFAS 123R"), which revises SFAS No. 123, "Accounting for Stock Based Compensation", and supersedes APB 25. Among other items, SFAS 123R eliminates the use of APB 25 and the intrinsic value method of accounting, and requires companies to recognize in the financial statements the cost of employee services received in exchange for awards of equity instruments, based on the grant-date fair value of those awards. This cost is to be recognized over the period during which an employee is required to provide service in exchange for the award (typically the vesting period). SFAS 123R also requires that benefits associated with tax deductions in excess of recognized compensation cost be reported as a financing cash inflow, rather than as an operating cash flow as required under current literature.

SFAS 123R permits companies to adopt its requirements using either a "modified prospective" method, or a "modified retrospective" method.

Under the "modified prospective" method, compensation cost is recognized in the financial statements beginning with the effective date, based on the requirements of SFAS 123R for all share-based awards granted or modified after that date, and based on the requirements of SFAS 123 for all unvested awards granted prior to the effective date of SFAS 123R. Under the "modified retrospective" method, the requirements are the same as under the "modified prospective" method, but this method also permits entities to restate financial statements of previous periods based on proforma disclosures made in accordance with SFAS 123.

In May 2005, the FASB issued SFAS No. 154, "Accounting Changes and Error Corrections" ("SFAS 154"), which changes the requirements for the accounting for and reporting of a change in accounting principle. The statement requires retrospective application to prior period financial statements of changes in accounting principle, unless impracticable to do so. It also requires that a change in the depreciation, amortization, or depletion method for long-lived non-financial assets be accounted as a change in accounting estimate, effected by a change in accounting principle. Accounting for error corrections and accounting estimate changes will continue under the guidance in APB Opinion 20, "Accounting Changes," as carried forward in this pronouncement. The statement is effective for fiscal years beginning after December 15, 2005.

F-38

Wonder Auto Limited

Notes to Consolidated Financial Statements

(Stated in US Dollars)

4. Summary of significant accounting policies (Cont’d)

Recently issued accounting pronouncements (cont’d)

In November 2005, the FASB issued FSP Nos. FAS 115-1 and 124-1, "The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments". This FSP addresses the determination as to when an investment is considered impaired, whether the impairment is 'other-than-temporary', and the measurement of an impairment loss. The investment is impaired if the fair value is less than cost. The impairment is 'other-than-temporary' for equity securities and debt securities that can contractually be prepaid or otherwise settled in such a way that the investor would not recover substantially all of its cost. If 'other-than-temporary', an impairment loss shall be recognized in earnings equal to the difference between the investment's cost and its fair value. The guidance in this FSP is effective in reporting periods beginning after December 15, 2005.

The Company has adopted all the above accounting procurements effective January 1, 2006 and considers that they have no material impact on these consolidated financial statements.

5.             Finance costs

	Year ended December 31,
	2005		2004		2003
Interest expenses	$	611,326	$	537,958	$	384,695
Bills discounting charges		186,103		68,524		109,007
Bank charges and net exchange loss		41,525		36,659		55,899
	$	838,954	$	643,141	$	549,601

6. Income taxes

BVI

The Company and Man Do Auto were incorporated in the BVI and, under the current laws of the BVI, are not subject to income taxes.

F-39

Wonder Auto Limited

Notes to Consolidated Financial Statements

(Stated in US Dollars)

6. Income taxes (Cont’d)

PRC

Enterprises income tax (“EIT”) to Jinzhou Halla in the PRC is charged at 27%, in which 24% for national tax and 3% for local tax, of the assessable profits. As approved by the local tax authority in the PRC, Jinzhou Halla was entitled to two years’ exemption from EIT followed by three years’ 50% tax reduction, commencing from the first cumulative profit-making year in the fiscal financial year of 2001. Accordingly, Jinzhou Halla was subject to tax rate of 13.5% for 2003, 2004 and 2005. Furthermore, Jinzhou Halla, being a Foreign Investment Enterprise (“FIE”), is engaged in advanced technology industry, Jinzhou Halla was approved to enjoy a further three years’ 50% tax reduction for 2006, 2007 and 2008. During the three years ended December 31, 2005, 2004 and 2003, tax benefit related to the above concession amounting to $997,482, $854,989 and $825,481 respectively.

Jinzhou Halla, being a FIE, was entitled to another two special tax concessions. Firstly, equivalent to 40% of the purchase price of qualifying domestic capital expenditure as defined and approved under the relevant PRC income tax rule can be used to offset against EIT. Jinzhou Halla obtained approval from the relevant tax authority for such capital investment and tax concession amounting to $70,039, $136,690 and $160,221 were granted for the three years ended December 31, 2005, 2004 and 2003 respectively.

Secondly, if there is a 10% increase in the current year’s domestic development expenses over the prior year, amount equivalent to 50% of the current year’s expenses can be used to offset against EIT. Based on the approval from the relevant tax authority, tax concession amounting to $30,188 was granted for the year ended December 31, 2005.

The components of the provision (benefit) for income taxes from continuing operations are :-

	Year ended December 31,
	2005		2004			2003
Current taxes - PRC	$	896,399	$	863,115		$	724,364
Deferred taxes - PRC		857		(144,817	)		(59,104	)
	$	897,256	$	718,298		$	665,260

F-40

Wonder Auto Limited

Notes to Consolidated Financial Statements

(Stated in US Dollars)

6. Income taxes (Cont’d)

The effective income tax expenses differs from the PRC statutory income tax rate of 27% from continuing operations in the PRC as follows :-

	Year ended December 31,
	2005			2004			2003
Provision for income taxes at statutory
income tax rate	$	1,970,509		$	1,702,539		$	1,588,306
Non-deductible items for tax		31,817			11,845			67,126
Income not subject to tax		(7,361	)		(4,407	)		(4,470	)
Tax concessions		(1,097,709	)		(991,679	)		(985,702	)
	$	897,256		$	718,298		$	665,260

Deferred tax assets (liabilities) as of December 31, 2005, 2004 and 2003 are composed of the following :-

	As of December 31,
	2005			2004			2003
The PRC
Current deferred tax assets:
Allowance for doubtful debts	$	5,231		$	5,096		$	4,839
Provision for obsolete inventories		26,211			50,481			33,398
Provision for warranty		123,444			110,092			104,510
Accrued liabilities		37,188			29,173			32,883
Others		69,474			96,391			-
	$	261,548		$	291,233		$	175,630
Non current deferred tax assets
(liabilities):
Depreciation of property, plant
and equipment	$	298,021		$	235,532		$	187,034
Amortization of land use right		12,621			12,862			13,426
Amortization of know-how		(158,326	)		(135,557	)		(116,856	)
	$	152,316		$	112,837		$	83,604

7. Earnings per share

During the reporting periods, the Company had no dilutive instruments. Accordingly, the basic and diluted earnings per share are the same.

The earnings per share is not presented for the year of 2003 because the Company’s common stock in 2003 represented the outstanding registered capital of Jinzhou Halla which are not divided into number of shares.

F-41

Wonder Auto Limited

Notes to Consolidated Financial Statements

(Stated in US Dollars)

8. Restricted cash

	As of December 31,
	2005		2004		2003
Bank deposits held as collateral for bills payable
	$	3,597,609	$	634,439	$	11,367

When the Company intends or is requested to settle its suppliers by issuance of bills, it is required to place deposits with banks equal to 50% of the bills amount at the time of issuance. These deposits will be used to settle the bills at maturity.

9. Other receivables, prepayments and deposits

	As of December 31,
	2005		2004		2003
Advances to staff	$	110,178	$	48,023	$	48,132
Value added tax and other tax recoverable		145,669		302,655		119,644
Prepayments		126,573		116,597		77,864
Other receivables		10,486		12,357		1,436
	$	392,906	$	479,632	$	247,076

10.Inventories

	As of December 31,
	2005			2004			2003
Raw materials	$	2,733,814		$	2,534,627		$	3,660,256
Work-in-progress		301,958			208,708			263,986
Finished goods		4,965,991			4,641,691			6,321,061
		8,001,763			7,385,026			10,245,303
Provision for obsolete inventories		(194,153	)		(373,932	)		(247,392	)
	$	7,807,610		$	7,011,094		$	9,997,911

Provision for (recovery of) obsolete inventories of ($186,646), $126,524 and $7,416 were (credited) charged to operations during the three years ended December 31, 2005, 2004 and 2003 respectively.

F-42

Wonder Auto Limited

Notes to Consolidated Financial Statements

(Stated in US Dollars)

11.Know-how

In March 1996, the Company entered into two contracts with the Korean Company (note 2) to purchase two technical know-how in relation to product design, manufacturing and quality control of alternators and starters at a cash consideration of $1.36 million. This consideration was mutually agreed between Jinzhou Halla and the Korean Company. Under the terms of the contracts, the Company is able to use such know-how for unlimited period of time.

Since its acquisition, no indicator of impairment was identified and accordingly it is stated at cost.

12.          Trademarks and patents

	As of December 31,
	2005			2004			2003
Cost	$	3,471		$	3,381		$	3,175
Accumulated amortization		(1,564	)		(1,185	)		(847	)
	$	1,907		$	2,196		$	2,328

During the three years ended December 31, 2005, 2004 and 2003 amortization charge was $342, $338 and $251 respectively.

The estimated aggregate amortization expenses for trademarks and patents for the five succeeding years is as follows :-

Year
2006	$	348
2007		348
2008		348
2009		348
2010		348
	$	1,740

F-43

Wonder Auto Limited

Notes to Consolidated Financial Statements

(Stated in US Dollars)

13.Property, plant and equipment

	As of December 31,
		2005			2004			2003
Costs:
Buildings	$	4,869,688		$	4,553,961		$	4,000,592
Plant and machinery		10,440,533			8,932,890			6,633,290
Furniture, fixtures and equipment		309,952			236,491			181,437
Tools and equipment		877,572			672,982			443,681
Leasehold improvements		24,773			-			-
Motor vehicles		341,337			298,806			214,434
		16,863,855			14,695,130			11,473,434
Accumulated depreciation		(6,215,773	)		(4,908,996	)		(3,934,852	)
Net	$	10,648,082		$	9,786,134		$	7,538,582

An analysis of buildings, plant and machinery pledged to banks for banking loans (note 19a) is as follows :-

	As of December 31,
	2005			2004			2003
Costs:
Buildings	$	3,810,749		$	388,047		$	388,038
Plant and machinery		2,663,964			2,595,456			-
		6,474,713			2,983,503			388,038
Accumulated depreciation		(1,593,770	)		(617,807	)		(42,033	)
Net	$	4,880,943		$	2,365,696		$	346,005

	Year ended December 31,
		2005		2004		2003
Depreciation	$	348,473	$	191,840	$	11,641

During the reporting periods, depreciation is included in :-

	Year ended December 31,
	2005		2004		2003
Cost of sales and overheads of inventories	$	1,057,150	$	901,873	$	723,132
Other		101,411		84,644		85,742
	$	1,158,561	$	986,517	$	808,874

During the years ended December 31, 2004 and 2003, property, plant and equipment with carrying amounts of $50,501 and $12,190 were disposed of at considerations of $31,012 and $2,413 resulting in losses of $19,489 and $9,777 respectively.

F-44

Wonder Auto Limited

Notes to Consolidated Financial Statements

(Stated in US Dollars)

14.Land use right

	As of December 31,
	2005			2004			2003
Right to use land	$	800,027		$	779,453		$	779,434
Accumulated amortization		(220,007	)		(188,368	)		(162,382	)
	$	580,020		$	591,085		$	617,052

The Company obtained the right from the relevant PRC land authority for a period from August 1996 to August 2026 to use the land on which the office premises, production facilities and warehouse of the Company are situated. This right was pledged to a bank for the bank loans granted to the Company (Note 19b).

During the three years ended December 31, 2005, 2004 and 2003, amortization amounted to $26,245, $25,980 and $25,980 respectively.

The estimated aggregate amortization expenses for land use right for the five succeeding years is as follows :-

Year
2006	$	26,726
2007		26,726
2008		26,726
2009		26,726
2010		26,726
	$	133,630

15.Other payables and accrued expenses

	As of December 31,
	2005		2004		2003
Accrued audit fee	$	110,114	$	53,702	$	-
Other accrued expenses		256,102		35,980		-
Other tax payable		12,479		17,596		61,550
Payable for acquisition of property, plant
and equipment		166,789		145,813		178,908
Staff welfare payable - Note 15a		82,325		101,156		229,719
Other payables		82,013		-		-
	$	709,822	$	354,247	$	470,177

Note :-

a. Staff welfare payable represents accrued staff medical, industry injury claims, labour and unemployment insurances. Such contribution is based on certain percentage of salaries.

F-45

Wonder Auto Limited

Notes to Consolidated Financial Statements

(Stated in US Dollars)

16.Provision for warranty

During the three years ended December 31, 2005, 2004 and 2003, warranty expenses amounted to $1,067,163, $764,658 and $752,145 respectively.

17.Dividends

The dividends of $4,694,894 and $2,835,568 declared in the years ended December 31, 2004 and 2003 were made by Jinzhou Halla to the Then Stockholders in proportion to the percentage of their holdings of registered capital.

During the year ended December 31, 2005, a dividend of $28,401.48 per share was declared by the Company.

18.Amount due to a stockholder

The amount is interest-free, unsecured and repayable on demand.

19.Secured bank loans

	As of December 31,
	2005		2004		2003
Bank loans repayable as follows:
Within 1 year	$	7,431,813	$	9,127,907	$	8,628,284
After 1 year but within 2 years		4,954,542		-		-
	$	12,386,355	$	9,127,907	$	8,628,284

As of December 31, 2005, the Company’s banking facilities are composed of the following :-

Facilities granted	Granted		Amount Utilized		Unused
Secured bank loans	$	14,120,445	$	12,386,355	$	1,734,090

The above banking loans were secured by the following :-

(a)	Property, plant and equipment with carrying value of $4,880,943 respectively (note 13);
(b)	Land use right with carrying value of $580,020 (note 14); and
(c)	Guarantees executed by the Company’s sole director who is also a stockholder of the Company and a related company controlled by certain of the Company’s stockholders.

During the reporting periods, there was no covenant requirement under the banking facilities granted to the Company.

F-46

Wonder Auto Limited

Notes to Consolidated Financial Statements

(Stated in US Dollars)

20. Commitments and contingencies

  a. Capital commitment

As of December 31, 2005, the Company had capital commitments amounting to $186,828 in respect of the acquisition of property, plant and equipment which were contracted for but not provided in the financial statements.

 b. Operating lease arrangement

As of December 31, 2005, the Company had two non-cancelable operating leases for its warehouses. The leases will expire in 2006 and 2007 respectively and the expected payments are as follows :-

Year
2006	$	2,543
2007		1,282
	$	3,825

The rental expense relating to the operating leases was $3,764 and $4,955 for the two years ended December 31, 2005 and 2004 respectively.

21. Common stock

The common stock of the Company before the Reorganization (note 2) represented the issued and paid up registered capital of Jinzhou Halla of $12,000,000.

In 2004 the Company was incorporated for the purpose of the Reorganization. Its authorized, issued and outstanding common stock is as below.

Authorized

On March 22, 2004, the Company was incorporated with authorized common stock of $50,000 divided into 50,000 shares of par value of $1 per share.

F-47

Wonder Auto Limited

Consolidated Statements of Stockholders’ Equity

(Stated in US Dollars)

21. Common stock (Cont’d)

Issued and outstanding

All the Company’s shares were issued to the Then Stockholders or at their discretion as below.

At date of incorporation on March 22, 2004, 1 share of $1 each of the Company’s common stock was issued at par for cash.

On April 23, 2004, the Company issued 60 shares of $1 at par for cash.

On May 11, 2004, the Company issued 39 shares of $1 each and in return for the issuance of 39 shares the Then Stockholders transferred to the Company the entire equity interest in Man Do Auto which holds the 39% equity interest in Jinzhou Halla. The consideration for such issuance was determined to be $5,000,000 (which represents the net book value of Man Do Auto at the date of transfer) resulting in $4,999,961 credited to the additional paid-in capital of the Company.

On June 18, 2004, the Company issued 61 shares of $1 each at a consideration of $8,115,385 (representing the value of 61% direct equity interest in Jinzhou Halla agreed between the Company and the Then Stockholders at the date of issuance) with $8,115,324 credited to the additional paid-in capital of the Company.

On June 18, 2004, the Company issued 39 shares of US$1.00 each at par for cash.

22.          Statutory and other reserves

The Company’s statutory and other reserves comprise statutory reserve and enterprise expansion fund of Jinzhou Halla in the PRC.

	As of December 31,
	2005		2004		2003
Statutory reserve	$	2,292,614	$	1,651,445	$	1,005,957
Enterprise expansion fund		55,234		55,234		55,234
	$	2,347,848	$	1,706,679	$	1,061,191

Statutory reserve

In accordance with the relevant laws and regulations of the PRC and articles of association of Jinzhou Halla, it is required to appropriate 10% of its net income, after offsetting any prior years’ losses, to the statutory reserve. When the balance of such reserve reaches 100% of the registered capital, any further appropriation is optional. Upon approval from the board of directors of Jinzhou Halla, the statutory reserve can be used to offset accumulated losses or to increase registered capital.

F-48

Wonder Auto Limited

Notes to Consolidated Financial Statements

(Stated in US Dollars)

22.  Statutory and other reserves (Cont’d)

   Enterprise expansion fund

In accordance with the relevant laws and regulations of the PRC and articles of association of Jinzhou Halla, the appropriation of income to this fund is made in accordance with the recommendation of the board of directors of Jinzhou Halla. Upon approval by the board, it can be used for future expansion or to increase registered capital.

23.              Accumulated other comprehensive income

The accumulated other comprehensive income consists of foreign currency translation adjustments as follows :-

	Foreign
	currency
	translation
	adjustments
Balance, January 1, 2003	$	22,911
Foreign currency translation adjustments		907
Balance, December 31, 2003		23,818
Foreign currency translation adjustments		766
Balance, December 31, 2004		24,584
Foreign currency translation adjustments		420,086
Balance, December 31, 2005	$	444,670

24.Defined contribution plan

The Company has a defined contribution plan for all qualified employees in the PRC. The employer and its employees are each required to make contributions to the plan at the rates specified in the plan. The only obligation of the Company with respect to retirement scheme is to make the required contributions under the plan. No forfeited contribution is available to reduce the contribution payable in the future years. The defined contribution plan contributions were charged to the consolidated statements of operations. The Company contributed $417,824, $388,461 and $196,010 for the three years ended December 31, 2005, 2004 and 2003 respectively.

F-49

Wonder Auto Limited

Notes to Consolidated Financial Statements

(Stated in US Dollars)

25. Segment information

The Company is engaged in the manufacture and distribution of automotive electrical components including alternators and starters in the PRC. The Company has two reportable segments, alternators and starters, based on the type of products. Information for the two segments is disclosed under FAS 131, “Disclosures about Segments of an Enterprise and Related Information” as below :-

	Alternators						Starters						Total
	Year ended December 31						Year ended December 31						Year ended December 31
	2005		2004		2003		2005		2004		2003		2005		2004		2003
Revenue from external
customers	$	30,118,341	$	28,119,116	$	26,430,399	$	17,944,464	$	14,146,758	$	13,360,491	$	48,062,805	$	42,265,874	$	39,790,890
Interest income		17,844		9,017		10,219		10,632		4,537		5,165		28,476		13,554		15,384
Interest expenses		383,085		357,899		255,527		228,241		180,059		129,168		611,326		537,958		384,695
Amortization		16,661		17,509		17,423		9,926		8,809		8,808		26,587		26,318		26,231
Depreciation		963,870		805,037		609,744		194,691		181,480		199,130		1,158,561		986,517		808,874
Segment profit		3,904,964		3,413,013		3,672,782		3,384,753		2,897,393		2,119,833		7,289,717		6,310,406		5,882,615
Segment assets		35,053,650		27,265,236		26,891,530		16,990,104		9,708,836		10,751,564		52,043,754		36,974,072		37,643,094
Expenditure for segment
assets	$	1,292,607	$	1,915,749	$	940,566	$	770,284	$	963,777	$	475,367	$	2,062,891	$	2,879,526	$	1,415,933

F-50

Wonder Auto Limited

Notes to Consolidated Financial Statements

(Stated in US Dollars)

25.           Segment information (Cont’d)

A reconciliation is provided for unallocated amounts relating to corporate operations which is not included in the segment information.

	Year ended December 31,
	2005			2004			2003
Total consolidated revenue	$	48,062,805		$	42,265,874		$	39,790,890
Total profit for reportable segments	$	7,289,717		$	6,310,406		$	5,882,615
Unallocated amounts relating to
relating to operations:
Interest income		63			-			-
Other income		9,753			-			-
Other general expenses		(1,351	)		(4,706	)		-
Income before income taxes	$	7,298,182		$	6,305,700		$	5,882,615

	As of December 31,
	2005		2004		2003
Assets
Total assets for reportable segments	$	52,043,754	$	36,974,072	$	37,643,094
Cash and cash equivalents		9,008		543		-
Marketable securities		37,159		-		-
	$	52,089,921	$	36,974,615	$	37,643,094

All of the Company’s long-lived assets are located in the PRC. Geographic information about the revenues, which are classified based on the customers, is set out as follows :-

	As of December 31,
	2005		2004		2003
PRC	$	47,416,125	$	41,920,125	$	39,604,087
Others		646,680		345,749		186,803
Total	$	48,062,805	$	42,265,874	$	39,790,890

26.Related party transactions

Apart from the transactions as disclosed in notes 11, 18 and 19 to the financial statements, during the year ended December 31, 2003, the Company paid technical service fees to the Korean Company amounted to $131,598 based on a pre-agreed basis by both parties.

F-51

MGCC INVESTMENT STRATEGIES, INC.

(A Development Stage Enterprise)

 BALANCE SHEET

	March 31,			December 31,
	2006			2005
	(Unaudited)
ASSETS
CURRENT ASSETS
Cash	$	1,388		$	100
Total Assets	$	1,388		$	100
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable	$	11,809		$	10,609
Stockholder loan		11,000			--
Total Liabilities		22,809			10,609
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock, authorized 10,000,000 shares;
$0.0001 par value; none issued and outstanding		--			--
Common stock, authorized 90,000,000 shares;
$0.0001 par value; 1,156,850 shares issued and
outstanding at March 31, 2006 and December 31, 2005
(restated to give effect to a 1 for 20 reverse stock split
effected February 13, 2006)		116			116
Additional contributed capital		194,850			194,850
Deficit accumulated during the development stage		(216,387	)		(205,475	)
Total Stockholder's Deficit		(21,421	)		(10,509	)
Total Liabilities and Stockholder's Deficit	$	1,388		$	100

See accompanying notes to financial statements

F-52

MGCC INVESTMENT STRATEGIES, INC.

(A Development Stage Enterprise)

STATEMENT OF OPERATIONS

							For the period
							June 8, 2000
	For the Three Months						(Inception) to
	Ended March 31,						March 31,
	2006			2005			2006
	(Unaudited)			(Unaudited)			(Unaudited)
ADMINISTRATIVE EXPENSES
Stock based compensation							$	54,000
Consulting fees				$	1,560			15,000
Professional fees	$	10,452			21,674			118,033
Interest expense		--			--			1,032
Miscellaneous		460			5,040			59,353
Total Administrative Expenses		10,912			28,274			247,418
LOSS BEFORE EXTRAORDINARY GAIN		(10,912	)		(28,274	)		(247,418	)
EXTRAORDINARY GAIN ON DEBT FORGIVENESS		--			--			31,031
NET LOSS	$	(10,912	)	$	(28,274	)	$	(216,387	)
NET LOSS PER SHARE OF COMMON STOCK
(basic and diluted)
Continuing operations (Restated)	$	(0.009	)	$	(0.024	)	$	(0.570	)
Extraordinary gain (Restated)							$	0.072
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING (basic and diluted)
(Restated)		1,156,850			1,156,850			433,784

See accompanying notes to financial statements

F-53

MGCC INVESTMENT STRATEGIES, INC.

(A Development Stage Enterprise)

STATEMENT OF CASH FLOWS

							For the period
							June 8, 2000
	For the Three Months						(Inception) to
	Ended March 31,						March 31,
	2006			2005			2006
	(Unaudited)			(Unaudited)			(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
OF CONTINUING OPERATIONS
Net loss	$	(10,912	)	$	(28,274	)	$	(216,387	)
Extraordinary gain on debt forgiveness								(31,031	)
Net loss from continuing activities		(10,912	)		(28,274	)		(247,418	)
Common stock issued for incorporation fees								2,632
Stock based compensation								54,000
Changes in assets and liabilities
Accounts payable		1,200			12,876			11,809
Due to principal stockholder		11,000						30,280
Net cash used in operating activities
of continuing operations		1,288			(15,398	)		(148,697	)
CASH FLOWS FROM INVESTING ACTIVITIES
OF CONTINUING OPERATIONS
Registration costs								(14,646	)
Sale of common stock								133,700
Net cash provided by investing activities
of continuing operations		--			--			119,054
CASH FLOW FROM EXTRAORDINARY ITEM
Forgiveness of debt		--			--			31,031
Net increase (decrease) in cash		1,288			(15,398	)		1,388
CASH AT BEGINNING OF PERIOD		100			46,740			--
CASH AT END OF PERIOD	$	1,388		$	31,342		$	1,388
SUPPLEMENTAL CASH FLOW INFORMATION:
Non-cash Activities
Issuance of 50,000 shares of common stock
to principal stockholder of Company (Restated)							$	2,632
Issuance of 90,000 shares of common stock
to consultants (Restated)								54,000
Forgiveness of stockholder loans								19,280

See accompanying notes to financial statements

F-54

MGCC INVESTMENT STRATEGIES, INC.

(A Development Stage Enterprise)

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

NOTE A - CONDENSED FINANCIAL STATEMENTS

In the opinion of the Company, the accompanying condensed financial statements include all adjustments (consisting of normal recurring accruals) which are necessary for a fair presentation of the results for the periods presented. Certain information and footnote disclosure, normally included in the financial statements prepared in accordance with generally accepted accounting principles, have been condensed and omitted. The results of operations for the three months ended March 31, 2006 are not indicative of the results of oper- ations for the year ended December 31, 2006. The condensed financial statements should be read in con- junction with the Company's financial statements included in its annual Form 10 KSB for the year ended December 31, 2005.

NOTE B - GOING CONCERN

The Company was incorporated on June 8, 2000 and to date has had no operating activities and no significant capital contributions. The Company is seeking to merge with a private operating company and then will attempt to raise additional capital for investment and working capital purposes. There is no assurance that the Company will find a successful merger candidate nor is there any assurance that if a merger is successful that the Company will be able to raise adequate additional capital in the equity markets. These matters raise substantial doubt about the Company's ability to continue as a going concern. However, the accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

NOTE C - RELATED PARTY TRANSACTIONS

The Company has been advanced $11,000 by its principal shareholder. These loans do not have a maturity, are payable upon demand, and bear interest at 5%.

F-55

MGCC INVESTMENT STRATEGIES, INC.

AUDITED FINANCIAL STATEMENTS

FOR THE YEARS ENDED

DECEMBER 31, 2005, 2004 and 2003

F-56

CONTENTS
Report of Independent Registered Public Accounting Firm	1
Balance Sheets	2
Statements of Operations	3
Statements of Cash Flows	4
Statements of Stockholders’ Equity (Deficit)	5
Notes to Financial Statements	6

F-57

Report of Independent Registered Public Accounting Firm

To the Board of Directors

MGCC Investment Strategies, Inc.

Argyle, TX

We have audited the accompanying balance sheets of MGCC Investment Strategies, Inc. (a Development Stage Enterprise) as of December 31, 2005 and 2004 and the related statements of operations, stockholders’ equity (deficit), and cash flows for each of the three years in the period ended December 31, 2005. 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 the 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. 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 estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2005 and 2004, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2005, in conformity with U.S. generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note D to the financial statements, the Company has incurred cumulative losses of $205,475 since inception, and there are existing uncertain conditions the Company faces relative to its ability to obtain capital and operate successfully. These conditions raise substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters are also described in Note D. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.

/s/ Meyler & Company, LLC

Middletown, NJ

March 6, 2006

F-58

MGCC INVESTMENT STRATEGIES, INC.

(A Development Stage Enterprise)

BALANCE SHEETS

	December 31,
	2005			2004
ASSETS
CURRENT ASSETS
Cash	$	100		$	46,740
Total Current Assets	$	100		$	46,740
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable	$	10,609		$	2,639
Total Current Liabilities		10,609			2,639
STOCKHOLDERS’ EQUITY (DEFICIT)
Preferred stock, authorized 10,000,000 shares;
$0.0001 par value, none issued and outstanding
Common stock, authorized 90,000,000
Shares; $0.0001 par value; issued
and outstanding 1,156,850 shares at
December 31, 2005 and 2004 (restated to give effect
to 1 for 20 reverse stock split effected February 13, 2006)		116			116
Additional contributed capital (restated)		194,850			194,850
Deficit accumulated during the development stage		(205,475	)		(150,865	)
Stockholders Equity (Deficit)		(10,509	)		44,101
	$	100		$	46,740

See accompanying notes to financial statements.

F-59

MGCC INVESTMENT STRATEGIES, INC.

(A Development Stage Enterprise)

STATEMENTS OF OPERATIONS

										For the Period
										June 8, 2000
	For the Year									(Inception) to
	Ended December 31,									December 31,
	2005			2004			2003			2005
EXPENSES FROM CONTINUING OPERATIONS
Stock based compensation				$	54,000					$	54,000
Professional fees	$	58,370			27,668		$	21,543			107,581
Consulting fees to former principal
stockholder								10,000			15,000
Miscellaneous		26,239			28,531			698			58,893
Interest expense		1,032									1,032
LOSS BEFORE EXTRAORDINARY GAIN		(85,641	)		(110,199	)		(32,241	)		(236,506	)
EXTRAORDINARY GAIN ON DEBT FORGIVENESS		31,031									31,031
NET LOSS	$	(54,610	)	$	(110,199	)	$	(32,241	)	$	(205,475	)
NET LOSS PER SHARE OF COMMON STOCK
(basic and diluted)
Continuing operations (Restated)	$	(0.08	)	$	(0.12	)	$	(0.55	)	$	(0.59	)
Extraordinary gain (Restated)		0.03									0.08
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING (basic and diluted)
(Restated)		1,156,000			896,563			58,613			401,407

See accompanying notes to financial statements.

F-60

MGCC INVESTMENT STRATEGIES, INC.

(A Development Stage Enterprise)

STATEMENTS OF CASH FLOWS

										For the Period
										June 8, 2000
	For the Year									(Inception) to
	Ended December 31,									December 31,
	2005			2004			2003			2005
CASH FLOWS FROM OPERATING ACTIVITIES
OF CONTINUING OPERATIONS
Net loss	$	(54,610	)	$	(110,199	)	$	(32,241	)	$	(205,475	)
Extraordinary gain on debt forgiveness		(31,031	)								(31,031	)
Net loss from continuing operations		(85,641	)		(110,199	)		(32,241	)		(236,506	)
Common stock issued for incorporation fees											2,632
Stock based compensation					54,000						54,000
Changes in assets and liabilities
Accounts payable		7,970			(11,804	)		18,443			10,609
Due to principal stockholder					(11,447	)		17,207			19,280
Net cash used in operating activities
of continuing operations		(77,671	)		(79,450	)		3,409			(149,985	)
CASH FLOWS FROM INVESTING ACTIVITIES
OF CONTINUING OPERATIONS
Receipt of stock subscription receivable					7,700			3,750
Registration costs								(14,646	)		(14,646	)
Sale of common stock					100,000			26,000			133,700
Net cash provided by investing activities
of continuing operations					107,700			15,104			119,054
CASH FLOW FROM EXTRAORDINARY ITEM
Forgiveness of debt		31,031									31,031
Net increase (decrease) in cash		(46,640	)		28,250			18,513			100
CASH AT BEGINNING OF PERIOD		46,740			18,490			(23	)
CASH AT END OF PERIOD	$	100		$	46,740		$	18,490		$	100
SUPPLEMENTAL CASH FLOW INFORMATION:
Non-Cash Activities
Issuance of 50,000 shares of common stock
to principal stockholder of Company (Restated)										$	2,632
Issuance of 90,000 shares of common stock
to consultants (Restated)				$	54,000					$	54,000
Forgiveness of stockholder loans				$	19,280					$	19,280

See accompanying notes to financial statements.

F-61

MGCC INVESTMENT STRATEGIES, INC.

(A Development Stage Enterprise)

STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

							Additional
	Common Stock						Contributed			Accumulated			Subscription
	Number			Amount			Capital			Deficit			Receivable			Total
Issuance of common
stock to organizing
stockholders at
$.0001 per share		1,000,000		$	100		$	2,532								$	2,632
Net loss for year ended
December 31, 2002										$	(7,696	)					(7,696	)
Balance December 31,
2002		1,000,000			100			2,532			(7,696	)					(5,064	)
Net loss for year ended
December 31, 2003											(729	)					(729	)
Balance, December 31,
2003		1,000,000			100			2,532			(8,425	)					(5,793	)
Cost of registering securities								(14,646	)								(14,646	)
Issuance of 337,000
shares of common stock
@ $0.10 per share		337,000			34			33,666									33,700
Subscription receivable													$	(7,700	)		(7,700	)
Net loss for the year ended
December 31, 2003											(32,241	)					(32,241	)
Balance, December 31, 2003		1,337,000		$	134		$	21,552		$	(40,666	)	$	(7,700	)	$	(26,680	)
Stockholders loan forgiveness								19,280									19,280
Receipt of subscription
receivable														7,700			7,700
Issuance of 20,000,000 shares
at $0.005 per share		20,000,000			2,000			98,000									100,000
Issuance of shares to
consultant @ $0.03 per
share		1,800,000			180			53,820									54,000
Net Loss for the year ending
December 31, 2004											(110,199	)					(110,199	)
Balance, December
31, 2004		23,137,000		$	2,314		$	192,652		$	(150,865	)				$	44,101
Net loss for the year ending
December 31, 2005											(54,610	)					(54,610	)
Balance, December
31, 2005		23,137,000		$	2,314		$	192,652		$	205,475					$	(10,509	)
One-for-20 reverse stock
split effective February
13, 2006		(21,980,150	)		(2,198	)		2,198
Balance, December
31, 2005 (restated)		1,156,850		$	116		$	194,850		$	(205,475	)				$	(10,509	)

See accompanying notes to financial statements.

F-62

MGCC INVESTMENT STRATEGIES, INC.

(A Development Stage Enterprise)

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2005

NOTE A- STOCK SPLIT

On January 19, 2006, the Board of Directors of MGCC Investment Strategies, Inc. (the Company) approved a 20 for 1 reverse stock split which became effective February 13, 2006. This split reduced the number of common shares outstanding to 1,156,850. The number of common shares authorized and the par value of the common shares were not impacted by this stock split. All share and per share information in the financial statements and notes to the financial statements have been restated to give effect to the 20 for 1 reverse stock split except for the Statement of Stockholders’ Equity (Deficit) which reflect the reverse stock split as a reduction of the number of common shares outstanding and reclassifies amounts from common stock to additional paid-in capital.

NOTE B- ORGANIZATION

MGCC, a development stage enterprise, was organized under the laws of Nevada on June 8, 2000. The Company is seeking to merge with a private company and commence trading on a registered trading exchange.

NOTE C - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that effect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all short-term investments with an original maturity of three months or less to be cash equivalents.

Net Loss Per Common Share

The Company computes per share amounts in accordance with Statement of Financial Accounting standards (“SFAS”) No. 128, “Earnings per Share”. SFAS per share (“EPS”) requires presentation of basic and diluted EPS. Basic EPS is computed by dividing the income (loss) available to Common Stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS is based on the weighted-average number of shares of Common Stock and Common Stock equivalents outstanding during the periods.

Fair Values of Financial Instruments

The Company uses financial instruments in the normal course of business. The carrying values of cash and cash equivalents and accounts payable approximate their fair value due to the short-term maturities of these assets and liabilities.

F-63

MGCC INVESTMENT STRATEGIES, INC.

(A Development Stage Enterprise)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2005

NOTE D - GOING CONCERN

The Company was incorporated on June 8, 2000 and to date has had no operating activities and no significant capital contributions. The Company is seeking to merge with a private operating company and then will attempt to raise additional capital for investment and working capital purposes. There is no assurance that the Company will find a successful merger candidate nor is there any assurance that if a merger is successful that the Company will be able to raise adequate additional capital in the equity markets. These matters raise substantial doubt about the Company’s ability to continue as a going concern. However, the accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

NOTE E - RELATED PARTY TRANSACTIONS

On March 16, 2004, a former principal stockholder was reimbursed $11,447 for expenses which he paid on behalf of the Company and which were recorded as liabilities at December 31, 2003.

NOTE F - INCOME TAXES

The Company has adopted Financial Accounting Standard Statement No. 109, Accounting for Income Taxes (SFAS No. 109). Under this method, the Company recognizes a deferred tax liability or asset for temporary differences between the tax basis of an asset or liability and the related amount reported on the financial statements. The principal types of differences, which are

measured at current tax rates, are net operating loss carry forwards. At December 31, 2004, these differences resulted in a deferred tax asset of approximately $7,876. SFAS No. 109 requires the establishment of a valuation allowance to reflect the likelihood of realization of deferred tax assets. Since realization is not assured, the Company has recorded a valuation allowance for the entire deferred tax asset, and the accompanying financial statements do not reflect any net asset for deferred taxes at December 31, 2004.

The Company’s net operating loss carry forwards amounted to approximately $151,475 at December 31, 2005 and expire between 2015 and 2020.

NOTE G - STOCKHOLDERS’ EQUITY (DEFICIT)

On February 10, 2004, the Board of Directors approved an increase in its authorized shares of common stock from 40,000,000 shares to 90,000,000 shares.

On March 16, 2004, a change in the control of the Company occurred when MyTop International, Inc. purchased 25,000 shares of common stock from Raymond R. Cottrell (the former controlling shareholder) and 1,000,000 shares of common stock from the Company for an aggregate purchase price of $236,000. Of this amount, $2,500 was paid to Raymond R. Cottrell for the 25,000 shares of common stock and a consulting fee of $133,500 was paid to McKinley Greenfield Capital, Inc., a company controlled by Raymond R. Cottrell, as a fee for structuring the transaction. The remaining $100,000 was consideration for the 1,000,000 shares

F-64

MGCC INVESTMENT STRATEGIES, INC.

(A Development Stage Enterprise)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

DECEMBER 31, 2005

NOTE G - STOCKHOLDERS’ EQUITY (DEFICIT) (CONTINUED)

purchased from the Company by MyTop International, Inc. and is expected to be utilized by the Company for working capital.

As of March 16, 2004, in connection with the sale of shares of the Company’s common stock as described above, the former controlling stockholder agreed to forgive the net outstanding indebtedness to him from the Company. This debt forgiveness aggregated $19,280. On December 24, 2004, the Board of Directors approved the issuance of 90,000 shares of its common stock to the President and a consultant of the Company. The shares were valued at $0.6 per share. Accordingly, $54,000 of stock based compensation was recorded in the Company’s financial statements.

On December 19, 2005, Histonic, the majority shareholder of MGCC, sold its stake of 1,000,000 shares of MGCC to Halter Financial Investments, LP for $300,000. This stake represents approximately 86.4% of MGCC. The stock purchase agreement called for all officers of MGCC to resign, all directors other than Rachel Kang to resign, and MGCC to effect a 20 for 1 reverse stock split.

Histonic also received a put option, effective upon the reverse split, allowing Histonic to acquire Halter to purchase up to an additional 3,750 post split shares of MGCC at $4 per share. As part of this agreement, Histonic forgave a loan and accrued interest of $31,031. The gain on this forgiveness has been classified as an extraordinary gain in accordance with SFAS No. 145 and Accounting Principles Board Opinion 30.

F-65

EXHIBIT INDEX

Exhibit No.	Description
2.1	Share Exchange Agreement, dated June 22, 2006, among the registrant, Wonder Auto Limited and its stockholders.
10.1	Form of the Stock Purchase and Subscription Agreement, dated June 22, 2006.
10.2	Escrow Agreement, dated June 22, 2006, among the registrant, Sterne Agee & Leach, Inc., Empower Century Limited, Choice Inspire Limited and Securities Transfer Corporation.
10.3	Escrow Agreement, dated June 22, 2006, by and among Wonder Auto Limited, Empower Century Limited, Thelen Reid & Priest LLP and certain purchasers.
10.4	Stock Purchase Agreement, dated April 28, 2004, between Jinzhou Wonder Industry (Group) Co., Ltd and Wonder Auto Limited.
10.5	Technical Cooperation Agreement, dated July 25, 2003, between Jinzhou Halla Electrical Equipment Co., Ltd and MEISTER (Korea) Company Limited.
10.6	Strategic Cooperation Agreement, dated June 7, 2004, between Jinzhou Halla Electrical Equipment Co., Ltd. and HIVRON Inc.
10.7	Form of Purchase Contract with Supplier.
10.8	Equipment Purchase Agreement, dated January 1, 2006, between Jinzhou Halla Electrical Equipment Co., Ltd. and Suzhou Tenuo Automation Co., Ltd.
10.9	Equipment Purchase Agreement, dated May 19, 2005, between Jinzhou Halla Electrical Equipment Co., Ltd. and DMG meccanica.
10.10	Equipment Purchase Agreement, dated December 17, 2004, between Jinzhou Halla Electrical Equipment Co., Ltd. and OMT Co., Ltd.
10.11	Loan Agreement, dated October 18, 2005, between Jinzhou Halla Electrical Equipment Co., Ltd. and China Construction Bank (Jinzhou Linghe Branch).
10.12	Loan Agreement, dated September 30, 2005, between Jinzhou Halla Electrical Equipment Co., Ltd. and Jinzhou Commercial Bank (Chengjian Branch).
10.13	Loan Agreement, dated July 8, 2005, between Jinzhou Halla Electrical Equipment Co., Ltd and China Construction Bank (Jinzhou Linghe Branch).
10.14	Mortgage Agreement, dated September 28, 2005, between Jinzhou Halla Electronic Equipment Co., Ltd. and Jinzhou Commercial Bank (Linghe Branch).
10.15	Lease Agreement, dated November 8, 2005, by and among Beijing International Technological Cooperation Center Wang Jing Tower Company, Jinzhou Halla Electrical Equipment Co., Ltd. and Beijing Zhucheng Real Property Management Company.

10.16	Employment Contract, dated June 21, 2006, between Wonder Auto Limited and Qingjie Zhao.
10.17	Employment Contract, dated June 21, 2006, between Wonder Auto Limited and Yuncong Ma.
10.18	Employment Contract, dated June 21, 2006, between Wonder Auto Limited and Meirong Yuan.
10.19	Employment Contract between Jinzhou Halla Electrical Equipment Co., Ltd. and Seuk Jun Kim.
10.20	Employment Contract between Jinzhou Halla Electrical Equipment Co., Ltd. and Yuguo Zhao.
10.21	Employment Contract between Jinzhou Halla Electrical Equipment Co., Ltd. and Yongdong Liu.
10.22	Consulting Agreement, dated April 22, 2006, between Heritage Management Consultants, Inc. and Wonder Auto Limited.
10.23	Financial Advisory Agreement, dated March 15, 2006, between Wonder Auto Group and HFG International, Limited.
10.24	Assignment and Assumption Agreement, dated May 31, 2006, between Wonder Auto Group, HFG International Limited and Wonder Auto Limited.
16.1	Letter from Meyler & Company LLP regarding the change in certifying accountants
99.1	Press Release, dated June , 2006.

EX-2.1

                                                                     Exhibit 2.1

                            SHARE EXCHANGE AGREEMENT

                  This SHARE EXCHANGE AGREEMENT (this "Agreement"),  dated as of
June 22,  2006,  is by and among  MGCC  Investment  Strategies,  Inc.,  a Nevada
corporation  (the  "Parent"),  WONDER AUTO  LIMITED,  a British  Virgin  Islands
company (the "Company"),  and the  Stockholders of the Company  signatory hereto
(the "Stockholders").

                                   BACKGROUND

                  The  Company  has  245.277236  shares of  capital  stock  (the
"Company Stock") outstanding, all of which are held by the Stockholders. Each of
the  Stockholders is the record and beneficial  owner of the number of shares of
Company Stock set forth opposite such  Stockholder's  name on Exhibit A. Each of
the  Stockholders  has agreed to transfer  all of his,  her or its  (hereinafter
"its") shares of Company Stock in exchange for the number of newly issued shares
of Common Stock,  par value $0.001 per share, of the Parent (the "Parent Stock")
listed  opposite  such  Stockholder's  name on Exhibit A, which in the aggregate
amount to a total of 8,627,858 shares of Parent Stock (the "Shares").

                  The exchange of Company  Stock for Parent Stock is intended to
constitute a  reorganization  within the meaning of Section  368(a)(1)(B) of the
Internal  Revenue Code of 1986 (the  "Code"),  as amended or such other tax free
reorganization exemptions that may be available under the Code.

                  The Board of  Directors  of the  Parent and the  Company  have
determined that it is desirable to effect this plan of reorganization  and share
exchange.


                                    AGREEMENT

                  NOW THEREFORE, the parties agree as follows:

                                    ARTICLE I

                               Exchange of Shares

         SECTION 1.01.  Exchange by Stockholders.  At the Closing (as defined in
Section 1.02), each of the Stockholders shall sell, transfer, convey, assign and
deliver to the Parent its Company  Stock free and clear of all Liens (as defined
below) in  exchange  for the Parent  Stock  listed on  Exhibit A  opposite  such
Stockholder's name.

         SECTION 1.02. Closing.  The closing (the "Closing") of the transactions
contemplated  hereby  (the  "Transactions")  shall take place on the date hereof
(the "Closing Date").



                                   ARTICLE II

                 Representations and Warranties of Stockholders

         Each of the Stockholders  hereby severally (and not jointly) represents
and warrants to the Parent with respect to itself, as follows:

         SECTION 2.01. Good Title.  The Stockholder is the record and beneficial
owner, and has good title to its Company Stock,  with the right and authority to
sell and  deliver  such  Company  Stock.  Upon  delivery of any  certificate  or
certificates duly assigned,  representing the same as herein contemplated and/or
upon  registering  of the Parent as the new owner of such  Company  Stock in the
share  register  of the  Company,  the Parent  will  receive  good title to such
Company  Stock,  free  and  clear of all  liens,  security  interests,  pledges,
equities and claims of any kind, voting trusts, stockholder agreements and other
encumbrances (collectively, "Liens").

         SECTION 2.02. Organization.  Each Stockholder that is an entity is duly
organized and validly existing in its jurisdiction of organization.

         SECTION 2.03.  Power and Authority.  Each Stockholder that is an entity
has the legal power and  authority to execute and deliver this  Agreement and to
perform  its  obligations  hereunder.  All  acts  required  to be  taken  by the
Stockholders to enter into this Agreement and to carry out the Transactions have
been properly  taken.  This  Agreement  constitutes  a legal,  valid and binding
obligation  of  the  Stockholder,   enforceable   against  such  Stockholder  in
accordance with the terms hereof.

         SECTION  2.04.  No  Conflicts.  The  execution  and  delivery  of  this
Agreement by the  Stockholder  and the  performance  by the  Stockholder  of its
obligations  hereunder in accordance with the terms hereof: (i) will not require
the  consent  of any  third  party  or any  federal,  state,  local  or  foreign
government  or any court of  competent  jurisdiction,  administrative  agency or
commission  or other  governmental  authority  or  instrumentality,  domestic or
foreign ("Governmental  Entity") under any statutes,  laws,  ordinances,  rules,
regulations,  orders, writs,  injunctions,  judgments, or decrees (collectively,
"Laws"); (ii) will not violate any Laws applicable to such Stockholder and (iii)
will not violate or breach any contractual  obligation to which such Stockholder
is a party.

         SECTION  2.05.  No Finder's  Fee. The  Stockholder  has not created any
obligation for any finder's,  investment  banker's or broker's fee in connection
with the Transactions.

         SECTION  2.06.  Purchase  Entirely  for Own  Account.  The Parent Stock
proposed to be  acquired  by the  Stockholder  hereunder  will be  acquired  for
investment  for  its  own  account,  and  not  with a  view  to  the  resale  or
distribution of any part thereof,  and the Stockholder has no present  intention
of selling or otherwise distributing the Parent Stock, except in compliance with
applicable securities laws.

         SECTION 2.07. Available Information. The Stockholder has such knowledge
and  experience  in  financial  and  business  matters  that  it is  capable  of
evaluating the merits and risks of investment in the Parent.

                                        2


         SECTION 2.08.  Non-Registration.  The Stockholder  understands that the
Parent  Stock has not been  registered  under  the  Securities  Act of 1933,  as
amended (the "Securities  Act") and, if issued in accordance with the provisions
of this  Agreement,  will be issued by reason of a specific  exemption  from the
registration  provisions of the Securities  Act which depends upon,  among other
things,  the bona fide nature of the  investment  intent and the accuracy of the
Stockholder's representations as expressed herein.

         SECTION 2.09. Restricted Securities.  The Stockholder  understands that
the  Parent  Stock  is  characterized  as  "restricted   securities"  under  the
Securities Act inasmuch as this Agreement  contemplates that, if acquired by the
Stockholder pursuant hereto, the Parent Stock would be acquired in a transaction
not involving a public offering.  The Stockholder  further  acknowledges that if
the Parent Stock is issued to the  Stockholder in accordance with the provisions
of this  Agreement,  such Parent  Stock may not be resold  without  registration
under  the  Securities  Act or the  existence  of an  exemption  therefrom.  The
Stockholder  represents that it is familiar with Rule 144 promulgated  under the
Securities Act, as presently in effect,  and understands the resale  limitations
imposed thereby and by the Securities Act.

         SECTION 2.10.     Legends.  It is understood that the Parent Stock will
bear the following legend:

                  THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
                  ACT OF 1933 (THE  "SECURITIES  ACT") OR UNDER APPLICABLE STATE
                  SECURITIES LAWS AND MAY NOT BE SOLD,  TRANSFERRED OR OTHERWISE
                  DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND ANY
                  APPLICABLE  STATE  SECURITIES  LAWS OR PURSUANT  TO  AVAILABLE
                  EXEMPTIONS  FROM SUCH  REGISTRATION,  PROVIDED THAT THE SELLER
                  DELIVERS TO THE COMPANY AN OPINION OF COUNSEL  (WHICH  OPINION
                  IS  REASONABLY  SATISFACTORY  TO THE COMPANY)  CONFIRMING  THE
                  AVAILABILITY  OF  SUCH  EXEMPTION.  THESE  SECURITIES  MAY  BE
                  PLEDGED IN CONNECTION  WITH A BONA FIDE MARGIN ACCOUNT SECURED
                  BY SUCH  SECURITIES  TO THE  EXTENT  PERMITTED  BY  APPLICABLE
                  FEDERAL AND STATE SECURITIES LAWS.

                    (a) Any legend  required by the "blue sky" laws of any state
           to the extent such laws are applicable to the securities  represented
           by the certificate so legended.

                                   ARTICLE III

                  Representations and Warranties of the Company

         The Company  represents and warrants to the Parent that,  except as set
forth in the Company  Disclosure  Letter (as defined  below) (and  regardless of
whether or not the Company Disclosure Letter is referenced below with respect to
any  particular  representation  or  warranty),  dated  as of the  date  of this
Agreement,  from the  Company to the Parent,  which  Company  Disclosure  Letter
incorporates  by reference all of the  disclosure  contained in that certain Due
Diligence Report,  dated April 29, 2006, issued by Beijing Jia Yuan Law Firm and
delivered to the Parent,  relating to the Company's  subsidiaries  (the "Company
Disclosure Letter"):

                                        3


         SECTION 3.01. Organization, Standing and Power. Each of the Company and
its  subsidiaries  (the  "Company  Subsidiaries")  is  duly  organized,  validly
existing and in good standing under the laws of the  jurisdiction in which it is
organized  and  has  the  corporate   power  and  authority  and  possesses  all
governmental  franchises,   licenses,  permits,   authorizations  and  approvals
necessary to enable it to own, lease or otherwise hold its properties and assets
and  to  conduct  its  businesses  as  presently  conducted,   other  than  such
franchises,  licenses, permits,  authorizations and approvals the lack of which,
individually  or in the  aggregate,  has not had and  would  not  reasonably  be
expected to have a material  adverse effect on the Company,  a material  adverse
effect on the  ability  of the  Company to perform  its  obligations  under this
Agreement or on the ability of the Company to  consummate  the  Transactions  (a
"Company Material Adverse Effect").  The Company and each Company  Subsidiary is
duly  qualified  to do  business  in each  jurisdiction  where the nature of its
business or its ownership or leasing of its properties  make such  qualification
necessary  except  where the  failure  to so  qualify  would not  reasonably  be
expected to have a Company Material Adverse Effect. The Company has delivered to
the  Parent  true  and  complete  copies  of  the  memorandum  and  articles  of
association of the Company and such other constituent instruments of the Company
as may exist, each as amended to the date of this Agreement (as so amended,  the
"Company Constituent Instruments"),  and the comparable charter,  organizational
documents and other constituent instruments of each Company Subsidiary,  in each
case as amended through the date of this Agreement.

         SECTION 3.02.     Company Subsidiaries; Equity Interests.

                    (a)  The  Company   Disclosure  Letter  lists  each  Company
           Subsidiary and its jurisdiction of organization.  Except as specified
           in the  Company  Disclosure  Letter,  all the  outstanding  shares of
           capital stock or equity  investments of each Company  Subsidiary have
           been validly issued and are fully paid and  nonassessable  and are as
           of the  date of this  Agreement  owned  by the  Company,  by  another
           Company Subsidiary or by the Company and another Company  Subsidiary,
           free and clear of all Liens.

                    (b) Except for its  interests  in the Company  Subsidiaries,
           the Company does not as of the date of this Agreement  own,  directly
           or indirectly,  any capital stock,  membership interest,  partnership
           interest,  joint  venture  interest or other  equity  interest in any
           person.

         SECTION 3.03.  Capital  Structure.  The authorized capital stock of the
Company consists of 50,000 ordinary shares of which,  245.277236 ordinary shares
are  issued and  outstanding.  Except as set forth  above,  no shares of capital
stock or other  voting  securities  of the  Company  are  issued,  reserved  for
issuance or outstanding.  Except as specified in the Company  Disclosure Letter,
the  Company is the sole  record and  beneficial  owner of all of the issued and
outstanding capital stock of each Company Subsidiary.  All outstanding shares of
the  capital  stock  of  the  Company  and  each  Company  Subsidiary  are  duly
authorized,  validly issued,  fully paid and nonassessable and not subject to or
issued in violation of any purchase option, call option, right of first refusal,
preemptive right, subscription right or any similar right under any provision of
the  applicable  corporate  laws of the  British  Virgin  Islands,  the  Company
Constituent  Instruments  or any Contract (as defined in Section  3.05) to which
the Company is a party or otherwise  bound.  Except as set forth in this section
3.03 and in the Company Disclosure Letter, there are not any bonds,  debentures,
notes or other  indebtedness  of Company or any  Company  Subsidiary  having the
right to vote (or convertible into, or exchangeable  for,  securities having the
right to vote) on any  matters on which  holders of Company  Stock or the common
stock of any Company Subsidiary may vote ("Voting Company Debt").  Except as set
forth  above,  as of the  date of this  Agreement,  there  are not any  options,
warrants,  rights,  convertible  or  exchangeable  securities,  "phantom"  stock
rights, stock appreciation rights,  stock-based performance units,  commitments,
Contracts,  arrangements or undertakings of any kind to which the Company or any
Company  Subsidiary  is a party or by which any of them is bound (i)  obligating
the Company or any Company Subsidiary to issue,  deliver or sell, or cause to be
issued,  delivered or sold,  additional  shares of capital stock or other equity
interests in, or any security  convertible  or exercisable  for or  exchangeable
into any  capital  stock of or other  equity  interest  in,  the  Company or any
Company  Subsidiary or any Voting Company Debt,  (ii)  obligating the Company or
any Company  Subsidiary to issue,  grant,  extend or enter into any such option,
warrant, call, right, security, commitment, Contract, arrangement or undertaking
or (iii) that give any person the right to receive any economic benefit or right
similar to or derived from the economic benefits and rights occurring to holders
of the capital stock of the Company or of any Company Subsidiary.  Except as set
forth in the Company Disclosure Letter, as of the date of this Agreement,  there
are not any  outstanding  contractual  obligations of the Company to repurchase,
redeem or otherwise acquire any shares of capital stock of Parent.

                                        4


         SECTION 3.04. Authority;  Execution and Delivery;  Enforceability.  The
Company has all requisite  corporate  power and authority to execute and deliver
this Agreement and to consummate the Transactions. The execution and delivery by
the  Company  of this  Agreement  and the  consummation  by the  Company  of the
Transactions have been duly authorized and approved by the Board of Directors of
the Company and no other  corporate  proceedings  on the part of the Company are
necessary to authorize  this Agreement and the  Transactions.  When executed and
delivered,  this Agreement will be enforceable against the Company in accordance
with its terms.

         SECTION 3.05.     No Conflicts; Consents.

                    (a) Except as set forth in the  Company  Disclosure  Letter,
           the execution and delivery by the Company of this Agreement does not,
           and the  consummation  of the  Transactions  and compliance  with the
           terms hereof and thereof will not,  conflict  with,  or result in any
           violation of or default (with or without  notice or lapse of time, or
           both) under, or give rise to a right of termination,  cancellation or
           acceleration  of any  obligation  or to  loss of a  material  benefit
           under,  or  result  in the  creation  of  any  Lien  upon  any of the
           properties or assets of the Company or any Company  Subsidiary under,
           any  provision  of (i) the  Company  Constituent  Instruments  or the
           comparable  charter  or  organizational   documents  of  any  Company
           Subsidiary,  (ii) any material contract,  lease, license,  indenture,
           note,  bond,  agreement,  permit,  concession,   franchise  or  other
           instrument  (a  "Contract")  to  which  the  Company  or any  Company
           Subsidiary is a party or by which any of their respective  properties
           or assets is bound or (iii)  subject to the filings and other matters
           referred  to in Section  3.05(b),  any  material  judgment,  order or
           decree  ("Judgment") or material Law applicable to the Company or any
           Company  Subsidiary or their respective  properties or assets,  other
           than,  in the case of clauses  (ii) and (iii)  above,  any such items
           that,  individually  or in the aggregate,  have not had and would not
           reasonably be expected to have a Company Material Adverse Effect.

                                        5


                    (b) Except as set forth in the Company Disclosure Letter and
           except  for  required   filings  with  the  Securities  and  Exchange
           Commission (the "SEC") and applicable  "Blue Sky" or state securities
           commissions, no material consent, approval, license, permit, order or
           authorization ("Consent") of, or registration,  declaration or filing
           with,  or permit  from,  any  Governmental  Entity is  required to be
           obtained  or made by or with  respect to the  Company or any  Company
           Subsidiary in connection with the execution, delivery and performance
           of this Agreement or the consummation of the Transactions.

         SECTION 3.06.     Taxes.

                    (a) Each of the  Company  and each  Company  Subsidiary  has
           timely filed, or has caused to be timely filed on its behalf, all Tax
           Returns  required  to be filed by it,  and all such Tax  Returns  are
           true, complete and accurate, except to the extent any failure to file
           or any inaccuracies in any filed Tax Returns,  individually or in the
           aggregate,  have not had and would not reasonably be expected to have
           a Company Material Adverse Effect.  All Taxes shown to be due on such
           Tax Returns,  or otherwise owed, have been timely paid, except to the
           extent that any failure to pay, individually or in the aggregate, has
           not had and  would  not  reasonably  be  expected  to have a  Company
           Material  Adverse  Effect.  There are no unpaid taxes in any material
           amount claimed to be due by the taxing authority of any jurisdiction,
           and the officers of the Company know of no basis for any such claim.

                    (b) The Company Financial  Statements (as defined in Section
           3.15)  reflect  an  adequate  reserve  for all Taxes  payable  by the
           Company and the Company  Subsidiaries (in addition to any reserve for
           deferred  Taxes to reflect  timing  differences  between book and Tax
           items) for all Taxable periods and portions  thereof through the date
           of such financial statements. No deficiency with respect to any Taxes
           has been  proposed,  asserted or assessed  against the Company or any
           Company Subsidiary, and no requests for waivers of the time to assess
           any such Taxes are pending,  except to the extent any such deficiency
           or request for waiver,  individually or in the aggregate, has not had
           and would  not  reasonably  be  expected  to have a Company  Material
           Adverse Effect.

                    (c) For purposes of this Agreement:

                  "Taxes"  includes all forms of taxation,  whenever  created or
imposed, and whether of the United States or elsewhere, and whether imposed by a
local, municipal,  governmental,  state, foreign,  federal or other Governmental
Entity, or in connection with any agreement with respect to Taxes, including all
interest, penalties and additions imposed with respect to such amounts.

                  "Tax Return" means all federal,  state, local,  provincial and
foreign Tax returns,  declarations,  statements,  reports,  schedules, forms and
information returns and any amended Tax return relating to Taxes.

                                        6


         SECTION 3.07.     Benefit Plans.

                    (a) Except as set forth in the  Company  Disclosure  Letter,
           the  Company  does not have or  maintain  any  collective  bargaining
           agreement   or  any  bonus,   pension,   profit   sharing,   deferred
           compensation,   incentive   compensation,   stock  ownership,   stock
           purchase,   stock  option,  phantom  stock,   retirement,   vacation,
           severance,  disability,  death benefit,  hospitalization,  medical or
           other  plan,  arrangement  or  understanding  (whether or not legally
           binding)  providing  benefits  to any  current  or  former  employee,
           officer  or  director  of  the  Company  or  any  Company  Subsidiary
           (collectively,  "Company Benefit Plans").  Except as set forth in the
           Company Disclosure Letter, as of the date of this Agreement there are
           not any severance or termination  agreements or arrangements  between
           the  Company  or any  Company  Subsidiary  and any  current or former
           employee,   officer  or  director  of  the  Company  or  any  Company
           Subsidiary,  nor does the Company or any Company  Subsidiary have any
           general severance plan or policy.

                    (b) Since March 31, 2006, there has not been any adoption or
           amendment  in any  material  respect by the  Company  or any  Company
           Subsidiary of any Company Benefit Plan.

         SECTION 3.08. Litigation.  There is no action, suit, inquiry, notice of
violation, proceeding (including any partial proceeding such as a deposition) or
investigation pending or threatened in writing against or affecting the Company,
any  subsidiary or any of their  respective  properties  before or by any court,
arbitrator,   governmental  or  administrative   agency,   regulatory  authority
(federal,  state,  county,  local or foreign),  stock market,  stock exchange or
trading  facility  ("Action")  which (i)  adversely  affects or  challenges  the
legality,  validity or  enforceability of any of this Agreement or the Shares or
(ii)  could,  if there  were an  unfavorable  decision,  individually  or in the
aggregate,  have or  reasonably  be  expected  to result  in a Company  Material
Adverse  Effect.  Neither the Company nor any  subsidiary,  nor any  director or
officer  thereof (in his or her capacity as such), is or has been the subject of
any Action involving a claim or violation of or liability under federal or state
securities laws or a claim of breach of fiduciary duty.

         SECTION 3.09.  Compliance  with  Applicable  Laws.  The Company and the
Company Subsidiaries are in compliance with all applicable Laws, including those
relating  to  occupational  health and safety  and the  environment,  except for
instances of noncompliance that, individually and in the aggregate, have not had
and would not reasonably be expected to have a Company  Material Adverse Effect.
Except  as set forth in the  Company  Disclosure  Letter,  the  Company  has not
received any written communication during the past two years from a Governmental
Entity  that  alleges  that the  Company is not in  compliance  in any  material
respect with any  applicable  Law.  This Section 3.09 does not relate to matters
with respect to Taxes, which are the subject of Section 3.06.

         SECTION  3.10.  Brokers;  Schedule  of Fees and  Expenses.  No  broker,
investment  banker,  financial  advisor  or  other  person  is  entitled  to any
broker's,  finder's,  financial  advisor's or other similar fee or commission in
connection with the Transactions based upon arrangements made by or on behalf of
the Company.

                                        7


         SECTION 3.11. Contracts.  Except as disclosed in the Company Disclosure
Letter,  there are no Contracts  that are material to the business,  properties,
assets,  condition (financial or otherwise),  results of operations or prospects
of the Company and its  subsidiaries  taken as a whole.  Neither the Company nor
any Company  Subsidiary  is in violation of or in default  under (nor does there
exist any condition which upon the passage of time or the giving of notice would
cause such a violation of or default  under) any Contract to which it is a party
or by  which  it or any  of its  properties  or  assets  is  bound,  except  for
violations  or  defaults  that  would  not,  individually  or in the  aggregate,
reasonably be expected to result in a Company Material Adverse Effect.

         SECTION  3.12.  Title  to  Properties.  Except  as  set  forth  in  the
Disclosure Letter, the Company and the Company  Subsidiaries do not own any real
property.  Each of the Company and the Company Subsidiaries has sufficient title
to, or valid  leasehold  interests in, all of its  properties and assets used in
the conduct of its businesses. All such assets and properties, other than assets
and  properties  in which the  Company or any of the  Company  Subsidiaries  has
leasehold interests,  are free and clear of all Liens other than those set forth
in the Company Disclosure Letter and except for Liens that, in the aggregate, do
not and will not  materially  interfere  with the ability of the Company and the
Company Subsidiaries to conduct business as currently conducted.

         SECTION  3.13.  Intellectual  Property.  The  Company  and the  Company
Subsidiaries  own, or are validly  licensed or otherwise  have the right to use,
all patents,  patent rights,  trademarks,  trademark rights,  trade names, trade
name  rights,   service  marks,  service  mark  rights,   copyrights  and  other
proprietary  intellectual  property rights and computer programs  (collectively,
"Intellectual  Property  Rights")  which  are  material  to the  conduct  of the
business  of the  Company and the  Company  Subsidiaries  taken as a whole.  The
Company Disclosure Letter sets forth a description of all Intellectual  Property
Rights  which are material to the conduct of the business of the Company and the
Company  Subsidiaries  taken as a whole.  There are no claims pending or, to the
knowledge  of the  Company,  threatened  that the  Company or any of the Company
Subsidiaries  is infringing or otherwise  adversely  affecting the rights of any
person with regard to any  Intellectual  Property Right. To the knowledge of the
Company, no person is infringing the rights of the Company or any of the Company
Subsidiaries with respect to any Intellectual Property Right.

         SECTION 3.14.  Labor  Matters.  There are no  collective  bargaining or
other  labor  union  agreements  to  which  the  Company  or any of the  Company
Subsidiaries  is a party or by which any of them is  bound.  No  material  labor
dispute exists or, to the knowledge of the Company,  is imminent with respect to
any of the employees of the Company.

         SECTION 3.15.  Financial  Statements.  The Company has delivered to the
Parent its audited consolidated  financial statements for the fiscal years ended
December 31, 2005,  2004 and 2003 and  unaudited  financial  statements  for the
fiscal  quarter  ended  March 31, 2006  (collectively,  the  "Company  Financial
Statements").  The Company Financial Statements have been prepared in accordance
with generally  accepted  accounting  principles  applied on a consistent  basis
throughout  the periods  indicated.  The  Company  Financial  Statements  fairly
present in all material  respects the financial  condition and operating results
of the Company,  as of the dates, and for the periods,  indicated  therein.  The
Company does not have any material  liabilities  or  obligations,  contingent or
otherwise,  other  than (i)  liabilities  incurred  in the  ordinary  course  of
business  subsequent to March 31, 2006, and (ii) obligations under contracts and
commitments  incurred in the ordinary  course of business and not required under
generally  accepted  accounting  principles  to  be  reflected  in  the  Company
Financial  Statements,  which, in both cases,  individually and in the aggregate
would not be reasonably expected to result in a Company Material Adverse Effect.

                                        8


         SECTION 3.16.  Insurance.  The Company and its subsidiaries are insured
by insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the  businesses in which the
Company and its  subsidiaries are engaged and in the geographic areas where they
engage in such businesses. The Company has no reason to believe that it will not
be able to renew its and its subsidiaries'  existing  insurance  coverage as and
when such coverage  expires or to obtain similar  coverage from similar insurers
as may be necessary to continue its business on terms consistent with market for
the Company's and such subsidiaries' respective lines of business.

         SECTION 3.17. Transactions With Affiliates and Employees. Except as set
forth in the Company Disclosure Letter and Company Financial Statements, none of
the officers or  directors of the Company and, to the  knowledge of the Company,
none of the  employees  of the Company is  presently a party to any  transaction
with the  Company or any  subsidiary  (other  than for  services  as  employees,
officers and directors),  including any contract, agreement or other arrangement
providing for the furnishing of services to or by,  providing for rental of real
or personal property to or from, or otherwise  requiring payments to or from any
officer,  director or such  employee or, to the  knowledge  of the Company,  any
entity in which any officer,  director,  or any such  employee has a substantial
interest or is an officer, director, trustee or partner.

         SECTION  3.18.  Internal  Accounting  Controls.  The  Company  and  its
subsidiaries  maintain a system of internal  accounting  controls  sufficient to
provide  reasonable  assurance that (i)  transactions are executed in accordance
with  management's  general or specific  authorizations,  (ii)  transactions are
recorded  as  necessary  to  permit  preparation  of  financial   statements  in
conformity with generally accepted  accounting  principles and to maintain asset
accountability,  (iii) access to assets is  permitted  only in  accordance  with
management's   general  or  specific   authorization,   and  (iv)  the  recorded
accountability  for assets is compared  with the existing  assets at  reasonable
intervals and appropriate  action is taken with respect to any differences.  The
Company has established  disclosure  controls and procedures for the Company and
designed  such  disclosure  controls  and  procedures  to ensure  that  material
information relating to the Company,  including its subsidiaries,  is made known
to the officers by others within those  entities.  The  Company's  officers have
evaluated the  effectiveness  of the Company's  controls and  procedures.  Since
December  31,  2005,  there have been no  significant  changes in the  Company's
internal  controls or, to the Company's  knowledge,  in other factors that could
significantly affect the Company's internal controls.

         SECTION 3.19. Solvency. Based on the financial condition of the Company
as of the closing date (and assuming that the closing shall have occurred),  (i)
the Company's  fair saleable value of its assets exceeds the amount that will be
required to be paid on or in respect of the Company's  existing  debts and other
liabilities  (including known contingent  liabilities) as they mature,  (ii) the
Company's  assets do not constitute  unreasonably  small capital to carry on its
business  for the  current  fiscal year as now  conducted  and as proposed to be
conducted including its capital needs taking into account the particular capital
requirements  of the business  conducted by the Company,  and projected  capital
requirements and capital  availability  thereof, and (iii) the current cash flow
of the Company, together with the proceeds the Company would receive, were it to
liquidate all of its assets,  after taking into account all anticipated  uses of
the cash,  would be  sufficient  to pay all amounts on or in respect of its debt
when such amounts are required to be paid.  The Company does not intend to incur
debts  beyond its ability to pay such debts as they mature  (taking into account
the timing and amounts of cash to be payable on or in respect of its debt).

                                        9


         SECTION  3.20.  Application  of Takeover  Protections.  The Company has
taken all necessary action, if any, in order to render  inapplicable any control
share acquisition, business combination, poison pill (including any distribution
under a rights  agreement) or other similar  anti-takeover  provision  under the
Company's charter documents or the laws of its state of incorporation that is or
could become  applicable to the Stockholders as a result of the Stockholders and
the Company  fulfilling their  obligations or exercising their rights under this
Agreement,  including,  without  limitation,  the issuance of the Shares and the
Stockholders' ownership of the Shares.

         SECTION 3.21. No Additional  Agreements.  The Company does not have any
agreement  or  understanding   with  any   Stockholders   with  respect  to  the
transactions  contemplated  by this  Agreement  other than as  specified in this
Agreement.

         SECTION  3.22.  Investment  Company.  The Company is not, and is not an
affiliate of, and  immediately  following  the Closing will not have become,  an
"investment  company" within the meaning of the Investment  Company Act of 1940,
as amended.

         SECTION 3.23. Disclosure.  The Company confirms that neither it nor any
person  acting on its behalf has  provided  any  Stockholder  or its  respective
agents or counsel with any  information  that the Company  believes  constitutes
material,  non-public  information  except insofar as the existence and terms of
the proposed  transactions  hereunder may constitute such information and except
for  information  that will be disclosed by the Parent under a current report on
Form 8-K  filed  within  one  business  days  after  the  Closing.  The  Company
understands  and  confirms  that the  Stockholders  will  rely on the  foregoing
representations  and  covenants in effecting  transactions  in securities of the
Company. All disclosure provided to the Stockholders  regarding the Company, its
business and the transactions  contemplated hereby, furnished by or on behalf of
the Company (including the Company's representations and warranties set forth in
this Agreement) are true and correct and do not contain any untrue  statement of
a material  fact or omit to state any material  fact  necessary in order to make
the statements made therein, in light of the circumstances under which they were
made, not misleading.

         SECTION 3.24. Information Supplied. None of the information supplied or
to be supplied by the Company for inclusion or incorporation by reference in the
notice that is required to be sent to the stockholders of the Parent pursuant to
Rule 14f-1 (the "14f-1 Notice") promulgated under the Securities Exchange Act of
1934 (the  "Exchange  Act") will, at the date it is first mailed to the Parent's
stockholders,  contain any untrue  statement of a material fact or omit to state
any material  fact  required to be stated  therein or necessary in order to make
the statements therein, in light of the circumstances under which they are made,
not misleading.

                                       10


         SECTION 3.25. Absence of Certain Changes or Events. Except as disclosed
in the Company Financial  Statements or in the Company Disclosure  Letter,  from
March 31, 2006 to the date of this  Agreement,  the Company  has  conducted  its
business only in the ordinary course, and during such period there has not been:

                    (a)  any  change  in  the  assets,  liabilities,   financial
           condition  or  operating  results  of  the  Company  or  any  Company
           Subsidiary,  except  changes in the ordinary  course of business that
           have not caused, in the aggregate, a Company Material Adverse Effect;

                    (b) any damage,  destruction or loss, whether or not covered
           by insurance, that would have a Company Material Adverse Effect;

                    (c) any waiver or  compromise  by the Company or any Company
           Subsidiary of a valuable right or of a material debt owed to it;

                    (d) any  satisfaction  or discharge of any lien,  claim,  or
           encumbrance  or  payment  of any  obligation  by the  Company  or any
           Company Subsidiary, except in the ordinary course of business and the
           satisfaction or discharge of which would not have a Company  Material
           Adverse Effect;

                    (e) any material change to a material  Contract by which the
           Company or any Company  Subsidiary or any of its respective assets is
           bound or subject;

                    (f) any mortgage,  pledge,  transfer of a security  interest
           in, or lien, created by the Company or any Company  Subsidiary,  with
           respect to any of its material properties or assets, except liens for
           taxes not yet due or payable  and liens  that  arise in the  ordinary
           course of business and do not materially impair the Company's or such
           Company Subsidiary's ownership or use of such property or assets;

                    (g) any  loans  or  guarantees  made by the  Company  or any
           Company  Subsidiary to or for the benefit of its employees,  officers
           or directors, or any members of their immediate families,  other than
           travel advances and other advances made in the ordinary course of its
           business;

                    (h) any alteration of the Company's  method of accounting or
           the identity of its auditors;

                    (i) any  declaration or payment of dividend or  distribution
           of cash or other property to Stockholders or any purchase, redemption
           or agreements to purchase or redeem any shares of Company Stock;

                    (j)  any  issuance  of  equity  securities  to any  officer,
           director or  affiliate,  except  pursuant to existing  Company  stock
           option plans; or

                                       11


                    (k) any  arrangement  or  commitment  by the  Company or any
           Company  Subsidiary to do any of the things described in this Section
           3.25.

         SECTION 3.26.  No  Undisclosed  Events,  Liabilities,  Developments  or
Circumstances. No event, liability,  development or circumstance has occurred or
exists,  or  is  contemplated  to  occur  with  respect  to  the  Company,   its
subsidiaries or their respective business, properties,  prospects, operations or
financial condition, that would be required to be disclosed by the Company under
applicable  securities  laws on a registration  statement on Form S-1 filed with
the SEC  relating to an issuance and sale by the Company of its Common Stock and
which has not been publicly announced.

         SECTION 3.27. Foreign Corrupt Practices.  Neither the Company,  nor any
of its subsidiaries,  nor, to the Company's  knowledge,  any director,  officer,
agent,  employee or other  person  acting on behalf of the Company or any of its
subsidiaries has, in the course of its actions for, or on behalf of, the Company
(i) used any corporate funds for any unlawful contribution,  gift, entertainment
or other unlawful expenses relating to political activity;  (ii) made any direct
or indirect unlawful payment to any foreign or domestic  government  official or
employee  from  corporate  funds;  (iii)  violated  or is in  violation  of  any
provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or (iv)
made any unlawful bribe, rebate,  payoff,  influence payment,  kickback or other
unlawful payment to any foreign or domestic government official or employee.


                                   ARTICLE IV

                  Representations and Warranties of the Parent

                  The Parent  represents  and warrants as follows to each of the
Stockholders  and  the  Company  that,  except  as set  forth  in  the  reports,
schedules,  forms,  statements and other  documents filed by Parent with the SEC
and publicly available prior to the date of the Agreement (the "Filed Parent SEC
Documents")  or in the  letter,  dated  as of the date of this  Agreement,  from
Parent to the Company and the Stockholders (the "Parent Disclosure Letter"):

         SECTION  4.01.  Organization,   Standing  and  Power.  Parent  is  duly
organized,  validly existing and in good standing under the laws of the State of
Nevada and has full corporate power and authority and possesses all governmental
franchises,  licenses, permits, authorizations and approvals necessary to enable
it to own,  lease or otherwise hold its properties and assets and to conduct its
businesses  as  presently  conducted,  other  than  such  franchises,  licenses,
permits,  authorizations and approvals the lack of which, individually or in the
aggregate,  has not had and would not  reasonably be expected to have a material
adverse effect on Parent,  a material adverse effect on the ability of Parent to
perform  its  obligations  under this  Agreement  or on the ability of Parent to
consummate the Transactions (a "Parent Material Adverse Effect"). Parent is duly
qualified to do business in each  jurisdiction  where the nature of its business
or  their  ownership  or  leasing  of its  properties  make  such  qualification
necessary  and where the failure to so qualify  would  reasonably be expected to
have a Parent Material Adverse Effect.  Parent has delivered to the Company true
and complete copies of the articles of  incorporation  of Parent,  as amended to
the date of this Agreement (as so amended, the "Parent Charter"), and the Bylaws
of Parent, as amended to the date of this Agreement (as so amended,  the "Parent
Bylaws").

                                       12


         SECTION  4.02.  Subsidiaries;  Equity  Interests.  Parent does not own,
directly or indirectly,  any capital  stock,  membership  interest,  partnership
interest, joint venture interest or other equity interest in any person.

         SECTION 4.03. Capital Structure. The authorized capital stock of Parent
consists of  90,000,000  shares of Parent  Common  Stock,  par value $0.0001 per
share, and 10,000,000 shares of preferred stock, par value $0.0001 per share. As
of the date hereof (i)  1,156,850  shares of Parent  Common Stock are issued and
outstanding,  (ii) no shares of  preferred  stock are  outstanding  and (iii) no
shares  of  Parent  Common  Stock or  preferred  stock are held by Parent in its
treasury.  Except as set forth above, no shares of capital stock or other voting
securities  of Parent were issued,  reserved for  issuance or  outstanding.  All
outstanding  shares of the capital stock of Parent are, and all such shares that
may be issued  prior to the date hereof will be when  issued,  duly  authorized,
validly  issued,  fully paid and  nonassessable  and not subject to or issued in
violation  of  any  purchase  option,  call  option,  right  of  first  refusal,
preemptive right, subscription right or any similar right under any provision of
the General  Corporation  Law of the State of Nevada,  the Parent  Charter,  the
Parent  Bylaws or any Contract to which  Parent is a party or  otherwise  bound.
There  are not any  bonds,  debentures,  notes or other  indebtedness  of Parent
having the right to vote (or convertible into, or exchangeable  for,  securities
having the right to vote) on any matters on which holders of Parent Common Stock
may vote ("Voting  Parent Debt").  Except as set forth above,  as of the date of
this  Agreement,  there are not any options,  warrants,  rights,  convertible or
exchangeable  securities,  "phantom" stock rights,  stock  appreciation  rights,
stock-based   performance  units,   commitments,   Contracts,   arrangements  or
undertakings  of any kind to which Parent is a party or by which it is bound (i)
obligating Parent to issue, deliver or sell, or cause to be issued, delivered or
sold,  additional  shares of capital stock or other equity  interests in, or any
security  convertible or exercisable for or exchangeable  into any capital stock
of or  other  equity  interest  in,  Parent  or any  Voting  Parent  Debt,  (ii)
obligating  Parent  to  issue,  grant,  extend  or enter  into any such  option,
warrant, call, right, security, commitment, Contract, arrangement or undertaking
or (iii) that give any person the right to receive any economic benefit or right
similar to or derived from the economic benefits and rights occurring to holders
of the capital stock of the Parent. As of the date of this Agreement,  there are
not any outstanding contractual  obligations of Parent to repurchase,  redeem or
otherwise acquire any shares of capital stock of Parent.  Except as set forth in
Schedule  4.03,  the  Parent  is not a  party  to  any  agreement  granting  any
securityholder of the Parent the right to cause the Parent to register shares of
the capital stock or other securities of the Parent held by such  securityholder
under the  Securities  Act. The  stockholder  list  provided to the Company is a
current  shareholder  list generated by its stock transfer agent,  and such list
accurately  reflects  all of the issued and  outstanding  shares of the Parent's
Common Stock.

         SECTION 4.04. Authority;  Execution and Delivery;  Enforceability.  The
execution and delivery by the Parent of this Agreement and the  consummation  by
the Parent of the  Transactions  have been duly  authorized  and approved by the
Board of Directors of the Parent and no other corporate  proceedings on the part
of the Parent are necessary to authorize  this  Agreement and the  Transactions.
This Agreement  constitutes a legal, valid and binding obligation of the Parent,
enforceable against the Parent in accordance with the terms hereof.

                                       13


         SECTION 4.05.     No Conflicts; Consents.

                    (a) Except as set forth in the Parent Disclosure Letter, the
           execution and delivery by Parent of this Agreement, does not, and the
           consummation of Transactions and compliance with the terms hereof and
           thereof will not,  conflict  with,  or result in any  violation of or
           default (with or without notice or lapse of time, or both) under,  or
           give rise to a right of termination,  cancellation or acceleration of
           any  obligation  or  to  loss  of a  material  benefit  under,  or to
           increased,   additional,   accelerated   or   guaranteed   rights  or
           entitlements  of any person  under,  or result in the creation of any
           Lien  upon any of the  properties  or assets  of  Parent  under,  any
           provision of (i) Parent Charter or Parent  Bylaws,  (ii) any material
           Contract to which Parent is a party or by which any of its properties
           or assets is bound or (iii)  subject to the filings and other matters
           referred to in Section 4.05(b), any material Judgment or material Law
           applicable to Parent or its properties or assets,  other than, in the
           case  of  clauses  (ii)  and  (iii)  above,   any  such  items  that,
           individually  or in  the  aggregate,  have  not  had  and  would  not
           reasonably be expected to have a Parent Material Adverse Effect.

                    (b) No Consent of, or  registration,  declaration  or filing
           with,  or permit  from,  any  Governmental  Entity is  required to be
           obtained or made by or with respect to Parent in connection  with the
           execution,   delivery  and  performance  of  this  Agreement  or  the
           consummation of the Transactions,  other than the (A) filing with the
           SEC of a 14f-1  Notice and (B) filing  with the SEC of reports  under
           Sections 13 and 16 of the Exchange  Act, and (C) filings  under state
           "blue sky" laws, as may be required in connection with this Agreement
           and the Transactions.

         SECTION 4.06.     SEC Documents; Undisclosed Liabilities.

                    (a)  Parent  has  filed  all  reports,   schedules,   forms,
           statements  and other  documents  required to be filed by Parent with
           the SEC since January 1, 2005, pursuant to Sections 13(a), 14 (a) and
           15(d) of the Exchange Act (the "Parent SEC Documents").

                    (b)  As of its  respective  filing  date,  each  Parent  SEC
           Document  complied in all material  respects with the requirements of
           the Exchange Act and the rules and regulations of the SEC promulgated
           thereunder  applicable  to  such  Parent  SEC  Document,  and did not
           contain any untrue  statement  of a material  fact or omit to state a
           material fact required to be stated  therein or necessary in order to
           make the  statements  therein,  in light of the  circumstances  under
           which  they were made,  not  misleading.  Except to the  extent  that
           information  contained in any Parent SEC Document has been revised or
           superseded by a later filed Parent SEC  Document,  none of the Parent
           SEC  Documents  contains any untrue  statement of a material  fact or
           omits to state any  material  fact  required to be stated  therein or
           necessary in order to make the  statements  therein,  in light of the
           circumstances  under  which  they  were  made,  not  misleading.  The
           consolidated  financial  statements of Parent  included in the Parent
           SEC  Documents  comply  as to  form  in all  material  respects  with
           applicable  accounting  requirements  and  the  published  rules  and
           regulations  of the SEC with respect  thereto,  have been prepared in
           accordance with the U.S.  generally  accepted  accounting  principals
           ("GAAP") (except, in the case of unaudited  statements,  as permitted
           by the rules and  regulations  of the SEC)  applied  on a  consistent
           basis during the periods  involved (except as may be indicated in the
           notes thereto) and fairly present the consolidated financial position
           of Parent and its  consolidated  subsidiaries as of the dates thereof
           and the  consolidated  results of their operations and cash flows for
           the periods shown (subject, in the case of unaudited  statements,  to
           normal year-end audit adjustments).

                                       14


                    (c) Except as set forth in the Filed  Parent SEC  Documents,
           Parent has no  liabilities  or  obligations  of any  nature  (whether
           accrued,  absolute,  contingent or otherwise)  required by GAAP to be
           set forth on a balance sheet of Parent or in the notes  thereto.  The
           Parent  Disclosure  Letter sets forth all financial  and  contractual
           obligations  and  liabilities  (including  any  obligations  to issue
           capital  stock or other  securities of the parent) due after the date
           hereof.  As of the date  hereof the Parent has total  liabilities  of
           less than $5,000,  all of which  liabilities  shall be paid off at or
           prior to the Closing and shall in no event remain  liabilities of the
           Parent, the Company or the Stockholders following the Closing.

         SECTION 4.07. Information Supplied. None of the information supplied or
to be supplied by Parent for  inclusion  or  incorporation  by  reference in the
14f-1 Notice will, at the date it is first mailed to the Parent's  stockholders,
contain any untrue  statement  of a material  fact or omit to state any material
fact required to be stated  therein or necessary in order to make the statements
therein,  in  light  of  the  circumstances  under  which  they  are  made,  not
misleading.

         SECTION 4.08. Absence of Certain Changes or Events. Except as disclosed
in the Filed Parent SEC Documents or in the Parent Disclosure  Letter,  from the
date of the most  recent  audited  financial  statements  included  in the Filed
Parent SEC  Documents to the date of this  Agreement,  Parent has  conducted its
business only in the ordinary course, and during such period there has not been:

                    (a)  any  change  in  the  assets,  liabilities,   financial
           condition or operating  results of the Parent from that  reflected in
           the Parent SEC Documents,  except  changes in the ordinary  course of
           business that have not caused,  in the aggregate,  a Parent  Material
           Adverse Effect;

                    (b) any damage,  destruction or loss, whether or not covered
           by insurance, that would have a Parent Material Adverse Effect;

                    (c) any  waiver or  compromise  by the  Parent of a valuable
           right or of a material debt owed to it;

                    (d) any  satisfaction  or discharge of any lien,  claim,  or
           encumbrance or payment of any obligation by the Parent, except in the
           ordinary  course of business  and the  satisfaction  or  discharge of
           which would not have a Parent Material Adverse Effect;

                    (e) any material change to a material  Contract by which the
           Parent or any of its assets is bound or subject;

                    (f) any material change in any  compensation  arrangement or
           agreement with any employee, officer, director or stockholder;

                                       15


                    (g) any  resignation  or  termination  of  employment of any
           officer of the Parent;

                    (h) any mortgage,  pledge,  transfer of a security  interest
           in,  or lien,  created  by the  Parent,  with  respect  to any of its
           material properties or assets,  except liens for taxes not yet due or
           payable and liens that arise in the  ordinary  course of business and
           do not  materially  impair  the  Parent's  ownership  or use of  such
           property or assets;

                    (i) any loans or guarantees made by the Parent to or for the
           benefit of its  employees,  officers or directors,  or any members of
           their  immediate  families,  other  than  travel  advances  and other
           advances made in the ordinary course of its business;

                    (j) any  declaration,  setting  aside  or  payment  or other
           distribution in respect of any of the Parent's  capital stock, or any
           direct or indirect redemption,  purchase, or other acquisition of any
           of such stock by the Parent;

                    (k) any  alteration of the Parent's  method of accounting or
           the identity of its auditors;

                    (l)  any  issuance  of  equity  securities  to any  officer,
           director or  affiliate,  except  pursuant to  existing  Parent  stock
           option plans; or

                    (m) any arrangement or commitment by the Parent to do any of
           the things described in this Section 4.08.

         SECTION 4.09.     Taxes.

                    (a)  Parent  has  timely  filed,  or has caused to be timely
           filed on its behalf,  all Tax Returns required to be filed by it, and
           all such Tax Returns are true,  complete and accurate,  except to the
           extent  any  failure  to file or any  inaccuracies  in any  filed Tax
           Returns, individually or in the aggregate, have not had and would not
           reasonably be expected to have a Parent Material Adverse Effect.  All
           Taxes shown to be due on such Tax  Returns,  or otherwise  owed,  has
           been  timely  paid,  except to the  extent  that any  failure to pay,
           individually  or  in  the  aggregate,  has  not  had  and  would  not
           reasonably be expected to have a Parent Material Adverse Effect.

                    (b) The most recent  financial  statements  contained in the
           Filed Parent SEC Documents  reflect an adequate reserve for all Taxes
           payable by Parent (in addition to any reserve for  deferred  Taxes to
           reflect  timing  differences  between  book  and Tax  items)  for all
           Taxable  periods  and  portions  thereof  through  the  date  of such
           financial  statements.  No  deficiency  with respect to any Taxes has
           been proposed,  asserted or assessed against Parent,  and no requests
           for waivers of the time to assess any such Taxes are pending,  except
           to the extent any such deficiency or request for waiver, individually
           or in the aggregate, has not had and would not reasonably be expected
           to have a Parent Material Adverse Effect.

                    (c) There are no Liens for  Taxes  (other  than for  current
           Taxes not yet due and payable) on the assets of Parent. Parent is not
           bound by any agreement with respect to Taxes.

                                       16


         SECTION 4.10. Absence of Changes in Benefit Plans. From the date of the
most  recent  audited  financial  statements  included  in the Filed  Parent SEC
Documents  to the date of this  Agreement,  there has not been any  adoption  or
amendment  in any  material  respect  by  Parent  of any  collective  bargaining
agreement  or  any  bonus,  pension,  profit  sharing,   deferred  compensation,
incentive compensation,  stock ownership,  stock purchase, stock option, phantom
stock,   retirement,    vacation,   severance,    disability,   death   benefit,
hospitalization, medical or other plan, arrangement or understanding (whether or
not legally  binding)  providing  benefits  to any  current or former  employee,
officer or director of Parent (collectively,  "Parent Benefit Plans"). As of the
date  of  this   Agreement   there   are   not   any   employment,   consulting,
indemnification, severance or termination agreements or arrangements between the
Parent and any  current or former  employee,  officer or director of the Parent,
nor does the Parent have any general severance plan or policy.

         SECTION 4.11. ERISA Compliance;  Excess Parachute Payments.  The Parent
does not, and since its inception never has,  maintained,  or contributed to any
"employee  pension  benefit  plans"  (as  defined  in  Section  3(2) of  ERISA),
"employee  welfare  benefit  plans" (as defined in Section 3(1) of ERISA) or any
other Parent  Benefit  Plan for the benefit of any current or former  employees,
consultants, officers or directors of Parent.

         SECTION 4.12.  Litigation.  Except as disclosed in the Filed Parent SEC
Documents  or in the  Parent  Disclosure  Letter,  there is no Action  which (i)
adversely affects or challenges the legality,  validity or enforceability of any
of this  Agreement  or the Shares or (ii)  could,  if there were an  unfavorable
decision,  individually  or in the aggregate,  have or reasonably be expected to
result  in a  Parent  Material  Adverse  Effect.  Neither  the  Parent  nor  any
subsidiary,  nor any  director  or officer  thereof  (in his or her  capacity as
such),  is or has been the subject of any Action  involving a claim or violation
of or liability  under federal or state  securities laws or a claim of breach of
fiduciary duty.

         SECTION 4.13.  Compliance with Applicable Laws.  Except as disclosed in
the Filed Parent SEC Documents or in the Parent Disclosure Letter,  Parent is in
compliance  with all applicable  Laws,  including those relating to occupational
health and safety and the  environment,  except for  instances of  noncompliance
that,  individually and in the aggregate,  have not had and would not reasonably
be expected to have a Parent Material Adverse Effect. Except as set forth in the
Filed Parent SEC Documents or in the Parent  Disclosure  Letter,  Parent has not
received any written communication during the past two years from a Governmental
Entity that alleges  that Parent is not in  compliance  in any material  respect
with any  applicable  Law.  The  Parent  is in  compliance  with  all  effective
requirements of the  Sarbanes-Oxley  Act of 2002, as amended,  and the rules and
regulations   thereunder,   that  are   applicable  to  it,  except  where  such
noncompliance  could not have or  reasonably  be  expected to result in a Parent
Material  Adverse  Effect.  This  Section  4.13 does not relate to matters  with
respect to Taxes, which are the subject of Section 4.09.

         SECTION  4.14.  Contracts.  Except as disclosed in the Parent Filed SEC
Documents, there are no Contracts that are material to the business, properties,
assets,  condition (financial or otherwise),  results of operations or prospects
of the  Parent  taken as a whole.  Parent is not in  violation  of or in default
under (nor does there exist any condition  which upon the passage of time or the
giving of notice would cause such a violation of or default  under) any Contract
to which it is a party or by which  it or any of its  properties  or  assets  is
bound, except for violations or defaults that would not,  individually or in the
aggregate, reasonably be expected to result in a Parent Material Adverse Effect.

                                       17


         SECTION 4.15.  Title to Properties.  Parent has good title to, or valid
leasehold  interests in, all of its properties and assets used in the conduct of
its businesses. All such assets and properties, other than assets and properties
in which the Parent  has  leasehold  interests,  are free and clear of all Liens
other than those set forth in the Parent  Disclosure Letter and except for Liens
that,  in the  aggregate,  do not and will  not  materially  interfere  with the
ability of the Parent to conduct  business as  currently  conducted.  Parent has
complied in all material respects with the terms of all material leases to which
it is a party and under  which it is in  occupancy,  and all such  leases are in
full force and effect.  Parent enjoys peaceful and undisturbed  possession under
all such material leases.

         SECTION  4.16.  Intellectual  Property.  Parent  owns,  or  is  validly
licensed or otherwise  has the right to use, all  Intellectual  Property  Rights
which are  material  to the  conduct of the  business  of the Parent  taken as a
whole. The Parent Disclosure Letter sets forth a description of all Intellectual
Property  Rights which are material to the conduct of the business of the Parent
taken as a whole.  Except as set forth in the Parent Disclosure Letter no claims
are pending or, to the  knowledge of the Parent,  threatened  that the Parent is
infringing or otherwise adversely affecting the rights of any person with regard
to any Intellectual Property Right. To the knowledge of the Parent, no person is
infringing  the rights of the Parent with respect to any  Intellectual  Property
Right.

         SECTION 4.17.  Labor  Matters.  There are no  collective  bargaining or
other  labor union  agreements  to which the Parent is a party or by which it is
bound.  No material labor dispute exists or, to the knowledge of the Parent,  is
imminent with respect to any of the employees of the Parent.

         SECTION 4.18. Market Makers.  The Parent has at least two market makers
for its common  shares and such market makers have obtained all permits and made
all  filings  necessary  in order for such  market  makers to continue as market
makers of the Parent.

         SECTION 4.19. Transactions With Affiliates and Employees. Except as set
forth in the Filed Parent SEC Documents and Parent  Disclosure  Letter,  none of
the  officers or  directors  of the Parent and, to the  knowledge of the Parent,
none of the employees of the Parent is presently a party to any transaction with
the Parent or any subsidiary (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for
the  furnishing  of services to or by,  providing for rental of real or personal
property to or from,  or  otherwise  requiring  payments to or from any officer,
director or such  employee  or, to the  knowledge  of the Parent,  any entity in
which any officer,  director, or any such employee has a substantial interest or
is an officer, director, trustee or partner.

         SECTION 4.20.  Internal  Accounting  Controls.  The Parent  maintains a
system  of  internal   accounting  controls  sufficient  to  provide  reasonable
assurance that (i)  transactions  are executed in accordance  with  management's
general or specific authorizations,  (ii) transactions are recorded as necessary
to permit  preparation  of financial  statements  in conformity  with  generally
accepted  accounting  principles  and to maintain  asset  accountability,  (iii)
access to assets is permitted only in accordance  with  management's  general or
specific  authorization,  and (iv) the  recorded  accountability  for  assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.  The Parent has established disclosure
controls and procedures for the Parent and designed such disclosure controls and
procedures  to ensure that material  information  relating to the Parent is made
known to the officers by others  within those  entities.  The Parent's  officers
have evaluated the effectiveness of the Parent's controls and procedures.  Since
December  31,  2005,  there have been no  significant  changes  in the  Parent's
internal  controls or, to the Parent's  knowledge,  in other  factors that could
significantly affect the Parent's internal controls.

                                       18


         SECTION 4.21. Solvency.  Based on the financial condition of the Parent
as of the closing date (and assuming that the closing shall have occurred),  (i)
the Parent's fair saleable  value of its assets  exceeds the amount that will be
required to be paid on or in respect of the  Parent's  existing  debts and other
liabilities  (including known contingent  liabilities) as they mature,  (ii) the
Parent's  assets do not  constitute  unreasonably  small capital to carry on its
business  for the  current  fiscal year as now  conducted  and as proposed to be
conducted including its capital needs taking into account the particular capital
requirements  of the business  conducted by the Parent,  and  projected  capital
requirements and capital  availability  thereof, and (iii) the current cash flow
of the Parent,  together with the proceeds the Parent would receive,  were it to
liquidate all of its assets,  after taking into account all anticipated  uses of
the cash,  would be  sufficient  to pay all amounts on or in respect of its debt
when such amounts are  required to be paid.  The Parent does not intend to incur
debts  beyond its ability to pay such debts as they mature  (taking into account
the timing and amounts of cash to be payable on or in respect of its debt).

         SECTION 4.22. Application of Takeover Protections. The Parent has taken
all necessary action, if any, in order to render  inapplicable any control share
acquisition, business combination, poison pill (including any distribution under
a rights agreement) or other similar anti-takeover  provision under the Parent's
charter  documents  or the laws of its state of  incorporation  that is or could
become  applicable to the  Stockholders as a result of the  Stockholders and the
Parent  fulfilling  their  obligations  or  exercising  their  rights under this
Agreement,  including,  without  limitation,  the issuance of the Shares and the
Stockholders' ownership of the Shares.

         SECTION 4.23. No  Additional  Agreements.  The Parent does not have any
agreement  or  understanding   with  the   Stockholders   with  respect  to  the
transactions  contemplated  by this  Agreement  other than as  specified in this
Agreement.

         SECTION  4.24.  Investment  Company.  The Parent is not,  and is not an
affiliate of, and  immediately  following  the Closing will not have become,  an
"investment  company" within the meaning of the Investment  Company Act of 1940,
as amended.

         SECTION 4.25.  Disclosure.  The Parent confirms that neither it nor any
person  acting on its behalf has  provided  any  Stockholder  or its  respective
agents or counsel  with any  information  that the Parent  believes  constitutes
material,  non-public  information  except insofar as the existence and terms of
the proposed  transactions  hereunder may constitute such information and except
for  information  that will be disclosed by the Parent under a current report on
Form  8-K  filed  within  one  business  days  after  the  Closing.  The  Parent
understands  and  confirms  that the  Stockholders  will  rely on the  foregoing
representations  and  covenants in effecting  transactions  in securities of the
Parent.  All disclosure  provided to the Stockholders  regarding the Parent, its
business and the transactions  contemplated hereby, furnished by or on behalf of
the Parent (including the Parent's  representations  and warranties set forth in
this Agreement) are true and correct and do not contain any untrue  statement of
a material  fact or omit to state any material  fact  necessary in order to make
the statements made therein, in light of the circumstances under which they were
made, not misleading.

                                       19


         SECTION 4.26. Certain Registration Matters.  Except as specified in the
Parent  Disclosure  Letter  and  Filed  Parent  SEC  Documents  and  except  for
registration  rights granted to affiliates of Timothy Halter, the Parent has not
granted  or agreed to grant to any person  any  rights  (including  "piggy-back"
registration  rights) to have any securities of the Parent  registered  with the
SEC or any other governmental authority that have not been satisfied.

         SECTION 4.27. Listing and Maintenance Requirements.  The Parent is, and
has no reason to believe that it will not in the foreseeable  future continue to
be, in compliance  with the listing and maintenance  requirements  for continued
listing of the Parent Stock on the trading  market on which the Parent Stock are
currently  listed or quoted.  The  issuance  and sale of the  Shares  under this
Agreement does not contravene the rules and regulations of the trading market on
which the Parent Stock are  currently  listed or quoted,  and no approval of the
stockholders  of the Parent is  required  for the Parent to issue and deliver to
the Stockholders the Shares contemplated by this Agreement.

         SECTION 4.28.  No  Undisclosed  Events,  Liabilities,  Developments  or
Circumstances. No event, liability,  development or circumstance has occurred or
exists, or is contemplated to occur with respect to the Parent, its subsidiaries
or their respective  business,  properties,  prospects,  operations or financial
condition, that would be required to be disclosed by the Parent under applicable
securities  laws on a  registration  statement  on Form S-1  filed  with the SEC
relating to an issuance and sale by the Parent of its Common Stock and which has
not been publicly announced.

         SECTION 4.29. Foreign Corrupt Practices. Neither the Parent, nor any of
its subsidiaries,  nor, to the Parent's knowledge, any director, officer, agent,
employee  or  other  person  acting  on  behalf  of  the  Parent  or  any of its
subsidiaries  has, in the course of its actions for, or on behalf of, the Parent
(i) used any corporate funds for any unlawful contribution,  gift, entertainment
or other unlawful expenses relating to political activity;  (ii) made any direct
or indirect unlawful payment to any foreign or domestic  government  official or
employee  from  corporate  funds;  (iii)  violated  or is in  violation  of  any
provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or (iv)
made any unlawful bribe, rebate,  payoff,  influence payment,  kickback or other
unlawful payment to any foreign or domestic government official or employee.

                                       20



                                    ARTICLE V

                                   Deliveries

         SECTION 5.01.     Deliveries of the Stockholders.

                    (a) Concurrently  herewith each Stockholder is delivering to
           the Parent this Agreement executed by the Stockholder.

                    (b) At or  prior  to the  Closing,  each  Stockholder  shall
           deliver to the Parent:

                           (i) certificates representing its Company Stock; and

                           (ii) duly  executed  stock powers for transfer by the
                  Stockholder of its Company Stock to the Parent.

         SECTION 5.02.     Deliveries of the Parent.

                    (a) Concurrently herewith, the Parent is delivering:

                           (i) to each Stockholder and to the Company, a copy of
                  this Agreement executed by Parent;

                           (ii) to the Company,  a certificate  from the Parent,
                  signed by its Secretary or Assistant Secretary certifying that
                  the attached copies of the Parent  Charter,  Parent Bylaws and
                  resolutions of the Board of Directors of the Parent  approving
                  the Agreement and the Transactions are all true,  complete and
                  correct and remain in full force and effect;

                           (iii) to the  Company,  a letter  of  resignation  of
                  Timothy  Halter  from all  offices  he holds  with the  Parent
                  effective upon the Closing and from his position as a director
                  of the Parent  that will  become  effective  upon the 10th day
                  following  the mailing by the Parent to its  stockholders  the
                  14f-1 Notice;

                           (iv) to the  Company,  evidence  of the  election  of
                  Qingjie Zhao, as a director and as the Chief Executive Officer
                  and President of the Parent  effective  upon execution of this
                  Agreement by the Parent;

                           (v) to the Company, such pay-off letters and releases
                  relating to  liabilities as the Company shall request and such
                  pay-off  letters and releases  shall be in form and  substance
                  satisfactory to the Company; and

                           (vi) to the Company the results of UCC, judgment lien
                  and tax lien searches with respect to the Parent,  the results
                  of which indicate no liens on the assets of the Parent.

                    (b) At or before  the  Closing,  the  counsel  to the Parent
           shall have  delivered  to the  Company and the  Stockholders  a legal
           opinion on the enforceability of this Share Exchange  Agreement,  the
           Escrow Agreement and the Stock Purchase and Subscription Agreement in
           a form reasonably acceptable to the Company and the Stockholders.

                                       21


                    (c) At or within 5 business days following the Closing,  the
           Parent shall deliver:

                           (i) to each  Stockholder,  certificates  representing
                  the  new  shares  of  Parent   Common  Stock  issued  to  such
                  Stockholder as set forth on Exhibit A; and

                           (ii)  to  the   Company,   consent   letters  of  the
                  accounting  firms  of  Parent   confirming  each  such  firm's
                  respective  consent  to  the  use  by the  Parent  of  reports
                  prepared by such firm  regarding the  financial  statements of
                  the Parent in all future  registration  statements  filed with
                  the SEC in the form annexed as Exhibit B hereto.

         SECTION 5.03.     Deliveries of the Company.

                    (a) Concurrently  herewith, the Company is delivering to the
           Parent:

                           (i) this Agreement executed by Company; and

                           (ii) a  certificate  from the Company,  signed by its
                  authorized  officer certifying that the attached copies of the
                  Company  Constituent  Instruments and resolutions of the Board
                  of Directors of the Company  approving  the  Agreement and the
                  Transactions are all true,  complete and correct and remain in
                  full force and effect.

                                   ARTICLE VI

                              Conditions to Closing

         SECTION  6.01.  Stockholder  and  Company  Conditions  Precedent.   The
obligations of the  Stockholders  and the Company to enter into and complete the
Closing is subject,  at the option of the Stockholders  and the Company,  to the
fulfillment on or prior to the Closing Date of the following conditions.

                    (a) Representations  and Covenants.  The representations and
           warranties of the Parent contained in this Agreement shall be true in
           all  material  respects on and as of the  Closing  Date with the same
           force and effect as though  made on and as of the Closing  Date.  The
           Parent shall have  performed  and  complied in all material  respects
           with all covenants and  agreements  required by this  Agreement to be
           performed  or complied  with by the Parent on or prior to the Closing
           Date.  The Parent shall have  delivered to the  Stockholders  and the
           Company,  a  certificate,  dated the Closing  Date,  to the foregoing
           effect.

                    (b)  Litigation.  No action,  suit or proceeding  shall have
           been  instituted  before any court or governmental or regulatory body
           or instituted or threatened by any governmental or regulatory body to
           restrain,  modify or prevent the carrying out of the  Transactions or
           to  seek  damages  or a  discovery  order  in  connection  with  such
           Transactions,  or which has or may have, in the reasonable opinion of
           the Company or any Stockholders,  a materially  adverse effect on the
           assets, properties,  business,  operations or condition (financial or
           otherwise) of the Parent or the Company.

                                       22


                    (c) No Material  Adverse  Change.  There shall not have been
           any  occurrence,   event,  incident,   action,  failure  to  act,  or
           transaction  since  December 31, 2005 which has had or is  reasonably
           likely to cause a Parent Material Adverse Effect.

                    (d) Post-Closing Capitalization.  At, and immediately after,
           the Closing, the authorized capitalization,  and the number of issued
           and  outstanding  shares of the capital  stock of the Company and the
           Parent, on a fully-diluted  basis,  shall be as specified in Schedule
           6.01(d).

                    (e) SEC Reports. The Parent shall have filed all reports and
           other documents required to be filed by Parent under the U.S. federal
           securities laws through the Closing Date.

                    (f) OTCBB  Quotation.  The Parent shall have  maintained its
           status  as  a   Company   whose   common   stock  is  quoted  on  the
           Over-the-Counter  Bulletin  Board and no reason shall exist as to why
           such status shall not continue immediately following the Closing.

                    (g)  Deliveries.  The  deliveries  specified in Section 5.02
           shall have been made by the Parent.

                    (h) No  Suspensions  of  Trading in Parent  Stock;  Listing.
           Trading in the Parent Stock shall not have been  suspended by the SEC
           or any trading market  (except for any  suspensions of trading of not
           more than one trading day solely to permit  dissemination of material
           information  regarding  the  Parent)  at any time  since  the date of
           execution of this Agreement,  and the Parent Stock shall have been at
           all times since such date listed for trading on a trading market.

         SECTION 6.02.  Parent  Conditions  Precedent.  The  obligations  of the
Parent to enter into and complete  the Closing is subject,  at the option of the
Parent,  to the  fulfillment  on or prior to the Closing  Date of the  following
conditions, any one or more of which may be waived by the Parent in writing.

                    (a) Representations  and Covenants.  The representations and
           warranties  of the  Stockholders  and the Company  contained  in this
           Agreement  shall be true in all  material  respects  on and as of the
           Closing  Date with the same force and effect as though made on and as
           of the Closing  Date.  The  Stockholders  and the Company  shall have
           performed  and complied in all material  respects  with all covenants
           and agreements required by this Agreement to be performed or complied
           with by the  Stockholders  and the Company on or prior to the Closing
           Date. The Company shall have delivered to the Parent, if requested, a
           certificate, dated the Closing Date, to the foregoing effect.

                                       23


                    (b)  Litigation.  No action,  suit or proceeding  shall have
           been  instituted  before any court or governmental or regulatory body
           or instituted or threatened by any governmental or regulatory body to
           restrain,  modify or prevent the carrying out of the  Transactions or
           to  seek  damages  or a  discovery  order  in  connection  with  such
           Transactions,  or which has or may have, in the reasonable opinion of
           the Parent,  a materially  adverse effect on the assets,  properties,
           business,  operations  or condition  (financial  or otherwise) of the
           Parent.

                    (c) No Material  Adverse  Change.  There shall not have been
           any  occurrence,   event,  incident,   action,  failure  to  act,  or
           transaction  since  December 31, 2005 which has had or is  reasonably
           likely to cause a Company Material Adverse Effect.

                    (d) Deliveries. The deliveries specified in Section 5.01 and
           Section  5.03  shall  have  been  made  by the  Stockholders  and the
           Company, respectively.

                    (e) Audited Financial Statements and Form 10 Disclosure. The
           Company  shall have  provided  the Parent and the  Stockholders  with
           reasonable assurances that the Parent will be able to comply with its
           obligation  to file a  current  report  on Form  8-K  within  one (1)
           business days following the Closing  containing the requisite audited
           consolidated  financial  statements  of the Company and the requisite
           Form 10-type disclosure regarding the Company.

                    (f) Post-Closing Capitalization.  At, and immediately after,
           the Closing, the authorized capitalization,  and the number of issued
           and  outstanding  shares of the capital  stock of the Company and the
           Parent, on a fully-diluted  basis,  shall be as specified in Schedule
           6.01(d).


                                   ARTICLE VII

                                    Covenants

         SECTION 7.01.     Preparation of the 14f-1 Notice; Blue Sky Laws.

                    (a) As soon as possible following the date of this Agreement
           and in any event, within two business days hereafter, the Company and
           Parent  shall  prepare  and file  with the SEC the  14f-1  Notice  in
           connection with the consummation of this Agreement.  The Parent shall
           cause the 14f-1 Notice to be mailed to the Parent's  stockholders  as
           promptly as practicable thereafter.

                    (b) Parent shall take any action  (other than  qualifying to
           do business in any  jurisdiction in which it is not now so qualified)
           required to be taken under any applicable  state  securities  laws in
           connection  with the issuance of Parent Stock in connection with this
           Agreement.

         SECTION 7.02. Public Announcements. Parent and the Company will consult
with each other before issuing, and provide each other the opportunity to review
and comment upon, any press release or other public  statements  with respect to
the Agreement and the Transactions and shall not issue any such press release or
make any such  public  statement  prior to such  consultation,  except as may be
required by  applicable  Law,  court process or by  obligations  pursuant to any
listing agreement with any national securities exchange.

                                       24


         SECTION  7.03.  Fees and  Expenses.  All fees and expenses  incurred in
connection with this Agreement shall be paid by the party incurring such fees or
expenses, whether or not this Agreement is consummated.

         SECTION  7.04.   Continued   Efforts.   Each  party  hereto  shall  use
commercially  reasonable efforts to (a) take all action reasonably  necessary to
consummate the Transactions,  and (b) take such steps and do such acts as may be
necessary to keep all of its  representations and warranties true and correct as
of the Closing Date with the same effect as if the same had been made,  and this
Agreement had been dated, as of the Closing Date.

         SECTION  7.05.  Conduct of  Business.  During the period  from the date
hereof  through the Closing  Date,  Parent and the Company  shall carry on their
respective  businesses  in the ordinary and usual  course  consistent  with past
practice.

         SECTION 7.06. Exclusivity.  The Parent shall not (i) solicit, initiate,
or encourage the submission of any proposal or offer from any person relating to
the  acquisition of any capital stock or other voting  securities of the Parent,
or any assets of the Parent  (including any acquisition  structured as a merger,
consolidation,  share exchange or other business combination),  (ii) participate
in any  discussions or  negotiations  regarding,  furnish any  information  with
respect to,  assist or  participate  in, or  facilitate  in any other manner any
effort or  attempt by any  person to do or seek any of the  foregoing,  or (iii)
take any other action that is inconsistent  with the  Transactions  and that has
the effect of avoiding the Closing  contemplated hereby. The Parent shall notify
the Company  immediately if any person makes any proposal,  offer,  inquiry,  or
contact with respect to any of the foregoing.

         SECTION  7.07.  Filing of 8-K and Press  Release.  Parent  shall  file,
within one  business day of the Closing  Date, a current  report on Form 8-K and
attach as exhibits all relevant  agreements with the SEC disclosing the terms of
this Agreement and other requisite  disclosure  regarding the  Transactions  and
including the requisite audited consolidated financial statements of the Company
and the requisite  Form 10 disclosure  regarding the Company.  In addition,  the
Parent  shall issue a press  release  prior to 9:30 a.m.  (New York Time) on the
business  day  following  the  Closing  Date,  announcing  the  closing  of  the
transaction.

         SECTION   7.08.   Resale   Registration   Statement.    Parent   shall,
simultaneously with the Closing, file a registration statement to register those
shares of Parent  common stock issued to those  shareholders  of the Company who
participated in the Company's private offering of securities deemed  consummated
on the Effective Date, which registration statement shall be kept current by the
Parent  for a period  of at  least 24  months  from the date  such  registration
statement is declared effective by the SEC.

         SECTION 7.09.  Furnishing of  Information.  As long as any  Stockholder
owns the Shares,  the Parent  covenants to timely file (or obtain  extensions in
respect  thereof  and file  within the  applicable  grace  period)  all  reports
required  to be filed  by the  Parent  after  the date  hereof  pursuant  to the
Exchange  Act.  As long as any  Stockholder  owns  Shares,  if the Parent is not
required to file reports  pursuant to such laws,  it will prepare and furnish to
the  Stockholders  and make publicly  available in  accordance  with Rule 144(c)
promulgated  by the SEC pursuant to the Securities  Act, such  information as is
required  for the  Stockholder  to sell the Shares  under  Rule 144.  The Parent
further  covenants that it will take such further action as any holder of Shares
may reasonably  request,  all to the extent required from time to time to enable
such person to sell the Shares  without  registration  under the  Securities Act
within the limitation of the exemptions provided by Rule 144.

                                       25


         SECTION  7.10.  Integration.  The Company  shall not, and shall use its
best efforts to ensure that no affiliate of the Company shall,  sell,  offer for
sale or solicit offers to buy or otherwise  negotiate in respect of any security
(as defined in Section 2 of the  Securities  Act) that would be integrated  with
the offer or sale of the Shares in a manner that would require the  registration
under the  Securities Act of the  acquisition of the Shares by the  Stockholders
pursuant to the Agreement, or that would be integrated with the offer or sale of
the Shares for purposes of the rules and  regulations of any trading market in a
manner that would require stockholder  approval of the sale of the securities to
the Stockholders.

         SECTION  7.11.  Subsequent  Registrations.  Other than  pursuant to the
registration statement filed in connection with the transactions contemplated by
this  Agreement  and any  registrations  effected  pursuant to the  registration
rights  referred to in Schedule 4.03,  prior to the date that such  registration
statement  is  declared  effective  by the  SEC,  the  Parent  may not  file any
registration statement (other than on Form S-8) with the SEC with respect to any
securities of the Parent.

         SECTION  7.12.  Limitation  on  Issuance of Future  Priced  Securities.
During the six months  following  the  Closing,  the Parent  shall not issue any
"Future Priced Securities" as such term is described by NASD IM-4350-1.

         SECTION 7.13.  Indemnification of Investors.  The Parent will indemnify
and hold the Stockholders and their directors, officers, shareholders, partners,
employees  and agents  (each,  an "Investor  Party")  harmless  from any and all
losses,  liabilities,  obligations,  claims,  contingencies,  damages, costs and
expenses, including all judgments, amounts paid in settlements,  court costs and
reasonable attorneys' fees and costs of investigation  (collectively,  "Losses")
that any such  Investor  Party may suffer or incur as a result of or relating to
any  misrepresentation,  breach or inaccuracy of any  representation,  warranty,
covenant  or  agreement  made by the  Company  or  Parent  in this or any  other
transaction  document. In addition to the indemnity contained herein, the Parent
will reimburse  each Investor Party for its reasonable  legal and other expenses
(including the cost of any  investigation,  preparation and travel in connection
therewith) incurred in connection therewith, as such expenses are incurred.

         SECTION 7.14.  Non-Public  Information.  Each of the Company and Parent
covenant and agree that  neither it nor any other person  acting on their behalf
will provide any Stockholder or its agents or counsel with any information  that
the Company or Parent  believes  constitutes  material  non-public  information,
unless prior thereto such  Stockholder  shall have executed a written  agreement
regarding the confidentiality  and use of such information.  Each of the Company
and Parent  understands and confirms that each  Stockholder  shall be relying on
the foregoing  representations  in effecting  transactions  in securities of the
Parent.

                                       26


         SECTION 7.15.  Listing of  Securities.  The Parent  agrees,  (i) if the
Parent applies to have Parent Stock traded on any other trading market,  it will
include in such  application  the Shares,  and will take such other action as is
necessary or  desirable  to cause the Shares to be listed on such other  trading
market as  promptly  as  possible,  and (ii) it will take all action  reasonably
necessary  to continue  the  listing  and  trading of Parent  Stock on a trading
market and will comply in all material  respects  with the  Parent's  reporting,
filing and other obligations under the bylaws or rules of the trading market.

         SECTION  7.16.  Assumption  of Company  Obligations.  The Parent hereby
assumes and agrees to perform those  obligations  included in that certain Stock
Purchase and Subscription  Agreement,  dated on or about the date hereof,  among
the Company,  Empower  Century  Limited and certain  purchasers of the Company's
common  stock,  that are to be  performed  by the "Public  Company,"  as defined
therein.

         SECTION 7.17. Forward Stock Split. Within 30 days following the Closing
Parent shall effectuate a forward stock split on a 2.448719 for 1 basis.

                                  ARTICLE VIII

                                  Miscellaneous

         SECTION 8.01. Notices. All notices, requests, claims, demands and other
communications  under this  Agreement  shall be in  writing  and shall be deemed
given upon receipt by the parties at the  following  addresses (or at such other
address for a party as shall be specified by like notice):

                  If to the Parent, to:

                  MGCC Investment Strategies, Inc.
                  12890 Hilltop Road
                  Argyle, Texas 76226
                  Attention:  Timothy Halter
                  Facsimile: (972) 233 - 0300

                  If to the Company, to:

                  Wonder Auto Limited
                  No. 56 Lingxi Street
                  Taihe District
                  Jinzhou City, Liaoning
                  People's Republic of China, 121013
                  Attention: Qingjie Zhao
                  Facsimile:

                                       27


                  If to  Stockholders  at the  addresses  set forth in Exhibit A
           hereto.

                  with a copy to:

                  Thelen, Reid & Priest, LLP
                  701 Eighth Street, N.W.
                  Washington, D.C.  20001
                  Attention:  Louis A. Bevilacqua, Esq.
                  Facsimile: (202) 654-1804

         SECTION 8.02.  Amendments;  Waivers;  No Additional  Consideration.  No
provision  of this  Agreement  may be  waived  or  amended  except  in a written
instrument signed by the Company, Parent and the Stockholders holding a majority
of the Shares. No waiver of any default with respect to any provision, condition
or requirement of this  Agreement  shall be deemed to be a continuing  waiver in
the  future  or a waiver  of any  subsequent  default  or a waiver  of any other
provision,  condition or requirement  hereof, nor shall any delay or omission of
either party to exercise any right  hereunder in any manner  impair the exercise
of any such right. No consideration  shall be offered or paid to any Stockholder
to  amend or  consent  to a  waiver  or  modification  of any  provision  of any
transaction  document  unless  the same  consideration  is also  offered  to all
Stockholders who then hold Shares.

         SECTION 8.03. Registration  Provisions.  If for any reason the SEC does
not permit all of the Shares to be included in the Registration  Statement filed
pursuant to Section 7.08, or for any other reason any outstanding Shares are not
then  covered by an  effective  Registration  Statement,  then the Parent  shall
prepare and file within 30 days, an additional  Registration  Statement covering
the resale of all Shares  not  already  covered  by an  existing  and  effective
Registration Statement for an offering to be made on a continuous basis pursuant
to Rule 415, on Form S-1 (or on such other form  appropriate  for such purpose).
The Parent shall cause each such Registration Statement to be declared effective
under the Securities  Act as soon as possible and shall use its reasonable  best
efforts to keep such Registration  Statement continuously effective for at least
24 months following such time as it is declared effective by the SEC.

         SECTION  8.04.  Replacement  of  Securities.   If  any  certificate  or
instrument  evidencing any Shares is mutilated,  lost, stolen or destroyed,  the
Parent  shall issue or cause to be issued in exchange and  substitution  for and
upon  cancellation  thereof,  or in lieu  of and  substitution  therefor,  a new
certificate  or  instrument,  but  only  upon  receipt  of  evidence  reasonably
satisfactory to the Parent of such loss,  theft or destruction and customary and
reasonable  indemnity,  if requested.  The applicants  for a new  certificate or
instrument under such  circumstances  shall also pay any reasonable  third-party
costs associated with the issuance of such replacement  Shares. If a replacement
certificate or instrument evidencing any Shares is requested due to a mutilation
thereof,  the Parent may  require  delivery  of such  mutilated  certificate  or
instrument as a condition precedent to any issuance of a replacement.

         SECTION 8.05.  Remedies.  In addition to being entitled to exercise all
rights provided herein or granted by law, including recovery of damages, each of
the  Stockholders,   Parent  and  the  Company  will  be  entitled  to  specific
performance  under this Agreement.  The parties agree that monetary  damages may
not be adequate  compensation  for any loss  incurred by reason of any breach of
obligations  described in the  foregoing  sentence and hereby agrees to waive in
any action for specific  performance  of any such  obligation the defense that a
remedy at law would be adequate.

                                       28


         SECTION  8.06.  Independent  Nature of  Stockholders'  Obligations  and
Rights. The obligations of each Stockholder under this Agreement are several and
not joint with the  obligations  of any other  Stockholder,  and no  Stockholder
shall be  responsible in any way for the  performance of the  obligations of any
other  Stockholder  under this  Agreement.  The decision of each  Stockholder to
acquire  Shares  pursuant to this  Agreement  has been made by such  Stockholder
independently of any other Stockholder.  Nothing contained herein, and no action
taken by any  Stockholder  pursuant  hereto,  shall be deemed to constitute  the
Stockholders as a partnership, an association, a joint venture or any other kind
of entity,  or create a presumption  that the Stockholders are in any way acting
in concert or as a group with respect to such  obligations  or the  transactions
contemplated herein. Each Stockholder acknowledges that no other Stockholder has
acted as agent for such  Stockholder  in connection  with making its  investment
hereunder and that no Stockholder will be acting as agent of such Stockholder in
connection  with monitoring its investment in the Shares or enforcing its rights
under this  Agreement.  Each  Stockholder  shall be  entitled  to  independently
protect and enforce its rights,  including without limitation the rights arising
out of this Agreement,  and it shall not be necessary for any other  Stockholder
to be joined as an additional party in any proceeding for such purpose.  Each of
the  Company  and  Parent  acknowledge  that each of the  Stockholders  has been
provided with this same Agreement for the purpose of closing a transaction  with
multiple  Stockholders  and not because it was required or requested to do so by
any Stockholder.

         SECTION 8.07. Limitation of Liability.  Notwithstanding anything herein
to the contrary,  each of the Parent and the Company  acknowledge and agree that
the  liability  of a  Stockholder  arising  directly  or  indirectly,  under any
transaction  document  of any and every  nature  whatsoever  shall be  satisfied
solely  out of the assets of such  Stockholder,  and that no  trustee,  officer,
other  investment  vehicle or any other  affiliate  of such  Stockholder  or any
investor,  shareholder  or  holder  of shares  of  beneficial  interest  of such
Stockholder shall be personally liable for any liabilities of such Stockholder.

         SECTION 8.08.  Interpretation;  Disclosure Letters. When a reference is
made in this  Agreement to a Section,  such  reference  shall be to a Section of
this  Agreement  unless  otherwise  indicated.  Whenever  the  words  "include",
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation".

         SECTION  8.09.  Severability.  If any term or other  provision  of this
Agreement is invalid, illegal or incapable of being enforced by any rule or Law,
or public policy,  all other  conditions and provisions of this Agreement  shall
nevertheless  remain in full force and effect so long as the  economic  or legal
substance of the Transactions  contemplated hereby is not affected in any manner
materially  adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall  negotiate  in good  faith to modify  this  Agreement  so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that  Transactions  contemplated  hereby  are  fulfilled  to the  extent
possible.

                                       29


         SECTION 8.10. Counterparts;  Facsimile Execution. This Agreement may be
executed in one or more  counterparts,  all of which shall be considered one and
the same agreement and shall become effective when one or more counterparts have
been signed by each of the parties and delivered to the other parties. Facsimile
execution  and delivery of this  Agreement  is legal,  valid and binding for all
purposes.

         SECTION  8.11.  Entire  Agreement;  Third  Party  Beneficiaries.   This
Agreement,  taken  together  with the Company  Disclosure  Letter and the Parent
Disclosure Letter, (a) constitute the entire agreement,  and supersede all prior
agreements  and  understandings,  both written and oral,  among the parties with
respect to the  Transactions  and (b) are not intended to confer upon any person
other than the parties any rights or remedies.

         SECTION 8.12.  Governing Law. This Agreement  shall be governed by, and
construed in accordance  with, the laws of the State of New York,  regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof, except to the extent the laws of Nevada are mandatorily applicable
to the Transactions.

         SECTION 8.13. Assignment. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned,  in whole or in
part,  by operation of law or otherwise by any of the parties  without the prior
written  consent of the other  parties.  Any purported  assignment  without such
consent shall be void. Subject to the preceding  sentences,  this Agreement will
be binding upon, inure to the benefit of, and be enforceable by, the parties and
their respective successors and assigns.



                            [Signature Page Follows]







                                       30



         The parties  hereto have  executed and  delivered  this Share  Exchange
Agreement as of the date first above written.

The Parent:
                                         MGCC INVESTMENT STRATEGIES, INC.


                                         By: /s/Timothy Halter
                                             -----------------------------------
                                             Name: Timothy Halter
                                             Title: CEO and President


The Company:
                                         WONDER AUTO LIMITED


                                         By: /s/Qingjie Zhao
                                             -----------------------------------
                                             Name: Qingjie Zhao
                                             Title: CEO and Chairman








          [Stockholder Share Exchange Agreement Signature Pages Follow]





         The  undersigned   Stockholder  hereby  executes  this  Share  Exchange
Agreement as of the date first above written.



                                             For Individuals:


                                             ---------------------------
                                             Print Name Above


                                             ---------------------------
                                             Sign Name Above


                                             For Entities:


                                             Choice Inspire Limited
                                             ---------------------------
                                             Print Name Above


                                             By: /s/Qingjie Zhao
                                             ---------------------------
                                             Name: Qingjie Zhao
                                             Title:  CEO and Chairman






                  [Signature Page to Share Exchange Agreement]




         The  undersigned   Stockholder  hereby  executes  this  Share  Exchange
Agreement as of the date first above written.



                                             For Individuals:


                                             ---------------------------
                                             Print Name Above


                                             ---------------------------
                                             Sign Name Above


                                             For Entities:


                                             Empower Century Limited
                                             ---------------------------
                                             Print Name Above


                                             By: /s/Qingjie Zhao
                                             ---------------------------
                                             Name: Qingjie Zhao
                                             Title:  CEO and Chairman







                  [Signature Page to Share Exchange Agreement]





         The  undersigned   Stockholder  hereby  executes  this  Share  Exchange
Agreement as of the date first above written.



                                             For Individuals:


                                             ---------------------------
                                             Print Name Above


                                             ---------------------------
                                             Sign Name Above


                                             For Entities:


                                             ATLAS ALLOCATION FUND, L.P.
                                             ---------------------------
                                             Print Name Above

                                             By: Atlas Capital Management, L.P.,
                                                 its General Partner
                                             By: RHA, Inc., its General Partner

                                             By: /s/Robert H. Alpert
                                                --------------------------------
                                             Name: Robert H. Alpert
                                             Title: President







                  [Signature Page to Share Exchange Agreement]




         The  undersigned   Stockholder  hereby  executes  this  Share  Exchange
Agreement as of the date first above written.



                                             For Individuals:


                                             Daniel O. Conwill IV
                                             ---------------------------
                                             Print Name Above


                                             /s/Daniel O. Conwill IV
                                             ---------------------------
                                             Sign Name Above


                                             For Entities:


                                             ---------------------------
                                             Print Name Above


                                             By:
                                                ------------------------
                                             Name:
                                             Title:







                  [Signature Page to Share Exchange Agreement]




         The  undersigned   Stockholder  hereby  executes  this  Share  Exchange
Agreement as of the date first above written.



                                             For Individuals:


                                             Gary C. Evans
                                             ---------------------------
                                             Print Name Above


                                             /s/Gary C. Evans
                                             ---------------------------
                                             Sign Name Above


                                             For Entities:


                                             ---------------------------
                                             Print Name Above


                                             By:
                                                ------------------------
                                             Name:
                                             Title:







                  [Signature Page to Share Exchange Agreement]




         The  undersigned   Stockholder  hereby  executes  this  Share  Exchange
Agreement as of the date first above written.



                                             For Individuals:


                                             William W. Gay
                                             ---------------------------
                                             Print Name Above


                                             /s/William W. Gay
                                             ---------------------------
                                             Sign Name Above


                                             For Entities:


                                             ---------------------------
                                             Print Name Above


                                             By:
                                                ------------------------
                                             Name:
                                             Title:







                  [Signature Page to Share Exchange Agreement]




         The  undersigned   Stockholder  hereby  executes  this  Share  Exchange
Agreement as of the date first above written.



                                             For Individuals:


                                             Harold E. Gear
                                             ---------------------------
                                             Print Name Above


                                             /s/Harold E. Gear
                                             ---------------------------
                                             Sign Name Above


                                             For Entities:


                                             ---------------------------
                                             Print Name Above


                                             By:
                                                ------------------------
                                             Name:
                                             Title:







                  [Signature Page to Share Exchange Agreement]




         The  undersigned   Stockholder  hereby  executes  this  Share  Exchange
Agreement as of the date first above written.



                                             For Individuals:


                                             Matthew Hayden
                                             ---------------------------
                                             Print Name Above


                                             /s/Matthew Hayden
                                             ---------------------------
                                             Sign Name Above


                                             For Entities:


                                             ---------------------------
                                             Print Name Above


                                             By:
                                                ------------------------
                                             Name:
                                             Title:







                  [Signature Page to Share Exchange Agreement]




         The  undersigned   Stockholder  hereby  executes  this  Share  Exchange
Agreement as of the date first above written.



                                             For Individuals:



                                             -----------------------------------
                                             Print Name Above


                                             -----------------------------------
                                             Sign Name Above


                                             For Entities:


                                             Jayhawk China Fund (Cayman) Ltd.
                                             -----------------------------------
                                             Print Name Above


                                             By: /s/Michael D. Schmitz
                                                --------------------------------
                                             Name: Michael D. Schmitz
                                             Title: CFO of Investment Manager







                  [Signature Page to Share Exchange Agreement]




         The  undersigned   Stockholder  hereby  executes  this  Share  Exchange
Agreement as of the date first above written.



                                             For Individuals:



                                             David Kenkel
                                             ---------------------------
                                             Print Name Above


                                             /s/David Kenkel
                                             ---------------------------
                                             Sign Name Above


                                             For Entities:


                                             ---------------------------
                                             Print Name Above


                                             By:
                                                ------------------------
                                             Name:
                                             Title:







                  [Signature Page to Share Exchange Agreement]




         The  undersigned   Stockholder  hereby  executes  this  Share  Exchange
Agreement as of the date first above written.



                                             For Individuals:


                                             Michael R. Kindred
                                             Mary A. Kubes-Kindred
                                             ---------------------------
                                             Print Name Above


                                             /s/Michael R. Kindred
                                             /s/Mary A. Kubes-Kindred
                                             ---------------------------
                                             Sign Name Above


                                             For Entities:


                                             ---------------------------
                                             Print Name Above


                                             By:
                                                ------------------------
                                             Name:
                                             Title:







                  [Signature Page to Share Exchange Agreement]




         The  undersigned   Stockholder  hereby  executes  this  Share  Exchange
Agreement as of the date first above written.



                                             For Individuals:


                                             Glen A. Little
                                             ---------------------------
                                             Print Name Above


                                             /s/Glen A. Little
                                             ---------------------------
                                             Sign Name Above


                                             For Entities:


                                             ---------------------------
                                             Print Name Above


                                             By:
                                                ------------------------
                                             Name:
                                             Title:







                  [Signature Page to Share Exchange Agreement]




         The  undersigned   Stockholder  hereby  executes  this  Share  Exchange
Agreement as of the date first above written.



                                             For Individuals:


                                             ---------------------------
                                             Print Name Above


                                             ---------------------------
                                             Sign Name Above


                                             For Entities:


                                             Pinnacle China Fund, L.P.
                                             ---------------------------
                                             Print Name Above


                                             By: /s/Barry M. Kitt
                                                ------------------------
                                             Name: Barry M. Kitt
                                             Sole Member, Kitt China Management,
                                             L.L.C.,
                                             the Manager of Pinnacle China
                                             Management, L.L.C.,
                                             the General Partner of Pinnacle
                                             China Advisors, L.P.
                                             the General Partner of Pinnacle
                                             China Fund, L.P.








                  [Signature Page to Share Exchange Agreement]




         The  undersigned   Stockholder  hereby  executes  this  Share  Exchange
Agreement as of the date first above written.



                                             For Individuals:


                                             Dean C. Pisani
                                             ---------------------------
                                             Print Name Above


                                             /s/Dean C. Pisani
                                             ---------------------------
                                             Sign Name Above


                                             For Entities:


                                             ---------------------------
                                             Print Name Above


                                             By:
                                                ------------------------
                                             Name:
                                             Title:







                  [Signature Page to Share Exchange Agreement]




         The  undersigned   Stockholder  hereby  executes  this  Share  Exchange
Agreement as of the date first above written.



                                             For Individuals:


                                             Carolyn Prahl
                                             ---------------------------
                                             Print Name Above


                                             /s/Carolyn Prahl
                                             ---------------------------
                                             Sign Name Above


                                             For Entities:


                                             ---------------------------
                                             Print Name Above


                                             By:
                                                ------------------------
                                             Name:
                                             Title:







                  [Signature Page to Share Exchange Agreement]




         The  undersigned   Stockholder  hereby  executes  this  Share  Exchange
Agreement as of the date first above written.



                                             For Individuals:


                                             -----------------------------------
                                             Print Name Above


                                             -----------------------------------
                                             Sign Name Above


                                             For Entities:


                                             Precept Capital Master Fund, G.P.
                                             -----------------------------------
                                             Print Name Above

                                             By: its agent & attorney in fact,
                                             Precept Capital Management, LP

                                             By: its General Partner, Precept
                                             Management, LLC

                                             By: /s/Blair Baker
                                                --------------------------------
                                             Name: Blair Baker
                                             Title: President and CEO







                  [Signature Page to Share Exchange Agreement]




         The  undersigned   Stockholder  hereby  executes  this  Share  Exchange
Agreement as of the date first above written.



                                             For Individuals:


                                             --------------------------------
                                             Print Name Above


                                             --------------------------------
                                             Sign Name Above


                                             For Entities:


                                             Sandor Capital Master Fund, L.P.
                                             --------------------------------
                                             Print Name Above


                                             By: /s/John S. Lemak
                                                -----------------------------
                                             Name: John S. Lemak
                                             Title: General Partner







                  [Signature Page to Share Exchange Agreement]




         The  undersigned   Stockholder  hereby  executes  this  Share  Exchange
Agreement as of the date first above written.



                                             For Individuals:


                                             -----------------------------------
                                             Print Name Above


                                             -----------------------------------
                                             Sign Name Above


                                             For Entities:


                                             Sterling Research & Management LLC
                                             -----------------------------------
                                             Print Name Above


                                             By: /s/Louis Teplis
                                                --------------------------------
                                             Name: Louis Teplis







                  [Signature Page to Share Exchange Agreement]




         The  undersigned   Stockholder  hereby  executes  this  Share  Exchange
Agreement as of the date first above written.



                                             For Individuals:


                                             Michael K. Studer
                                             ---------------------------
                                             Print Name Above


                                             /s/Michael K. Studer
                                             ---------------------------
                                             Sign Name Above


                                             For Entities:


                                             ---------------------------
                                             Print Name Above


                                             By:
                                                ------------------------
                                             Name:
                                             Title:







                  [Signature Page to Share Exchange Agreement]




         The  undersigned   Stockholder  hereby  executes  this  Share  Exchange
Agreement as of the date first above written.



                                             For Individuals:


                                             John H. Trescot Jr.
                                             ---------------------------
                                             Print Name Above


                                             /s/John H. Trescot Jr.
                                             ---------------------------
                                             Sign Name Above


                                             For Entities:


                                             ---------------------------
                                             Print Name Above


                                             By:
                                                ------------------------
                                             Name:
                                             Title:







                  [Signature Page to Share Exchange Agreement]




         The  undersigned   Stockholder  hereby  executes  this  Share  Exchange
Agreement as of the date first above written.



                                             For Individuals:


                                             ---------------------------
                                             Print Name Above


                                             ---------------------------
                                             Sign Name Above


                                             For Entities:


                                             Westpark Capital, L.P.
                                             ---------------------------
                                             Print Name Above


                                             By: /s/Patrick Brosnahan
                                                ------------------------
                                             Name: Patrick Brosnahan
                                             Title: General Partner







                  [Signature Page to Share Exchange Agreement]




         The  undersigned   Stockholder  hereby  executes  this  Share  Exchange
Agreement as of the date first above written.



                                             For Individuals:


                                             -----------------------------------
                                             Print Name Above


                                             -----------------------------------
                                             Sign Name Above


                                             For Entities:


                                             Whitebox Intermarket Partners, LP
                                             -----------------------------------
                                             Print Name Above

                                             By: Whitebox Intermarket Advisors,
                                             LLC

                                             By: /s/Jonathan Wood
                                                --------------------------------
                                             Name: Jonathan Wood
                                             Title: Director, CFO







                  [Signature Page to Share Exchange Agreement]



      The undersigned Stockholder hereby executes this Share Exchange Agreement
as of the date first above written.

                                      For Individuals:

                                      -----------------------------------
                                      Print Name Above


                                      Sign Name Above

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

                                      For Entities:

                                      US Special Opportunities Trust  PLC
                                      -----------------------------------
                                      Print Name Above

                                      By: US Special Opportunities Trust PLC

                                      By:   /s/Russell Cleveland
                                            -----------------------------
                                      Name: Russell Cleveland
                                      Title: President


                  [Signature Page to Share Exchange Agreement]



      The undersigned Stockholder hereby executes this Share Exchange Agreement
as of the date first above written.

                                 For Individuals:

                                 -----------------------------------
                                 Print Name Above


                                 Sign Name Above

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

                                 For Entities:

                                 Renaissance US Growth Investment Trust PLC
                                 ------------------------------------------
                                 Print Name Above

                                 By: Renaissance US Growth Investment Trust PLC

                                 By:   /s/Russell Cleveland
                                 --------------------------
                                 Name: Russell Cleveland
                                 Title: President

                  [Signature Page to Share Exchange Agreement]


      The undersigned Stockholder hereby executes this Share Exchange Agreement
as of the date first above written.

                                 For Individuals:

                                 -----------------------------------
                                 Print Name Above


                                 Sign Name Above

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

                                 For Entities:

                                 Premier RENN US Emerging Growth Fund Ltd.
                                 Print Name Above

                                 By: Premier RENN US Emerging Growth Fund Ltd.

                                 By: /s/Russell Cleveland
                                     --------------------
                                 Name:  Russell Cleveland
                                 Title: President

                  [Signature Page to Share Exchange Agreement]


      The undersigned Stockholder hereby executes this Share Exchange Agreement
as of the date first above written.

                                 For Individuals:

                                 Gerald W. Bolfing
                                 ---------------------
                                 Print Name Above

                                 /s/ Gerald W. Bolfing
                                 ---------------------
                                 Sign Name Above

                                 For Entities:

                                 Print Name Above
                                 ---------------------
                                 By:

                                 By:
                                    -----------------
                                 Name:
                                 Title:

                  [Signature Page to Share Exchange Agreement]




                                    EXHIBIT A

                       Shareholders of Wonder Auto Limited



                                                                   Number of       Percentage of Total      Company  Number of
                                          Tax ID Number of          Shares of       Shares Represented    Shares of Parent Stock
Name and Address of Stockholder            Stockholder            Company Stock        By Shares             to be Received by
                                         (if Applicable)          Being Exchanged    Being Exchanged            Stockholder
                                                                                               
Choice Inspire Limited                          N/A                         78              31.8%                2,743,724
c/o Wonder Auto Limited
No. 56 Lingxi Street
Taihe District
Jinzhou City, Liaoning
People's Republic of China  121013

Empower Century Limited                         N/A                     91.815176          37.43%                3,229,685
c/o Wonder Auto Limited
No. 56 Lingxi Street
Taihe District
Jinzhou City, Liaoning
People's Republic of China  121013

Atlas Allocation Fund, L.P.                  20-4276550                  3.773103           1.54%                 132,722
100 Crescent Court, #880
Dallas, TX 75201

Gerald W. Bolfing                           ###-##-####                  .377310            0.15%                  13,272
3613 Rocky Ledge Circle
Waco, TX 76708

Daniel O. Conwill IV                        ###-##-####                  1.886551           0.77%                  66,361
70 Audubon Blvd.
New Orleans, LA 70118

Gary C. Evans                               ###-##-####                  3.773103           1.54%                 132,722
1808 Point de Vue
Suite 1000
Flower Mound, TX 75022

William W. Gay                              ###-##-####                  .188655            0.08%                  6,636
524 Stockton Street
Jacksonville, FL 32204






                                                                   Number of       Percentage of Total      Company  Number of
                                          Tax ID Number of          Shares of       Shares Represented    Shares of Parent Stock
Name and Address of Stockholder            Stockholder            Company Stock        By Shares             to be Received by
                                         (if Applicable)          Being Exchanged    Being Exchanged            Stockholder
                                                                                               
Harold E. Gear                              ###-##-####                  .188655            0.08%                   6,636
2558 Admirals Walk Drive South
Orange Park, FL 32073

Matthew Hayden                              ###-##-####                  .754621            0.31%                  26,544
1401 Havens Drive
N. Myrtle Beach, SC 29582

Jayhawk China Fund (Cayman) Ltd.             98-0170144                 11.319309           4.61%                 398,167
c/o Jayhawk Capital Management, LLC
8201 Mission Road, Suite 110
Prairie Village, KS  66208

David Kenkel                                ###-##-####                  .188655            0.08%                   6,636
148 Wedgewood Lane
Whitefish, MT 59937

Michael R. Kindred and Mary A.
Kubes-Kindred, Joint Tenants                 53-82-4228                  .377310            0.15%                  13,272
5810 Windmier Lane
Dallas, TX 75252                            ###-##-####

Glenn A. Little                             ###-##-####                  .377310            0.15%                  13,272
211 W. Wall Street
Midland, TX 79701

Pinnacle China Fund, L.P.                    20-3358646                 27.543656          11.23%                 968,878
4965 Preston Park Blvd., Suite 240
Plano, TX 75093

Dean C. Pisani                              ###-##-####                  .188655            0.08%                   6,636
517 Round Hollow Lane
Southlake, TX 76092

Carolyn Prahl                               ###-##-####                  .377310            0.15%                  13,272
5133 Lake in the Woods
Lakeland, FL 33813






                                                                     Number of       Percentage of Total      Company  Number of
                                            Tax ID Number of          Shares of       Shares Represented    Shares of Parent Stock
Name and Address of Stockholder              Stockholder            Company Stock        By Shares             to be Received by
                                           (if Applicable)          Being Exchanged    Being Exchanged            Stockholder
                                                                                                 
Precept Capital Master Fund, G.P.              75-2755033                  1.886551           0.77%                  66,361
c/o Precept Capital Management
100 Crescent Court, Suite 850
Dallas, TX 75201

Sandor Capital Master Fund, L.P.               27-0013809                  3.773103           1.54%                 132,722
2828 Routh Street, Suite 500
Dallas, TX 75201

Sterling Research & Management LLC             71-1006903                  1.131931           0.46%                   39,817
225 Valley Rd. NW
Atlanta, GA 30305

Michael K. Studer                             ###-##-####                  .188655            0.08%                   6,636
4804 Anchor Court
Flower Mound, TX 75022

US Special Opportunities Trust PLC                N/A                      2.829827           1.15%                  99,542
c/o RENN Capital Group
8080 N. Central Expressway
Suite 210
Dallas, TX 75204

Renaissance US Growth
  Investment Trust PLC                            N/A                      2.829827           1.15%                  99,542
c/o RENN Capital Group
8080 N. Central Expressway
Suite 210
Dallas, TX 75204

Premier RENN US Emerging
  Growth Fund Limited                             N/A                      1.886551           0.77%                  66,361
c/o RENN Capital Group
8080 N. Central Expressway
Suite 210
Dallas, TX 75204

John H. Trescot Jr.                           ###-##-####                   .188655           0.08%                   6,636
A Ways Away
East Palatka, FL 32131

Westpark Capital, L.P.                         75-2945750                  7.546206           3.08%                 265,445
4965 Preston Park Blvd #220
Plano, TX 75093

Whitebox Intermarket Partners, LP                 N/A                      1.886551           0.77%                  66,361
3033 Excelsior Blvd. #300
Minneapolis, MN 55416

                       TOTAL:                                            245.277236            100%               8,627,858

EX-10.1

                                                                    Exhibit 10.1


                  STOCK PURCHASE AND SUBSCRIPTION AGREEMENT


            STOCK  PURCHASE  AND  SUBSCRIPTION  AGREEMENT,  dated June 22, 2006,
      among WONDER AUTO  LIMITED,  a British  Virgin  Islands  corporation  (the
      "Company"),  EMPOWER CENTURY LIMITED, a British Virgin Islands corporation
      (the  "Stockholder")  and the purchasers  listed on Annex I hereto (each a
      "Purchaser" and collectively, the "Purchasers").

                                   BACKGROUND

            The Company  desires to sell  45.277236 of its ordinary  shares (the
      "Company  Shares") to the Purchasers in order to raise  $12,000,000 in the
      aggregate and the Stockholder, who is the holder of 61% of the outstanding
      capital  stock of the Company,  desires to sell  30.184824 of the ordinary
      shares (the "Stockholder Shares" and together with the Company Shares, the
      "Shares")  held by the  Stockholder  to the  Purchasers  for an  aggregate
      consideration of $8,000,000.  Each Purchaser desires to acquire the number
      of ordinary shares specified opposite such Purchaser's  respective name on
      Annex I hereto from the Company and the Stockholder.

            Immediately  following  the  closing  of the  offering  contemplated
      hereby (the  "Offering"),  the Shares shall be exchanged for shares of the
      common stock (the "Public Company Shares") of a US domiciled  company that
      is obligated to file periodic  reports with the US Securities and Exchange
      Commission (the  "Commission") and whose shares are eligible for quotation
      on the NASD Over-the  Counter  Bulletin Board (the "Public  Company") upon
      the closing of a share exchange  transaction (the "Exchange  Transaction")
      among  the  Company,  the  stockholders  of  the  Company  (including  the
      Purchasers,  who will then be  stockholders of the Company) and the Public
      Company pursuant to a Share Exchange  Agreement in substantially  the form
      attached hereto as Exhibit A (the "Exchange Agreement"). Upon consummation
      of the Exchange  Transaction,  it is  anticipated  that  Purchasers in the
      Offering will own 27.13% of the issued and outstanding common stock of the
      Public Company.

                                    AGREEMENT

            NOW,  THEREFORE,  in  consideration  of the mutual  promises  herein
      contained  and with the intent to be legally  bound,  the parties  hereto,
      hereby agree as follows:

      1. Purchase and Sale.

      1.1 Purchase and Sale of Company  Shares.  The Company  shall sell to each
Purchaser  and each  Purchaser  shall  acquire  from the  Company  the number of
Company  Shares  specified  opposite  each  Purchaser's  name on Annex I to this
Agreement.

      1.2 Purchase and Sale of Stockholder Shares. The Stockholder shall sell to
each Purchaser and each Purchaser  shall acquire from the Stockholder the number
of Stockholder  Shares  specified  opposite each  Purchaser's name on Annex I to
this Agreement.



      2. Purchase Price.

      2.1  General.  The gross  purchase  price (the  "Purchase  Price") for the
Company Shares and the Stockholder  Shares, in the aggregate,  is Twenty Million
Dollars  ($20,000,000)  payable as  specified  in this  Section 2 subject to the
other terms and conditions of this Agreement.  The portion of the Purchase Price
applicable to the Company Shares is Twelve Million Dollars ($12,000,000) and the
portion of the Purchase  Price  applicable  to the  Stockholder  Shares is Eight
Million  Dollars  ($8,000,000).  The Shares  are being sold at a price  equal to
$265,033.85 per Share.

            (a) Payment at Closing. At the Closing,  each Purchaser shall pay to
      the  Company and to the  Stockholder  the  portion of the  Purchase  Price
      payable to the Company and the  Stockholder by such Purchaser as set forth
      opposite such Purchaser's name on Annex I, by wire transfer of immediately
      available funds in United States Dollars to:

            Thelen Reid & Priest, LLP - Attorney
            Special Account (Non-Interest Bearing)
            Account # 53505184
            ABA # 021-000-089
            SWIFT CODE: Citi US33
            Citibank, N.A.
            Citicorp Center
            153 East 53rd Street
            New York, New York 10043
            Client Name:  Wonder Auto Limited
            Attorney Name: Louis A. Bevilacqua, Esq.

      2.2 Escrow  Arrangement;  Closing.  The  Purchase  Price and  certificates
representing  the  Shares  will be held in escrow  pending  the  closing  of the
Offering.  The Purchaser understands that it will not earn interest on any funds
held in escrow.  Attached  as  Exhibit B hereto is the form of Escrow  Agreement
(the "Escrow  Agreement") that will govern the maintenance of the Purchase Price
and the Shares until the sooner of the closing of the Offering or the expiration
thereof.  The Closing Date of the Offering is referred to as the "Closing Date."
The Closing  shall occur on or before July 15, 2006.  The Company shall have the
right to a one time 45 day  extension  of the Closing  Date upon  receipt of the
written consent of all Purchasers to the Offering. If the Offering is not closed
by said  date  the  Purchase  Price  then in  escrow  shall be  returned  to the
Purchasers and the certificates  representing the Shares shall be cancelled. The
Closing shall be deemed to have occurred  upon the  satisfaction  of each of the
conditions  set  forth in  Section 4 below and in the  following  sequence:  (a)
confirmation from the Escrow Agent, as identified in the Escrow Agreement,  that
$20,000,000 is on deposit;  (b)  participation  by each of the Purchasers in the
Exchange Transaction;  and (c) the Public Company files a registration statement
on a  suitable  form  (the  "Registration  Statement")  with the  Commission  to
register the Public Company  Shares held by the Purchasers to the Offering.  The
Purchase  Price will not be released to either the Company or the Public Company
until  such  time as each  of the  forgoing  has  been  completed.  Certificates
representing  Public  Company  Shares  will be  issued  in the name of each such
Purchaser,  and the  name of such  Purchaser  will be  registered  on the  stock
transfer  books of the  Public  Company as the  record  owner of Public  Company
Shares. As of the filing date of the Registration Statement,  the Public Company
will promptly  thereafter  deliver to each Purchaser a stock certificate for the
Public Company Shares to which it is entitled.

                                        2


      2.3  Binding  Agreement.  The  Purchaser  agrees to be bound  hereby  upon
execution and delivery to the Company and the  Stockholder of the signature page
to this  Agreement  and receipt from the Company and the  Stockholder  of a duly
executed  signature page to this Agreement,  which may be delivered by faxing to
the Purchaser the signature page to this Agreement that has been executed by the
Company and the Stockholder.

      3. Offering Materials

      Purchaser  represents  and warrants  that it is in receipt of, and that it
has carefully read, the following items:

            (a) The audited consolidated financial statements of the Company and
      its  subsidiaries,  for the fiscal years ended December 31, 2005, 2004 and
      2003 (the "Financial Statements");

            (b) The Exchange Agreement;

            (c) The Escrow Agreement;

            (d) The Escrow  Agreement  relating to the "Make  Good"  arrangement
      described in Section 11.11 below (the "Make Good Escrow Agreement"); and

            (e) A draft of the Registration Statement.

      The documents  listed in this Section 3 shall be referred to herein as the
"Disclosure Documents."

      4. Conditions to Purchaser's Obligations.

      4.1 The obligation of each Purchaser to close the transaction contemplated
by this Agreement (the "Transaction") is subject to the satisfaction on or prior
to the  Closing  Date of the  following  conditions  set forth in  Sections  4.2
through 4.11 hereof.

      4.2 The Company shall have executed this Agreement.

      4.3 The Board of Directors of the Company  shall have adopted  resolutions
consistent with Section 5.1(d) below.

      4.4 Each  Purchaser  shall  have  received  copies  of all  documents  and
information  which it may  have  reasonably  requested  in  connection  with the
Offering.

      4.5 The Exchange  Transaction shall have been  simultaneously  consummated
and the  Exchange  Agreement  shall  include a  provision  pursuant to which the
Public Company expressly  assumes those  obligations  included in this Agreement
that are to be performed by the Public Company.

      4.6 The  Registration  Statement  shall have been filed with the SEC which
filing  shall not be made until each of the other  conditions  set forth in this
Section  4 shall  have  been and  continue  to be  satisfied.  It being  further
acknowledged  that the  effectiveness  of the  Registration  Statement  shall be
maintained until the earlier of the second anniversary of the declaration of its
effectiveness  by the SEC or the date all the shares of common stock  registered
therein have been sold.

                                        3


      4.7 The  representations and warranties of the Company and the Stockholder
shall be true and correct on and as of the Closing Date as though made on and as
of such date.

      4.8 If so requested by Purchaser,  the Company shall have delivered to the
custodian for the Purchaser duly executed certificate(s), registered in the name
of Purchaser's nominee, representing the Public Company Shares.

      4.9 No statute,  rule,  regulation,  executive  order,  decree,  ruling or
injunction  shall have been  enacted,  entered,  promulgated  or endorsed by any
court or  governmental  authority of competent  jurisdiction  that prohibits the
consummation of any of the transactions contemplated by this Agreement.

      4.10 Since  December  31,  2005,  no event or series of events  shall have
occurred  that  reasonably  could  have or result in any of (i) a  material  and
adverse effect on the legality, validity or enforceability of this Agreement and
the transactions  contemplated hereby, (ii) a material and adverse effect on the
results of operations,  assets,  prospects,  business or condition (financial or
otherwise) of the Company and its  subsidiaries,  taken as a whole,  or (iii) an
adverse impairment to the Company's or the Stockholder's ability to perform on a
timely basis its obligations under this Agreement.

      4.11 Counsel to the Company shall have delivered to each Purchaser a legal
opinion in a form reasonably acceptable to each Purchaser.

      5. Representations and Warranties of the Company.

      5.1 The Company  represents  and warrants to each  Purchaser  that, at the
date of this Agreement and as of the Closing Date:

                  (a) Due Organization  and Good Standing.  The Company and each
            of  its  subsidiaries  are  corporations  duly  organized,   validly
            existing and in good standing  under the laws of their  jurisdiction
            of incorporation,  with all requisite  corporate power and authority
            to carry on the  business  in which they are  engaged and to own the
            properties  they own,  and the Company has all  requisite  power and
            authority to execute and deliver this  Agreement  and to  consummate
            the transactions  contemplated  hereby.  The Company and each of its
            subsidiaries  are duly qualified and licensed to do business and are
            in good  standing  in all  jurisdictions  where the  nature of their
            business  makes  such  qualification  necessary,  except  where  the
            failure  to be  qualified  or  licensed  would  not have a  Material
            Adverse  Effect.  The  ownership by the Company of its  subsidiaries
            that are located in the People's Republic of China complies with all
            applicable laws of the People's  Republic of China.  For purposes of
            this  Agreement,  "Material  Adverse  Effect"  means  any  of  (i) a
            material   and  adverse   effect  on  the   legality,   validity  or
            enforceability of this Agreement, (ii) a material and adverse effect
            on  the  results  of  operations,  assets,  prospects,  business  or
            condition   (financial   or   otherwise)  of  the  Company  and  the
            subsidiaries, taken as a whole or (iii) an adverse impairment to the
            Company's ability to perform on a timely basis its obligations under
            this Agreement.

                  (b) Litigation.  There is no action, suit, inquiry,  notice of
            violation,  proceeding  (including any partial  proceeding such as a
            deposition)  or  investigation  pending  or  threatened  in  writing
            against or affecting  the Company,  any  subsidiary  or any of their
            respective   properties   before  or  by  any   court,   arbitrator,
            governmental  or   administrative   agency,   regulatory   authority
            (federal,  state,  county,  local or foreign),  stock market,  stock
            exchange or trading facility  ("Action") which (i) adversely affects
            or challenges  the legality,  validity or  enforceability  of any of
            this  Agreement  or the  Shares  or (ii)  could,  if  there  were an
            unfavorable  decision,  individually  or in the  aggregate,  have or
            reasonably  be  expected  to result in a  Material  Adverse  Effect.
            Neither the Company nor any subsidiary,  nor any director or officer
            thereof (in his or her capacity as such), is or has been the subject
            of any Action  involving a claim or violation of or liability  under
            federal or state  securities  laws or a claim of breach of fiduciary
            duty.

                                        4


                  (c) Financial Statements.  The audited financial statements of
            the Company as of December  31, 2005 and 2004,  including  the notes
            contained  therein,  fairly  present the  financial  position of the
            Company  at the  respective  dates  thereof  and the  results of its
            operations  for the periods  purported to be covered  thereby.  Such
            financial statements have been prepared in conformity with generally
            accepted  accounting  principles  consistently  applied  with  prior
            periods subject to any comments and notes contained  therein.  Since
            the date of the  audited  financial  statements  for the year  ended
            December  31,  2005,  (i)  there has been no  event,  occurrence  or
            development  that has had or that could  reasonably  be  expected to
            result  in a  Material  Adverse  Effect,  (ii) the  Company  has not
            incurred any  liabilities  (contingent or otherwise)  other than (A)
            trade payables,  accrued expenses and other liabilities  incurred in
            the ordinary  course of business  consistent  with past practice and
            (B)  liabilities  not  required  to be  reflected  in the  Company's
            financial  statements  pursuant  to  generally  accepted  accounting
            principles,  (iii)  the  Company  has  not  altered  its  method  of
            accounting or the identity of its auditors, (iv) the Company has not
            declared  or made  any  dividend  or  distribution  of cash or other
            property  to its  stockholders  or  purchased,  redeemed or made any
            agreements  to purchase  or redeem any shares of its capital  stock,
            and (v) the  Company  has not issued any  equity  securities  to any
            officer, director or affiliate,  except pursuant to existing Company
            stock option plans.

                  (d)  Authorization.  The Company,  by appropriate and required
            corporate action,  has, or will have prior to the date hereof,  duly
            authorized  the  execution of this  Agreement  and duly effected the
            issuance of the Company  Shares.  The Company Shares are not subject
            to preemptive or other rights of any stockholders of the Company and
            when  issued in  accordance  with the terms of this  Agreement,  the
            Company Shares will be validly issued, fully paid and non-assessable
            and free and  clear of all  pledges,  liens  and  encumbrances.  The
            Company has the  requisite  corporate  power and  authority to enter
            into  and  to  consummate  the  transactions  contemplated  by  this
            Agreement and otherwise to carry out its obligations hereunder.  The
            Company has  reserved  from its duly  authorized  capital  stock the
            ordinary shares of capital stock issuable pursuant to this Agreement
            in order to issue the Company Shares.

                  (e) No Conflicts. Performance of this Agreement and compliance
            with the  provisions  hereof will not violate any  provision  of any
            applicable law or of the charter documents of the Company, or of any
            of its  subsidiaries,  and,  will not conflict with or result in any
            breach  of  any  of the  terms,  conditions  or  provisions  of,  or
            constitute a default under,  or result in the creation or imposition
            of any lien,  charge or  encumbrance  upon, any of the properties or
            assets of the Company,  or of any of its  subsidiaries,  pursuant to
            the terms of any indenture.  The Company is not in default under any
            provision of its organizational  documents or under any provision of
            any agreement or other instrument to which it is a party or by which
            it is bound or of any law, governmental order, rule or regulation so
            as to affect adversely in any material manner its business or assets
            or its condition, financial or otherwise.

                                        5


                  (f)  Disclosure.  All  disclosure  provided to the  Purchasers
            regarding   the  Company,   its   business   and  the   transactions
            contemplated  hereby,  furnished  by or on  behalf  of  the  Company
            (including the Company's representations and warranties set forth in
            this  Agreement)  are true and correct and do not contain any untrue
            statement  of a  material  fact or omit to state any  material  fact
            necessary in order to make the statements made therein,  in light of
            the circumstances under which they were made, not misleading.

                  (g) Binding Obligation.  This Agreement has been duly executed
            and  delivered  by the Company and  constitutes  a valid and binding
            obligation  of the  Company,  enforceable  against  the  Company  in
            accordance with its terms.

                  (h) Investment Company.  The Company is not now, and after the
            sale of the Company  Shares under this Agreement and under all other
            agreements and the  application of the net proceeds from the sale of
            the Company Shares will not be, an "investment  company"  within the
            meaning of the Investment Company Act of 1940, as amended.

                  (i) Securities  Act Exemption.  Subject to the accuracy of the
            Purchasers'  representations  and  warranties  in  Section 7 of this
            Agreement, the offer, sale, and issuance of the Shares in conformity
            with the terms of this Agreement constitute transactions exempt from
            the registration  requirements of Section 5 of the Securities Act of
            1933, as amended (the "Securities Act") and from the registration or
            qualification requirements of the laws of any applicable state.

                  (j) No Public  Offering.  Neither the Company,  nor any of its
            affiliates,  nor any  person  acting  on its or  their  behalf,  has
            directly or  indirectly  made any offers or sales in any security or
            solicited any offers to buy any security  under  circumstances  that
            would require  registration under the Securities Act of the issuance
            of the Shares to the Purchaser.

                  (k)  Capitalization.  The  number  of  shares  and type of all
            authorized, issued and outstanding capital stock of the Company, and
            all  shares  of  capital  stock  reserved  for  issuance  under  the
            Company's  various  option and  incentive  plans,  is  specified  in
            Schedule  5.1(k).  No  securities  of the  Company  are  entitled to
            preemptive or similar  rights,  and no person has any right of first
            refusal,  preemptive right,  right of participation,  or any similar
            right  to  participate  in the  transactions  contemplated  by  this
            Agreement.  There are no outstanding options, warrants, scrip rights
            to subscribe to, calls or  commitments  of any character  whatsoever
            relating to, or securities,  rights or obligations  convertible into
            or exchangeable for, or giving any person any right to subscribe for
            or  acquire,  any  shares  of  capital  stock  of  the  Company,  or
            contracts, commitments,  understandings or arrangements by which the
            Company or any subsidiary is or may become bound to issue additional
            shares of capital  stock,  or  securities or rights  convertible  or
            exchangeable into shares of capital stock of the Company.  The issue
            and sale of the  Company  Shares by the  Company  or the sale of the
            Stockholder Shares by the Stockholder will not,  immediately or with
            the passage of time, obligate the Company to issue shares of capital
            stock of the Company or other  securities  to any person (other than
            the  Purchasers)  and will not  result  in a right of any  holder of
            Company securities to adjust the exercise,  conversion,  exchange or
            reset price under such securities.

                                        6


                  (l)  Subsidiaries.  The  Company  has no  direct  or  indirect
            subsidiaries  other than as specified in the  Disclosure  Documents.
            Except as disclosed in Schedule 5.1(l),  the Company owns,  directly
            or indirectly,  all of the capital stock of each subsidiary free and
            clear  of any and all  liens,  and all the  issued  and  outstanding
            shares of capital stock of each  subsidiary  are validly  issued and
            are fully paid,  non-assessable  and free of preemptive  and similar
            rights.

                  (m) No  Consents.  The  Company is not  required to obtain any
            consent,  waiver,  authorization or order of, give any notice to, or
            make any filing or  registration  with,  any court or other federal,
            state,  local or other  governmental  authority  or other  person in
            connection  with the  execution,  delivery  and  performance  by the
            Company of this Agreement, other than (i) the filing with the SEC of
            one  or  more   Registration   Statements  in  accordance  with  the
            requirements  of the Exchange  Agreement,  (ii) filings  required by
            state  securities  laws,  (iii)  the  filing  of a Notice of Sale of
            Securities on Form D with the Commission  under  Regulation D of the
            Securities Act, (iv) the filings required in accordance with Section
            11.2 and (v) those that have been made or obtained prior to the date
            of this Agreement.

                  (n) Insurance. The Company and the subsidiaries are insured by
            insurers of recognized financial  responsibility against such losses
            and risks and in such  amounts as are prudent and  customary  in the
            businesses  in which the Company and the  subsidiaries  are engaged.
            The  Company  has no reason to  believe  that it will not be able to
            renew its and the subsidiaries'  existing  insurance coverage as and
            when such  coverage  expires  or to  obtain  similar  coverage  from
            similar  insurers as may be  necessary  to continue  its business on
            terms   consistent   with   market  for  the   Company's   and  such
            subsidiaries' respective lines of business.

                  (o) Internal Controls. The Company and the subsidiaries of the
            Company maintain a system of internal accounting controls sufficient
            to provide  reasonable  assurance that (i) transactions are executed
            in accordance with management's general or specific  authorizations,
            (ii) transactions are recorded as necessary to permit preparation of
            financial  statements  in conformity  with United  States  generally
            accepted accounting principles and to maintain asset accountability,
            (iii)  access  to  assets  is  permitted  only  in  accordance  with
            management's  general  or  specific  authorization,   and  (iv)  the
            recorded  accountability  for assets is compared  with the  existing
            assets at reasonable  intervals and appropriate action is taken with
            respect to any differences.  The Company has established  disclosure
            controls and procedures (as defined in Exchange Act Rules  13a-15(e)
            and 15d-15(e)) for the Company and designed such disclosure controls
            and procedures to ensure that material  information  relating to the
            Company, including its subsidiaries,  is made known to the principal
            executive  officer and principal  financial  officer of the Company.
            The Company's  principal  executive officer and principal  financial
            officer have evaluated the  effectiveness of the Company's  controls
            and  procedures in accordance  with Item 307 of Regulation S-K under
            the  Exchange  Act for the  Company's  most  recently  ended  fiscal
            quarter or fiscal year-end (such date, the "Evaluation Date").

                  (p)  Registration  Rights.  Except as  specified  in  Schedule
            5.1(p), the Company has not granted or agreed to grant to any person
            any rights (including "piggy-back"  registration rights) to have any
            securities  of the  Company  registered  with  the SEC or any  other
            governmental authority that have not been satisfied.

                                        7


                  (q)  Anti-Takeover  Provisions.  The  Company  has  taken  all
            necessary  action,  if any,  in order  to  render  inapplicable  any
            control  share  acquisition,   business  combination,   poison  pill
            (including  any  distribution  under a  rights  agreement)  or other
            similar  anti-takeover  provision under the Company's Certificate of
            Incorporation  (or  similar  charter  documents)  or the laws of its
            state of  incorporation  that is or could become  applicable  to the
            Purchasers as a result of the Purchasers and the Company  fulfilling
            their  obligations or exercising  their rights under this Agreement,
            including  without  limitation the Company's  issuance of the Shares
            and the Purchasers' ownership of the Shares.

                  (r) No Agreements with  Purchasers.  The Company does not have
            any agreement or  understanding  with any Purchaser  with respect to
            the  transactions  contemplated  by  this  Agreement  other  than as
            specified in this Agreement.

                  (s) Labor  Relations.  No material labor dispute exists or, to
            the knowledge of the Company, is imminent with respect to any of the
            employees of the Company.

                  (t) Compliance.  Neither the Company nor any subsidiary (i) is
            in default  under or in violation of (and no event has occurred that
            has not been  waived  that,  with  notice  or lapse of time or both,
            would result in a default by the Company or any  subsidiary  under),
            nor has the  Company or any  subsidiary  received  notice of a claim
            that it is in  default  under  or that it is in  violation  of,  any
            indenture,  loan or  credit  agreement  or any  other  agreement  or
            instrument  to  which  it is a party  or by  which  it or any of its
            properties  is bound  (whether or not such default or violation  has
            been  waived),  (ii) is in  violation  of any  order  of any  court,
            arbitrator  or  governmental  body,  or  (iii)  is or  has  been  in
            violation of any statute,  rule or  regulation  of any  governmental
            authority,  including without limitation all foreign, federal, state
            and  local  laws  relating  to  taxes,   environmental   protection,
            occupational  health  and  safety,  product  quality  and safety and
            employment  and labor  matters,  except  in each case as could  not,
            individually or in the aggregate,  have or reasonably be expected to
            result in a Material Adverse Effect.

                  (u)  Regulatory  Permits.  The  Company  and the  subsidiaries
            possess all certificates,  authorizations  and permits issued by the
            appropriate federal,  state, local or foreign regulatory authorities
            necessary to conduct their respective  businesses,  except where the
            failure to possess such permits  could not,  individually  or in the
            aggregate,  have or  reasonably  be expected to result in a Material
            Adverse  Effect,  and neither the  Company  nor any  subsidiary  has
            received any notice of  proceedings  relating to the  revocation  or
            modification of any such permits.

                  (v) Title to Assets. The Company and its subsidiaries have all
            necessary  use rights  under the laws of the  People's  Republic  of
            China to all real  property  used by them that is  material to their
            respective  businesses and good and marketable title in all personal
            property  owned  by  them  that  is  material  to  their  respective
            businesses,  in each case free and clear of all  liens,  except  for
            liens as do not materially  affect the value of such property and do
            not  materially  interfere with the use made and proposed to be made
            of such  property  by the  Company  and the  subsidiaries.  Any real
            property  and  facilities  held under  lease by the  Company and the
            subsidiaries   are  held  by  them  under  valid,   subsisting   and
            enforceable  leases of which the Company and the subsidiaries are in
            compliance,  except as could not,  individually or in the aggregate,
            have or  reasonably  be  expected  to result in a  Material  Adverse
            Effect.

                                        8


                  (w) Patents and Trademarks.  The Company and the  subsidiaries
            have,  or have  rights to use,  all  patents,  patent  applications,
            trademarks,  trademark  applications,  service  marks,  trade names,
            copyrights,  licenses and other similar rights that are necessary or
            material for use in connection with their respective  businesses and
            which  the  failure  to  so  have  could,  individually  or  in  the
            aggregate,  have or  reasonably  be expected to result in a Material
            Adverse Effect (collectively,  the "Intellectual  Property Rights").
            Neither the Company nor any subsidiary has received a written notice
            that the  Intellectual  Property  Rights  used by the Company or any
            subsidiary  violates or infringes upon the rights of any Person.  To
            the knowledge of the Company, all such Intellectual  Property Rights
            are  enforceable  and there is no existing  infringement  by another
            person of any of the Intellectual Property Rights.

                  (x)  Transactions  With Affiliates and Employees.  None of the
            officers or directors  of the Company  and, to the  knowledge of the
            Company,  none of the  employees of the Company is presently a party
            to any  transaction  with the Company or any subsidiary  (other than
            for services as employees,  officers and  directors),  including any
            contract,   agreement  or  other   arrangement   providing  for  the
            furnishing  of  services to or by,  providing  for rental of real or
            personal property to or from, or otherwise  requiring payments to or
            from any officer,  director or such employee or, to the knowledge of
            the Company, any entity in which any officer,  director, or any such
            employee  has a  substantial  interest or is an  officer,  director,
            trustee or partner.

                  (y) Solvency.  Based on the financial condition of the Company
            as of the Closing Date (and  assuming  that the Offering  shall have
            occurred),  (i) the  Company's  fair  saleable  value of its  assets
            exceeds the amount that will be required to be paid on or in respect
            of the Company's  existing  debts and other  liabilities  (including
            known  contingent  liabilities)  as they mature,  (ii) the Company's
            assets do not constitute  unreasonably small capital to carry on its
            business  for  the  current  fiscal  year  as now  conducted  and as
            proposed to be  conducted  including  its capital  needs taking into
            account  the  particular   capital   requirements  of  the  business
            conducted by the Company,  and projected  capital  requirements  and
            capital availability thereof, and (iii) the current cash flow of the
            Company,  together with the proceeds the Company would receive, were
            it to  liquidate  all of its assets,  after  taking into account all
            anticipated uses of the cash, would be sufficient to pay all amounts
            on or in respect of its debt when such  amounts  are  required to be
            paid.  The Company does not intend to incur debts beyond its ability
            to pay such debts as they mature (taking into account the timing and
            amounts of cash to be payable on or in respect of its debt).

                  (z) Certain Fees.  Except as described in Section 10.6 hereof,
            no brokerage or finder's fees or commissions  are or will be payable
            by the  Company to any  broker,  financial  advisor  or  consultant,
            finder,  placement agent,  investment  banker,  bank or other person
            with respect to the transactions contemplated by this Agreement. The
            Purchasers shall have no obligation with respect to any fees or with
            respect to any claims (other than such fees or commissions owed by a
            Purchaser pursuant to written agreements  executed by such Purchaser
            which fees or commissions  shall be the sole  responsibility of such
            Purchaser)  made by or on behalf of other persons for fees of a type
            contemplated  in this Section that may be due in connection with the
            transactions contemplated by this Agreement.

                                        9


      5.2  Indemnification.  The Company will  indemnify and hold the Purchasers
and their  directors,  officers,  shareholders,  partners,  employees and agents
(each,  a  "Purchaser  Party")  harmless  from any and all losses,  liabilities,
obligations,  claims, contingencies,  damages, costs and expenses, including all
judgments,  amounts paid in settlements,  court costs and reasonable  attorneys'
fees and costs of investigation (collectively, "Losses") that any such Purchaser
Party may suffer or incur as a result of or relating  to any  misrepresentation,
breach or inaccuracy of any representation, warranty, covenant or agreement made
by the  Company  in any  Transaction  Document.  In  addition  to the  indemnity
contained  herein,  the Company  will  reimburse  each  Purchaser  Party for its
reasonable  legal and other expenses  (including the cost of any  investigation,
preparation  and  travel  in  connection   therewith)   incurred  in  connection
therewith, as such expenses are incurred.

      6. Representations and Warranties of the Stockholder.

      6.1 The Stockholder represents and warrants to each Purchaser that, at the
date of this Agreement and as of the Closing Date:

                  (a) Ownership of Stockholder  Shares. The Stockholder owns the
            Stockholder Shares of record and beneficially, free and clear of all
            liens, claims, charges,  security interests, and encumbrances of any
            kind   whatsoever.   The  Stockholder  has  sole  control  over  the
            Stockholder Shares or sole discretionary  authority over any account
            in which they are held.

                  (b) No Options or Similar  Rights with Respect to  Stockholder
            Shares. The Stockholder has, since acquiring the Stockholder Shares,
            never  granted  to any  person  an option  or right to  purchase  or
            otherwise  acquire the  Stockholder  Shares,  by contract of sale or
            otherwise,  nor had any "short  position  in" as to the  Stockholder
            Shares.  The  Stockholder has never effected nor attempted to effect
            any distribution or public offering of the Stockholder Shares.

                  (c)  Authority.  The  Stockholder  has full  right,  power and
            authority  to execute,  deliver and perform  this  Agreement  and to
            carry out the transactions  contemplated  hereby. This Agreement has
            been duly and validly  executed and delivered by the Stockholder and
            constitutes  a  valid,   binding   obligation  of  the  Stockholder,
            enforceable  against the  Stockholder  in accordance  with its terms
            (except as such  enforceability  may be  limited  by laws  affecting
            creditor's rights generally).

                  (d) No Consents. No consent, approval,  authorization or order
            of, or any filing or  declaration  with,  any court or  governmental
            agency or body,  trustee or other  person is required in  connection
            with the  consummation by the Stockholder of the transactions on its
            part  contemplated by this  Agreement,  except (i) filings as may be
            required  under  Sections  13(d) and 16(a) of the Exchange  Act, and
            (ii) those that have been made or obtained prior to the date of this
            Agreement.

                  (e) No Conflicts.  The execution,  delivery and performance by
            the  Stockholder  of this  Agreement  to which it is a party and the
            consummation  of the  transactions  contemplated  thereby do not and
            will not result in a breach or violation of, or constitute a default
            under (with or without  notice or lapse of time),  any  stockholders
            agreement,   voting  trust  agreement,   trust  or  other  fiduciary
            agreement,  pledge  registration rights agreement or other agreement
            or instrument to which the  Stockholder or any of its properties are
            bound or  affected,  and  will  not  violate  or  conflict  with any
            judgment,  decree or order of any court or other governmental agency
            or any law, rule or regulation applicable to the Stockholder.

                                       10


                  (f) Certain Registration Matters. Assuming the accuracy of the
            Purchasers'  representations  and  warranties  set forth herein,  no
            registration  under the Securities Act is required for the offer and
            sale of the Stockholder Shares to the Purchasers hereunder.

                  (g) Certain Fees.  Except as described in Schedule 6.1(g),  no
            brokerage or finder's fees or commissions  are or will be payable by
            the  Stockholders  to any broker,  financial  advisor or consultant,
            finder,  placement agent,  investment  banker,  bank or other person
            with respect to the transactions contemplated by this Agreement. The
            Purchasers shall have no obligation with respect to any fees or with
            respect to any claims (other than such fees or commissions owed by a
            Purchaser pursuant to written  agreements  executed by such Investor
            which fees or commissions  shall be the sole  responsibility of such
            Purchaser)  made by or on behalf of other persons for fees of a type
            contemplated  in this Section that may be due in connection with the
            transactions contemplated by this Agreement.

                  (h) No Additional  Agreements.  Such Stockholder does not have
            any  agreement  or  understanding  with  any  Purchaser  or with the
            Company  with  respect  to the  transactions  contemplated  by  this
            Agreement other than as specified in this Agreement.

      6.2 Indemnification. The Stockholder will indemnify and hold the Purchaser
Parties  harmless  from any and all  Losses  that any such  Purchaser  Party may
suffer or incur as a result of or relating to any  misrepresentation,  breach or
inaccuracy of any  representation,  warranty,  covenant or agreement made by the
Stockholder in any Transaction  Document. In addition to the indemnity contained
herein,  the Stockholder  will reimburse each Purchaser Party for its reasonable
legal and other expenses  (including the cost of any investigation,  preparation
and travel in connection  therewith) incurred in connection  therewith,  as such
expenses are incurred.

      7. Transfer and Registration Rights.

      7.1  Purchaser  acknowledges  that it is acquiring  the Shares for its own
account  and  for  the  purpose  of  investment  and  not  with  a  view  to any
distribution  or resale thereof within the meaning of the Securities Act and any
applicable  state  or  other  securities  laws  ("State  Acts"),   except  in  a
transaction  which is in compliance  with the  Securities  Act or pursuant to an
exemption  therefrom.  Purchaser  further agrees that, except in connection with
the  Exchange  Transaction,  it will not sell,  assign,  transfer  or  otherwise
dispose of any of the Shares in  violation of the  Securities  Act or state blue
sky laws and acknowledges that, in taking unregistered  Shares, it must continue
to bear economic risk in regard to its  investment  for an indefinite  period of
time because of the fact that such securities have not been registered under the
Securities Act or state blue sky laws and further  realizes that such securities
cannot be sold unless  subsequently  registered  under the  Securities Act or an
exemption from such registration is available. Subject to the foregoing, nothing
contained herein shall be deemed a representation  or warranty by such Purchaser
to hold the Shares for any period of time.

                                       11


      8. Closing.

      8.1 The closing of the Offering  shall take place at such time and at such
place as the Company shall  determine,  provided that the Closing shall occur no
later than July 15, 2006,  unless  otherwise  extended  pursuant to the terms of
this  Agreement.  If the  closing  of the sale of  Shares to  Purchaser  has not
occurred within the time frame provided in the previous sentence, then Purchaser
may terminate this Agreement by giving written notice to the Company.

      9. Purchaser  Representations.  Purchaser hereby represents,  warrants and
acknowledges and agrees with the Company as follows:

      9.1 Information.  Purchaser has been furnished with and has carefully read
the  Disclosure  Documents as set forth in Section 3 hereto and is familiar with
the terms of the Offering.  With respect to individual  or  partnership  tax and
other  economic  considerations  involved in this  investment,  Purchaser is not
relying on the Company (or any agent or  representative  of any of the Company).
Purchaser has carefully  considered  and has, to the extent  Purchaser  believes
such discussion necessary, discussed with Purchaser's legal, tax, accounting and
financial   advisers  the  suitability  of  an  investment  in  the  Shares  for
Purchaser's particular tax and financial situation.

      9.2  Opportunity  to Inspect.  Purchaser has had an opportunity to inspect
relevant  documents  relating to the organization and operations of the Company.
Purchaser acknowledges that all documents,  records and books pertaining to this
investment which Purchaser has requested have been made available for inspection
by Purchaser and Purchaser's attorney, accountant or other adviser(s).

      9.3  Opportunity  to  Inquire.  Purchaser  and/or  Purchaser's  advisor(s)
has/have had a reasonable  opportunity  to ask questions of and receive  answers
and to request additional  relevant  information from a person or persons acting
on behalf of the Company concerning the Offering.

      9.4 No  Advertising or General  Solicitation.  Purchaser is not purchasing
the Shares as a result of or subsequent to any advertisement, article, notice or
other  communication  published in any  newspaper,  magazine or similar media or
broadcast over television or radio or presented at any seminar.

      9.5 Accredited Investor. Purchaser is an "accredited investor," within the
meaning of Rule 501(a) of  Regulation D under the  Securities  Act  ("Regulation
D"). Purchaser, by reason of Purchaser's business or financial experience or the
business or financial  experience of Purchaser's  professional  advisers who are
unaffiliated  with and who are not  compensated by the Company or any affiliate,
directly  or  indirectly,  can be  reasonably  assumed to have the  capacity  to
protect Purchaser's own interests in connection with the transaction.  Purchaser
further  acknowledges  that he has read the  written  materials  provided by the
Company.

      9.6 No Need for  Liquidity.  Purchaser has adequate means of providing for
Purchaser's  current  financial  needs  and  contingencies,  is able to bear the
substantial  economic  risks of an  investment  in the Shares for an  indefinite
period of time, has no need for liquidity in such investment and, at the present
time, could afford a complete loss of such investment.

      9.7  Sophistication.  Purchaser  has  such  knowledge  and  experience  in
financial,  tax  and  business  matters  so as to  enable  Purchaser  to use the
information  made  available  to Purchaser  in  connection  with the Offering to
evaluate  the  merits  and risks of an  investment  in the Shares and to make an
informed investment decision with respect thereto.

                                       12


      9.8 Risks  Relating  to  Purchase  of Shares.  Purchaser  recognizes  that
investment  in  the  Shares  involves   substantial  risks.   Purchaser  further
recognizes  that no Federal or state  agencies have passed upon this offering of
the  Shares or made any  finding or  determination  as to the  fairness  of this
investment.

      9.9 Legend.  Purchaser acknowledges that each certificate representing the
Public  Company  Shares shall  contain a legend  substantially  in the following
form:

            THESE  SECURITIES HAVE NOT BEEN REGISTERED  UNDER THE SECURITIES ACT
            OF 1933 (THE "SECURITIES  ACT") OR UNDER APPLICABLE STATE SECURITIES
            LAWS AND MAY NOT BE  SOLD,  TRANSFERRED  OR  OTHERWISE  DISPOSED  OF
            UNLESS  REGISTERED UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE
            SECURITIES  LAWS OR  PURSUANT  TO  AVAILABLE  EXEMPTIONS  FROM  SUCH
            REGISTRATION,  PROVIDED  THAT THE SELLER  DELIVERS TO THE COMPANY AN
            OPINION OF COUNSEL (WHICH OPINION IS REASONABLY  SATISFACTORY TO THE
            COMPANY)  CONFIRMING  THE  AVAILABILITY  OF  SUCH  EXEMPTION.  THESE
            SECURITIES  MAY BE PLEDGED  IN  CONNECTION  WITH A BONA FIDE  MARGIN
            ACCOUNT  SECURED  BY SUCH  SECURITIES  TO THE  EXTENT  PERMITTED  BY
            APPLICABLE FEDERAL AND STATE SECURITIES LAWS.

      9.10 Authority. If this Agreement is executed and delivered on behalf of a
partnership,  corporation,  trust or estate: (i) such partnership,  corporation,
trust or  estate  has the full  legal  right and  power  and all  authority  and
approval  required  (a) to execute  and  deliver,  or  authorize  execution  and
delivery of, this Agreement and all other instruments  executed and delivered by
or on behalf of such  partnership,  corporation,  trust or estate in  connection
with the purchase of the Shares, and (b) to purchase and hold such Shares;  (ii)
the signature of the party signing on behalf of such  partnership,  corporation,
trust or estate is binding upon such partnership,  corporation, trust or estate;
and (iii) such  partnership,  corporation  or trust has not been  formed for the
specific  purpose of acquiring the Shares,  unless each beneficial owner of such
entity is qualified as an "accredited investor" within the meaning of Regulation
D and has submitted information substantiating such individual qualification.

      9.11 Retirement Plan. If Purchaser is a retirement plan or is investing on
behalf of a retirement  plan,  Purchaser  acknowledges  that  investment  in the
Shares  poses  risks in  addition to those  associated  with other  investments,
including the  inability to use losses  generated by an investment in the Shares
to offset taxable income.

                                       13


      9.12 Patriot Act; etc. The Purchaser is not, nor is it acting as an agent,
representative,  intermediary or nominee for, a person identified on the list of
blocked  persons  maintained  by the  Office of  Foreign  Assets  Control,  U.S.
Department  of  Treasury.  In addition,  the  Purchaser  has  complied  with all
applicable U.S. laws, regulations,  directives, and executive orders relating to
anti-money laundering , including but not limited to the following laws: (1) the
Sharing and  Strengthening  America by Providing  Appropriate  Tools Required to
Intercept  and  Obstruct  Terrorism  Act of 2001,  Public  Law  107-56;  and (2)
Executive  Order 13224  (Blocking  Property and  Prohibiting  Transactions  with
Persons Who Commit,  Threaten to Commit, or Support  Terrorism) of September 23,
2001. Any resale of Shares by the Purchaser to transferees shall not violate the
statutes mentioned in this representation.

      10. Understandings.

      Purchaser  understands,  acknowledges  and  agrees  with  the  Company  as
follows:

      10.1 Irrevocable  Nature.  Purchaser  hereby  acknowledges and agrees that
upon  execution  of  this  Agreement  by the  Purchaser,  the  Company  and  the
Stockholder,  the Purchaser's  obligation to purchase the Shares is irrevocable,
and,  except  as  required  by law or as  permitted  under  Section  8.1  above,
Purchaser is not entitled to cancel,  terminate or revoke this  Agreement or any
agreements  of  Purchaser  hereunder  and that  this  Agreement  and such  other
agreements  shall  survive the death or  disability  of  Purchaser  and shall be
binding upon and inure to the benefit of the parties hereto and their respective
heirs,  executors,   administrators,   successors,   legal  representatives  and
permitted  assigns.  If Purchaser is more than one person,  the  obligations  of
Purchaser   hereunder   shall  be  joint  and   several   and  the   agreements,
representations, warranties and acknowledgments herein contained shall be deemed
to be made  by and be  binding  upon  each  such  person  and his or her  heirs,
executors,  administrators,  successors,  legal  representatives  and  permitted
assigns.

      10.2 No Determination as to Fairness.  No federal or state agency has made
any findings or  determination  as to the fairness of the terms of this Offering
for investment, nor any recommendations or endorsement of the Shares.

      10.3  Exemption.  The Offering is intended to be exempt from  registration
under the Securities Act by virtue of Section 4(2) of the Securities Act and the
provisions of Rule 506 of Regulation D  thereunder,  which is in part  dependent
upon the truth,  completeness  and accuracy of the statements  made by Purchaser
herein.

      10.4  Legend.  Certificates  evidencing  the Shares  shall not contain any
legend (including the legend set forth in Section 9.9): (i) while a registration
statement  covering the resale of such Shares in effective  under the Securities
Act,  or  (ii)  following  a sale or  transfer  of such  Shares  pursuant  to an
effective  registration  statement  (including the  Registration  Statement,  as
defined above), or (iii) following a sale or transfer of such Shares pursuant to
Rule 144 under the Securities Act as evidenced by an opinion of counsel selected
by  transferor,  the form and  substance of which  opinion  shall be  reasonably
satisfactory  to the Company,  to the effect that such transfer does not require
registration of such  transferred  Shares under the securities Act (assuming the
transferor  is not an Affiliate of the  Company),  or (iv) while such Shares are
eligible for sale under Rule 144(k) and the  transferor has provided the Company
with an opinion of counsel selected by the transferor, the form and substance of
which  opinion shall be reasonably  satisfactory  to the company,  to the effect
that such Shares are eligible  for sale under Rule  144(k).  The Company may not
make any notation on its records or give  instructions  to any transfer agent of
the Company that enlarge the restrictions on transfer set forth in this Section.

                                       14


      10.5  Transferee  Suitability.  It is  understood  that  in  order  not to
jeopardize the Offering's exempt status under Section 4(2) of the Securities Act
and Regulation D, any transferee  may, at a minimum,  be required to fulfill the
investor suitability requirements thereunder.

      10.6 Brokers and Finders.  No person or entity acting on behalf,  or under
the authority, of Purchaser is or will be entitled to any broker's,  finder's or
similar fee or commission in connection  with the  transactions  contemplated by
this Agreement. The Purchaser acknowledges and agrees, however, that Sterne Agee
& Leach,  Inc. and Global Hunter  Securities are acting as the Placement  Agents
for this  private  placement  and will receive a cash fee that is equal to seven
percent (7%) of the total amount raised, such fee being payable by the Company.

      10.7 Confidential Nature of Information.  Purchaser  acknowledges that the
information  furnished  in this  Agreement  by the Company to  Purchaser  or its
advisers in connection  with the  Offering,  is  confidential  and nonpublic and
agrees that all such written  information which is material and not yet publicly
disseminated by the Company shall be kept in confidence by Purchaser and neither
used by Purchaser for  Purchaser's  personal  benefit  (other than in connection
with this Agreement), nor disclosed to any third party, except Purchaser's legal
and other  advisers  who shall be  advised  of the  confidential  nature of such
information,  for any reason; provided,  however, that this obligation shall not
apply  to any  such  information  that (i) is part of the  public  knowledge  or
literature and readily accessible at the date hereof, (ii) becomes a part of the
public knowledge or literature and readily accessible by publication  (except as
a result of a breach of this  provision) or (iii) is received from third parties
(except  third  parties who, to the  knowledge of the  Purchaser,  disclose such
information  in  violation of any  confidentiality  agreements  or  obligations,
including,  without limitation, any subscription agreement entered into with the
Company).  The Company  represents and warrants to the Purchasers that following
the filing of the Form 8-K pursuant to Section 11.2 herein,  the Purchaser  will
not be in possession of any non-public information with respect to the Company.

      10.8 Survival. The representations, warranties and agreements of Purchaser
and  the  Company  contained  herein  and  in any  other  writing  delivered  in
connection with the Offering shall be true and correct in all material  respects
on and as of the  Closing  Date  as if made on and as of the  date  the  Company
executes  this  Agreement  and shall  survive the execution and delivery of this
Agreement and the purchase of the Shares.

      10.9 NO RECOMMENDATION.  IN MAKING AN INVESTMENT DECISION,  PURCHASER MUST
RELY ON ITS OWN  EXAMINATION  OF THE  COMPANY  AND THE  TERMS  OF THE  OFFERING,
INCLUDING THE MERITS AND RISKS INVOLVED. THE SHARES HAVE NOT BEEN RECOMMENDED BY
ANY  FEDERAL  OR  STATE  SECURITIES  COMMISSION  OR  REGULATORY  AUTHORITY.  ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

      11. Covenants.

      11.1  Prohibition  on Certain Equity  Financings.  The Company agrees that
neither it nor the Public Company shall  undertake any other  financings  (other
than acquisitions  utilizing capital stock of the Company or the Public Company,
it being  understood that the shares issuable in such  transaction  shall not be
registered until the  Registration  Statement (as that term is defined below) is
deemed  effective by the SEC) involving  Equity Common Shares (as defined below)
on terms more  favorable than those in the Offering until thirty (30) days after
the  effectiveness  of the  Registration  Statement  covering  all of the Public
Company Shares,  without the prior written approval of the holders of a majority
of the Public Company Shares.  The Company and the Public Company may complete a
financing  on terms  that are  equivalent  or less  favorable  than those in the
Offering at their discretion;  however, the Company acknowledges that the Equity
Common  Shares sold in such an offering can not be  registered  for resale until
after the date the Registration  Statement is declared effective by the SEC. The
term "Equity  Common  Shares" as used herein shall mean all capital stock of the
Company or the Public Company, plus all rights, warrants,  options,  convertible
preferred  shares,  indebtedness,   exchangeable  securities  or  other  rights,
exercisable for or convertible  into,  directly or indirectly,  capital stock of
the Company or the Public  Company.  Notwithstanding  the above,  "Equity Common
Shares"  shall not  include  any  common  shares of the  Public  Company  issued
pursuant to any incentive or stock option plan of the Public Company approved by
the shareholders or the board of directors of the Public Company.

                                       15


      11.2 Filing of Offering  Documents.  The Company  shall file all  required
documents  related to the Offering as exhibits to the Current Report on form 8-K
to be filed with the SEC by the Public Company on the business day following the
Closing Date.

      11.3 Press Release.  Immediately  following the Closing, but no later than
9:30am  Eastern Time on the business day following the Closing Date, the Company
shall issue a press release,  in a form suitable to the  Purchasers,  disclosing
the material terms of the Offering.

      11.4 Exchange Act  Compliance.  As long as any Purchaser  owns the Shares,
the Company  covenants to timely file (or obtain  extensions in respect  thereof
and file within the applicable grace period) all reports required to be filed by
the Company  after the date hereof  pursuant to the Exchange Act. As long as any
Purchaser owns Shares,  if the Company is not required to file reports  pursuant
to such laws,  it will prepare and furnish to the  Purchasers  and make publicly
available in accordance with Rule 144(c) such information as is required for the
Purchasers to sell the Shares under Rule 144. The Company further covenants that
it will take such further action as any holder of Shares may reasonably request,
all to the extent  required  from time to time to enable such person to sell the
Shares  without  registration  under the Securities Act within the limitation of
the exemptions provided by Rule 144.

      11.5 No  Integrated  Offerings.  The Company  shall not, and shall use its
best efforts to ensure that no affiliate of the Company shall,  sell,  offer for
sale or solicit offers to buy or otherwise  negotiate in respect of any security
(as defined in Section 2 of the  Securities  Act) that would be integrated  with
the offer or sale of the Shares in a manner that would require the  registration
under the  Securities Act of the sale of the Shares to the  Purchasers,  or that
would be  integrated  with the offer or sale of the Shares for  purposes  of the
rules and  regulations  of any  Trading  Market in a manner  that would  require
stockholder  approval of the sale of the Shares to the Purchasers.  For purposes
hereof,  "Trading  Market" shall mean whichever of the New York Stock  Exchange,
the American Stock  Exchange,  the NASDAQ  National  Market,  the NASDAQ Capital
Market or OTC  Bulletin  Board on which the Common Stock is listed or quoted for
trading on the date in question.

                                       16


      11.6 Prohibition on Filing Registration Statements. Other than pursuant to
the Registration Statement or as required under the Make Good Escrow Agreements,
prior to the date the Registration  Statement is declared  effective by the SEC,
the Company  may not file any  registration  statement  (other than on Form S-8)
with the SEC with respect to any securities of the Company.

      11.7 Future Priced Securities. During the six months following the Closing
Date, the Company shall not issue any "Future Priced Securities" as such term is
described by NASD IM-4350-1.

      11.8 Material  Non-Public  Information.  The Company  covenants and agrees
that  neither it nor any other  person  acting on its behalf  will  provide  any
Purchaser  or its  agents  or  counsel  with any  information  that the  Company
believes constitutes material non-public information,  unless prior thereto such
Purchaser shall have executed a written agreement  regarding the confidentiality
and use of such  information.  The Company  understands  and confirms  that each
Purchaser  shall  be  relying  on the  foregoing  representations  in  effecting
transactions in securities of the Company.

      11.9 Listing of Public  Company  Shares.  The Company  agrees,  (i) if the
Company  applies to have the Public  Company  Shares traded on any other Trading
Market,  it will include in such application the Public Company Shares then held
by the Purchasers,  and will take such other action as is necessary or desirable
to cause the Public  Company Shares to be listed on such other Trading Market as
promptly as possible,  and (ii) it will take all action reasonably  necessary to
continue  the  listing  and  trading of the Public  Company  Shares on a Trading
Market and will comply in all material  respects with the  Company's  reporting,
filing and other obligations under the bylaws or rules of the Trading Market.

      11.10  Use of  Proceeds.  The net  proceeds  from the  sale of the  Shares
hereunder will be used for working capital purposes and not for the satisfaction
of any portion of the Company's  debt (other than payment of trade  payables and
accrued expenses in the ordinary course of the Company's business and consistent
with  prior  practices),   or  to  redeem  any  Common  Stock  or  Common  Stock
equivalents.

      11.11 Make Good Escrow  Arrangement.  The  Stockholder  and Choice Inspire
Limited,  the only other  stockholder  of the Company,  shall  escrow  1,347,644
shares, to be equitably  adjusted for stock splits,  stock dividends and similar
adjustments (the "Make Good Shares") of the Public Company's common stock,  that
these  stockholders  will  receive  as a  result  of the  Exchange  Transaction,
representing  13.77% of the  Public  Company's  issued  and  outstanding  common
capital stock immediately following the closing of the Exchange Transaction (the
"Make Good Pool").  The Company  covenants  that it would  attain the  following
financial  performance  thresholds (the  "Performance  Thresholds"):  $8,140,000
million of Net Income  ("NI") for the fiscal year ("FY06")  ending  December 31,
2006 (the "2006  Threshold")  and $12,713,760 of NI for the fiscal year ("FYO7")
ending December 31, 2007 (the "2007  Threshold").  The Company shall provide the
Purchaser Representative (as defined hereinafter) with (a) its audited financial
statements,  prepared in accordance with US GAAP, on or before March 31, 2007 so
as to allow the Purchaser Representative the opportunity to evaluate whether the
2006 Threshold was attained and (b) its audited financial  statements,  prepared
in  accordance  with U.S.  GAAP,  on or before March 31, 2008 so as to allow the
Subscriber Representative the opportunity to evaluate whether the 2007 Threshold
was attained.  If the 2006 Threshold is not achieved,  one-half of the Make Good
Shares  will be  distributed  on a pro  rata  basis  to the  Purchasers  of this
Offering.  If the 2007  Threshold is not achieved,  the  second-half of the Make
Good Shares can be  distributed  on a pro rata basis to the  Purchasers  of this
Offering. Notwithstanding anything to the contrary herein, only those Purchasers
who remain  stockholders  of the  Public  Company at the time that the Make Good
Shares become deliverable hereunder, shall be entitled to their pro rata portion
of the Make Good Shares. If required, the appropriate number of Make Good Shares
will be delivered to the  Purchasers  in the Offering  within ten (10)  business
days of the date the audit  report for the  applicable  period is filed with the
SEC.  The  Purchaser  hereby  appoints  Sterne Agee & Leach,  Inc. to act as the
Purchaser Representative (the "Purchase  Representative") in connection with the
Make Good Escrow Agreement entered into with the Stockholders for the purpose of
effectuating this provision. The Purchaser  Representative's sole responsibility
shall be to review the financial  statements of the Public  Company to determine
whether any make Good Shares should be distributed.

                                       17


      11.12 Penalty for Failure to Deliver  Certificates.  If a Purchaser  shall
make a sale or  transfer  of  Shares  either  (x)  pursuant  to Rule  144 or (y)
pursuant to a  registration  statement and in each case shall have  delivered to
the Company or the Company's transfer agent the certificate  representing Shares
containing a  restrictive  legend which are the subject of such sale or transfer
and a representation letter in customary form (the date of such sale or transfer
and Share  delivery being the "Share  Delivery  Date") and (1) the Company shall
fail to  deliver  or cause  to be  delivered  to such  Purchaser  a  certificate
representing  such Shares that is free from all  restrictive or other legends by
the third  business day following the Share Delivery Date and (2) following such
third  business  day after the  Share  Delivery  Date and prior to the time such
Shares are received free from restrictive legends,  the Purchaser,  or any third
party on behalf of such Purchaser,  purchases (in an open market  transaction or
otherwise)  shares of Common Stock to deliver in  satisfaction  of a sale by the
Purchaser of such Shares (a "Buy-In"), then the Company shall pay in cash to the
Purchaser (for costs incurred  either directly by such Purchaser or on behalf of
a third  party)  the  amount by which the total  purchase  price paid for Common
Stock as a result of the Buy-In (including brokerage commissions, if any) exceed
the  proceeds  received by such  Purchaser as a result of the sale to which such
Buy-In  relates.   The  Purchaser  shall  provide  the  Company  written  notice
indicating the amounts payable to the Purchaser in respect of the Buy-In.

      11.13 Registration  Procedures.  At its expense,  the Public Company will:

                  (a)  Keep  the  Registration  Statement  effective  until  the
            earlier  of (i) three  years  and (ii)  such  time  that all  Public
            Company   Shares   received  by  the   Purchasers  in  the  Exchange
            Transaction  and covered by such  Registration  Statement  have been
            sold or may be sold  without  volume  restrictions  pursuant to Rule
            144(k) (the "Effectiveness  Period") as determined by the counsel to
            the Company  pursuant to a written  opinion  letter to such  effect,
            addressed and  acceptable to the  Company's  transfer  agent and the
            affected holders of such Shares ("Holders");

                  (b) After the date that the Registration Statement is declared
            effective  by  the   Commission,   without  regard  for  the  reason
            thereunder or efforts therefore,  the Company covenants not to allow
            such  Registration  Statement  to  cease,  for  any  reason,  to  be
            effective and  available to the  Purchasers at any time prior to the
            expiration  of its  Effectiveness  Period as to all  Public  Company
            Shares  which it is required to cover for more than an  aggregate of
            30 Trading Days (which need not be consecutive);

                  (c) Prepare and file with the Commission  such  amendments and
            supplements to the Registration Statement and the prospectus used in
            connection  with the  Registration  Statement as may be necessary to
            comply with the  provisions of the  Securities Act with respect to a
            disposition   of  all  securities   covered  by  such   Registration
            Statement;

                                       18


                  (d)  Furnish  to such  Purchaser  and its  legal  counsel  (i)
            promptly after the same is prepared and publicly distributed,  filed
            with the  Commission  or  received by the  Company,  one copy of the
            Registration  Statement and any amendment thereto,  each preliminary
            prospectus and  prospectus and each amendment or supplement  thereto
            in both electronic and print format,  and (ii) such number of copies
            of  a  prospectus,  including  a  preliminary  prospectus,  and  all
            amendments and supplements thereto, and such other documents as each
            Purchaser  may  reasonably   request  in  order  to  facilitate  the
            disposition of the Public Company Shares owned by such Purchaser;

                  (e)  Notify  each  Purchaser  at any  time  when a  prospectus
            relating  thereto is required to be delivered  under the  Securities
            Act,  of the  happening  of any  event  as a  result  of  which  the
            prospectus  included  in  such  Registration  Statement,  as then in
            effect,  includes an untrue statement of a material fact or omits to
            state a material fact required to be stated  therein or necessary to
            make the statements therein not misleading or incomplete in light of
            the  circumstances  then  existing,  and  at  the  request  of  such
            Purchaser,  prepare and furnish to it a reasonable  number of copies
            of a  supplement  to or an amendment  of such  prospectus  as may be
            necessary so that, as thereafter  delivered to such Purchaser,  such
            prospectus  shall not include an untrue statement of a material fact
            or omit to state a material  fact  required to be stated  therein or
            necessary  to  make  the   statements   therein  not  misleading  or
            incomplete in light of the circumstances then existing;

                  (f) Use its  commercially  reasonable  efforts to prevent  the
            issuance of any stop order or other suspension of effectiveness of a
            Registration  Statement,  and, if such an order is issued, to obtain
            the withdrawal of such order at the earliest  possible moment and to
            notify each Purchaser (or, in the event of an underwritten offering,
            the  managing  underwriters)  of the  issuance of such order and the
            resolution thereof;

                  (g) Cause all Public Company Shares received by the Purchasers
            in the Exchange  Transaction  to be listed or included for quotation
            on a Trading  Market on which the Common Stock of the Public Company
            is then listed, traded or included for quotation;

                  (h)  Provide a  transfer  agent and  registrar  for all Public
            Company Shares and CUSIP number for all such Public Company  Shares,
            in each case not later than the effective date of such registration;

                  (i) Make  available  for  inspection  by the  Purchasers,  any
            underwriter  participating  in  any  disposition  pursuant  to  such
            Registration  Statement and any attorney or  accountant  retained by
            the  Purchasers or  underwriter,  all  financial and other  records,
            pertinent  corporate  documents  and  properties  of the Company and
            cause the Company's officers and directors to supply all information
            reasonably  requested by  Purchaser,  any  underwriter,  attorney or
            accountant in connection with such Registration Statement. Provided,
            however,  that the Public  Company shall not provide  information to
            the  Purchasers to the extent it  constitutes  material,  non-public
            information;

                  (j)  Furnish to each  Purchaser  or its  counsel a copy of all
            documents  filed  with  and  all  correspondence   from  or  to  the
            Commission  in  connection  with  any such  registration.  Provided,
            however,  that the Public  Company shall not provide  information to
            the  Purchasers to the extent it  constitutes  material,  non-public
            information;

                                       19


                  (k) Take all other  reasonable  actions  necessary to expedite
            and  facilitate  disposition by each Purchaser of the Public Company
            Shares pursuant to the Registration Statement.

      11.14 Indemnification and Contribution.

                  (a) To the fullest extent permitted by law, the Public Company
            will,  and hereby  does,  indemnify,  hold  harmless and defend each
            Purchaser who holds Public Company Shares, the directors,  officers,
            partners, employees, agents, representatives of, and each person, if
            any, who controls any Purchaser within the meaning of the Securities
            Act or the Exchange Act (each, an "Indemnified Person"), against any
            losses, claims, damages,  liabilities,  judgments, fines, penalties,
            charges,  costs,  attorneys'  fees,  amounts paid in  settlement  or
            expenses,  joint or several  (collectively,  "Claims"),  incurred in
            investigating,  preparing  or  defending  any action,  claim,  suit,
            inquiry,   proceeding,   investigation  or  appeal  taken  from  the
            foregoing by or before any court or governmental,  administrative or
            other regulatory agency, body or the Commission,  whether pending or
            threatened,  whether  or not an  Indemnified  Person  is or may be a
            party thereto (collectively, "Indemnified Damages"), to which any of
            them may  become  subject  insofar  as such  Claims  (or  actions or
            proceedings,  whether  commenced or threatened,  in respect thereof)
            arise out of or are based upon: (i) any untrue  statement or alleged
            untrue  statement of a material fact in a Registration  Statement or
            any  post-effective  amendment  thereto  or in any  filing  made  in
            connection  with  the   qualification  of  the  offering  under  the
            securities  or other  "blue sky" laws of any  jurisdiction  in which
            Public  Company  Shares  are  offered,  or the  omission  or alleged
            omission to state a material fact  required to be stated  therein or
            necessary to make the statements  therein not  misleading,  (ii) any
            untrue  statement or alleged  untrue  statement  of a material  fact
            contained  in  any  preliminary  prospectus  if  used  prior  to the
            effective date of such Registration  Statement,  or contained in the
            final prospectus (as amended or supplemented,  if the Public Company
            files any amendment  thereof or supplement  thereto with the SEC) or
            the omission or alleged  omission to state therein any material fact
            necessary  to make  the  statements  made  therein,  in light of the
            circumstances  under which the  statements  therein  were made,  not
            misleading,  (iii) any violation or alleged  violation by the Public
            Company of the  Securities  Act,  the  Exchange  Act, any other law,
            including, without limitation, any state securities law, or any rule
            or regulation thereunder, in each case relating to the offer or sale
            of the Public Company Shares pursuant to a Registration Statement or
            (iv) any material  violation by the Public Company of this Agreement
            (the  matters in the  foregoing  clauses  (i)  through  (iv)  being,
            collectively,  "Violations"). The Public Company shall reimburse the
            Indemnified Persons for any legal fees or other expenses incurred by
            them in connection with investigating or defending any such Claim as
            such fees or expenses  are  incurred;  provided,  however,  that the
            indemnity  agreement  contained in this 11.14(a)  shall not apply to
            amounts  paid in  settlement  of any  Claim  if such  settlement  is
            effected  without the prior written  consent of the Public  Company,
            which consent shall not be  unreasonably  withheld.  Notwithstanding
            anything  to the  contrary  contained  herein,  the  indemnification
            agreement contained in this Section11.14(a):  (i) shall not apply to
            a Claim by an  Indemnified  Person  arising  out of or based  upon a
            Violation  which occurs in reliance  upon  information  furnished in
            writing to the  Company or the  Public  Company by such  Indemnified
            Person  expressly for use in connection  with the preparation of the
            Registration  Statement or any such amendment  thereof or supplement
            thereto;  (ii) shall not be  available  to the extent  such Claim is
            based on a  failure  of a  Purchaser  to  deliver  or to cause to be
            delivered the prospectus  made available by the Public  Company,  if
            such prospectus was timely made available by the Public Company; and
            (iii) shall not apply to amounts paid in  settlement of any Claim if
            such settlement is effected without the prior written consent of the
            Public Company,  which consent shall not be  unreasonably  withheld.
            Such indemnity  shall remain in full force and effect  regardless of
            any investigation made by or on behalf of the Indemnified Person and
            shall  survive  the  transfer  of the Public  Company  Shares by the
            Purchasers.

                                       20


                  (b)  Each  Purchaser  agrees  to  severally  and  not  jointly
            indemnify,  hold harmless and defend,  to the same extent and in the
            same manner as is set forth in  Section11.14(a),  the  Company,  the
            Public Company,  each of their respective  directors,  each of their
            respective officers who signs the Registration  Statement,  and each
            Person,  if any,  who  controls  the  Company or the Public  Company
            within  the  meaning  of the  Securities  Act or  the  Exchange  Act
            (collectively   and  together  with  an   Indemnified   Person,   an
            "Indemnified  Party"),  against any Claim or Indemnified  Damages to
            which any of them may become subject,  under the Securities Act, the
            Exchange  Act or  otherwise,  insofar as such  Claim or  Indemnified
            Damages arise out of or are based upon any  Violation,  in each case
            to the extent, and only to the extent, that such Violation occurs in
            reliance upon written information furnished to the Public Company or
            the Company by such Purchaser  expressly for use in connection  with
            such Registration Statement;  and, such Purchaser will reimburse any
            legal or other  expenses  reasonably  incurred by them in connection
            with investigating or defending any such Claim;  provided,  however,
            that the  indemnity  agreement  contained in this  Section  11.14(b)
            shall not apply to amounts paid in  settlement  of any Claim if such
            settlement  is effected  without the prior  written  consent of such
            Purchaser,   which  consent  shall  not  be  unreasonably  withheld;
            provided, further, however, that the Purchaser shall be liable under
            this  Section11.14(b) for only that amount of a Claim or Indemnified
            Damages as does not exceed the proceeds to such Investor as a result
            of the sale of Public Company Shares. Such indemnity shall remain in
            full force and effect regardless of any investigation  made by or on
            behalf of such  Indemnified  Party and shall survive the transfer of
            the Public Company Shares by the Purchasers.

                  (c)  The   foregoing   indemnity   agreements   contained   in
            Sections11.14(a)  and  11.14(b) are subject to the  condition  that,
            insofar  as they  relate  to any  Violation  made  in a  preliminary
            prospectus but  eliminated or remedied in the amended  prospectus on
            file with the Commission at the time the  Registration  Statement in
            question becomes  effective or in the amended  prospectus filed with
            the  Commission  pursuant  to  Rule  424(b)  promulgated  under  the
            Securities Act (the "Final  Prospectus"),  such indemnity agreements
            shall not inure to the benefit of any Indemnified Party if a copy of
            the  Final  Prospectus  was  furnished  in a  timely  manner  to the
            Indemnified  Party and was not furnished to the person asserting the
            Indemnified  Damages at or prior to the time such action is required
            by the Securities Act.

                  (d) Promptly after receipt by an Indemnified  Party under this
            Section11.14  of  notice  of  the  commencement  of  any  action  or
            proceeding   (including  any  governmental   action  or  proceeding)
            involving  a Claim,  such  Indemnified  Party  shall,  if a Claim in
            respect thereof is to be made against any  indemnifying  party under
            this  Section  11.14,  deliver to the  indemnifying  party a written
            notice of the commencement thereof, and the indemnifying party shall
            have  the  right  to   participate   in,  and,  to  the  extent  the
            indemnifying  party so desires,  jointly with any other indemnifying
            party  similarly  noticed,  to assume control of the defense thereof
            with counsel mutually satisfactory to the indemnifying party and the
            Indemnified Party (or, if there is more than one Indemnified  Party,
            a  majority  in  interest  of the  Indemnified  Parties);  provided,
            however,  that an  Indemnified  Party shall have the right to retain
            its  own  counsel  with  the  fees  and  expenses  to be paid by the
            indemnifying  party,  if,  in  the  reasonable  opinion  of  counsel
            retained  by the  Indemnified  Party,  the  representation  by  such
            counsel of the Indemnified Party and the indemnifying party would be
            inappropriate due to actual or potential differing interests between
            such  Indemnified  Party and any  other  party  represented  by such
            counsel in such  proceeding.  The Indemnified  Party shall cooperate
            fully with the indemnifying party in connection with any negotiation
            or defense of any such action or claim by the indemnifying party and
            shall furnish to the indemnifying  party all information  reasonably
            available to the  Indemnified  Party which relates to such action or
            claim. The indemnifying party shall keep the Indemnified Party fully
            apprised  at all  times  as to the  status  of  the  defense  or any
            settlement  negotiations with respect thereto. No indemnifying party
            shall  be  liable  for  any  settlement  of  any  action,  claim  or
            proceeding effected without its written consent; provided,  however,
            that the indemnifying party shall not unreasonably  withhold,  delay
            or condition its consent.  No indemnifying party shall,  without the
            consent of the Indemnified  Party,  consent to entry of any judgment
            or enter  into any  settlement  or other  compromise  which does not
            include as an unconditional  term thereof the giving by the claimant
            or  plaintiff  to such  Indemnified  Party  of a  release  from  all
            liability  in  respect  to  such  claim  or  litigation.   Following
            indemnification  as provided for hereunder,  the indemnifying  party
            shall be  subrogated  to all  rights of the  Indemnified  Party with
            respect to all third parties,  firms or corporations relating to the
            matter  for which  indemnification  has been  made.  The  failure to
            deliver written notice to the indemnifying party within a reasonable
            time of the  commencement  of any such action shall not relieve such
            indemnifying  party of any liability to the Indemnified  Party under
            this Section 11.14, except to the extent that the indemnifying party
            is materially prejudiced in its ability to defend such action.

                                       21


                  (e) If the indemnification  provided for in this Section 11.14
            is  unavailable to or  insufficient  to hold harmless an Indemnified
            Party under  subsection (a) or (b) hereof in respect of any Claim or
            Indemnified  Damages,  then each indemnifying party shall contribute
            to the amount paid or payable by such Indemnified  Party as a result
            of such  Claim  or  Indemnified  Damages  in such  proportion  as is
            appropriate  to reflect the relative  fault of the Public Company on
            the one hand and the Purchaser on the other in  connection  with the
            statements  or omissions  or other  matters  which  resulted in such
            Claim  or  Indemnified  Damages,  as  well  as  any  other  relevant
            equitable considerations.  The relative fault shall be determined by
            reference  to,  among  other  things,  in  the  case  of  an  untrue
            statement,  whether  the untrue  statement  relates  to  information
            supplied by the  Company or the Public  Company on the one hand or a
            Purchaser on the other and the parties' relative intent,  knowledge,
            access to  information  and  opportunity  to correct or prevent such
            untrue  statement.  The Public Company and the Purchasers agree that
            it would not be just and equitable if contribution  pursuant to this
            Section 11.14(e) were determined by pro rata allocation (even if all
            Purchasers  were  treated as one entity for such  purpose) or by any
            other  method of  allocation  which does not take into  account  the
            equitable considerations referred to above in this Section 11.14(e).
            The amount  paid or payable by an  Indemnified  Party as a result of
            the Claims or Indemnified  Damages referred to above in this Section
            11.14(e)  shall be deemed  to  include  any legal or other  expenses
            reasonably  incurred by such  Indemnified  Party in connection  with
            investigating or defending any such action or claim. Notwithstanding
            the  provisions  of this Section  11.14(e),  no  Purchaser  shall be
            required  to  contribute  any  amount  in  excess  of the  amount of
            proceeds  received  by the  Purchaser  from the  sale of the  Public
            Company  Shares.  No Person guilty of  fraudulent  misrepresentation
            (within the meaning of Section 11(f) of the Securities Act) shall be
            entitled to contribution  from any Person who was not guilty of such
            fraudulent   misrepresentation.   Contribution  (together  with  any
            indemnification  or other  obligations  under this Agreement) by any
            Purchaser  (including any  Indemnified  Party  associated  with such
            Purchaser)  shall be  limited  in amount to the  amount of  proceeds
            received  by such  Purchaser  from  the sale of the  Public  Company
            Shares.

                                       22


      12. Miscellaneous.

      12.1 Notices.  Except as set forth elsewhere herein,  any notice or demand
to be given or served in connection  herewith shall be deemed to be sufficiently
given or served for all purposes by being sent as registered or certified  mail,
return receipt requested, postage prepaid, in the case of the Company, addressed
to it at the address set forth below:

                          Wonder Auto Limited
                          No. 56 Lingxi Street
                          Taihe District
                          Jinzhou City, Liaoning
                          People's Republic of China, 121013


      and in the case of Purchaser  to the address set forth on the  Signature
Page hereto

      12.2  Governing  Law.  This  Agreement  shall be  enforced,  governed  and
construed in  accordance  with the laws of the State of New York without  giving
effect to choice of laws principles or conflict of laws provisions thereof.

      12.3 Jurisdiction.  The parties hereby  irrevocably  consent and submit to
the  jurisdiction  of the state and federal  courts  located in the State of New
York for all purposes. Purchaser hereby waives, and agrees not to assert against
the Company,  or any successor assignee thereof, by way of motion, as a defense,
or otherwise,  in any such suit,  action or  proceeding,  (i) any claim that the
Purchaser  is not  personally  subject to the  jurisdiction  of the  above-named
courts,  and (ii) to the extent permitted by applicable law, any claim that such
proceeding  relating to the enforcement of an award is in an inconvenient  forum
or that the venue of any such  proceeding is improper or that this Agreement may
not be enforced or that judgment may not be entered in any such courts.

      12.4 Attorney's Fees. In any action, proceeding or counterclaim brought to
enforce any of the provisions of this Agreement or to recover damages, costs and
expenses in connection with any breach of the Agreement,  the prevailing  party,
as determined  by the finder of fact,  shall be entitled to be reimbursed by the
opposing party for all of the prevailing  party's  reasonable outside attorneys'
fees, costs and other  out-of-pocket  expenses  incurred in connection with such
action, proceeding or counterclaim.

                                       23


      12.5 Entire  Agreement.  This Agreement  constitutes the entire  agreement
among the parties hereto with respect to the subject matter hereof. There are no
restrictions,  promises, warranties or undertakings,  other than those set forth
herein.  The  Company  acknowledges  that all  material  facts upon which it has
relied in forming its decision to enter into this  Agreement  are  expressly set
forth  herein  and  further  acknowledges  that the  Purchaser  has not made any
representations,  express or implied,  which are not expressly set forth herein.
This Agreement  supercedes all prior  agreements  and  understandings  among the
parties hereto with respect to the subject matter hereof.

      12.6 Publicity.  The Company shall not issue any public statement or press
release,  or otherwise  disclose in any manner the identity of the  Purchaser or
that  Purchaser has purchased the Shares,  without the prior written  consent of
the Purchaser,  except as may be required by applicable law; provided,  however,
that the Company may disclose such  information  in the  Registration  Statement
filed with the SEC.

      12.7  Amendment.  No provision of this  Agreement may be waived or amended
except in a written  instrument signed by the Company and the Purchasers holding
a majority  of the  Shares  provided  that those  provisions  that  require  all
Purchasers  to consent  requires  100% to amend.  No waiver of any default  with
respect to any provision,  condition or  requirement of this Agreement  shall be
deemed to be a  continuing  waiver in the  future or a waiver of any  subsequent
default or a waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of either party to exercise  any right  hereunder in
any manner  impair the  exercise of any such right.  No  consideration  shall be
offered or paid to any Purchaser to amend or consent to a waiver or modification
of any provision of this Agreement unless the same consideration is also offered
to all Purchasers who then hold Shares.

      12.8  Successors  and Assigns.  This  Agreement  shall be binding upon and
inure to the benefit of the parties and their successors and permitted  assigns.
The Company may not assign this Agreement or any rights or obligations hereunder
without the prior written  consent of the  Purchasers.  Any Purchaser may assign
any or all of its  rights  under  this  Agreement  to any  person  to whom  such
Purchaser  assigns or transfers any Shares,  provided such transferee  agrees in
writing to be bound,  with respect to the transferred  Shares, by the provisions
hereof  that apply to the  "Purchasers."  This  Agreement  is  intended  for the
benefit of the parties  hereto and their  respective  successors  and  permitted
assigns and is not for the benefit of, nor may any provision  hereof be enforced
by, any other  person  (except an  indemnified  party  pursuant  to Section  4.2
herein).

      12.9  Severability.  If any  provision  of  this  Agreement  is held to be
invalid or unenforceable in any respect,  the validity and enforceability of the
remaining  terms  and  provisions  of  this  Agreement  shall  not in any way be
affected or impaired  thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor,  and upon so
agreeing, shall incorporate such substitute provision in this Agreement.

      12.10 Nature of Obligations.  The obligations of each Purchaser under this
Agreement are several and not joint with the obligations of any other Purchaser,
and no Purchaser  shall be  responsible  in any way for the  performance  of the
obligations of any other Purchaser  under this  Agreement.  The decision of each
Purchaser to purchase  Shares  pursuant to this  Agreement has been made by such
Purchaser independently of any other Purchaser. Nothing contained herein, and no
action taken by any Purchaser  pursuant  thereto,  shall be deemed to constitute
the Purchasers as a partnership,  an  association,  a joint venture or any other
kind of  entity,  or create a  presumption  that the  Purchasers  are in any way
acting  in  concert  or as a  group  with  respect  to such  obligations  or the
transactions contemplated by this Agreement. Each Purchaser acknowledges that no
other  Purchaser has acted as agent for such Purchaser in connection with making
its  investment  hereunder and that no Purchaser will be acting as agent of such
Purchaser  in  connection  with  monitoring  its  investment  in the  Shares  or
enforcing its rights under this  Agreement.  Each Purchaser shall be entitled to
independently protect and enforce its rights, including, without limitation, the
rights  arising out of this  Agreement,  and it shall not be  necessary  for any
other  Purchaser to be joined as an additional  party in any proceeding for such
purpose.  The Company acknowledges that each of the Purchasers has been provided
with the same  Agreement for the purpose of closing a transaction  with multiple
Purchasers  and  not  because  it  was  required  or  requested  to do so by any
Purchaser.

                                       24


                                 SIGNATURE PAGE

      IN WITNESS  WHEREOF,  the parties have  executed  this Stock  Purchase and
Subscription Agreement as of the date first set forth above.



THE COMPANY:                               THE STOCKHOLDER:



WONDER AUTO LIMITED                        EMPOWER CENTURY LIMITED



By:                                        By:
   ---------------------------                ---------------------------
    Name: Qingjie Zhao                        Name: Qingjie Zhao
    Title: CEO and Chairman                   Title:




                                    THE PURCHASERS:


                                    For Individuals:

                                    ---------------------------
                                    Print Name Above

                                    ---------------------------
                                    Sign Name Above


                                    For Entities:

                                    ---------------------------
                                    Print Name Above

                                    By:
                                       ------------------------------
                                       Name:
                                       Title:



                                    ADDRESS:
                                            ---------------------------
                                            ---------------------------
                                            ---------------------------

                                    TAX ID NUMBER:
                                                 ---------------------------


TOTAL NUMBER OF SHARES PURCHASED
                                ------------------

TOTAL COST OF SHARES PURCHASED, AT $265,033.85 PER SHARE, IS $                 .
                                                              ------------------




                                     ANNEX I




                                                NUMBER OF COMPANY     PURCHASE PRICE FOR     NUMBER OF STOCKHOLDER
NAME OF PURCHASER                                SHARES PURCHASED       COMPANY SHARES          SHARES PURCHASED
                                                                                    
Atlas Allocation Fund, L.P.                          2.263862              $600,000                 1.509241

Gerald Bolfing                                       0.226386               $60,000                 0.150924

Daniel O. Conwill IV                                 1.131931              $300,000                 0.754621

Gary C. Evans                                        2.263862              $600,000                 1.509241

William W. Gay                                       0.113193               $30,000                 0.075462

Harold E. Gear                                       0.113193               $30,000                 0.075462

Matthew Hayden                                       0.452772              $120,000                 0.301848

Jayhawk China Fund (Cayman) Ltd.                     6.791585             $1,800,000                4.527724

David Kenkel                                         0.113193               $30,000                 0.075462

Michael R. Kindred and Mary A.                       0.226386               $60,000                 0.150924
Kubes-Kindred, Joint Tenants

Glenn A. Little                                      0.226386               $60,000                 0.150924

Pinnacle China Fund, L.P.                           16.526191             $4,380,000               11.017461

Dean C. Pisani                                       0.113193               $30,000                 0.075462

Carolyn Prahl                                        0.226386               $60,000                 0.150924

Precept Capital Master Fund, G.P.                    1.131931              $300,000                 0.754621

Sandor Capital Master Fund, L.P.                     2.263862              $600,000                 1.509241

Sterling Research & Management LLC                   0.679159              $180,000                 0.452772

Michael K. Studer                                    0.113193               $30,000                 0.075462

US Special Opportunities Trust PLC                   1.697896              $450,000                 1.131931

Renaissance US Growth Investment Trust PLC           1.697896              $450,000                 1.131931

Premier RENN US Emerging Growth Fund Limited         1.131931              $300,000                 0.754621

John H. Trescot Jr.                                  0.113193               $30,000                 0.075462

Westpark Capital, L.P.                               4.527724             $1,200,000                3.018482

Whitebox Intermarket Partners, LP                    1.131931              $300,000                 0.754621

                                        TOTALS      45.277236             $12,000,000              30.184824


                                                                      AGGREGATE PORTION
                                                                      OF PURCHASE PRICE
                                                PURCHASE PRICE FOR       PAYABLE BY
NAME OF PURCHASER                               STOCKHOLDER SHARES       PURCHASER
                                                                
Atlas Allocation Fund, L.P.                          $400,000            $1,000,000

Gerald Bolfing                                       $40,000              $100,000

Daniel O. Conwill IV                                 $200,000             $500,000

Gary C. Evans                                        $400,000            $1,000,000

William W. Gay                                       $20,000              $50,000

Harold E. Gear                                       $20,000              $50,000

Matthew Hayden                                       $80,000              $200,000

Jayhawk China Fund (Cayman) Ltd.                    $1,200,000           $3,000,000

David Kenkel                                         $20,000              $50,000

Michael R. Kindred and Mary A.                       $40,000              $100,000
Kubes-Kindred, Joint Tenants

Glenn A. Little                                      $40,000              $100,000

Pinnacle China Fund, L.P.                           $2,920,000           $7,300,000

Dean C. Pisani                                       $20,000              $50,000

Carolyn Prahl                                        $40,000              $100,000

Precept Capital Master Fund, G.P.                    $200,000             $500,000

Sandor Capital Master Fund, L.P.                     $400,000            $1,000,000

Sterling Research & Management LLC                   $120,000             $300,000

Michael K. Studer                                    $20,000              $50,000

US Special Opportunities Trust PLC                   $300,000             $750,000

Renaissance US Growth Investment Trust PLC           $300,000             $750,000

Premier RENN US Emerging Growth Fund Limited         $200,000             $500,000

John H. Trescot Jr.                                  $20,000              $50,000

Westpark Capital, L.P.                               $800,000            $2,000,000

Whitebox Intermarket Partners, LP                    $200,000             $500,000

                                      TOTALS        $8,000,000          $20,000,000

EX-10.2

                                                                    Exhibit 10.2
                                ESCROW AGREEMENT

      This Escrow Agreement (the  "Agreement"),  dated June 22, 2006, is entered
into by and among MGCC Investment  Strategies,  Inc., a Nevada  corporation (the
"Company"),  Sterne Agee & Leach,  Inc.,  a Delaware  corporation,  as placement
agent and  representative of the Subscribers (the "Subscriber  Representative"),
Empower  Century  Limited,  a British  Virgin Islands  corporation  ("Empower"),
Choice Inspire  Limited,  a British Virgin Island  corporation  ("Choice,"  and,
together with Empower, the "Stockholders"),  and Securities Transfer Corporation
(hereinafter  referred to as "Escrow Agent"). All capitalized terms used but not
defined herein shall have the meanings assigned them in the various Subscription
Agreements,  between Wonder Auto Limited, a BVI corporation  ("Wonder") and each
Subscriber  in  the  Offering  (each  a  "Subscriber"  and   collectively,   the
"Subscribers").

                                   BACKGROUND

      As an  inducement  to the  Subscribers  to  enter  into  the  Subscription
Agreement, the Stockholders agreed that the Stockholders would place the "Escrow
Shares" (as hereinafter  defined) into escrow for the benefit of the Subscribers
in the event the Company  failed to satisfy  the  "Performance  Thresholds"  (as
hereinafter   defined).   Pursuant  to  the  requirements  of  the  Subscription
Agreement, the Company, the Stockholders and the Subscriber  Representative have
agreed to  establish  an escrow  on the terms and  conditions  set forth in this
Agreement and the Escrow Agent has agreed to act as escrow agent pursuant to the
terms and conditions of this Agreement.

                                    AGREEMENT

      NOW, THEREFORE, in consideration of the mutual promises of the parties and
the terms and conditions hereof, the parties hereby agree as follows:

      1. Appointment of Escrow Agent. The Subscriber Representative on behalf of
the  Subscribers,  the  Stockholders  and the Company hereby appoint  Securities
Transfer  Corporation  as Escrow Agent to act in  accordance  with the terms and
conditions  set forth in this  Agreement,  and Escrow Agent hereby  accepts such
appointment and agrees to act in accordance with such terms and conditions.

      2.  Establishment  of Escrow.  Upon the execution of this  Agreement,  the
Stockholders   shall  deliver  to  the  Escrow  Agent  four  stock  certificates
evidencing 1,347,644 shares in the aggregate, to be equitably adjusted for stock
splits,  stock  dividends  and similar  adjustments  (collectively,  the "Escrow
Shares") of the Company's  common capital stock along with stock powers executed
in blank. The first two certificates (one from each Stockholder) shall represent
673,822  shares in the  aggregate,  to be equitably  adjusted for stock  splits,
stock  dividends  and similar  adjustments  (the "2006  Escrow  Shares") and the
second two  certificates  (one from each  Stockholder)  shall  evidence  673,822
shares in the  aggregate,  to be  equitably  adjusted  for stock  splits,  stock
dividends and similar adjustments (the "2007 Escrow Shares").



      3. Representations of The Stockholders.  The Stockholders hereby represent
and warrant to the Subscribers and the Subscriber Representative as follows:

            (i) The Escrow Shares are validly issued, fully paid and
      nonassessable shares of the Company, and free and clear of all pledges,
      liens and encumbrances.

            (ii) Performance of this Agreement and compliance with the
      provisions hereof will not violate any provision of any applicable law and
      will not conflict with or result in any breach of any of the terms,
      conditions or provisions of, or constitute a default under, or result in
      the creation or imposition of any lien, charge or encumbrance upon, any of
      the properties or assets of the Stockholders pursuant to the terms of any
      indenture, mortgage, deed of trust or other agreement or instrument
      binding upon the Stockholders, other than such breaches, defaults or liens
      which would not have a material adverse effect taken as a whole.

      4.  Disbursement  of Escrow Shares.  Wonder  covenanted to the Subscribers
that Wonder would attain the following  financial  performance  thresholds  (the
"Performance  Thresholds"):  $8,140,000  million  of Net  Income  ("NI") for the
fiscal  year  ("FY06")  ending  December  31,  2006 (the "2006  Threshold")  and
$12,713,760  of NI for the fiscal year  ("FYO7")  ending  December 31, 2007 (the
"2007 Threshold").  The Company will provide the Subscriber  Representative with
(a) its audited financial statements, prepared in accordance with US GAAP, on or
before  March  31,  2007  so as  to  allow  the  Subscriber  Representative  the
opportunity  to evaluate  whether the 2006  Threshold  was  attained and (b) its
audited  financial  statements,  prepared in  accordance  with U.S.  GAAP, on or
before  March  31,  2008  so as  to  allow  the  Subscriber  Representative  the
opportunity  to evaluate  whether the 2007  Threshold was attained.  If the 2006
Threshold  is not  achieved,  the Company  shall  cause its  special  securities
counsel,  Thelen Reid & Priest LLP, to provide written instruction to the Escrow
Agent instructing the Escrow Agent to issue and deliver within ten business days
following   delivery  of  the  FY06  financial   statements  to  the  Subscriber
Representative certificates registered in the name of each Subscriber evidencing
the  Subscriber's  pro rata  portion  of the  2006  Escrow  Shares.  If the 2007
Threshold  is not  achieved,  the Company  shall  cause its  special  securities
counsel,  Thelen Reid & Priest LLP, to provide written instruction to the Escrow
Agent to issue and deliver  within ten business days  following  delivery of the
FY07  financial  statements  to  the  Subscriber   Representative   certificates
registered in the name of each Subscriber  evidencing the  Subscriber's pro rata
portion of the 2007 Escrow  Shares.  Each  Subscriber's  portion of the required
number of Escrow Shares shall be equal to such  Subscriber's pro rata portion of
such  required  number of Escrow  Shares  (based upon the  respective  number of
shares of Wonder's  capital stock  acquired by each  Subscriber  pursuant to the
Subscription  Agreement).  Notwithstanding anything to the contrary herein, only
those  Subscribers  who remain  stockholders of the Company at the time that any
Escrow Shares become  deliverable  hereunder shall be entitled to their pro rata
portion of such Escrow Shares.  The Subscriber  Representative  shall thereafter
promptly  deliver to the Subscribers  such  certificates.  The Escrow Agent need
only rely on the letter of  instruction  from  Thelen  Reid & Priest LLP in this
regard.  If the 2006  Threshold or the 2007  Threshold is achieved,  the Company
shall  cause  Thelen  Reid & Priest LLP to provide  written  instruction  to the
Escrow Agent,  for the release of the 2006 Escrow Shares or 2007 Escrow  Shares,
respectively, to the Stockholders.


                                       2


      5. Duration. This Agreement shall terminate on the distribution of all the
Escrow Shares in accordance with Section 4 above.

      6.  Interpleader.  Should any  controversy  arise among the parties hereto
with  respect to this  Agreement  or with  respect  to the right to receive  the
Escrow  Shares,  Escrow Agent shall have the right to consult  counsel and/or to
institute an  appropriate  interpleader  action to  determine  the rights of the
parties.  Escrow Agent is also hereby  authorized  to  institute an  appropriate
interpleader  action upon receipt of a written  letter of direction  executed by
the parties so directing  Escrow Agent. If Escrow Agent is directed to institute
an appropriate  interpleader action, it shall institute such action not prior to
thirty (30) days after  receipt of such letter of  direction  and not later than
sixty  (60)  days  after  such  date.  Any  interpleader  action  instituted  in
accordance  with  this  Section  6 shall  be filed  in any  court  of  competent
jurisdiction in Dallas County,  Texas, and the Escrow Shares in dispute shall be
deposited with the court and in such event Escrow Agent shall be relieved of and
discharged from any and all  obligations  and liabilities  under and pursuant to
this Agreement with respect to the Escrow Shares.

      7. Exculpation and Indemnification of Escrow Agent.

            (a) Escrow Agent is not a party to, and is not bound by or charged
with notice of any agreement out of which this escrow may arise. Escrow Agent
acts under this Agreement as a depositary only and is not responsible or liable
in any manner whatsoever for the sufficiency, correctness, genuineness or
validity of the subject matter of the escrow, or any part thereof, or for the
form or execution of any notice given by any other party hereunder, or for the
identity or authority of any person executing any such notice. Escrow Agent will
have no duties or responsibilities other than those expressly set forth herein.
Escrow Agent will be under no liability to anyone by reason of any failure on
the part of any party hereto (other than Escrow Agent) or any maker, endorser or
other signatory of any document to perform such person's or entity's obligations
hereunder or under any such document. Except for this Agreement and instructions
to Escrow Agent pursuant to the terms of this Agreement, Escrow Agent will not
be obligated to recognize any agreement between or among any or all of the
persons or entities referred to herein, notwithstanding its knowledge thereof.

            (b) Escrow Agent will not be liable for any action taken or omitted
by it, or any action suffered by it to be taken or omitted, in good faith and in
the exercise of its own best judgment, and may rely conclusively on, and will be
protected in acting upon, any order, notice, demand, certificate, or opinion or
advice of counsel (including counsel chosen by Escrow Agent), statement,
instrument, report or other paper or document (not only as to its due execution
and the validity and effectiveness of its provisions, but also as to the truth
and acceptability of any information therein contained) which is reasonably
believed by Escrow Agent to be genuine and to be signed or presented by the
proper person or persons. The duties and responsibilities of the Escrow Agent
hereunder shall be determined solely by the express provisions of this Agreement
and no other or further duties or responsibilities shall be implied, including,
but not limited to, any obligation under or imposed by any laws of the State of
Texas upon fiduciaries.


                                       3


            (c) Escrow Agent will be indemnified and held harmless, jointly and
severally, by the Company and the Stockholders from and against any expenses,
including reasonable attorneys' fees and disbursements, damages or losses
suffered by Escrow Agent in connection with any claim or demand, which, in any
way, directly or indirectly, arises out of or relates to this Agreement or the
services of Escrow Agent hereunder; except, that if Escrow Agent is guilty of
willful misconduct, fraud or gross negligence under this Agreement, then Escrow
Agent will bear all losses, damages and expenses arising as a result of such
willful misconduct, fraud or gross negligence. Promptly after the receipt by
Escrow Agent of notice of any such demand or claim or the commencement of any
action, suit or proceeding relating to such demand or claim, Escrow Agent will
notify the other parties hereto in writing. For the purposes hereof, the terms
"expense" and "loss" will include all amounts paid or payable to satisfy any
such claim or demand, or in settlement of any such claim, demand, action, suit
or proceeding settled with the express written consent of the parties hereto,
and all costs and expenses, including, but not limited to, reasonable attorneys'
fees and disbursements, paid or incurred in investigating or defending against
any such claim, demand, action, suit or proceeding. The provisions of this
Section 7 shall survive the termination of this Agreement.

      8.  Compensation of Escrow Agent. The Company will pay Escrow Agent $1,500
for all services rendered by Escrow Agent hereunder.

      9.  Resignation of Escrow Agent.  At any time, upon ten (10) days' written
notice to the Company, Escrow Agent may resign and be discharged from its duties
as Escrow Agent hereunder. As soon as practicable after its resignation,  Escrow
Agent will  promptly  turn over to a successor  escrow  agent  appointed  by the
Company  the  Escrow  Shares  held  hereunder  upon  presentation  of a document
appointing the new escrow agent and evidencing  its acceptance  thereof.  If, by
the end of the 10-day period  following the giving of notice of  resignation  by
Escrow Agent, the Company shall have failed to appoint a successor escrow agent,
Escrow  Agent may  interplead  the Escrow  Shares into the registry of any court
having jurisdiction.

      10.  Records.   Escrow  Agent  shall  maintain  accurate  records  of  all
transactions  hereunder.  Promptly after the termination of this Agreement or as
may  reasonably be requested by the parties hereto from time to time before such
termination,  Escrow Agent shall provide the parties hereto, as the case may be,
with a complete copy of such records, certified by Escrow Agent to be a complete
and accurate account of all such transactions. The authorized representatives of
each of the  parties  hereto  shall have access to such books and records at all
reasonable  times during normal business hours upon reasonable  notice to Escrow
Agent.

      11.  Notice.  All notices,  communications  and  instructions  required or
desired to be given under this  Agreement must be in writing and shall be deemed
to be duly  given  if sent by  registered  or  certified  mail,  return  receipt
requested, or overnight courier to the following addresses:

      If to Escrow Agent:     Securities Transfer Corporation
                              2591 Dallas Parkway, Suite 102
                              Frisco, Texas 75034
                              Attention: Kevin Halter

      If to the Company or the Stockholders:  c/o Wonder Auto Limited
                                              No. 56 Lingxi Street
                                              Taihe District
                                              Jinzhou City, Liaoning
                                              People's Republic of China  121013


                                       4


      If to the Subscriber    Sterne Agee & Leach, Inc.
      Representative:         Corporate Headquarters
                              800 Shades Creek Parkway, Suite 700
                              Birmingham, Alabama 35209


or to such other address and to the attention of such other person as any of the
above may have  furnished  to the other  parties in  writing  and  delivered  in
accordance with the provisions set forth above.

      12.  Execution  in  Counterparts.   This  Agreement  may  be  executed  in
counterparts,  each of  which  shall be  deemed  an  original,  but all of which
together shall constitute one and the same instrument.  Facsimile  execution and
delivery of this Agreement is legal, valid and binding for all purposes.

      13.  Assignment  and  Modification.  This  Agreement  and the  rights  and
obligations  hereunder of any of the parties hereto may not be assigned  without
the prior written consent of the other parties hereto. Subject to the foregoing,
this  Agreement  will be  binding  upon and inure to the  benefit of each of the
parties hereto and their respective  successors and permitted assigns.  No other
person will acquire or have any rights under,  or by virtue of, this  Agreement.
No portion of the Escrow Shares shall be subject to  interference  or control by
any creditor of any party hereto, or be subject to being taken or reached by any
legal or equitable process in satisfaction of any debt or other liability of any
such party  hereto  prior to the  disbursement  thereof to such party  hereto in
accordance with the provisions of this Agreement.  This Agreement may be changed
or modified only in writing signed by all of the parties hereto.

      14.  APPLICABLE  LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS  APPLICABLE TO CONTRACTS MADE AND
TO BE  PERFORMED  THEREIN,  EXCEPT  THAT THE  PORTIONS  OF THE TEXAS TRUST CODE,
SECTION 111.001, ET SEQ. OF THE TEXAS PROPERTY CODE, CONCERNING FIDUCIARY DUTIES
AND  LIABILITIES  OF  TRUSTEES  SHALL NOT APPLY TO THIS  AGREEMENT.  THE PARTIES
EXPRESSLY  WAIVE SUCH DUTIES AND  LIABILITIES,  IT BEING THEIR  INTENT TO CREATE
SOLELY AN AGENCY RELATIONSHIP AND HOLD THE ESCROW AGENT LIABLE ONLY IN THE EVENT
OF ITS WILLFUL MISCONDUCT, FRAUD, OR GROSS NEGLIGENCE. ANY LITIGATION CONCERNING
THE SUBJECT  MATTER OF THIS  AGREEMENT  SHALL BE  EXCLUSIVELY  PROSECUTED IN THE
COURTS OF  DALLAS  COUNTY,  TEXAS,  AND ALL  PARTIES  CONSENT  TO THE  EXCLUSIVE
JURISDICTION AND VENUE OF THOSE COURTS.

      15. Headings. The headings contained in this Agreement are for convenience
of reference only and shall not affect the construction of this Agreement.


                                       5


      16. Attorneys' Fees. If any action at law or in equity, including an
action for declaratory relief, is brought to enforce or interpret the provisions
of this Agreement, the prevailing party shall be entitled to recover reasonable
attorneys' fees from the other party (unless such other party is the Escrow
Agent), which fees may be set by the court in the trial of such action or may be
enforced in a separate action brought for that purpose, and which fees shall be
in addition to any other relief that may be awarded.

      17. Registration Rights. If any Escrow Shares are distributed to the
Subscribers hereunder, then the Company shall use commercially reasonable
efforts to file a registration statement relating to the resale by the
Subscribers of the Escrow Shares so distributed within 30 days following the
date that the Company is obligated hereunder to deliver any such Escrow Shares
to the Subscribers and the Company shall thereafter use commercially reasonable
efforts to cause such registration statement to become effective. The
Subscribers shall provide such information to the Company as the Company may
reasonably request in order to prepare such registration statement, including,
without limitation, delivery to the Company of Selling Stockholder
questionnaires. The Company shall cause such registration statement to remain
effective until each Subscriber has sold any Escrow Shares received by it
thereunder or until each Subscriber is permitted to resell all of the Escrow
Shares received hereunder at one time pursuant to Rule 144(k) of the Securities
Act of 1933, as amended.

                            [Signature Page Follows]


                                       6



      IN WITNESS  WHEREOF,  the parties have duly executed this  Agreement as of
the date set forth opposite their respective names.

                                    MGCC INVESTMENT STRATEGIES, INC.

                                    By:    /s/Timothy Halter
                                           ------------------------
                                    Its:   President
                                           ------------------------
                                    Dated: June 22, 2006
                                           ------------------------


                                    EMPOWER CENTURY LIMITED

                                    By:    /s/Qingjie Zhao
                                           ------------------------
                                    Its:   Chairman
                                           ------------------------
                                    Dated: June 22, 2006
                                           ------------------------


                                    CHOICE INSPIRE LIMITED

                                    By:    /s/Qingjie Zhao
                                           ------------------------
                                    Its:   Chairman
                                           ------------------------
                                    Dated: June 22, 2006
                                           ------------------------


                                    SECURITIES TRANSFER CORPORATION

                                    By:    /s/Kevin Halter
                                           ------------------------
                                    Its:   President
                                           ------------------------
                                    Dated: June 20, 2006
                                           ------------------------


                                    STERNE AGEE & LEACH, INC.
                                    As representative of the Subscribers

                                    By:    /s/ W. Barry McRac
                                           ------------------------
                                    Its:   Managing Director
                                           ------------------------
                                    Dated: June 22, 2006
                                           ------------------------

                 [Signature Page to Make Good Escrow Agreement]

EX-10.3

                                                                    Exhibit 10.3
                                ESCROW AGREEMENT

      This Escrow Agreement (the "Agreement"), entered into as of this 22 day of
June,  2006,  is by and among  WONDER AUTO  LIMITED,  a British  Virgin  Islands
corporation (the "Company"),  Empower Century Limited,  a British Virgin Islands
corporation  ("Empower"),  each of the  purchasers  of  ordinary  shares  of the
Company (the "Shares")  identified below  (collectively,  the  "Purchasers") and
THELEN  REID & PRIEST  LLP  (hereinafter  referred  to as "Escrow  Agent").  All
capitalized  terms used but not defined herein shall have the meanings  assigned
them in the Subscription Agreement (as hereinafter defined).

                                   BACKGROUND

      The Company, Empower and the Purchasers have entered into a Stock Purchase
and Subscription Agreement (the "Subscription Agreement") pursuant to which each
Purchaser has agreed to purchase  from the Company and Empower,  and the Company
and  Empower  have  agreed  to sell to each  Purchaser,  the  number  of  Shares
identified therein.  Pursuant to Section 2.2 of the Subscription Agreement,  the
Company,  Empower and the  Purchasers  have agreed to establish an escrow on the
terms and conditions set forth in this Agreement. The Escrow Agent has agreed to
act as escrow agent pursuant to the terms and conditions of this Agreement.

                                    AGREEMENT

      NOW,  THEREFORE,  in  consideration of the promises of the parties and the
terms and conditions hereof, the parties hereby agree as follows:

      1.  Appointment of Escrow Agent.  Each Purchaser,  the Company and Empower
hereby  appoint  Thelen Reid & Priest LLP as Escrow  Agent to act in  accordance
with the  Subscription  Agreement and the terms and conditions set forth in this
Agreement, and Escrow Agent hereby accepts such appointment and agrees to act in
accordance with such terms and conditions.

      2.  Establishment  of Escrow.  All amounts  provided by the  Purchasers in
connection with their acquisition of the Shares as set forth in the Subscription
Agreement  shall be  deposited  with the Escrow Agent in  immediately  available
funds by federal wire transfer or cashiers  check,  such funds being referred to
herein as the "Escrow Funds". In addition,  certificates representing the Shares
(the "Escrowed Certificates") shall be deposited with the Escrow Agent.

      3.  Segregation of Escrow Funds. The Escrow Funds shall be segregated from
the assets of Escrow  Agent and held in trust for the  benefit  of the  Company,
Empower and the Purchasers in accordance herewith.

      4. Receipt and Investment of Funds.

            (a) Escrow Agent agrees to place the Escrow Funds in a  non-interest
bearing  and  federally  insured  depository  account.  Subject to Section  7(c)
hereof,  Escrow Agent shall have no liability  for any loss  resulting  from the
deposit of the Escrow Funds.



            (b) The Escrow Agent shall cause to be prepared all income and other
tax  returns  and  reports  the  Escrow  Agent,  in its sole  discretion,  deems
necessary or advisable in order to comply with all tax and other laws, rules and
regulations applicable to the Escrow Funds.

      5. Disbursement of the Escrow Funds.

            (a) This Agreement shall terminate upon the earlier of (i) the close
of business on July 15, 2006,  unless the offering  expiration date is otherwise
extended pursuant to Section 1.4 of the Subscription  Agreement (the "Expiration
Date"), or (ii) the filing, on or before the close of business on the Expiration
Date, of the Registration  Statement (the "Registration  Statement") relating to
the Public Company Shares (as defined in the Subscription Agreement) required to
be filed by the Company under the terms of the  Subscription  Agreement with the
United States  Securities and Exchange  Commission (each date of each such event
described  in (i) and (ii) above being  referred  to herein as the  "Termination
Date").  The Termination  Date may be extended by joint written  instructions to
the Escrow Agent by the Company, Empower and each Purchaser.

            (b) On the Termination  Date,  Escrow Agent shall either release the
Escrow  Funds  in  the  Escrow  Account  to  the  Purchasers  and  the  Escrowed
Certificates  to the Company and Empower if the  Registration  Statement has not
been  timely  filed or if the  Registration  Statement  has been  timely  filed,
release  the Escrow  Funds in the Escrow  Account,  minus bank  charges  and any
amounts to be paid to any related third parties as per the  instructions  of the
Company and Empower,  to the Company and Empower's  designated  bank account and
deliver the Escrowed Certificates as per the instructions of the Purchasers.

      6.  Interpleader.  Should any  controversy  arise among the parties hereto
with  respect to this  Agreement  or with  respect  to the right to receive  the
Escrow Funds or the Escrowed Certificates,  Escrow Agent shall have the right to
consult  counsel  and/or to  institute  an  appropriate  interpleader  action to
determine the rights of the parties.  Escrow Agent is also hereby  authorized to
institute an appropriate interpleader action upon receipt of a written letter of
direction  executed by the parties so directing Escrow Agent. If Escrow Agent is
directed to institute an appropriate  interpleader  action,  it shall  institute
such  action  not prior to thirty  (30) days  after  receipt  of such  letter of
direction and not later than sixty (60) days after such date.  Any  interpleader
action  instituted in accordance with this Section 6 shall be filed in any court
of competent  jurisdiction  in New York, New York, and the portion of the Escrow
Funds in dispute  shall be  deposited  with the court and in such  event  Escrow
Agent shall be  relieved  of and  discharged  from any and all  obligations  and
liabilities under and pursuant to this Agreement with respect to that portion of
the Escrow Funds.

      7. Exculpation and Indemnification of Escrow Agent.

            (a)  Escrow  Agent is not a party to, and is not bound by or charged
with notice of any  agreement  out of which this escrow may arise.  Escrow Agent
acts under this Agreement as a depositary  only and is not responsible or liable
in any  manner  whatsoever  for the  sufficiency,  correctness,  genuineness  or
validity of the subject  matter of the escrow,  or any part thereof,  or for the
form or execution of any notice given by any other party  hereunder,  or for the
identity or authority of any person  executing any such notice or depositing the
Escrow Funds.  Escrow Agent will have no duties or  responsibilities  other than
those  expressly  set forth  herein.  Escrow Agent will be under no liability to
anyone by reason of any  failure  on the part of any party  hereto  (other  than
Escrow  Agent) or any maker,  endorser  or other  signatory  of any  document to
perform  such  person's  or  entity's  obligations  hereunder  or under any such
document. Except for this Agreement and instructions to Escrow Agent pursuant to
the terms of this Agreement, Escrow Agent will not be obligated to recognize any
agreement  between or among any or all of the  persons or  entities  referred to
herein, notwithstanding its knowledge thereof.


                                       2


            (b) Escrow  Agent will not be liable for any action taken or omitted
by it, or any action suffered by it to be taken or omitted, in good faith and in
the exercise of its own best judgment, and may rely conclusively on, and will be
protected in acting upon, any order, notice, demand,  certificate, or opinion or
advice  of  counsel  (including  counsel  chosen by  Escrow  Agent),  statement,
instrument,  report or other paper or document (not only as to its due execution
and the validity and  effectiveness of its provisions,  but also as to the truth
and  acceptability  of any information  therein  contained)  which is reasonably
believed  by Escrow  Agent to be genuine  and to be signed or  presented  by the
proper person or persons.  The duties and  responsibilities  of the Escrow Agent
hereunder shall be determined solely by the express provisions of this Agreement
and no other or further duties or responsibilities shall be implied,  including,
but not limited to, any obligation  under or imposed by any laws of the State of
New York upon fiduciaries.

            (c)  Escrow  Agent  will be  indemnified  and held  harmless  by the
Company  and  Empower  from  and  against  any  expenses,  including  reasonable
attorneys' fees and disbursements, damages or losses suffered by Escrow Agent in
connection with any claim or demand,  which, in any way, directly or indirectly,
arises out of or relates  to this  Agreement  or the  services  of Escrow  Agent
hereunder;  except, that if Escrow Agent is guilty of willful misconduct,  fraud
or gross  negligence  under  this  Agreement,  then  Escrow  Agent will bear all
losses,  damages and expenses  arising as a result of such  willful  misconduct,
fraud or gross negligence. For this purpose, the term "attorneys' fees" includes
fees payable to any counsel  retained by the Escrow Agent in connection with its
services under this agreement and, with respect to any matter arising under this
agreement as to which the Escrow Agent  performs  legal  services,  its standard
hourly  rates and charges then in effect.  Promptly  after the receipt by Escrow
Agent of notice of any such demand or claim or the  commencement  of any action,
suit or  proceeding  relating to such demand or claim,  Escrow Agent will notify
the  other  parties  hereto  in  writing.  For the  purposes  hereof,  the terms
"expense"  and "loss" will  include  all amounts  paid or payable to satisfy any
such claim or demand, or in settlement of any such claim,  demand,  action, suit
or proceeding  settled with the express  written  consent of the parties hereto,
and all costs and expenses, including, but not limited to, reasonable attorneys'
fees and  disbursements,  paid or incurred in investigating or defending against
any such claim,  demand,  action,  suit or  proceeding.  The  provisions of this
Section 7 shall survive the termination of this Agreement.

            (d) The Purchasers  acknowledge that they know that the Escrow Agent
has  represented  the Company in connection  with this agreement and that it may
continue to represent the Company in that  connection and in connection with the
transactions  contemplated by this agreement and the Subscription  Agreement and
the  transactions   relating  to  the  Company's  alternative  public  offering,
including,  but not limited to, in  connection  with any disputes that may arise
under  any such  agreements  or  transactions.  The  Escrow  Agent  shall not be
precluded from or restricted in any way from  representing the Company or any of
its  affiliates  or otherwise  acting as attorneys for the Company or any of its
affiliates  in any  matter,  except  for any legal  proceeding  or other  matter
related to this Agreement.  The Escrow Agent shall be permitted to represent the
Company in any and all legal matters  pertaining to, the Subscription  Agreement
and the Company's alternative public offering, whether or not there is a dispute
between the  Purchasers  and the Company with  respect to any such  matter.  The
Purchasers irrevocably consent to any such representation and waive any conflict
or appearance of conflict with respect to any such representation.


                                       3


      8.  Resignation of Escrow Agent.  At any time, upon ten (10) days' written
notice to the Company and  Empower,  Escrow  Agent may resign and be  discharged
from its duties as Escrow  Agent  hereunder.  As soon as  practicable  after its
resignation,  Escrow Agent will promptly  turn over to a successor  escrow agent
appointed by the Company and Empower all monies and property held hereunder upon
presentation  of a document  appointing  the new escrow agent and evidencing its
acceptance thereof.  If, by the end of the 10-day period following the giving of
notice of resignation by Escrow Agent, the Company and Empower shall have failed
to appoint a successor  escrow  agent,  Escrow Agent may  interplead  the Escrow
Funds into the registry of any court having jurisdiction.

      9. Method of Distribution  by Escrow Agent.  All  disbursements  by Escrow
Agent to a party to this  Agreement will be made by wire transfer of immediately
available funds to an account  designated in writing by the party to receive any
such payment.

      10.  Records.   Escrow  Agent  shall  maintain  accurate  records  of  all
transactions  hereunder.  Promptly after the termination of this Agreement or as
may  reasonably be requested by the parties hereto from time to time before such
termination,  Escrow Agent shall provide the parties hereto, as the case may be,
with a complete copy of such records, certified by Escrow Agent to be a complete
and accurate account of all such transactions. The authorized representatives of
each of the  parties  hereto  shall have access to such books and records at all
reasonable  times during normal business hours upon reasonable  notice to Escrow
Agent.

      11.  Notice.  All notices,  communications  and  instructions  required or
desired to be given under this  Agreement must be in writing and shall be deemed
to be duly  given  if sent by  registered  or  certified  mail,  return  receipt
requested, or overnight courier to the following addresses:

      If to Escrow Agent:     Thelen Reid & Priest LLP
                              701 Eighth Street, N.W.
                              Washington, DC 20001
                              Attention: Louis A. Bevilacqua, Esq.

      If to the Company:      Wonder Auto Limited
                              No. 56 Lingxi Street
                              Taihe District
                              Jinzhou City, Liaoning
                              People's Republic of China, 121013


                                       4


      If to Empower:          Empower Century Limited
                              No. 56 Lingxi Street
                              Taihe District
                              Jinzhou City, Liaoning
                              People's Republic of China, 121013

      If to the Purchasers:   To their addresses as specified in the
                              Subscription Agreement

or to such other address and to the attention of such other person as any of the
above may have  furnished  to the other  parties in  writing  and  delivered  in
accordance with the provisions set forth above.

      12. Execution in Counterparts;  Facsimile Execution. This Agreement may be
executed in counterparts,  each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. Facsimile execution
and delivery of this Agreement is legal, valid and binding for all purposes.

      13.  Assignment  and  Modification.  This  Agreement  and the  rights  and
obligations  hereunder of any of the parties hereto may not be assigned  without
the prior written consent of the other parties hereto. Subject to the foregoing,
this  Agreement  will be  binding  upon and inure to the  benefit of each of the
parties hereto and their respective  successors and permitted assigns.  No other
person will acquire or have any rights under,  or by virtue of, this  Agreement.
No portion  of the Escrow  Funds or  Escrowed  Certificates  shall be subject to
interference  or control by any creditor of any party  hereto,  or be subject to
being taken or reached by any legal or equitable  process in satisfaction of any
debt or other  liability  of any such  party  hereto  prior to the  disbursement
thereof  to  such  party  hereto  in  accordance  with  the  provisions  of this
Agreement.  This  Agreement may be changed or modified only in writing signed by
all of the parties hereto.

      14.  APPLICABLE  LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE  WITH THE LAWS OF THE STATE OF NEW YORK,  USA APPLICABLE TO CONTRACTS
MADE AND TO BE PERFORMED  THEREIN.  THE PARTIES  EXPRESSLY WAIVE SUCH DUTIES AND
LIABILITIES,  IT BEING THEIR INTENT TO CREATE SOLELY AN AGENCY  RELATIONSHIP AND
HOLD THE ESCROW AGENT LIABLE ONLY IN THE EVENT OF ITS WILLFUL MISCONDUCT, FRAUD,
OR GROSS  NEGLIGENCE.  ANY  LITIGATION  CONCERNING  THE  SUBJECT  MATTER OF THIS
AGREEMENT SHALL BE EXCLUSIVELY  PROSECUTED IN THE COURTS OF NEW YORK COUNTY, NEW
YORK,  USA, AND ALL PARTIES CONSENT TO THE EXCLUSIVE  JURISDICTION  AND VENUE OF
THOSE COURTS.

      15. Headings. The headings contained in this Agreement are for convenience
of reference only and shall not affect the construction of this Agreement.


                                       5


      16.  Attorneys'  Fees.  If any  action at law or in equity,  including  an
action for declaratory relief, is brought to enforce or interpret the provisions
of this Agreement,  the prevailing party shall be entitled to recover reasonable
attorneys'  fees from the other  party  (unless  such other  party is the Escrow
Agent), which fees may be set by the court in the trial of such action or may be
enforced in a separate action brought for that purpose,  and which fees shall be
in addition to any other relief that may be awarded.

                            [Signature Page Follows]


                                       6


      IN WITNESS  WHEREOF,  the parties have duly executed this  Agreement as of
the date first above written.

The Company:
                                    WONDER AUTO LIMITED

                                    By:   /s/Qingjie Zhao
                                          -------------------------------------
                                          Name: Qingjie Zhao
                                          Title: CEO and Chairman


Empower:
                                    EMPOWER CENTURY LIMITED

                                    By:   /s/Qingjie Zhao
                                          -------------------------------------
                                          Name: Qingjie Zhao
                                          Title: Chairman


Escrow Agent:
                                    THELEN REID & PRIEST

                                    By:   /s/Louis A. Bevilacqua, Esq.
                                          -------------------------------------
                                          Name: Louis A. Bevilacqua, Esq.
                                          Title: Partner


                       [Purchaser Signature Page Follows]


                      [Signature Page to Escrow Agreement]


      IN  WITNESS  WHEREOF,  the  undersigned  Purchaser  hereby  executes  this
Agreement as of the date first above written.


                                       For Individuals:


                                       -----------------------------
                                       Print Name Above


                                       -----------------------------
                                       Sign Name Above

                                       For Entities:

                                       ATLAS ALLOCATION FUND, L.P.
                                       ---------------------------
                                       Print Name Above

                                       By: Atlas Capital Management, L.P.,
                                           its General Partner
                                       By: RHA, Inc., its General Partner

                                       By: /s/Robert H. Alpert
                                          ------------------------
                                       Name: Robert H. Alpert
                                       Title: President


                      [Signature Page to Escrow Agreement]


      IN  WITNESS  WHEREOF,  the  undersigned  Purchaser  hereby  executes  this
Agreement as of the date first above written.


                                       For Individuals:


                                       Daniel O. Conwill IV
                                       -----------------------------
                                       Print Name Above

                                       /s/Daniel O. Conwill IV
                                       -----------------------------
                                       Sign Name Above


                                       For Entities:


                                       -----------------------------
                                       Print Name Above


                                       By:
                                          --------------------------
                                       Name:
                                       Title:


                      [Signature Page to Escrow Agreement]


      IN  WITNESS  WHEREOF,  the  undersigned  Purchaser  hereby  executes  this
Agreement as of the date first above written.


                                       For Individuals:


                                       Gary C. Evans
                                       -----------------------------
                                       Print Name Above

                                       /s/Gary C. Evans
                                       -----------------------------
                                       Sign Name Above


                                       For Entities:


                                       -----------------------------
                                       Print Name Above

                                       By:
                                          --------------------------
                                       Name:
                                       Title:


                      [Signature Page to Escrow Agreement]


      IN  WITNESS  WHEREOF,  the  undersigned  Purchaser  hereby  executes  this
Agreement as of the date first above written.


                                       For Individuals:


                                       William W. Gay
                                       -----------------------------
                                       Print Name Above

                                       /s/William W. Gay
                                       -----------------------------
                                       Sign Name Above


                                       For Entities:


                                       -----------------------------
                                       Print Name Above


                                       By:
                                          --------------------------
                                       Name:
                                       Title:


                      [Signature Page to Escrow Agreement]


      IN  WITNESS  WHEREOF,  the  undersigned  Purchaser  hereby  executes  this
Agreement as of the date first above written.


                                       For Individuals:


                                       Harold E. Gear
                                       -----------------------------
                                       Print Name Above

                                       /s/Harold E. Gear
                                       -----------------------------
                                       Sign Name Above


                                       For Entities:


                                       -----------------------------
                                       Print Name Above


                                       By:
                                          --------------------------
                                       Name:
                                       Title:


                      [Signature Page to Escrow Agreement]


      IN  WITNESS  WHEREOF,  the  undersigned  Purchaser  hereby  executes  this
Agreement as of the date first above written.


                                       For Individuals:

                                       Matthew Hayden
                                       -----------------------------
                                       Print Name Above

                                       /s/Matthew Hayden
                                       -----------------------------
                                       Sign Name Above


                                       For Entities:


                                       -----------------------------
                                       Print Name Above

                                       By:
                                          --------------------------
                                       Name:
                                       Title:


                      [Signature Page to Escrow Agreement]


      IN  WITNESS  WHEREOF,  the  undersigned  Purchaser  hereby  executes  this
Agreement as of the date first above written.


                                       For Individuals:

                                       -----------------------------
                                       Print Name Above


                                       -----------------------------
                                       Sign Name Above

                                       For Entities:

                                       Jayhawk China Fund (Cayman) Ltd.
                                       --------------------------------
                                       Print Name Above

                                       By: /s/Michael D. Schmitz
                                          --------------------------
                                       Name: Michael D. Schmitz
                                       Title: CFO of Investment Manager


                      [Signature Page to Escrow Agreement]


      IN  WITNESS  WHEREOF,  the  undersigned  Purchaser  hereby  executes  this
Agreement as of the date first above written.


                                       For Individuals:


                                       David Kenkel
                                       -----------------------------
                                       Print Name Above

                                       /s/David Kenkel
                                       -----------------------------
                                       Sign Name Above


                                       For Entities:


                                       -----------------------------
                                       Print Name Above

                                       By:
                                          --------------------------
                                       Name:
                                       Title:


                      [Signature Page to Escrow Agreement]


      IN  WITNESS  WHEREOF,  the  undersigned  Purchaser  hereby  executes  this
Agreement as of the date first above written.



                                       For Individuals:

                                       Michael R. Kindred
                                       Mary A. Kubes-Kindred
                                       -----------------------------
                                       Print Name Above

                                       /s/Michael R. Kindred
                                       /s/Mary A. Kubes-Kindred
                                       -----------------------------
                                       Sign Name Above

                                       For Entities:


                                       -----------------------------
                                       Print Name Above

                                       By:
                                          --------------------------
                                       Name:
                                       Title:


                      [Signature Page to Escrow Agreement]


      IN  WITNESS  WHEREOF,  the  undersigned  Purchaser  hereby  executes  this
Agreement as of the date first above written.


                                       For Individuals:

                                       Glen A. Little
                                       -----------------------------
                                       Print Name Above

                                       /s/Glen A. Little
                                       -----------------------------
                                       Sign Name Above

                                       For Entities:


                                       -----------------------------
                                       Print Name Above

                                       By:
                                          --------------------------
                                       Name:
                                       Title:


                      [Signature Page to Escrow Agreement]


      IN  WITNESS  WHEREOF,  the  undersigned  Purchaser  hereby  executes  this
Agreement as of the date first above written.


                            For Individuals:


                            -----------------------------
                            Print Name Above


                            -----------------------------
                            Sign Name Above


                            For Entities:

                            Pinnacle China Fund, L.P.
                            -----------------------------
                            Print Name Above

                            By:      /s/Barry M. Kitt
                               --------------------------
                            Name: Barry M. Kitt
                            Sole Member, Kitt China Management, L.L.C.,
                            the Manager of Pinnacle China Management, L.L.C.,
                            the General Partner of Pinnacle China Advisors, L.P.
                            the General Partner of Pinnacle China Fund, L.P.


                      [Signature Page to Escrow Agreement]


      IN  WITNESS  WHEREOF,  the  undersigned  Purchaser  hereby  executes  this
Agreement as of the date first above written.


                                       For Individuals:

                                       Dean C. Pisani
                                       -----------------------------
                                       Print Name Above

                                       /s/Dean C. Pisani
                                       -----------------------------
                                       Sign Name Above


                                       For Entities:


                                       -----------------------------
                                       Print Name Above

                                       By:
                                          --------------------------
                                       Name:
                                       Title:


                      [Signature Page to Escrow Agreement]


      IN  WITNESS  WHEREOF,  the  undersigned  Purchaser  hereby  executes  this
Agreement as of the date first above written.


                                       For Individuals:

                                       Carolyn Prahl
                                       -----------------------------
                                       Print Name Above

                                       /s/Carolyn Prahl
                                       -----------------------------
                                       Sign Name Above


                                       For Entities:


                                       -----------------------------
                                       Print Name Above


                                       By:
                                          --------------------------
                                       Name:
                                       Title:


                      [Signature Page to Escrow Agreement]


      IN  WITNESS  WHEREOF,  the  undersigned  Purchaser  hereby  executes  this
Agreement as of the date first above written.


                                       For Individuals:


                                       ---------------------------------
                                       Print Name Above


                                       ---------------------------------
                                       Sign Name Above


                                       For Entities:

                                       Precept Capital Master Fund, G.P.
                                       ---------------------------------
                                       Print Name Above

                                       By: its agent & attorney in fact,
                                       Precept Capital Management, LP

                                       By: its General Partner, Precept
                                       Management, LLC

                                       By: /s/Blair Baker
                                          --------------------------
                                       Name: Blair Baker
                                       Title: President and CEO


                      [Signature Page to Escrow Agreement]


      IN  WITNESS  WHEREOF,  the  undersigned  Purchaser  hereby  executes  this
Agreement as of the date first above written.



                                       For Individuals:


                                       --------------------------------
                                       Print Name Above


                                       --------------------------------
                                       Sign Name Above


                                       For Entities:

                                       Sandor Capital Master Fund, L.P.
                                       --------------------------------
                                       Print Name Above

                                       By: /s/John S. Lemak
                                          -----------------------------
                                       Name: John S. Lemak
                                       Title: General Partner


                      [Signature Page to Escrow Agreement]


      IN  WITNESS  WHEREOF,  the  undersigned  Purchaser  hereby  executes  this
Agreement as of the date first above written.


                                       For Individuals:


                                       ----------------------------------
                                       Print Name Above


                                       ----------------------------------
                                       Sign Name Above


                                       For Entities:

                                       Sterling Research & Management LLC
                                       ----------------------------------
                                       Print Name Above

                                       By: /s/Louis Teplis
                                          -------------------------------
                                       Name: Louis Teplis


                      [Signature Page to Escrow Agreement]


      IN  WITNESS  WHEREOF,  the  undersigned  Purchaser  hereby  executes  this
Agreement as of the date first above written.



                                       For Individuals:

                                       Michael K. Studer
                                       -----------------------------
                                       Print Name Above

                                       /s/Michael K. Studer
                                       -----------------------------
                                       Sign Name Above


                                       For Entities:

                                       -----------------------------
                                       Print Name Above

                                       By:
                                          --------------------------
                                       Name:
                                       Title:


                      [Signature Page to Escrow Agreement]


      IN  WITNESS  WHEREOF,  the  undersigned  Purchaser  hereby  executes  this
Agreement as of the date first above written.


                                       For Individuals:

                                       John H. Trescot Jr.
                                       -----------------------------
                                       Print Name Above

                                       /s/John H. Trescot Jr.
                                       -----------------------------
                                       Sign Name Above


                                       For Entities:


                                       -----------------------------
                                       Print Name Above

                                       By:
                                          --------------------------
                                       Name:
                                       Title:


                      [Signature Page to Escrow Agreement]


      IN  WITNESS  WHEREOF,  the  undersigned  Purchaser  hereby  executes  this
Agreement as of the date first above written.


                                       For Individuals:


                                       -----------------------------
                                       Print Name Above


                                       -----------------------------
                                       Sign Name Above


                                       For Entities:

                                       Westpark Capital, L.P.
                                       -----------------------------
                                       Print Name Above

                                       By: /s/Patrick Brosnahan
                                          --------------------------
                                       Name: Patrick Brosnahan
                                       Title: General Partner


                      [Signature Page to Escrow Agreement]


      IN  WITNESS  WHEREOF,  the  undersigned  Purchaser  hereby  executes  this
Agreement as of the date first above written.


                                       For Individuals:


                                       -----------------------------
                                       Print Name Above


                                       -----------------------------
                                       Sign Name Above


                                       For Entities:

                                       Whitebox Intermarket Partners, LP
                                       -------------------------------------
                                       Print Name Above

                                       By: Whitebox Intermarket Advisors, LLC

                                       By: /s/Jonathan Wood
                                          --------------------------
                                       Name: Jonathan Wood
                                       Title: Director, CFO


                      [Signature Page to Escrow Agreement]


         IN WITNESS WHEREOF, the undersigned Purchaser hereby executes this
Agreement as of the date first above written.


                                       FOR INDIVIDUALS:


                                       -----------------------------
                                       Print Name Above

                                       -----------------------------
                                       Sign Name Above


                                       FOR ENTITIES:


                                       US Special Opportunities Trust PLC
                                       -----------------------------------
                                       Print Name Above

                                       By: US Special Opportunities Trust PLC

                                       By: /s/Russell Cleveland
                                           -------------------------
                                       Name:  Russell Cleveland
                                       Title: President


         IN WITNESS WHEREOF, the undersigned Purchaser hereby executes this
Agreement as of the date first above written.


                                       FOR INDIVIDUALS:



                                       -----------------------------
                                       Print Name Above


                                       -----------------------------
                                       Sign Name Above


                                       FOR ENTITIES:


                                       US Special Opportunities Trust PLC
                                       -------------------------------------
                                       Print Name Above

                                       By: US Special Opportunities Trust PLC

                                       By: /s/Russell Cleveland
                                           -------------------------
                                       Name: Russell Cleveland
                                       Title: President


                      [Signature Page to Escrow Agreement]


         IN WITNESS WHEREOF, the undersigned Purchaser hereby executes this
Agreement as of the date first above written.


                                  FOR INDIVIDUALS:


                                  -----------------------------
                                  Print Name Above


                                  -----------------------------
                                  Sign Name Above


                                  FOR ENTITIES:


                                  Renaissance US Growth Investment Trust PLC
                                  ------------------------------------------
                                  Print Name Above

                                  By: Renaissance US Growth Investment Trust PLC

                                  By: /s/Russell Cleveland
                                      -------------------------
                                  Name: Russell Cleveland
                                  Title: President


                      [Signature Page to Escrow Agreement]


         IN WITNESS WHEREOF, the undersigned Purchaser hereby executes this
Agreement as of the date first above written.


                                  FOR INDIVIDUALS:


                                  -----------------------------
                                  Print Name Above


                                  -----------------------------
                                  Sign Name Above


                                  FOR ENTITIES:


                                  Premier RENN US Emerging Growth Fund Ltd.
                                  --------------------------------------------
                                  Print Name Above

                                  By: Premier RENN US Emerging Growth Fund Ltd.

                                  By: /s/Russell Cleveland
                                      -------------------------
                                  Name: Russell Cleveland
                                  Title: President


                      [Signature Page to Escrow Agreement]


         IN WITNESS WHEREOF, the undersigned Purchaser hereby executes this
Agreement as of the date first above written.


                                       FOR INDIVIDUALS:


                                       Gerald W. Bolfing
                                       -----------------------------------------
                                       Print Name Above

                                       /s/ Gerald W. Bolfing
                                       -----------------------------------------
                                       Sign Name Above


                                       FOR ENTITIES:


                                       Print Name Above

                                       By:

                                       By:
                                          --------------------------------------
                                       Name:
                                       Title:

EX-10.4

Exhibit 10.4

Stock Purchase Agreement

Parties:

Party A: Jinzhou Wonder Industry (Group) Co., Ltd (“Wonder Group”)

Party B: Wonder Auto Limited (“Wonder Ltd.”)

April 28, 2004 in Beijing

RECITALS:

WHEREAS, Jinzhou Halla Electrical Co.Ltd.( “Halla”) is a joint-venture enterprise established in compliance with the Chinese laws;

WHEREAS, Wonder Group owns 61% of Halla’s stock at the execution of this agreement.

WHEREAS, Wonder Ltd. is a British Virgin Islands corporation.

WHEREAS, Wonder Ltd. shall acquire all of the Halla’s stock owned by Wonder Group in exchange for RMB 67,100,000.

NOW, THEREFORE, the Parties intended to be legally bound, hereby agree as follows.

1.Definition:

Halla: Jinzhou Halla Electrical Co. Ltd.

Transfer Consideration: as defined in Section 3.2

2.Basic Transaction:

2.1 Wonder Ltd. agrees to acquire from Wonder Group 61% of issued and outstanding stock of Halla, including all the future interest derived from the shares. The transferred shares shall be clear and free of any encumbrance or restrictions on transfer.

2.2 Since Halla intends to complete its distribution of profits, which are realized in the duration of year 2002 and from January to July of 2003, to its shareholders, the transaction does not affect any rights and benefits on the part of the shareholders resulting from the aforementioned distribution.

2.3 After the consummation of the transfer, Wonder Ltd. will own 60% of issued and outstanding stock of Halla.

3.Price and Payment Arrangement

1

3.1 Both parties agree to determine the purchase price based on Halla’s net asset at the date of July 31, 2003, which is estimated to be RMB1,687,000,000, audited by an accounting firm.

3.2 The purchase price shall be RMB67,100,000, not including the undistributed profits realized in the period defined in Article. 2.2.

3.3 Manners of Payment: payment shall be made by Party B’s parent company— Empower Century Limited within 60 days after the closing.

4.Conditions to Closing

4.1 Both parties agree that the transfer becomes effective at the closing date.

i.   Both parties have full power and authority to execute and deliver this agreement and to perform its obligations hereunder.

ii.   The execution of the agreement and the transfer of the stock has been duly authorized by all requisite corporation action of Party A.

iii.   The execution of the agreement and the transfer of the stock has been duly authorized by all requisite corporation action of Party B.

iv.   The execution of the agreement and the transfer of the stock has been duly authorized by board of directors of Party A and shareholders of Party A agree to waive their right of first refusal regarding the transferred stock.

v.   The transfer of the stock has been approved by the Jinzhou Bureau of International Trade, and Halla is approved by the Bureau to conduct international trade with foreign investors.

4.2 If the conditions set forth in Article 4.1 are not satisfied at the closing date, Party B can terminate the contract with written notice delivered to Party A.

4.3 If the agreement is terminated pursuant to Article 4.2, the parties agree as follows:

i.   All obligations and duties, except those regarding confidentiality, are discharged upon the termination of the agreement.

ii.   Both parties shall extend effort in good faith to restore the other party to the original state before the closing.

iii.   Each party shall bear its own cost incurred before the closing regarding this transaction.

2

iv.   If the failure of the condition is caused by breach of contract on the part of one party, the other party reserves all his rights to legal remedies.

5.Closing

5.1 Both parties agree to duly fulfill all the obligations set forth in this agreement.

5.2 If Party A breaches Article 5.1, Party B can at its options continue its performance under the agreement and Party A shall compensate all the damages suffered by Party A and caused by Party B’s breaches.

6.Presentations and Warranties of Party A

6.1 All information furnished by Party A regarding this agreement is true and accurate.

6.2 Party A shall compensate all the damages caused by its misrepresentation to Party B.

6.3 Each warranty set forth herein is consistent with each other.

6.4 Any action or investigation in the course of due diligence on the part of Party B shall not affect its right to legal remedies for the damages caused by Party A’s misrepresentation, unless Party B executes release documents that are authorized by Party B’s requisite corporation actions.

6.5 If Party A breaches any obligations under this agreement before the execution of this agreement, Party B can terminate the agreement with written notice.

6.6 Party A shall obtain all the required governmental or other consent and duly conduct the relevant filings to relevant authorities.

7.Warranties and Representations of Party B

7.1 Party B is duly formed and in good standing under the laws of British Virginia Islands.

8.Additional Warranties and Representations of Party A

8.1 Party A shall fulfill its obligations regarding the execution and performance of the agreement and the underlying transaction is clear and free of any encumbrance or obligations on the part of Party A owed to any third parties.

9.Disclosure and Assistance of Party B’s due diligence.

10.Force majeure

3

If the failure to comply with the agreeement is caused by interventing force not attrituble to any party, both parties can terminate the contract with written notice delivered to the other party.

11.Confidentiality

11.1 Both parties shall treat and hold as confidential all of the information in connection with this agreement.

11.2 Both parties shall refrain from any public comments regarding this transaction without the other party’s written consent.

11.3 All the obligations defined in this provision shall survive the closing herein.

12.Remidies for Breaches of This Agreeement

12.1 Any posponed actions or undertaking of remedial measures on the part of one party after the breach on the part of the other party shall not affect the non-breaching party’s right to any entitled legal remedies.

12.1 If any provision was determined as illegal, void or unenforceable pursuant to regulations in any relevant jurisdiction, other provisions shall continue in full force and effect.

13.Tax Matters: Parties shall pay taxes resulted from this transaction, if any, as required by the applicable law..

14.Liabilities for Breaches of This Agreement

14.1 Breaching party shall be responsible for any loss or damages caused by its breaches of this agreement.

15.Termination and Modifications of the Agreement

15.1 Any change to this Agreement shall not be effietive without both partie’s written consent.

15.2 This agreement may be terminated in the following situations:

i.   With both parties’ written consent

ii.   The agreement is void by govermental action or demand that is final and conclusive.

iii.   Any material breach not corrected by the breaching party within 30 days of the written notice issued by the non-breaching party.

4

15.3 If this agreement is terminated by the non-breaching party, in absence of fraud or breaches set forth in Article 16.2 on the part of the non-breaching party, all obligations on the part of the non-breaching party shall be hereby released.

16.Disbute Resolution

16.2 This Agreement is governed by laws of the People’s Republic of China. Any laws or regulation enacted after the execution of this agreement shall not have retroactive effects on this agreement.

16.3 Any dispute arisng from this agreement shall be first resolved by negotiation between both parties. If the dispute is not resolved in 60 days after the dispute is raised, either party can resort to the court sitting in the jurisdiction where this agreement is executed.

Jinzhou Wonder Group.

/s/ Qingjie Zhao

Wonder limited

/s/ Meina Zhang

5

EX-10.5

Exhibit 10.5

Technical Cooperation Agreement

Party A: Jinzhou Halla Electrical Equipment Co., Ltd (referred to as JHECO)

Party B: MEISTER (Korea) Company Limited (referred to as MEISTER)

Whereas the parent company of MEISTER, Mando Machinery Corporation has transferred its 100% shares in JHECO to Jinzhou Wonder Industrial (Group) Co. Ltd (referred to as Wonder), the two parties reached agreements on technical cooperation as follows:

1.   The Party A shall continue to employ personnel originally assigned by Party B as the managers of R & D department and financial planning department respectively. The term is five (5) years. However, the extension of term of financial planning department manager shall be subject to evaluation each year by both parties.

The Party A shall pay Party B USD140,000 as technical allowance. This annual USD140,000 allowance shall be paid monthly.

2.   This Agreement shall become effective upon the date of execution, but the payment pursuant to Article 1 shall be calculated based on the duration starting from May 1^st, 2003.

3.   Apart from the technical allowance stipulated in Item 1, the employed personnel of Party B shall be entitled benefits in accord with which were enjoyed previously.

4.   This Agreement can be terminated upon consent of both parties. In case one party breaches this Agreement materially, the other non-breaching party shall be entitled to terminate this Agreement. Party A shall pay Party B all the payables due before termination of this agreement.

5.   The payment involved in this Agreement shall not include any tax or deduction, if so, the tax and deduction shall be in Party A’s account.

6.   Wonder shall provide Party B’s personnel with necessary support to ensure their full performance in JHECO.

7.   This Agreement has four (4) originals, two (2) for each party.

Party A: Jinzhou Halla Electrical Equipment Co. Ltd

/s/ Zhao Qingjie

Party B: MEISTER Corporation

/s/Tae Ho Yoon

1

EX-10.6

Exhibit 10.6

Strategic Cooperation Agreement

Party A: Jinzhou Halla Electrical Equipment Co., Ltd. (China)

Party B: HIVRON Inc.(Korea)

For the past two years affiliated with each other, the Party A and Party B have cooperated on projects of mutual interests and both parties satisfied with the results. The following Strategic Cooperation Agreement has been reached after sincere and friendly discussion:

1.	Party A has systematically researched and developed its present and future products, and formed its own intellectual property rights supporting competitiveness of its products.
2.	Party B has been providing with chips for alternator rectifier and regulator to Party A's Korean supplier and Chinese supplier.
3.	Party A and Party B will go on unanimous action on the above-mentioned cooperation, and carry out further joint research and development on chips for Party A's advanced products.
4.	Party B shall carry out chip study, design and manufacture chips according to requirement from Party A. The products developed for Party A shall be purchased by designated Party A's supplier by Party A. Party B agrees that competitive prices shall be given to Party A's supplier on chip products. Party B promises that no jointly developed chip products to be supplied to Party A's competitors.
5.	Party A will provide its new products' information and specifications to Party B timely in accord with its competition strategy. Party A agrees that instruct its suppliers to purchase products developed for Party A from Party B will be first priority.
6.	Party A and Party B agree to maintain long term strategic partnership, jointly ensuring Party A's products to have the largest market share in China in the future a few years, and to export to global market. Party A and Party B agree to bear its own costs incurred during joint development. Party 13 will benefit from providing chips to Party A's supplier regarding to the increasing market share of Party A. The research achievement shall be owned by the practicing parties, while Party A is entitled to use Party B's know-how formed during joint development free of charge.
7.	Party A shall support Party B to set up joint venture in Jinzhou China once conditions permit, so as Party B can manufacture developed products for Party A in China to Party A's supplier. Though no investment from Party A, Party A shall responsible to assist Party B in finding adequate partners of the joint venture, further strengthen the strategic partnership.
8.	Party A agrees Party B to be named Jinzhou Halla Electrical Equipment chips Research Centre (non-legal person organization).

9.	The two parties agree, unless damages incurred on purpose, no trace investigation responsibility or interest on counter party for the past cooperation at any time. Both parties promise that know-how acquired from cooperation, development, and research shall be kept confidential.
10.	Unstated matters shall be settled by discussion of the two parties.
11.	This agreement is written in English in two copies.

Party A: Jinzhou Halla Electrical Equipment Co., Ltd. (China)

Seal

Party B: HIVRON Inc.

Seal

Date: June 7, 2004

2

EX-10.7

Exhibit 10.7

Form of Purchase Contract with Supplier

Amount_________________

REF # _________________

Purchaser	Jinzhou Halla Electrical Equipment Co., Ltd.
Seller	____________________________________

Item	Clause	Description
1	Production standard	Manufactured strictly in accord with what is required in drawings provided by the purchaser
2	Regular orders	For details one shall read the monthly executed order by both parties for information regarding quantity and delivery date
3	Delivery	Seller shall deliver in time to designated warehouse. Any damages caused by collision, wet and corrosion shall be the Seller's responsibility
4	Packing	Strictly in accord with Purchaser's specification
5	Acceptance	To be accepted in accord with drawings and mutual-agreed standard
6	Notice and breaches	In case the Seller cannot deliver the product in time, a written notice shall be sent to the Purchaser twenty (20 ) days in advance, while a notice shall be sent to the purchaser two (2) months in advance if Seller stops its supply. And a six (6) months extension of supply may required when the substitute supplier cannot satisfy Purchaser's demand
7	Payment Method	The Seller shall make the payment sixty (60) days after the purchased item is placed in the storehouse. The payment will be made by wire transfer and the amount of wire transfer shall constitute 40-50% of the payment.
8	Responsibility	The delivery from Seller shall meet quality, quantity and time requirement of the Purchaser. Any damages to Purchaser's production caused by delayed delivery or poor goods quality shall be in the Seller's account.
9	Confidentiality	Any design or technical specifications and inspection standards shall be kept in secret and cannot be disclose to any third parties
10	Exclusivity	The Seller shall not provide contracted products to any third parties.
11	Punishment	If the Seller sold the contracted products to any third parties, the penalty will be RMB10.000 Yuan or 1.5 times of the breaching value whichever is larger

12	Ownership of drawings and	The Purchaser has the ownership of the design and technical information of the contracted products. Once this contract is terminated, the Seller shall return these design and technical information and can not sell the contracted products or products made by using the Purchaser's technology to any third parties. A charge at the amount of 1.5 times of the sale price may be impose on Seller by the Buyer if the Buyer breaches the contract.
13	others	Other matters will be decided in compliance with "Economic Contract Law" and relevant regulations The term of this contract is from ____________to __________

Buyer: Jinzhou Halla Electrical Equipment, Co., Ltd.    Seller: ________________

EX-10.8

Exhibit 10.8

Equipment Purchase Agreement

Purchaser       Jinzhou Halla Electrical Equipment Co., Ltd.

SellerSuzhou Tenuo Automation Co., Ltd.

1 Name: PMC automobile starter assembly line

Specification: it is set forth in the equipment catalogue

Price: RMB1,603,000.00

Name: commercial vehicle starter assembly line

Specification: see equipment catalogue

Price: RMB1,665,000.00

Total amount: RMB3,268,000.00

2 Technical standard and acceptance standard

Technical standard: in accordance with the relevant Technical Agreement

Acceptance standard: in accordance with the Technical Agreement at the Purchaser’s site

3 Effectiveness of contract

This contract shall be effective from the signing date

4 Delivery date

The contracted equipment shall be delivered to Purchaser’s factory before 31 May, 2006.

5 Delivery means/place

Factory of the Purchaser

6 Technical information

Along with delivery of the contracted equipment, all relevant operation manuals, maintenance instructions, drawings, electrical and pneumatic diagrams and their electronic files shall be delivered to the Purchaser

7 Warranty

The warranty period shall be one year commencing from the date of acceptance.

8 Payment

50% of the contract value (RMB1,634,000.00) shall be paid fifteen (15) days after signing of this contract, 45% of the contract value (RMB1,470,600.00) shall be paid fifteen (15) days after acceptance, while the remaining 5% (RMB163,400.00) shall be paid fifteen (15) days after one year the product is in use and remain in ordinary working conditions.

1

9 Confidentiality

The Purchaser shall keep confidential information regarding samples and design provided by the Seller.

10 Breaches of the Contract

Delivery shall be made in accordance with this contract. Any delay in delivery may result in a late fee in an amount of 0.2% of the sale price for each day after the stipulated delivery date set forth in this contract.

11 Dispute Solution

12 Attachment

The Technical Agreement is a part of this contract.

13 Miscellaneous

Jinzhou Halla Electrical Equipment Co., Ltd.

Seal

Suzhou Tenuo Automation Co., Ltd.

Seal

Signature Date: 1 January, 2006

2

EX-10.9

Exhibit 10.9

Equipment Purchase Agreement

May 19, 2005

Between

The seller DMG meccanica Via Cagliari,14/a 10090 Cascine Vica- Rivoli (TO) Italy (Later called DMG) and The Buyer JINZHOU HALLA ELECTRICAL EQUIPMENT CO.,LTD No. 16, Yulu Street, Jonzhou City, Liaoning P.R. C., China (Later called JHECO)

1

A. GENERAL DESCRIPTION

The following Contract concern the supply of one winding/inserting machine and two specific tooling capable of processing alternators stators.

For the purpose of this Contract, we have in our hands the following drawings and documentation:

Stator model JFZ192C diameter 106.2 mm '

•Lamination and Pack drawing: JA131A08501

•Stator Assembly Drawings: JA100808501

•Stator Winding Specifications: JM00A08502

•Winding with reversed wave split phases with/without inter-Ease connection

•Bare Wire diameter: 1.30mm (double insulation is used)

Stator model JFZ192D diameter 106.2 mm

•Lamination and Pack drawing: JA131A08501

•Stator Assembly Drawings: JAI 00808601

•Stator Winding Specifications: JAI 00A08602

•Winding with reversed wave split phases with/without inter-fase connection

•Bare Wire diameter: 1.35mm (double insulation is used)

Stator model JFZ1929C diameter 100.2 mm

•Lamination and-Pack drawing: JA131A09501

•Stator Assembly Drawings: JA100809501

•Stator Winding Specifications: JAI 00A09502

•Winding with reversed wave split phases with/without inter-fase connection

•Bare Wire diameter: 1.16mm (double insulation is used)

DMG guarantee the machine is able to wind and insert alternator stators with simultaneous insertion of the three phases with a slot fill up to 82% (square wire calculation method). DMG will do its best to prove 85% can be reached.

B. TECHNICAL DESCRIPTION OF MACHINES AND TOOLING

1.0OP. 20 - WAVE WINDING AND INSERTING

1.1Automatic Winding and Inserting Machine models WWA-0/R.

The machine is composed by a central base in welded fabricated structure for supporting the double ends indexing arm and the attachments for one (1) winding module and one (1) vertical inserting module. The double ends indexing arm is utilized to transfer the two upper inserting blade pack tooling from the winding module to the inserting module and vice versa. The machine includes the following modules:

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1.1.1Vertical Wave Winding Module, designed to produce wave shaped coils.

The winding head is composed of a rotor, which generates a polygonal coil, having a developed coil length (circle) between 800 mm. (31,5") and 1500 mm. (59"). This rotor is composed of six (6) radial moving forms for supporting the stratified winding (precision layer) and six (6) pushers for coil internal forming. Both forms and pushers, by moving towards the center, generates a wave shape to the polygonal wound coil. This is then finally ejected into the upper blade pack tooling.

The module has the following capabilities:

-use of single or parallel wires

-single or multiple layer of windings

-programmed position for leads exit

-programmed position for each winding on the upper blade pack tooling

-any type of winding including:

-traditional phases

- reversed wave split phases with or without cutting the wire between the semi-phases

- intra-bundle device to hide the exit lead of the internal phase. With this device the internal diameter of the stator will be clear from the presence of any lead

1.1.2Vertical Inserting Module for the automatic insertion of coils and closure wedges into the alternator stator pack.

The wedge material is fed through a set of rollers at a programmed length, cut and formed into the wedge magazine.

A single solid ring placed on the insertion axe, clamps the stator during the insertion cycle. This unit, along with the stator alignment gauge, guarantee a stiff and accurate positioning of the stator during the insertion process. The clamping bracket is pneumatically operated, the alignment gauge is manually operated. The transfer of the upper blade pack tooling with the wound coils from the winding to the insertion module and vice versa is done automatically with a double ends indexing arm. Loading and unloading operations of the stator are manually performed. DMG has to provide a heating device to keep the wedge material warm in winter time. JHECO to provide a reference.

SPECIFIC TOOLING

1.2Complete Set of Specific Tooling to be mounted on the above machine mod. WWA-O/R for only one alternator stator type with 36 slots, including:

- one (1) lower inserting tooling complete with wedge preparation, wedge magazine and wedge push rods

- two (2) upper blade pack inserting tooling (one per operating station)

- one (1) stator alignment gauge and clamping tooling

- one (1) set of six (6) forms and six (6) pushers for winding form

- one (1) set of coil ejector

The tooling is complete with quick change and set-up device.

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2.0OPTIONS AND/OR ADDITIONS:

2.1SPARE and WEAR PARTS

Should the Customer order the proposed line, the detailed list relevant to the Spare and Wear parts estimated necessary for a period of 2,000 working hours and covering the total amount shown, will be submitted for approval. The parts will be then delivered with the line.

2.2 PACKING

The investment shown is for seaworthy type packing.

2.3OPERATOR TRAINING AND MANUALS

For the Training of your Operators we estimate it will involve four days period: two days in Italy before the shipment of the line and a two days in your Plant, after the line has been installed. This will include:

a.Overall equipment operation

b.Individual station operation

c.Equipment tooling change over

d.Equipment trouble shooting

e.Material loading

It would be the Customer choice to send Operators or Maintenance Technicians to DMG for longer period that the one foreseen above, specifically during the debugging and preliminary tests of the line. No additional costs will be charged to the Customer for this during the time in Italy.

Part of this, are the Operator and Maintenance Manuals in English Language.

2.4INSTALLATION and START-UP

Installation Supervision and Start-up of the Line in your Plant. This will involve:

a.Check Station Alignment

b.Manual' operation try-out of every station.

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c.Automatic try-out of every station and complete system.

d. All debugging, including PLC, pneumatics, hydraulics, tooling, etc., related to the above.

e.Product try out and bringing the quality to the point of acceptance in Italy.

f. Run off and Customer acceptance of the line to the same standards and overall efficiency as were met in Italy.

Items that we cannot assume responsibility for are:

a.Time required to repair damaged parts during shipment.

b. Try-out of every new materials that were not used during the acceptance tests in Italy.

The estimated total time required would be approx. 8 man/days including traveling time. If additional time is required, this will be charged at our standard service rates.

2.5TRANSPORT CIF DALIAN

The investment shown is for transport CIF Dalian Port (China).

C.1 INVESTMENT SUMMARY FOR THE WINDING/INSERTING MACHINE MOD. WWA-0/R SHOWN IN LAYOUT A

Prices in EURO 1.0

1.0 Wave Winding and Inserting

1.1 One (1) Automatic Wave Winding and Inserting Machine mod. WWA-0/R, without specific tooling. The machine is complete with:

1.1.1One (1) Vertical Wave Winding Module

1.1.2One (1) Vertical Inserting Module 275.000,00

1.2 Two (2) Complete Set of Specific Tooling for one stator type with 36 slots155.000,00

INVESTMENT (Machine and Tooling)EURO 430.000,00

MACHINE PROMOTIONAL DISCOUNT 5%-EURO 13.750,00

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TOOLING PROMOTIONAL DISCOUNT 10%	-EURO 15.500,00
NET INVESTMENT (Machine and Tooling)	EURO 400.750,00

2.0OPTIONS and/or ADDITIONS:

2.1Spare and Wear Parts

Spare and Wear Parts estimated necessary for approx. 2000 working hours10.000,00

2.2Packing

Packing for road/sea transportation3.000,00

2.3Operator Training

Operator Training in DMG and at Customer Plant, including maintenance

manuals 3.000,00

2.4Installation and Start Up

Installation and Start Up in Customer Plant7.000,00

2.5Transport CIF Dalian Port

Transport CIF Dalian Port (China)7.250,00

INVESTMENT (Options and/or Additions)EURO 30.250,00

C.1	TOTAL INVESTMENT FOR THE COMPLETE SYSTEM WITH SHOWN IN LAYOUT AEURO	431.000,00
	PROMOTIONAL 32% DISCOUNT-EURO	138.000,00
	TOTAL NET INVESTMENT CIF DALIANEURO	293.000,00

D.TECHNICAL STANDARD FEATURES

1.CAPACITY

The proposed System will be capable of producing alternator stators within the following range:

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Wire size :1to2.0 mm

Core ID :80to115 mm

Core OD:110to150 mm

Core thickness :20to50 mm

2.PRODUCTION RATES

Estimated cycle times not including operator loading/unloading operation:

• Winding/inserting Machine mod. WWA-0/R:

-winding 3 standard phases: 12 x 3 = 36 seconds

-winding 3 reverse split phases with intefase connection: 16 x 3 = 48 seconds

-winding 3 reverse split phases without intefase connection : 20 x 3 = 60 seconds

The above cycle times gives the following production rates at 100% efficiency:

•100 to 110 complete stators with standard phase winding

•75 to 80 complete stators with reverse split phase winding with intefase connection

• 60 to 65 complete stators with reverse split phase winding without intefase connection

3.TOOLING CHANGE-OVER TIMES

Estimated complete tooling change-over times:

• Winding/Inserting Machine mod. WWA-01R : 22-25 minutes

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4.WORKING CONDITIONS

Proper equipment function is guaranteed within the following conditions:

Ambient Temperature: from 60°F (15°C) min. to 86°F (35°C) max.

Relative Humidity: from 45% min. to 80% max.

Air Pressure: 70 PSI (5 Bars) min.

Power Supply: 380V 3 phases 50Hz

5.CONTROLS

The proposed equipment will include Control PLC from Allen Bradley type MICROLOGIX or CONTROLOGIX

6.TECHNICAL DOCUMENTATION

The technical documentation is supplied in English language and includes:

-electrical schematics

-pneumatic schematics

-mechanical machine layout with part numbers

-tooling drabrings

-PLC software (CD Rom)

-User manual

-Standard components catalogues

7.STANDARDS

The proposed equipment will include the following standards. Please see the following "Technical Card"

8

date: May 2005TECHNICAL CARDCustomer: JHECO - CHINA

ELECTRICAL SYSTEM	STANDARD FEATURES
Line voltage	To be advised
Relays and aux. voltage	24 V D.C.
PLC input voltage for micro switches, push buttons, etc.	24 V D.C.
PLC output voltage for lights, etc.	24 V D.C.
PLC output voltage for pneumatic valves (PN)	24 V D.C.
PLC output voltage for hydraulic valves (HY)	24 V D.C.
PLC type	ALLEN BRADLEY
Aux. material	ALLEN BRADLEY
Push buttons	ELFIN/TELEMECANIQUE
Micro switch	Mechanical: EUCHNER/TELEMEC. Proximity switches with led: BALLUF
Brushless Motors and Servo Drives	ALLEN BRADLEY
Axes Motor Control Card	ALLEN BRADLEY
HYDRAULIC SYSTEM	STANDARD FEATURES
Materials - Valves 24V D.C.	N.A.
Cylinders	N.A.
Cylinder rod thread	N.A.
Fittings thread	N.A.
Fittings	N.A.
Connectors with led	N.A.
Pipe f	N.A.
PNEUMATIC SYSTEM	STANDARD FEATURES
Materials - Valves 24V D.C.	BOSCH
Cylinders	BOSCH
Cylinders rod thread	Metric
Fittings thread	Gas BSPP
Fittings (with quick clutch)	BOSCH
Magnetic sensor with led	Yes
Pipe f (mm)	Yes
Connector with led	Yes
PAINTING	STANDARD FEATUES - COLOURS
	InternalRALexternalRAL
Machine	Ivory
Electrical box in/out	gray
Electrical small box	Graygray
Electrical push button panel	Ivoryivory
Other Boxes	Ivoryivory
Raceway	Graygray
Moving parts	Yellow1018
Fixed safety parts	Ivory
NAMEPLATES LANGUAGE: ENGLISH

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E.GENERAL TERMS AND SALES CONDITIONS

PAYMENT TERMS

Prices are based on the following investment terms :

40% down payment by TIT with the Purchase Order within 15 days from the signature of the Contract. DMG's opening Bank has to open a guarantee letter to the buyer's opening Bank by SWIFT method with a validity to cover the manufacturing period until the shipping.

50% upon preliminary approval by the buyer and/or upon presentation of shipment documents.

10% upon final approval in Customer_ plant, no later than 40 days from the arrival of the equipment at Dalian Port

DMG’s opening Bank has to open a guarantee letter for the 10% to the buyer's opening Bank by SWIFT method with a validity to cover the warranty period.

These last two payments must be secured by Irrevocable Letter of Credit issued and confirmed by first class Bank.

DMG's opening Bank must also be first class Bank.

Should the Customer require other investment Terms than those proposed, a price revision will be necessary.

BEGINNING of PRELIMINARY ACCEPTANCE at DMG Plant

To be agreed upon.

At present, term it is 4 MONTHS (excluding the month of August) from receipt of full order and clarification of all technical documentation.

Delivery date is one-two weeks after the preliminary acceptance signature.

PRELIMINARY ACCEPTANCE

The preliminary acceptance of the equipment will take place at the DMG plant at the presence of your engineers proving:

-85% efficiency over approx. 1 hours running.

-Machine cycle time according to the contract

-Quality of the stators according to the supplied drawings

The necessary testing materials (250 parts 1D 106.21150 parts ID 100.21 wire/wedge material) have to be shipped to DMG (at YOUR CHARGE and EXPENSE) at least 60 days before the term scheduled for preliminary acceptance, which will consist in the manufacturing of samples for quality control and in the running for production control.

It would be Customer's responsibility to provide good quality of the parts necessary for the run off. Proper material for this application should be used by Customer in order to guarantee the same condition during the stator winding process. All gauges and inspection equipment necessary for the try-out of this system would also be the responsibility of the Customer.

Before shipment of the equipment from DMG Plant, the Customer would be requested to provide acceptance documentation and shipment authorization.

DMG will pay the living expenses for two (2) JHECO engineers during the preliminary acceptance for a period of 5 working days. JHECO will pay the air tickets.

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FINAL ACCEPTANCE

Final acceptance of the equipment will take place at the Customer Plant, utilizing the same good quality of the parts to be processed and of the material, in order to guarantee the conditions of the tests as when tested in DMG plant.

At the acceptance of the equipment, the Customer would be requested to provide acceptance documentation. This will be the starting date of the twelve months warranty.

AFTER SALES SERVICE

Under normal conditions, DMG after sales service guarantee, the availability of one technician within 3 days.

PACKING AND TRANSPORT

Please see point 2.2 and 2.5.

Packing is "throwaway" type and, unless otherwise agreed upon, it will be considered by DMG to be workman-like constructed. Any reservation from the Carrier at time of loading, MUST be presented in writing. The transportation of the equipment CIF Dalian is included in the Contract. DMG will choose the most suitable Carrier unless otherwise stipulated. JHECO is responsible for unloading, positioning and connecting the equipment to the necessary facilities. Customs operations and possible taxes or import duties are EXCLUDED from this quotation. Insurance costs are included as per CIF.

PERSONNEL TRAINING

Please see point 2.3.

Training will take place at the end of preliminary acceptance at the DMG plant, and at the end of final acceptance at Customer plant.

ACCIDENT PREVENTION

All DMG machines are equipped with accident prevention features in compliance with the International Safety Norms and CE Regulations, actually in force.

Based on the different evaluation criteria of these Norms, it is possible to have safety guarding built according to Customer Specifications: this would involve additional cost, which could be quoted separately.

Doors whose opening is prohibited during machine cycle (other than the ones to gain access for adjustment or set-up), are equipped of inter-lock type switches (considered standard). Would special technical requirements be necessary, additional cost(s) may be separately quoted.

WARRANTY

The equipment is guaranteed against mechanical and electrical failures due to breakdown arising from bad workmanship, materials or components and providing that the equipment has been subjected to normal wear and tear, replacement parts will be supplied free of charge for a period of twelve months or 2,000 working hours from completion of commissioning a Customer's plant whichever come first. Minor adjustment or repairs will be carried out by the end-user itself under advise of seller’s service engineering department. No costs to be charged to the seller other than replacement parts.

Component not manufactured and/or designed by DMG will carry its original manufacturer's warranty. DMG will not be liable for penalties of any description, under no circumstances will DMG be liable for anticipated profits or consequential damages.

11

DEVIATIONS from CONTRACT REQUIREMENTS

This contract was prepared using the information made available at the time of its signature. Should DMG be advised during subsequent discussions of additional information which causes a significant change in the System concept, DMG reserves the right to re-quote on the changes brought forth.

ARBITRATION

All disputes arising from the execution of or in connection with the Contract shall be settled through amicable consultation by both parties. In case no settlement can be reached within sixty (60) days after commencement of such consultation, the disputes shall be submitted for international arbitration. Unless otherwise agreed, the official language of arbitration shall be English.

EXCLUSIVITY

The information contained in this contract and enclosures thereof, is and remains, of DMG Meccanica SRL exclusive property, including all copyrights, designs, patent and trademark rights therein. The person, persons or corporation receiving this information agrees, by accepting it, that they or it shall treat the information as confidential and will not disclose, transmit or pass the same to others without receiving the prior written consent of DMG Meccanica SRL. Any publishing and/or authorization made by third person, will be considered by the industrial property right as harmful.

Signing this contract JHECO engage itself in not transfer to anybody the commercial and price condition agreed with DMG.

For and on behalf of:

The seller	The Buyer
DMG meccanica /s/ Piero Vanzetti	JINZHOU HALLA ELECTRICAL EQUIPMENT CO., LTD /s/ Wu Bingjun

12

EX-10.10

Exhibit 10.10

Equipment Purchase Contract

JW20051217A

PLACE: JINZHOU, LIAONIG

PurchaserJinzhou Halla Electrical Equipment Co., Ltd.

Seller                                    OMT Co., Ltd (Korea)

1 Contract commodity

1 set duration tester of alternators

1 set performance tester of alternators 1 set duration tester of starters

Details see relevant catalogues

2Contract value and currency

1 set duration tester of alternators

USD101,730.00

1 set performance tester of alternators

USD181,500.00

1 set duration tester of starters

USD85,390.00

Total value: USD368,620.00

3Origin and manufacturer

Korea, OMT Co., Ltd.

4Packing

New solid wooden case suitable for sea voyage. Any damage caused by packing shall be in the Sellers account

1

5Shipping marks

Clear print shall be on four sides of the packing of the case number, dimension, gross weight, net weight, contract number, port of destination, and the receiver

6Shipping date

The shipping date shall be 30 April, 2005 at a Korea port

7Departing port

Korea port

8Destination port

Dalian, China

9Payment

50% (USD184,310.00) shall be paid by T/T within 30 days after signing of this contract

45% (USD165,879.00) shall be paid by T/T within 30 days after acceptance at Jinzhou Halla Electrical Equipment Co., Ltd. The remaining 5% (USD18,431.00) shall be paid after one year normal operation accounted from the date of acceptance report

10Documentation: the Seller shall deliver 5 copies of original invoices; packing documentation, etc.

11Shipping condition: The Seller shall provide the information of the ship via fax 15 day before the agreed-upon date.

12Shipping notice: Upon completion of the loading, the Seller shall provide the number of the contract, quantity, weight and other necessary information to the Buyer via Fax.

13Functions and operations of the product: see equipment brochure.

14Warranty

The Seller shall ensure that the contract equipment are built in accordance with this contract. The Seller shall guarantee that the delivered equipment will remain in ordinary conditions for 12 months.

2

15Acceptance:

The Buyer shall make initial inspection of the equipments at the site of the Seller before shipping. The final inspection shall be done after the testing of the equipment at the site of the Buyer

16Inspection Procedure:

The Seller shall provide the Buyer with written statement that the equipments meet the requirements of this agreement with inspection result attached.

17Remedies regarding restitution, abatement of the price, return and repairs.

If the Seller is liable for the equipment not meeting the requirement of this agreement, the Buyer has right to ask for remedy within the warranty period as described under Section 14 and 16.

18Modifications: this Parties may modify the price and delivery date upon mutual agreement.

19Force majeure:

The Seller is not liable if the delay of delivery is caused by force beyond the control of the Seller. Nevertheless, the Seller shall under has the obligations to deliver the equipments within the shortest period.

20Delayed delivery and penalty

Other than what is defined in Clause 19, any delayed delivery caused by the Seller shall result in a late fee in the amount of 3% of the sale price each day until the product is delivered, to be deducted from the buyer’s payment.

21 Negotiation: All disputed shall be resolved through negotiation. If the dispute could not be resolved by negotiation, it shall be decided by the court.

22 Governing law

The governing law shall be laws of the People’s Republic of China if this contract is performed in China. The governing law shall be the laws of Korea if this contract is performed in Korea.

24 Appendix.

Jinzhou Halla Electrical Equipment Co., Ltd.

/s/ Jiyan Li

OMT Co., Ltd (Korea)

Seal

December 17^th, 2004

3

EX-10.11

Exhibit 10.11

Loan Agreement

The Borrower: Jinzhou Halla Electrical Equipment Co., Ltd.

The Lender: China Construction Bank (Jinzhou Linghe Branch)

October 18, 2005

1.The Loan

1.1 The amount of the loan: RMB20,000,000

2.Borrower can only use the loan for purpose of business operation. Any other use must be approved by the Lender.

3.The term of the loan: 1 year, commencing from October 18^th , 2005 to October 17^th , 2006 (the “Maturity Date”).

4.Interest Rate and Calculation of the Interest Rate

4.1 Interest rate

i.The interest rate of this loan in this contract is 7.254%. The accruals of interest shall be calculated on the basis of a 365-day year and the

         actual number of days elapsed..

4.2 Increase of Interest Rate

i.If Borrower uses the loan for other purposes not set forth in this agreement, the interest rate shall be increased to 14.508% per annum.

ii.If Borrow defaults in payment when due, the interest rate shall be increased to 10.881% per annum.

4.3 Interest shall accrue on the unpaid principal amount of each loan from the date such loan is made until the maturity thereof at a rate per month equal to the interest rate defined in this agreement.

4.4 Daily interest rate = monthly interest rate/30 = annual interest rate/360

4.5 Interest Payment

i.Interest accrued shall be paid by Borrower monthly on the 20^th day of each month.

1

5.Borrowing Procedure

5.1 Borrower must meet the following prerequisite conditions before withdrawing funding from the loan

i.      Borrower has furnished required documentation

ii.      The borrowing is consistent with applicable laws.

5.2 Borrower can request the loan by giving notice to Lender 3 days before the date of borrowing.

6.Manner of Payment

6.1 Manner of Payment

                                                                                                               i.    If Borrower defaults in the payment for either principal balance or interest when due, or Borrower ceases its business operation before the

                                                                                                                      payment becomes due, or certain circumstances occur as defined by applicable law, anypayment made by Borrower shall first be applied to

                                                                                                                      the amount of the outstanding principal balance and second to unpaid interest.

                                                                                                              ii.Except for the circumstances defined in the proceeding paragraph, any payment made by Borrower shall first be applied to the amount of

                                                                                                                        unpaid interest and second to the outstanding principal balance.

6.2 Borrower shall make the payment in a timely manner.

6.3 The whole amount of RMB20,000,000 shall become due on October 17, 2006.

6.4 Each payment require to be made by the Borrower hereunder shall be made by wire transfer or immediately available funds. If Borrower defaults in any payment when due, Lender can withdraw funding from any of Borrower’s China Construction Bank accounts to satisfy Borrower’s payment when due pursuant to this agreement.

2

6.5 Prepayment

i.Prepayment for the unpaid interest shall be make after giving written notice to Lender.

ii.Prepayment for the outstanding principal balance shall be made known to Lender by written application 30 business days before the date of

          the prepayment, subject to Lender’s approval. All interest accrued shall be calculated on the basis of actual number of days elapsed.

          Borrower agrees to pay Lender a fee upon Borrower’s prepayment, in any amount defined by the following formula: amount of fee =

          amount of prepayment * 0.1% * number of days before the payment due

7.The loan is guaranteed.

8.The rights and obligations of Borrower

8.1 Borrower can request the disbursement of the loan pursuant to this agreement.

i.        Borrower can extend the term of the loan pursuant to this agreement.

ii.Borrower can request Lender to keep confidentialany information regarding its financial conditions and business operation.

8.2 The obligations of Borrower:

iii.Provide to the Lender, as soon as possible within 10 days after the end of each fiscal quarter of Borrower, certain balance sheet and statement of income.

iv.Disclose information regarding financial conditions and use of the loan upon request of Lender.

v.          Inform Lender of any material change of the company.

vi.Lender can terminate the agreement in event of disposition of Borrower’s properties by Borrower at anunreasonably inadequate price.

vii.Borrower must obtain Lender’s written consent before it acts as guarantor for other third parties’ debt or obligations.

viii.     Borrower cannot partially or fully delegate its obligations under this agreement without Lender’s consent.

ix.Borrower shall pay off its debts according to their legal priorities. Borrower cannot entered into any contract that renders this loan

          subordinated.

3

9.Lender’s rights and obligations

9.1 Lender’s right

                                                            i.  Lender can require disclosure of Borrower’s financial status.

ii.   In the event of breaches of this agreement by Borrower, Lender can declare the entire outstanding principal balance of the loan, together with all accrued but unpaid interest immediate due and payable, or stop disbursement of the loan.

9.2 Lender’s obligations

i.   Lender shall disburse the loan in a timely manner

                                                            ii. Lender shall keep any information regarding Borrower that is derived from the loan transaction confidential.

10.Remedies for Breaches of the Agreement

10.1 Breaches of the Agreement on the part of Borrower occurs upon the occurrence of any of the following:

i.   Misrepresentation of material information regarding Borrower’s financial status.

ii.   Use of the loan for purpose not set forth in this agreement

iii.   Default in payment when it is due

iv.   Unreasonable disposition of Borrower’s properties by Borrower

v.   Material adverse changes occurred during the term of the loan

vi.   Use of the loan in engaging securities transactions

                                                         vii.  Change of Borrower’s structure that substantially adversely affects its capacity to make timely payments when due.

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10.2 Any occurrence of the following situations, without new guarantee agreement approved by Lender constitutes breaches of this agreement:

i.   Guarantor has material adverse change in its financial status

                                                           ii.  Guarantor provides guaranty to any other third parties which substantially adversely affects its capability of performance under the guarantee agreement.

iii.   Guarantor becomes insolvent or incapable to perform its obligation under the guarantee agreement.

10. 3 Any of the following on the part of Mortgagor without new guarantee agreement approved by Lender constitutes breaches of this agreement

i.   Mortgagor does not purchase property insurance for the mortgaged property or Mortgagor use the proceeds obtained in violation of the mortgage agreement.

ii.   The mortgaged property is damaged due to the behavior of the third person, and the mortgagor dispose the payment of damages in violation of the mortgage agreement.

iii.   Mortgagor disposes the mortgaged property without Lender’s written consent

10.4 Breaches on the part of Borrower based on certain conducts on the part of Borrower regarding certain lien.

10.5 Remedies for Lender

i.   In the event of breaches of this agreement by Borrower, Lender can declare the entire outstanding principal balance of the loan, together with all accrued but unpaid interest immediate due and payable, or stop disbursement of the loan.

ii.   Lender can foreclose the mortgaged properties subject to the mortgage.

iii.   Lender can increase interest rate at the event of Borrower’s default as set forth in this agreement.

11.Reserved

12.Choice of forum

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12.1 Dispute arising from this agreement shall be adjudicated by the court in the jurisdiction where Lender domiciles.

13.Effectiveness, Modification and Termination of the Agreement

14.There are 5 copies of this agreement.

15.Representation and warranties of the Lender

Jinzhou Halla Electrical Equipment Co.Ltd.

/s/ Yuncong Ma

Seal

China Construction Bank

/s/ Yun Zhao

Seal

EX-10.12

Exhibit 10.12

Loan Agreement

The Borrower: Jinzhou Halla Electrical Equipment Co., Ltd.

The Lender: Jinzhou Commercial Bank

1.The Loan

1.1 The amount of the loan: RMB40,000,000

1.2 The term of the loan: 3 years, commencing from September 30^th, 2005 to September 27^th, 2008 (the “Maturity Date”).

1.3 Borrower can only use the loan for purpose of business operation. Any other use must be approved by the Lender.

2.Interest Rate and Calculation of the Interest Rate

2.1 The interest rate of this loan in this contract is 0.624%, to be calculated on a monthly basis.

2.2 Interest shall accrue on the unpaid principal amount of each loan from the date such loan is made until the maturity thereof at a rate per month equal to the interest rate.

2.3 If Lender prepays the loan before the Maturity Date, the interests accrued shall be calculated on the basis of a 365-day year and the actual number of days lapsed.

3.Procedure of Borrowing

3.1 The obligation of Lender to make each loan is subject to determination by Lender that the following conditions have been satisfied:

i.   Borrower has furnished required documentation.

ii.   The borrowing is consistent with applicable laws.

3.2 Borrower shall request the loan 3 days before the date of borrowing.

4.Payment

4.1 Payment can be made by Lender or other third parties at the Maturity Date.

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5.Guarantee of the Loan

5.1 The loan is guaranteed as follows:

                                                           i.   Zhao Qingjie guarantees to Lender the prompt and complete payment when due.

ii.   The loan is secured by certain real properties provided by Halla.

6.The rights and obligations of Borrower

6.1 Borrower shall request the loan pursuant to this agreement.

i.   Borrower can extend the term of the loan pursuant to this agreement.

6.2 The obligations of Borrower:

i.   Provide the materials required by Lender in a timely manner

                                                           ii.  Disclose information regarding financial conditions and use of the loan upon request of Lender.

iii.   Inform Lender of any material change of the company.

iv.   Lender can terminate the agreement in event of disposition of properties by Borrower at an unreasonable price.

v.   Borrower must obtain Lender’s written consent before it acts as guarantor for other third parties’ debt or obligations.

vi.   Borrower shall not partially or fully delegate its obligations under this agreement without Lender’s consent.

vii.   Borrower shall pay off its debts according to their legal priorities. Borrower shall not entered into any contract that renders this loan subordinated.

7.Lender’s rights and obligations

7.1 Lender’s right

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i.   Lender can require disclosure of Borrower’s financial status.

ii.   In the event of breaches of this agreement by Borrower, Lender can declare the entire outstanding principal balance of the loan, together with all accrued but unpaid interest immediate due and payable, or stop disbursement of the loan.

                                                           iii. Lender can withdraw funding from any account that Borrower open with Lender, to satisfy Borrower’s obligations when due pursuant to this agreement.

7.2 Lender’s obligations

i.   Lender shall disburse the loan in a timely manner

ii.   Lender shall keep any information regarding Borrower’s financial conditions that is derived from the loan transaction confidential.

8.Effectiveness, Modification and Termination of the Agreement

8.1 This agreement shall become effective upon the signing of the agreement.

8.2 Any extension of the term of the loan shall be made no less than 30 days before the Maturity Date. The extension shall not become effective without Lender’s written consent.

9.Remedies for Breaches of the Agreement

9.1 Breaches of the Agreement on the part of Borrower occurs upon the occurrence of any of the following:

i.   Misrepresentation of material information regarding Borrower’s financial status.

ii.   Use of the loan for purpose not set forth in this agreement

iii.   Default in payment when due

iv.   Unreasonable disposition of Borrower’s properties by Borrower

v.   Material adverse changes during the term of the loan

vi.   Use of the loan in engaging securities transactions

vii.   The loan is obtained by fraud

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9.2 Any occurrence of the following situations, without new guarantee agreement approved by Lender constitutes breaches of this agreement:

i.   Guarantor has adverse material change in its financial status

ii.   Guarantor provides guaranty to any other third parties which substantially adversely affects its capability of performance under this agreement.

iii.   Guarantor becomes insolvent or incapable to perform its obligation under the guarantee agreement.

9.3 Any of the following on the part of Mortgagor without new guarantee agreement approved by Lender constitutes breaches of this agreement

i.   Mortgagor does not purchase property insurance for the mortgaged property or Mortgagor use the proceeds obtained in violation of the mortgage agreement.

ii.   The mortgaged property is damaged due to the behavior of the third person, and the mortgagor dispose the payment of damages in violation of the mortgage agreement.

iii.   Mortgagor disposes the mortgaged property without Lender’s written consent

9.4 Breaches on the part of Borrower regarding certain liens.

9.5 Remedies for Lender

i.   In the event of breaches of this agreement by Borrower, Lender can declare the entire outstanding principal balance of the loan, together with all accrued but unpaid interest immediate due and payable, or stop disbursement of the loan.

ii.   Lender can foreclose the mortgaged properties.

9.6 Remedies for Borrower

i.   Lender shall be responsible for any difference in amount between the interest of this loan that should have accrued and the actual accrued interest of an substitute loan obtained by Borrower after Lender breaches the agreement.

10.Dispute Resolution: in case of litigation, the venue should be the residence of the Lender.

Jinzhou Halla Electrical Equipment Co.Ltd.

/s/ Qingjie Zhao

Jinzhou Commercial Bank

Seal

EX-10.13

Exhibit 10.13

Loan Agreement

The Borrower: Jinzhou Halla Electrical Equipment Co., Ltd.

The Lender: China Construction Bank (Jinzhou Linghe Branch)

July 8^th, 2005

1.The Loan

1.1 The amount of the loan: RMB40,000,000

2.Borrower can only use the loan for purpose of business operation. Any other use must be approved by the Lender.

3.The term of the loan: 1 year, commencing from July 8^th, 2005 to July 7^th, 2006 (the “Maturity Date”).

4.Interest Rate and Calculation of the Interest Rate

4.1 Interest rate

i.The interest rate of this loan in this contract is 7.254%. The accruals of interest shall be calculated on the basis of a 365-day year and the

         actual number of days elapsed..

4.2 Increase of Interest Rate

i.If Borrower uses the loan for other purposes not set forth in this agreement, the interest rate shall be increased to 14.508% per annum.

ii.If Borrow defaults in payment when due, the interest rate shall be increased to 10.881% per annum.

4.3 Interest shall accrue on the unpaid principal amount of each loan from the date such loan is made until the maturity thereof at a rate per month equal to the interest rate defined in this agreement.

4.4 Daily interest rate = monthly interest rate/30 = annual interest rate/360

4.5 Interest Payment

i.Interest accrued shall be paid by Borrower monthly on the 20^th day of each month.

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5.Borrowing Procedure

5.1 Borrower must meet the following prerequisite conditions before withdrawing funding from the loan

i.   Borrower has furnished required documentation

ii.   The borrowing is consistent with applicable laws.

5.2 Borrower can request the loan by giving notice to Lender 3 days before the date of borrowing.

6.Manner of Payment

6.1 Manner of Payment

i.If Borrower defaults in the payment for either principal balance or interest when due, or Borrower ceases its business operation before the

         payment becomes due, or certain circumstances occur as defined by applicable law, anypayment made by Borrower shall first be applied to

         the amount of the outstanding principal balance and second to unpaid interest.

ii.Except for the circumstances defined in the proceeding paragraph, any payment made by Borrower shall first be applied to the amount of

          unpaid interest and second to the outstanding principal balance.

6.2 Borrower shall make the payment in a timely manner.

6.3 The whole amount of RMB40,000,000 shall become due on July 7^th, 2006.

6.4 Each payment require to be made by the Borrower hereunder shall be made by wire transfer or immediately available funds. If Borrower defaults in any payment when due, Lender can withdraw funding from any of Borrower’s China Construction Bank accounts to satisfy Borrower’s payment when due pursuant to this agreement.

6.5 Prepayment

i.Prepayment for the unpaid interest shall be make after giving written notice to Lender.

ii.Prepayment for the outstanding principal balance shall be made known to Lender by written application 30 business days before the date of

          the prepayment, subject to Lender’s approval. All interest accrued shall be calculated on the basis of actual number of days elapsed.

          Borrower agrees to pay Lender a fee upon Borrower’s prepayment, in any amount defined by the following formula: amount of fee =

          amount of prepayment * 0.1% * number of days before the payment due

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7.The loan is guaranteed.

8.The rights and obligations of Borrower

8.1 Borrower can request the disbursement of the loan pursuant to this agreement.

 i.        Borrower can extend the term of the loan pursuant to this agreement.

ii.Borrower can request Lender to keep confidentialany information regarding its financial conditions and business operation.

8.2 The obligations of Borrower:

iii.Provide to the Lender, as soon as possible within 10 days after the end of each fiscal quarter of Borrower, certain balance sheet and

           statement of income.

iv.Disclose information regarding financial conditions and use of the loan upon request of Lender.

v.          Inform Lender of any material change of the company.

vi.Lender can terminate the agreement in event of disposition of Borrower’s properties by Borrower at anunreasonably inadequate price.

vii.      Borrower must obtain Lender’s written consent before it acts as guarantor for other third parties’ debt or obligations.

viii.     Borrower cannot partially or fully delegate its obligations under this agreement without Lender’s consent.

ix.       Borrower shall pay off its debts according to their legal priorities. Borrower cannot entered into any contract that renders this loan

           subordinated.

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9.Lender’s rights and obligations

9.1 Lender’s right

i.Lender can require disclosure of Borrower’s financial status.

ii.       In the event of breaches of this agreement by Borrower, Lender can declare the entire outstanding principal balance of the loan, together     with all accrued but unpaid interest immediate due and payable, or stop disbursement of the loan.

9.2 Lender’s obligations

i.        Lender shall disburse the loan in a timely manner

ii.Lender shall keep any information regarding Borrower that is derived from the loan transaction confidential.

10.Remedies for Breaches of the Agreement

10.1 Breaches of the Agreement on the part of Borrower occurs upon the occurrence of any of the following:

i.         Misrepresentation of material information regarding Borrower’s financial status.

ii.         Use of the loan for purpose not set forth in this agreement

iii.         Default in payment when it is due

iv.         Unreasonable disposition of Borrower’s properties by Borrower

v.         Material adverse changes occurred during the term of the loan

vi.         Use of the loan in engaging securities transactions

                                                                                                             vii.        Change of Borrower’s structure that substantially adversely affects its capacity to make timely payments when due.

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10.2 Any occurrence of the following situations, without new guarantee agreement approved by Lender constitutes breaches of this agreement:

i.   Guarantor has material adverse change in its financial status

                                                           ii.  Guarantor provides guaranty to any other third parties which substantially adversely affects its capability of performance under the guarantee agreement.

iii.   Guarantor becomes insolvent or incapable to perform its obligation under the guarantee agreement.

10. 3 Any of the following on the part of Mortgagor without new guarantee agreement approved by Lender constitutes breaches of this agreement

i.   Mortgagor does not purchase property insurance for the mortgaged property or Mortgagor use the proceeds obtained in violation of the mortgage agreement.

ii.   The mortgaged property is damaged due to the behavior of the third person, and the mortgagor dispose the payment of damages in violation of the mortgage agreement.

iii.   Mortgagor disposes the mortgaged property without Lender’s written consent

10.4 Breaches on the part of Borrower based on certain conducts on the part of Borrower regarding certain lien.

10.5 Remedies for Lender

i.   In the event of breaches of this agreement by Borrower, Lender can declare the entire outstanding principal balance of the loan, together with all accrued but unpaid interest immediate due and payable, or stop disbursement of the loan.

ii.   Lender can foreclose the mortgaged properties subject to the mortgage.

iii.   Lender can increase interest rate at the event of Borrower’s default as set forth in this agreement.

11.Reserved

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12.Choice of forum

12.1 Dispute arising from this agreement shall be adjudicated by the court in the jurisdiction where Lender domiciles.

13.Effectiveness, Modification and Termination of the Agreement

14.There are 5 copies of this agreement.

15.Representation and warranties of the Lender

Jinzhou Halla Electrical Equipment Co.Ltd.

/s/ Yuncong Ma

Seal

China Construction Bank (Jingzhou Linghe Branch)

/s/ Shuzhi Zhang

Seal

EX-10.14

Exhibit 10.14

Mortgage Agreement

Parties:

Jinzhou Halla Electronic Equipment Co., Ltd. (the “Mortgagor”)

Jinzhou Commercial Bank (Linghe Branch) (the “Mortgagee”)

1.Mortgage Property

1.1 Mortgagor agrees to secure the loan with the properties listed in the appendix.

1.2 Mortgagor represents and warrants that it has full authority and power to dispose the property, clear and free of any encumbrance.

2.Underlying Loan

2.1 The loan secured by the mortgage is the revolving loan in a maximum amount of RMB40,000,000 from September 28, 2005 to September 22, 2008.

2.2 At any time during the term of the loan, Mortgagor can request loans from Mortgagee on conditions that the outstanding balance of the loan does not exceed RMB40,000,000.

3.Enforceability of the Agreement: this agreement is an independent from the loan agreement. The invalidity of the loan agreement shall not affect the enforceability of this agreement

4.Duration of the Mortgage

4.1 Duration of the Mortgage is two years, commencing after the Statute of Limitation regarding the underlying loan runs.

5.Amendment of the Agreement for the Underlying Loan

5.1 Mortgagee can adjust the interest rate of the underlying loan according to the change of the interest rate promulgated by the People’s Bank of China.

6.Possession of the Properties

6.1 During the term of mortgage, the Properties shall be under Mortgagor’s possession. Mortgagor shall be responsible for the maintenance and repairs of the properties.

7.Insurance for the Properties

7.1 Mortgagor shall purchase property insurance for the mortgage properties, subject to Mortgagee’s approval.

1

7.2 Mortgagor shall manifest in the insurance agreement that Mortgagee is entitled to first priority lien regarding the properties.

8.Damages caused by the third party

8.1 Any damages payment incurred by loss caused by a third party shall be allocated to the account assigned by Mortgagee.

9.Disposition of the Property

9.1 Mortgagor shall not dispose the Property during the term of the mortgage without Mortgagee’s written consent.

9.2 Mortgagee can opt for the following regarding the proceeds derived from the disposition of the properties approved by Mortgagee.

i.   Pay or prepay the loan and accrued interest

ii.   Treat the proceeds as deposit and secure the loan by the deposit certificate

10.Foreclosure

10.1 In the event of any of the following, the Mortgagee is entitled to foreclose the properties

i.   Mortgagor defaults in payment of the unpaid principal or accrued interest when due.

ii.   Mortgagee unreasonably dispose the properties and cause diminishment of their value.

10.2 Morgagee is entitled to the following remedies

i.   Foreclosure

ii.   Auction sale of the properties

iii.   Initiate a law suit in court

11.Remedies for breaches of contract

11.1 Morgagee is entitled to the following at the time of breaches on the part of Mortgagor

i.   Require the Mortgagor to remedy its breaches

ii.   Require the Mortgagor to provide additional mortgage

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iii.   Require for damages paid by Mortgagor

12.Record and Remove the Mortgage: Parties shall record the lien within 15 days.

Jinzhou Halla Electronic Equipment Co., Ltd.

Seal

/s/ Yuncong Ma

/s/ Qingjie Zhao

Seal

Jinzhou Commercial Bank (Linghe Branch)

Seal

Appendix

The List of the Mortgage Property

28^th, September, 2005

Mortgagor	Jinzhou Halla electrical equipment Co.Ltd.			Nature of business	Invested by foreigner
Account Number	402016547501018			The phone	3880053
The sums of the loans	10.000.000			The term of the loans	28th,September,2005 to 27th,September,2008
The name of the pledge	unit	amount	address	The value of the property	Record number of the properties
The land	Square meters	42169		3500	000106
The house property	Square meters	9712		2525	0007854
	Square meters	823.7		164	000196908
	Square meters	2714.4		705	000234108
	Square meters	1275		255	00181316
total

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Jinzhou Halla electrical equipment Co. Ltd.

/s/ Qingjie Zhao

/s/ Yuncong Ma

Jinzhou Commercial Bank (Linghe Branch)(Linghe Branch)

Seal

4

EX-10.15

Exhibit 10.15

LEASE AGREEMENT

Date: November 8, 2005

Lessor:                 Beijing International Technological Cooperation CenterWang Jing Tower Company (“Party A”)

Lessee:                 Jinzhou Halla Electrical Equipment Co., Ltd. ("Party B")

Management: Beijing Wangjing Zhucheng Real Property Management Company. (“Party C”)

1.Based on the laws and regulations of People's Republic of China, the Parties enter into this Lease Agreement in order to specify the rights and obligations of the Lessor and the Lessee.

2.Party A agrees to lease the properties and the facilities therein, located at 8085 and 8086 #8A to Party B for the usage of office space (the "Property"). The total area of the properties is 169 square meters. Any alteration to the building shall be approved by Party A before it is made.

3.Lease Term

a.   The term of the lease is 24 months, commencing from November 15, 2005 and ending on November 14, 2007.

b.   Extension of the term shall be requested no later than 45 days before the expiration of the lease and shall be approved by all the parties to this agreement. The extension agreement shall be executed at least 15 days before the expiration of the lease.

4.Rental Payment

a.   The rental payment is RMB17,000 per month. The management fee collected by Party C shall be determined in separated agreements.

5.Deposit

a.   Party A shall pay to Party B the sum of RMB51,000 as deposit within 3 days after the execution of the agreement.

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b.   The deposit is solely for security purpose and shall not be deemed as any other payment of any kind and cannot be assigned or be used as a lien to secure debts owed by Party B to any third parties during the lease term.  

c.   Party A can use the deposit to cover damages caused by breaches of this agreement on the part of Party B. Party A shall return the deposit, not including interests accrued, to Party B only after Party B has fulfilled all of Party B’s obligations hereunder.

d.   When Party A uses part or full amount of the deposit for the use set forth in 5c, Party B shall make payment of the equal amount to Party A for deposit purpose, within 3 days after Party A delivers written notice to Party B.

6.Other Fees

a.   The following fee shall be paid by Party B to Party C, based on the usage of utilities.

Water: Cold water: RMB5.6/ton; Warm water: RMB 9.5/ton

Electricity: RMB 0.95/unit

Other fees agreed by the parties.

7.Deposit Payment Arrangement

a.   Party B shall pay the deposit 5 days before the commencement of the lease in cash or through wire transfer.

b.   If Party B defaults in payment when due, Party B shall pay a late fee in the amount of 5% of the defaulted payment each day, not exceeding 30 days.

8.Party A may adjust the amount of payment based on changes of governmental regulations regardingutilities fees.

9.Necessary Documentation

10.Alteration or Decoration of the Property

a.   Any alteration to the Property shall be approved by Party A 15 days before it is made.

b.   Any alteration to the Property made by Party B is at its own cost.

c.   The Property need not be restored to its original state at the expiration of the lease term.

11.Repairs

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a.   Party A is responsible for maintaining the Property in a safe condition. Any damage to the Property caused by Party B’s misuse or negligence shall be borne by Party B.

b.   Party A shall be responsible for reasonable wear and tear arising from the use thereof under this lease.

12.Public Area: public area includes hallway, restroom, elevator, entrance door, hall and other area shared by public.

13.Right of Entry: Party A, Party C and relevant government officials can enter into the Property if it is for the purpose of security, fire and other necessary situations.

14.Remedies for Breaches of the Agreement

a.   If Party A and Party C fail to deliver the Property to Party B at the commencement of the lease, Party A shall pay 0.05% of the total rental price to Party B each day when such delay continues.

b.   Party A is responsible for any damages, loss or injury caused by its failure to maintain the Property pursuant to this agreement.

c.   Except as set forth in 15a, in the case of early termination of the lease by Party A, Party A shall pay to Party B the sum equal to the sum of security deposit.

d.   In the event Party B fails to make a payment when due, Party B shall on a daily basis, pay to Party C in the amount of 5% of the defaulted payment.

e.   If Party B fails to restore the Property to its original state after it makes alterations to the Property without Party A’s written consent, Party B is responsible for any loss and damages borne by other parties, and is subject to a late charge at the amount of two month’s rent.

f.   If Party B terminates the lease before its expiration, the deposit will not be refunded.

15.Force majeure: this agreement will be terminated automatically if caused by forces beyond the control of the parties.

16.Termination of the agreement

a.   Except as set for in 15a, any party cannot modify or terminate the agreement without other parties’ written consent.

b.   Any event of default on the part of Party B for longer than 30 days may result in termination of the lease by Party A or Party C.

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Beijing International Technological Cooperation CenterWangjing Tower Company

Seal

Jinzhou Halla Electrical Equipment Co., Ltd

Seal

Beijing Wangjing Zhucheng Real Property Management Co., Ltd.

Seal

4

EX-10.16

WONDER AUTO LIMITED

No. 56 Lingxi Street

Taihe District

Jinzhou City, Liaoning

People’s Republic of China, 121013

(86) 0416-5186632

June 21, 2006

By Hand Delivery

Qingjie Zhao

Dear Mr. Zhao:

The purpose of this letter agreement (the “Agreement”) is to confirm your employment arrangement with WONDER AUTO LIMITED (the “Company”), on the following terms and conditions:

1.Duties. You will be employed as the Chief Executive Officer and Director, subject to the supervision of the board of directors. Your duties will include, but not be limited to, developing and implementing the overall strategic direction of the Company and implementing the Company’s business plan as the most senior executive officer of the Company. You shall devote your entire business time, energies, attention and abilities to the business of Company unless otherwise authorized by the board of directors. During your employment by Company, you shall not engage in any activity or have any business interest which in any manner interferes with the proper performance of your duties, conflicts with the interest of Company or brings into disrepute the business reputation of Company.

2.Salary. Your salary will be at the rate of Ninety Thousand Dollars ($90,000) per year, to be paid in monthly installments or otherwise in accordance with Company’s normal payroll practices.

3.Bonus. You shall be eligible for a bonus, which will be payable in the sole discretion of Company based upon your performance and the Company’s performance during any year of your employment with the Company.

4.Term of Employment. You will be an employee-at-will. This means that either you or Company may end your employment at any time, with or without cause, and with or without notice.

5.Vacation. You shall be entitled to twenty paid vacation days. You may not take more than 10 vacation days consecutively. Vacation days will not be carried over to future years of employment.

6.Incentive and Other Plans. You will be entitled to participate in such pension, 401(k), major medical, life insurance and other plans and benefit programs as may be made available from time to time to employees of Company having responsibilities comparable to yours and under the terms of which you are eligible to participate.

7.Company Policies. You shall at all times be subject to and comply with policies, rules and procedures of Company then in effect, including without limitation with respect to hours of work, holidays, vacation and sick leave and pay, conflict of interest, improper payments, political contributions and payments to government officials.

8.Patents. You hereby assign to Company all rights to any inventions, techniques, processes, concepts, ideas, programs, source codes, formulae, research and development and marketing plans, whether or not patentable or copyrightable, made, conceived or reduced to practice by you during the course of your employment by Company.

9.Covenants. During your employment by Company and at all times thereafter, you shall not (a) disrupt, disparage, impair or interfere with the business of Company or (b) disclose to anyone else, directly or indirectly, any proprietary or business sensitive information concerning the business of Company or use, or permit or assist, by acquiescence or otherwise, anyone else to use, directly or indirectly, any such information. Such information shall include all information to the extent not generally known to the public which, if released to unauthorized persons, could be detrimental to the reputation or business interests of Company or parties with which Company contracts or which would permit such person to benefit improperly.

10.Company Property. Upon termination of your employment for any reason, you shall promptly deliver to Company all property belonging to Company and shall not retain any copies of any correspondence, reports, lists or other documents relating in any way to the affairs of Company or its clients.

11.Non-Solicitation. During the term of your employment by Company and for a period of twelve months following the termination of your employment, whether voluntary or involuntary, you shall not, directly or indirectly:

(a)solicit customers or business patronage which results in competition with the business of Company or any of its affiliates, or

(b)approach or attempt to induce any person who is then in the employ of Company to leave the employ of Company or employ or attempt to employ any person who was in the employ of Company at any time during the prior twelve months.

12.Notices.All notices hereunder shall be to the parties’ addresses set forth above for the Company and on the Signature Page for you, in writing and given by registered or certified mail, return receipt requested, postage and registration fees prepaid, and shall be deemed given when so mailed. The addresses set forth herein may be changed by notice given in the manner set forth in this Section.

13.Miscellaneous. This Agreement (a) shall be governed by, and construed in accordance with, the laws of the British Virgin Islands, without regard for the conflict of laws principles thereof, (b) shall inure to the benefit of, and shall be binding upon, the parties hereto and their respective heirs, legal representatives and assigns, (c) may not be changed orally but only by an agreement in writing signed by the party against whom any waiver, change, amendment, notification or discharge is sought, and (d) contains the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements, oral or written, between the parties hereto. The invalidity of all or any part of any section of this Agreement shall not render invalid the remainder of this Agreement. If any provision of this Agreement is so broad as to be unenforceable, such provision shall be interpreted to be only so broad as is enforceable.

Very truly yours,

WONDER AUTO LIMITED

By:/s/ Qingjie Zhao

Name: Qingjie Zhao

Title: CEO and Chairman

ACCEPTED AND AGREED TO

AS OF THE DATE FIRST ABOVE

WRITTEN:

/s/ Qingjie Zhao

QINGJIE ZHAO

Address:

c/o Wonder Auto Limited

No. 56 Lingxi Street

Taihe District

Jinzhou City, Liaoning

People’s Republic of China, 121013

EX-10.17

Exhibit 10.17

WONDER AUTO LIMITED

No. 56 Lingxi Street

Taihe District

Jinzhou City, Liaoning

People’s Republic of China, 121013

(86) 0416-5186632

June 21, 2006

By Hand Delivery

Yuncong Ma

Dear Mr. Ma:

The purpose of this letter agreement (the “Agreement”) is to confirm your employment arrangement with WONDER AUTO LIMITED (the “Company”), on the following terms and conditions:

1.Duties. You will be employed as the Chief Operating Officer, subject to the supervision of the Chief Executive Officer. Your duties will include, but not be limited to, overseeing the daily operations of the Company and assisting the Chief Executive Officer in developing and implementing the overall strategic direction of the Company and implementing the Company’s business plan. You shall devote your entire business time, energies, attention and abilities to the business of Company unless otherwise authorized by the board of directors. During your employment by Company, you shall not engage in any activity or have any business interest which in any manner interferes with the proper performance of your duties, conflicts with the interest of Company or brings into disrepute the business reputation of Company.

2.Salary. Your salary will be at the rate of Sixty Thousand Dollars ($60,000) per year, to be paid in monthly installments or otherwise in accordance with Company’s normal payroll practices.

3.Bonus. You shall be eligible for a bonus, which will be payable in the sole discretion of Company based upon your performance and the Company’s performance during any year of your employment with the Company.

4.Term of Employment. You will be an employee-at-will. This means that either you or Company may end your employment at any time, with or without cause, and with or without notice.

5.Vacation. You shall be entitled to twenty paid vacation days. You may not take more than 10 vacation days consecutively. Vacation days will not be carried over to future years of employment.

6.Incentive and Other Plans. You will be entitled to participate in such pension, 401(k), major medical, life insurance and other plans and benefit programs as may be made available from time to time to employees of Company having responsibilities comparable to yours and under the terms of which you are eligible to participate.

7.Company Policies. You shall at all times be subject to and comply with policies, rules and procedures of Company then in effect, including without limitation with respect to hours of work, holidays, vacation and sick leave and pay, conflict of interest, improper payments, political contributions and payments to government officials.

8.Patents. You hereby assign to Company all rights to any inventions, techniques, processes, concepts, ideas, programs, source codes, formulae, research and development and marketing plans, whether or not patentable or copyrightable, made, conceived or reduced to practice by you during the course of your employment by Company.

9.Covenants. During your employment by Company and at all times thereafter, you shall not (a) disrupt, disparage, impair or interfere with the business of Company or (b) disclose to anyone else, directly or indirectly, any proprietary or business sensitive information concerning the business of Company or use, or permit or assist, by acquiescence or otherwise, anyone else to use, directly or indirectly, any such information. Such information shall include all information to the extent not generally known to the public which, if released to unauthorized persons, could be detrimental to the reputation or business interests of Company or parties with which Company contracts or which would permit such person to benefit improperly.

10.Company Property. Upon termination of your employment for any reason, you shall promptly deliver to Company all property belonging to Company and shall not retain any copies of any correspondence, reports, lists or other documents relating in any way to the affairs of Company or its clients.

11.Non-Solicitation. During the term of your employment by Company and for a period of twelve months following the termination of your employment, whether voluntary or involuntary, you shall not, directly or indirectly:

(a)solicit customers or business patronage which results in competition with the business of Company or any of its affiliates, or

(b)approach or attempt to induce any person who is then in the employ of Company to leave the employ of Company or employ or attempt to employ any person who was in the employ of Company at any time during the prior twelve months.

12.Notices. All notices hereunder shall be to the parties’ addresses set forth above for the Company and on the Signature Page for you, in writing and given by registered or certified mail, return receipt requested, postage and registration fees prepaid, and shall be deemed given when so mailed. The addresses set forth herein may be changed by notice given in the manner set forth in this Section.

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13.Miscellaneous.  This Agreement (a) shall be governed by, and construed in accordance with, the laws of the British Virgin Islands, without regard for the conflict of laws principles thereof, (b) shall inure to the benefit of, and shall be binding upon, the parties hereto and their respective heirs, legal representatives and assigns, (c) may not be changed orally but only by an agreement in writing signed by the party against whom any waiver, change, amendment, notification or discharge is sought, and (d) contains the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements, oral or written, between the parties hereto. The invalidity of all or any part of any section of this Agreement shall not render invalid the remainder of this Agreement. If any provision of this Agreement is so broad as to be unenforceable, such provision shall be interpreted to be only so broad as is enforceable.

Very truly yours,

WONDER AUTO LIMITED

By:/s/ Qingjie Zhao

Name: Qingjie Zhao

Title: CEO and Chairman

ACCEPTED AND AGREED TO

AS OF THE DATE FIRST ABOVE

WRITTEN:

/s/ Yuncong Ma

YUNCONG MA

Address:

c/o Wonder Auto Limited

No. 56 Lingxi Street

Taihe District

Jinzhou City, Liaoning

People’s Republic of China, 121013

3

EX-10.18

Exhibit 10.18

WONDER AUTO LIMITED

No. 56 Lingxi Street

Taie District

Jinzhou City, Liaoning

People’s Republic of China, 121013

(86) 0416-5186632

June 21, 2006

By Hand Delivery

Meirong Yuan

Dear Mr. Yuan:

The purpose of this letter agreement (the “Agreement”) is to confirm your employment arrangement with WONDER AUTO LIMITED (the “Company”), on the following terms and conditions:

1.Duties. You will be employed as the Chief Financial Officer, subject to the supervision of the Chief Executive Officer. Your duties will include, but not be limited to, overseeing all financial matters relating to the Company, including the preparation of the Company’s financial statements and related matters. You shall devote your entire business time, energies, attention and abilities to the business of Company unless otherwise authorized by the board of directors. During your employment by Company, you shall not engage in any activity or have any business interest which in any manner interferes with the proper performance of your duties, conflicts with the interest of Company or brings into disrepute the business reputation of Company.

2.Salary. Your salary will be at the rate of Sixty Thousand Dollars ($60,000) per year, to be paid in monthly installments or otherwise in accordance with Company’s normal payroll practices.

3.Bonus. You shall be eligible for a bonus, which will be payable in the sole discretion of Company based upon your performance and the Company’s performance during any year of your employment with the Company.

4.Term of Employment. You will be an employee-at-will. This means that either you or Company may end your employment at any time, with or without cause, and with or without notice.

5.Vacation. You shall be entitled to twenty paid vacation days. You may not take more than 10 vacation days consecutively. Vacation days will not be carried over to future years of employment.

6.Incentive and Other Plans. You will be entitled to participate in such pension, 401(k), major medical, life insurance and other plans and benefit programs as may be made available from time to time to employees of Company having responsibilities comparable to yours and under the terms of which you are eligible to participate.

7.Company Policies. You shall at all times be subject to and comply with policies, rules and procedures of Company then in effect, including without limitation with respect to hours of work, holidays, vacation and sick leave and pay, conflict of interest, improper payments, political contributions and payments to government officials.

8.Patents. You hereby assign to Company all rights to any inventions, techniques, processes, concepts, ideas, programs, source codes, formulae, research and development and marketing plans, whether or not patentable or copyrightable, made, conceived or reduced to practice by you during the course of your employment by Company.

9.Covenants. During your employment by Company and at all times thereafter, you shall not (a) disrupt, disparage, impair or interfere with the business of Company or (b) disclose to anyone else, directly or indirectly, any proprietary or business sensitive information concerning the business of Company or use, or permit or assist, by acquiescence or otherwise, anyone else to use, directly or indirectly, any such information. Such information shall include all information to the extent not generally known to the public which, if released to unauthorized persons, could be detrimental to the reputation or business interests of Company or parties with which Company contracts or which would permit such person to benefit improperly.

10.Company Property. Upon termination of your employment for any reason, you shall promptly deliver to Company all property belonging to Company and shall not retain any copies of any correspondence, reports, lists or other documents relating in any way to the affairs of Company or its clients.

11.Non-Solicitation. During the term of your employment by Company and for a period of twelve months following the termination of your employment, whether voluntary or involuntary, you shall not, directly or indirectly:

(a)solicit customers or business patronage which results in competition with the business of Company or any of its affiliates, or

(b)approach or attempt to induce any person who is then in the employ of Company to leave the employ of Company or employ or attempt to employ any person who was in the employ of Company at any time during the prior twelve months.

12.Notices. All notices hereunder shall be to the parties’ addresses set forth above for the Company and on the Signature Page for you, in writing and given by registered or certified mail, return receipt requested, postage and registration fees prepaid, and shall be deemed given when so mailed. The addresses set forth herein may be changed by notice given in the manner set forth in this Section.

13.Miscellaneous.   This Agreement (a) shall be governed by, and construed in accordance with, the laws of the British Virgin Islands, without regard for the conflict of laws principles thereof, (b) shall inure to the benefit of, and shall be binding upon, the parties hereto and their respective heirs, legal representatives and assigns, (c) may not be changed orally but only by an agreement in writing signed by the party against whom any waiver, change, amendment, notification or discharge is sought, and (d) contains the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements, oral or written, between the parties hereto. The invalidity of all or any part of any section of this Agreement shall not render invalid the remainder of this Agreement. If any provision of this Agreement is so broad as to be unenforceable, such provision shall be interpreted to be only so broad as is enforceable.

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Very truly yours,

WONDER AUTO LIMITED

By:/s/ Qingjie Zhao

Name: Qingjie Zhao

Title: CEO and Chairman

ACCEPTED AND AGREED TO

AS OF THE DATE FIRST ABOVE

WRITTEN:

/s/ Meirong Yuan

MEIRONG YUAN

Address:

c/o Wonder Auto Limited

No. 56 Lingxi Street

Taihe District

Jinzhou City, Liaoning

People’s Republic of China, 121013

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EX-10.19

Exhibit 10.19

Employment Contract

Parties

Jinzhou Halla Electrical Equipment Co., Ltd (Party A)

Seuk Jun Kim (Party B)

December 1^st, 2003

1.The term of the contract is from December 1^st, 2003 to December 31^st, 2006.

2.Party B will be employed as Vice President of Research and Development.

3.Party A shall comply with the regulations, including regulations regarding improving the company’s sanitary conditions and working conditions.

4.Party A shall provide reasonable compensation based on Party B’s work performance.

5.Party A shall ensure the rights of Party B regarding employment, education and employment awards.

6.Party A shall purchase certain insurance for the benefits of Party B.

7.Party A can set forth requirements related to Party B’s work performance.

8.Party B shall comply with rules and regulations established by Party A.

9.Party B shall be entitled to benefits enumerated by applicable laws.

10.Pursuant to the following situations, both parties can modify the contract

a.   Change of Party A’s structure or business.

b.   Agreed by both parties

c.   Change of applicable laws

11.Pursuant to the following situations, Party A can terminate the contract

a.   Party B fails to satisfy necessary qualifications.

b.   Party A is insolvent or in the proceeding of bankruptcy.

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12.Pursuant to the following situations, Party B can terminate the contract

a.   Party A fails to purchase insurance policy for the benefits of Party B

b.   The working condition have materially adverse effect on Party B’s health.

13.Party A cannot terminate the contract in the following circumstances

a.   Without good cause set forth in article 11.

b.   Party B is injured during the employment.

14.The contract shall automatically be terminated when Party B is subject to any criminal charges and proceedings.

15.Both parties can terminate the contract by giving notice to the other party 30 days before the termination date of the employment.

16.The contract shall expire at the expiration date.

17.A party shall be responsible for damages caused by its breaches of this contract.

18.Other provisions

a.   Party A can terminate the contract in the following circumstances

i.   Party B engage in business during his vacation.

ii.   Violation of regulations and rules set forth by Party A.

iii.   If Party B terminate the contract without cause, Party B shall pay RMB1,000 to Party A for reimbursement of the training expenses.

Jinzhou Halla Electrical Equipment Co., Ltd (Party A)

/s/ Yuncong Ma

Seuk Jun Kim (Party B)

/s/ Seuk Jun Kim

2

EX-10.20

Exhibit 10.20

Employment Contract

Parties

Jinzhou Halla Electrical Equipment Co., Ltd (Party A)

Seal

Yuguo Zhao (Party B)

/s/ Yuguo Zhao

December 1, 2003

1.The term of the contract is from December 1, 2003 to November 30^th, 2006.

2.Party B will be employed as General Manager.

3.Party A shall comply with the regulations, including regulations regarding improving the company’s sanitary conditions and working conditions.

4.Party A shall provide reasonable compensation based on Party B’s work performance.

5.Party A shall ensure the rights of Party B regarding employment, education and employment awards.

6.Party A shall purchase certain insurance for the benefits of Party B.

7.Party A can set forth requirements related to Party B’s work performance.

8.Party B shall comply with rules and regulations established by Party A.

9.Party B shall be entitled to benefits enumerated by applicable laws.

10.Pursuant to the following situations, both parties can modify the contract

a.   Change of Party A’s structure or business.

b.   Agreed by both parties

c.   Change of applicable laws

11.Pursuant to the following situations, Party A can terminate the contract

a.   Party B fails to satisfy necessary qualifications.

b.   Party A is insolvent or in the proceeding of bankruptcy.

12.Pursuant to the following situations, Party B can terminate the contract

a.   Party A fails to purchase insurance policy for the benefits of Party B

b.   The working condition have materially adverse effect on Party B’s health.

13.Party A cannot terminate the contract in the following circumstances

a.   Without good cause set forth in article 11.

b.   Party B is injured during the employment.

14.The contract shall automatically be terminated when Party B is subject to any criminal charges and proceedings.

15.Both parties can terminate the contract by giving notice to the other party 30 days before the termination date of the employment.

16.The contract shall expire at the expiration date.

17.A party shall be responsible for damages caused by its breaches of this contract.

18.Other provisions

a.   Party A can terminate the contract in the following circumstances

i.   Party B engage in business during his vacation.

ii.   Violation of regulations and rules set forth by Party A.

iii.   If Party B terminate the contract without cause, Party B shall pay RMB1,000 to Party A for reimbursement of the training expenses.

19.Enforceability of this contract

20.Dispute resolution

21.Miscellaneous

EX-10.21

Exhibit 10.21

Employment Contract

Parties

Jinzhou Halla Electrical Equipment Co., Ltd (Party A)

Seal

Yongdong Liu (Party B)

/s/ Yongdong Liu

December 1, 2003

1.The term of the contract is from December 1, 2003 to November 30^th, 2006.

2.Party B will be employed as Division Head in the production department.

3.Party A shall comply with the regulations, including regulations regarding improving the company’s sanitary conditions and working conditions.

4.Party A shall provide reasonable compensation based on Party B’s work performance.

5.Party A shall ensure the rights of Party B regarding employment, education and employment awards.

6.Party A shall purchase certain insurance for the benefits of Party B.

7.Party A can set forth requirements related to Party B’s work performance.

8.Party B shall comply with rules and regulations established by Party A.

9.Party B shall be entitled to benefits enumerated by applicable laws.

10.Pursuant to the following situations, both parties can modify the contract

a.   Change of Party A’s structure or business.

b.   Agreed by both parties

c.   Change of applicable laws

11.Pursuant to the following situations, Party A can terminate the contract

a.   Party B fails to satisfy necessary qualifications.

b.   Party A is insolvent or in the proceeding of bankruptcy.

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12.Pursuant to the following situations, Party B can terminate the contract

a.   Party A fails to purchase insurance policy for the benefits of Party B

b.   The working condition have materially adverse effect on Party B’s health.

13.Party A cannot terminate the contract in the following circumstances

a.   Without good cause set forth in article 11.

b.   Party B is injured during the employment.

14.The contract shall automatically be terminated when Party B is subject to any criminal charges and proceedings.

15.Both parties can terminate the contract by giving notice to the other party 30 days before the termination date of the employment.

16.The contract shall expire at the expiration date.

17.A party shall be responsible for damages caused by its breaches of this contract.

18.Other provisions

a.   Party A can terminate the contract in the following circumstances

i.   Party B engage in business during his vacation.

ii.   Violation of regulations and rules set forth by Party A.

iii.   If Party B terminate the contract without cause, Party B shall pay RMB1,000 to Party A for reimbursement of the training expenses.

Jinzhou Halla Electrical Equipment Co., Ltd (Party A)

/s/ Yuncong Ma

Yong Dong Liu (Party B)

/s/ Yong Dong Liu

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EX-10.22

Exhibit 10.22

CONSULTING AGREEMENT

This Consulting Agreement (this “Agreement”) is entered into as of April 22, 2006 by and between the Wonder Auto Limited, a British Virgin Islands corporation (“Wonder”), and Heritage Management Consultants, Inc., a corporation organized under the laws of South Carolina, USA (“Heritage” or the “Consultant”).

RECITALS

1.   Consultant is willing to provide to Wonder and its affiliated companies (collectively, the “Company”) the consulting services identified in this Agreement.

2.   Wonder is willing to engage Consultant as an independent contractor, and not as an employee, on the terms and conditions set forth herein.

AGREEMENT

In consideration of the foregoing and of the mutual promises set forth herein, and intending to be legally bound, the parties hereto agree as follows:

1.   Engagement. Wonder hereby engages Consultant as an independent contractor to provide outsourced professional management services for the purpose of assisting the Company in meeting its obligations as a U.S. publicly traded company. Heritage shall provide an executive who will act as the Company’s spokesperson (the “Spokesperson”) to the U.S. financial markets, and who will be supported by the Heritage staff. The scope of work shall include the following:

§   Heritage representative(s) shall visit the Company’s location(s) to conduct a detailed analysis of the Company in order to gain a detailed understanding of the Company’s operations, strategies and financial projections.

§   Development of an investor presentation in coordination with the Company’s investor relations firm.

§   Heritage shall provide consultation to the Company during all fund raising activities during the term of the engagement. Spokesperson will make “one on one,” web cast and teleconference presentations to investment banks and potential investors on behalf of the Company. Heritage staff will coordinate communications between investment banks and the Company.

§   On an ongoing basis, Spokesperson shall be available to make “one on one” presentations, web cast presentation and teleconference updates to current investors, potential investors, and the analyst community as appropriate.

§   Spokesperson shall participate in investor conferences, as appropriate.

§   Heritage shall conduct quarterly investor conference calls, as appropriate.

§   Spokesperson and the Heritage staff shall be readily available to receive inquiries and coordinate responses to potential and current investors, buy and sell side analysts, the financial press, and the Securities and Exchange Commission.

§   Heritage shall work with the Company on proactively addressing issues or inquires which may result from the Company’s quarterly financial results.

§   Heritage shall provide management oversight of the US based service providers, specifically the attorneys, auditors, accounting firm, investor relations firm, web design firm and newswire distribution provider, in their timely completion of the following:

·   Submission of Exchange Act filings, including 10-K, 10-K and 8-K, with the SEC,

·   Press releases on financial results and material company events,

·   14 C filing,

·   SB-2 filings,

·   Preparation of an investor web site, and

·   Listing applications with US stock exchanges.

§   Heritage shall assist the Company in interviewing; selecting and retaining U.S. based service providers.

§   Heritage shall oversee the accuracy of Company financials with the stock exchanges and Bloomberg Financial Reporting to reflect updates required after a reverse merger transaction.

§   Heritage shall solicit independent research coverage with the sell side analyst community.

§   Heritage shall arrange and coordinate paid research coverage as necessary and with the agreement of the Company.

§   Heritage shall coordinate quarterly updates with research analysts covering the Company.

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2.   Term. This Agreement will commence on the date first written above, and unless modified by the mutual written agreement of the parties, shall continue for a period of one year.

3.   Compensation.

a.   In consideration of the services to be performed by Consultant, Wonder agrees to pay Consultant $175,000 U.S. dollars. Payments will be made in four (4) equal installments of $43,750. It is further agreed that the initial quarterly payment of $43,750 will be paid immediately upon the successful completion of a RTO, as defined in the below paragraph. The three (3) remaining payments will be made at the beginning of each quarter of the engagement, in advance. All payments are to be made via wire transfer to: Wachovia National Association, 401 South Tryon Street, Charlotte NC 28288, ABA number 053207766, for the benefit of: Heritage Management Consultants, Inc., account number 2000023896286.

b.   All out of pocket expenses incurred by Consultant and/or its associates shall be reimbursed by the Company. If the RTO is not consummated, Wonder agrees to reimburse Heritage for all out of pocket expenses incurred up to the date it is determined the RTO will not be effected.

4.   Representations and Warranties. Consultant represents and warrants (i) that Consultant has no obligations, legal or otherwise, inconsistent with the terms of this Agreement or with Consultant’s undertaking this relationship with the Company, (ii) that Consultant will not use in the performance of its responsibilities under this Agreement any confidential information or trade secrets of any other person or entity and (iii) that Consultant has not entered into or will enter into any agreement (whether oral or written) in conflict with this Agreement.

5.   Limited Liability. Consultant shall not be liable to the Company, or to anyone who may claim any right due to its relationship with the Company, for any acts or omissions on the part of the Consultant or the agents or employees of the Consultant in the performance of Consultant’s services under this Agreement. Wonder shall hold Consultant free and harmless from any obligations, costs, claims, judgments, attorney's fees, or attachments arising from or in any way related to the services rendered to the Company.

6.   Indemnification. Company agrees to indemnify and save harmless the Consultant, as well as Consultant’s officers, employees, and agents from all suits, actions, losses, damages, claims, or liability of any character, type or description, including without limiting the generality of the foregoing all expenses of litigation, court costs, and attorney's fees arising out of or occasioned by the acts of Wonder, its agents or employees, or occasioned by the acts of Consultant in the execution or performance of the services provided by the Consultant, at any time from the execution date of this Agreement until such time after any pertinent limitations period expires after the termination of this Agreement.

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As part of this indemnification, Wonder agrees to defend and hold harmless Consultant from and against any and all liabilities arising from the consulting agreement. As such, Consultant shall not be liable to Wonder, or to anyone who may claim any right due to its relationship with Wonder, for any acts or omissions on the part of the Consultant or the agents or employees of the Consultant in the performance of Consultant's services under this agreement. Wonder shall hold Consultant free and harmless from any obligations, costs, claims, judgments, attorney's fees, or attachments arising from or growing out of the services rendered to the Company.

7.   Governing Law. This Agreement shall be governed by the laws of the Peoples Republic of China and any dispute arising hereunder shall be submitted for binding arbitration to the China Foreign Trade Commission Arbitration Committee in Shanghai.

It is understood that this Agreement will be prepared and executed in both the English and Chinese languages, with both versions having legal efficacy. If a dispute arises as to the interpretation of a particular provision of this Agreement because of differences between the Chinese and English languages, the dispute shall be resolved in accordance with the provisions of the preceding paragraph.

8.   Miscellaneous. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorney’s fees, costs. This Agreement shall be binding on and inure to the benefit of the parties to it and their respective successors and assigns.

9.   Sole Agreement. This agreement supersedes any prior proposal, representation or understanding between the parties and its affiliates hereto, including, but not limited, the Consulting Agreement, dated April 21, 2006, executed at Hilton Head Island, South Carolina, U.S.A.

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Executed on the day and year first above written.

Wonder Auto Limited		Heritage Management Consultants, Inc.
By:	/s/ Qingjie Zhao Qingjie Zhao	By:	/s/ James H. Groh James H. Groh, President

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EX-10.23

Exhibit 10.23

FINANCIAL ADVISORY AGREEMENT

THIS FINANCIAL ADVISORY AGREEMENT ("Agreement" or "FAA") is made and entered into on the 15th of March, 2006, by and between HFG International, Limited, a Hong Kong corporation ("HFG"), and Wonder Auto Group, a Hong Kong corporation (the "Company").

W I T N E S S E T H:

WHEREAS, the Company desires to engage HFG to provide certain financial advisory and consulting services as specifically enumerated below commencing as of the date hereof related to the Restructuring, the Going Public Transaction and the Post-Transaction Period (each as hereinafter defined), and HFG is willing to be so engaged; and

WHEREAS, HFG will advise the Company with regard to matters related to their efforts to complete a capital raising transaction generating gross offering proceeds of $20 million USD (the "Financing"), $12 million for the Company and $8million to purchase shares from current shareholders of the Company.

NOW, THEREFORE, for and in consideration of the covenants set forth herein and the mutual benefits to be gained by the parties hereto, and other good and valuable consideration, the receipt and adequacy of which are now and forever acknowledged and confessed, the parties hereto hereby agree and intend to be legally bound as follows:

1.Retention. As of the date hereof, the Company hereby retains and HFG hereby agrees to be retained as the Company's exclusive financial advisor during the term of this Agreement. The Company acknowledges that HFG shall have the right to engage third parties to assist it in its efforts to satisfy its obligations hereunder. In its capacity as a financial advisor to the Company, HFG will:

A. Restructuring and Going Public Transaction.

(i)consult on the implementation of a restructuring plan (the "Restructuring") resulting in an organizational structure that will allow the Company to complete the Going Public Transaction;

(ii)assist the Company in evaluating the manner of effecting a going public transaction with a public shell corporation ("Pubco") domiciled in the United States of America, quoted on the "OTC BB" (a "Going Public Transaction"). Subject to completion of the due diligence, which demonstrates to HFG's sole satisfaction that the Company is a suitable candidate for the Going Public Transaction, the Company's timely completion of a U.S. GAAP audit by April 30, 2006, and all required legal filings and review, HFG will use its best efforts to complete the Going Public Transaction and the Financing by May 31, 2006.

HFG acknowledges that the Pubco has no assets or liabilities of any kind and is not subject to any contingent legal liabilities, and HFG shall be responsible for any loss suffered by the Company as a result of any legal liabilities in the Pubco prior to the date of Going Public Transaction.

(iii)The Company acknowledges that it has presented HFG with financial projections (the "2006 Projections") indicating that the Company will report net income of at least $8.57 million, with an allowable 5% grace margin equating to Net Income of $8.14 million USD for the fiscal year ending December 31, 2006 (the "2006 Projected NI"), based upon an audit conducted in conformity with US GAAP and US based auditing standards. Actual reported net income for 2006 shall be referred to herein as ("2006 ARNI"),

If 2005 ARNI equals $6.5 million USD or greater, the completion of the Going Public Transaction will result in the investors in the Financing, the current shareholders of Pubco and HFG (collectively, the "New Shareholders") controlling, in the aggregate, 41.8% of Pubco's issued and outstanding stock following consummation of the Going Public Transaction.

The company acknowledges that in the event that 2005 ARNI comes in below $6.5 million, HFG shall have the right, in its sole discretion, to either terminate this Agreement or renegotiate its terms.

The Company and its shareholders further acknowledge that in the event the Company fails to meet the 2006 Projected NI, its current shareholders will deliver to the investors in the Financing and HFG shares of Pubco that they will receive as a result of their participation in the Going Public Transaction (the "Make Good Provision") based on the following:

The Company's shareholders shall place into escrow that number of shares of Pubco, to which they shall be entitled upon consummation of the Going Public Transaction, representing an amount of shares equal to 30% of the total shares outstanding following the closing of the Going Public Transaction (the "Make Good Shares"). In the event the Company fails to report net income of $8.14 million USD for fiscal 2006 the escrow agent will transfer collectively to the investors in the Financing and to HFG that number of Make Good Shares based from the following formula:

(($8.14 million- 2006 ARNI)/$8.14 million) X Make Good Shares

The Company will ensure that the Make Good Shares will be delivered within ten business days of the date the audit for fiscal 2006 is completed and will be registered under Section 5 of the Securities Act of 1933 for purposes of resale, which registration statement shall be filed with the SEC within 30 days of the delivery of the Make Good Shares. The registration statement shall remain effective and the prospectus constituting a part thereof available for delivery in connection with the resale of the Make Good Shares for a period of 12 months commencing on the delivery date of the Make Good Shares.

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For the purpose of the Make Good Provision, in calculation of the 2006 ARNI, one time shell cost and one time legal expenses associated with the Going Public Transaction will not be deducted.

For the purpose of the Make Good Provision, "Force Majeure" shall mean all events, which were unforeseeable at the time this Agreement is signed, the occurrence and consequences of which cannot be avoided or overcome, and which arises after this Agreement is signed and prevent total or partial performance by any Party of this Agreement. Such events shall include earthquakes, typhoons, flood, fire, war, failures of international or domestic transportation, acts of government or public agencies, epidemics, civil disturbances, strikes and any other instances which cannot be foreseen, avoided or overcome. If an event of Force Majeure occurs, the Company's shareholders' obligations under this Make Good Provision affected by such an event shall be excused, without assuming the liability of breach of this Agreement. The Party claiming Force Majeure shall promptly inform the other Party in writing and shall furnish within 30 days sufficient evidence of the occurrence and duration of such Force Majeure.

B. Post Transaction Period

Upon consummation of the Going Public Transaction, HFG agrees to:

(i)coordinate and supervise a training program for the purpose of facilitating new management's operation of Pubco (the Company agrees that all costs and expenses charged by third party consultants introduced by HFG and engaged by the Company will be the sole responsibility of the Company);

(ii)if necessary, coordinate the preparation by the Company's legal counsel of an information statement to be filed with the SEC to change Pubco's name and to in turn assist in obtaining a new CUSIP number and stock symbol for Pubco;

(iii)oversee third party development by third parties of Pubco's investor relations efforts, which effort shall include (a) establishing a program for communicating with brokerage professionals, investment bankers and market makers; and (b) creating a complete investor relations strategy to be implemented in English and Chinese. The Company agrees that all costs and expenses charged by investor relations and press relations firms introduced by HFG and engaged by Pubco or the Company will be the sole responsibility of the Company;

(iv)coordinate with the Company's legal counsel in the preparation and assembly of application materials for the listing of Pubco's common stock on a national exchange or quotation medium that may include, but shall not necessarily be limited to, the American Stock Exchange or the NASDAQ Stock Market;

(v)assist in coordinating future capital raising transactions; and

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(vi)provide Pubco with such additional financial advisory services as may be reasonably requested, to the extent HFG has the expertise or legal right to render such services.

2.Financing. The Financing will be accomplished under terms and conditions that are mutually agreeable to the issuer and the investors. Following the completion of the Financing and Going Public Transaction, assuming 2005 ARNI of $6.5 million, the resulting percentage ownership of the Pubco will be as follows:

Previous Company Shareholders	58.2%
New Shareholders	41.8%

3.Financing Consideration. Subject to applicable law, any parties who facilitate the Financing will be paid a total cash amount equal to seven percent (7%) of the gross proceeds delivered upon consummation of a Financing.

Company will also agree to reimburse any facilitators of the Financing for all documented travel, lodging and other expenses incurred while completing the Financing during the term of this Agreement on the condition that such expenses are agreed in advance by the Company. Reimbursement is to be made within 10 days of receipt of a written request for reimbursement submitted to the Company.

4.Financing Conditions.

A. The Company acknowledges that the closing of a Financing will be contingent upon (a) the Company's commitment to ensure that Pubco files a registration statement with the U.S. Securities and Exchange Commission for the purpose of registering either the shares purchased in the Financing, or any security for which the purchased shares are exchanged, for resale, with offering proceeds not to be released from escrow until the registration statement is filed, (b) consummation of the Going Public Transaction in accordance with this FAA, and (c) the agreement by the Company that $500,000 of the net proceeds of the Financing will be placed into escrow and used for financial public and investor relations activities and the engagement of a US domiciled spokesperson(s) recommended by HFG for a period of at least 12 months following the closing of the Financing.

B. HFG acknowledges that special permission must be obtained from the Company in the event that (a) an investor, other than the China Pinnacle Fund, wishes to make an investment that would result in a greater than 20% ownership in the Company after the Financing and Going Public Transaction and/or (b) less than 3 separate investors are participating in the Financing.

5.Exclusivity. HFG shall have the exclusive right for a period of twelve months (the "Exclusivity Period") from the date of this Agreement to effect a Financing on behalf of the Company. However, the right of exclusivity granted hereunder shall terminate in the event HFG advises the Company that it either unwilling or unable to facilitate the Financing. In addition, the Company agrees that in the event that this Agreement is terminated for any reason, other than upon the completion of a Financing, it shall not enter into discussions or negotiations with or close a financing, regardless of terms, with any party introduced by HFG as a possible investor or placement agent for the Financing, each of which shall be listed on Schedule "A" to this Agreement at the time of introduction, for a period of two years following the date of termination of this Agreement.

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6.Authorization. Subject to the terms and conditions of this Agreement, the Company hereby appoints HFG to act on a best efforts basis as its consultant during the Authorization Period (as hereinafter defined). HFG hereby accepts such appoint, with it being expressly acknowledged that HFG is acting in the capacity of independent contractor and not as agent of either the Company, affiliates of the Company resulting from the Restructuring, or Pubco.

In addition, except in the event of an act constituting either willful misconduct or gross negligence on the part of HFG, the Company agrees that it will not hold HFG responsible in the event that either the Restructuring, the Financing or the Going Public Transaction is not consummated, nor shall it hold HFG liable for any damages suffered by the Company as a result of the Company's inability to consummate either the Restructuring, the Financing or the Going Public Transaction. However, in the event HFG commits an act constituting either willful misconduct or gross negligence which makes it impossible to complete either the Financing or the Going Public Transaction, HFG shall indemnify the Company against all costs, including legal, accounting and other fees and expenses, arising from the Company's efforts to complete the Financing and the Going Public Transaction. It is expressly acknowledged by the Company that HFG shall not render legal or accounting advice in connection with the services to be provided herein. HFG shall have the right to recommend the legal and accounting professionals for the transactions contemplated herein.

7.Authorization Period. HFG's engagement hereunder shall become effective on the date hereof (the "Effective Date") and will automatically terminate (the "Termination Date") on the first to occur of the following: (a) either party exercises their right of termination as provided for in this FAA, (b) the Company's breach of its covenants herein or (c) 12 months from the Effective Date. This Agreement may be extended beyond the Termination Date if both parties mutually agree in writing. Except as to certain obligations of the Company under Section 5. hereof, this Agreement shall also terminate immediately upon the mutual decision of the parties not to move forward with the Restructuring, the Financing or the Going Public Transaction.

8.Fees and Expenses. Simultaneous with the closing of the Going Public Transaction, the Company shall pay to HFG a fee of US $450,000 (the "Fee"), via wire transferred funds, directly from the proceeds of the Financing.

In addition, the Company shall reimburse HFG for all documented travel and lodging expenses incurred by HFG personnel for providing the services under this Agreement during the term of this Agreement on the condition that such expenses are agreed in advance by the Company. Reimbursement is to be made within 10 days of receipt of a written request for reimbursement submitted to the Company.

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9.Due Diligence and Auditabilty. HFG shall have the right to perform a due diligence investigation of the Company that demonstrates to HFG's sole satisfaction that the Company is a suitable candidate for the Going Public Transaction, which due diligence investigation shall include consultation with the Company's independent audit firm regarding the auditablity of the Company in accordance with US GAAP. HFG shall have the right to terminate this Agreement in the event it determines that there exists a material and non-curable due diligence matter. The Company shall also have the right to perform a due diligence investigation of the Pubco.

10.Indemnification. The parties hereto shall indemnify each other to the extent provided for in this paragraph. Except as a result of an act of gross negligence or willful misconduct on the part of a party hereto, no party shall be liable to another party, or its officers, directors, employees, shareholders or affiliates, for any damages sustained as a result of an act or omission taken or made under this Agreement. In those cases where gross negligence or willful misconduct of a party is alleged and proven, the non-damaged party agrees to defend, indemnify and hold the damaged party harmless from and against any and all reasonable costs, expenses and liabilities suffered or sustained as a result of the act of gross negligence or willful misconduct.

11.Governing Law. This Agreement shall be governed by the laws of the Peoples Republic of China and any dispute arising hereunder shall be submitted for binding arbitration to the China Foreign Trade Commission Arbitration Committee in Beijing.

It is understood that this Agreement will be prepared and executed in both the English and Chinese languages, with both versions having legal efficacy. If a dispute arises as to the interpretation of a particular provision of this Agreement because of differences between the Chinese and English languages, the dispute shall be resolved in accordance with the provisions of the preceding paragraph of this Section 11.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.

HFG: HFG International, Limited
By:	/s/Timothy P. Halter
	Timothy P. Halter,
	Its: President

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The Company: Wonder Auto Group
By:	/s/ Zhao Qing Jie
	Name: Mr. Zhao QingJie
	Its: Chairman

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SCHEDULE A

NAME OF POTENTIAL INVESTOR DATE INTRODUCED

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EX-10.24

Exhibit 10.24

ASSIGNMENT AND ASSUMPTION AGREEMENT

THIS ASSIGNEMENT AND ASSUMPTION AGREEMENT (“Agreement”) is made and entered into on this the 31st day of May, 2006, by and among between HFG International, Limited, a Hong Kong corporation (“HFG”), Wonder Auto Group, a Hong Kong corporation (the "Company) and Wonder Auto Limited, a company organized under the laws of The British Virgin Islands (“Wonder”).

W I T N E S S E T H:

WHEREAS, HFG and the Company have entered into that certain Financial Advisory Agreement (the “FAA”) dated March 15, 2006;

WHEREAS, the Company desires to assign its rights and obligations under the FAA to Wonder and Wonder is willing to assume all rights and obligations of the Company under the FAA; and

WHEREAS, HFG is willing to consent to the assignment by the Company of its rights and obligations under the FAA to Wonder.

NOW, THEREFORE, for and in consideration of the covenants set forth herein and the mutual benefits to be gained by the parties hereto, and other good and valuable consideration, the receipt and adequacy of which are now and forever acknowledged and confessed, the parties hereto hereby agree and intend to be legally bound as follows:

1.Assignment and Assumption.Upon the execution of this Agreement by the parties hereto, all rights and obligations of the Company under the FAA shall be assigned to and assumed by Wonder, with HFG hereby consenting to such action.

2. Governing Law. This Agreement shall be governed by the laws of the Peoples Republic of China and any dispute arising hereunder shall be submitted for binding arbitration to the China Foreign Trade Commission Arbitration Committee in Beijing.

It is understood that this Agreement will be prepared and executed in both the English and Chinese languages, with both versions having legal efficacy. If a dispute arises as to the interpretation of a particular provision of this Agreement because of differences between the Chinese and English languages, the dispute shall be resolved in accordance with the provisions of the Chinese version.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.

HFG: HFG International, Limited
By:	/s/Timothy P. Halter
	Timothy P. Halter,
	Its: President

The Company: Wonder Auto Group
By:	/s/Zhao Qing Jie
	Zhao Qing Jie
	Its: Chief Executive Officer

Wonder: Wonder Auto Limited
By:	/s/Zhao Qing Jie
	Zhao Qing Jie
	Its: Chief Executive Officer

EX-16

Exhibit 16

June 20, 2006

U. S. Securities and Exchange Commission

450 Fifth Street, NW

Washington, DC 20549

RE: MGCC Investment Strategies, Inc.

Gentlemen:

We have read the statements made by MGCC Investment Strategies, Inc., which we understand will be filed with the Commission, pursuant to Item 4.01 of Form 8-K as part of the Company’s Form 8-K report dated June 20, 2006. We agree with the statements concerning our Firm in such Form 8-K.

Yours truly,

/s/ Meyler & Company LLC

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE CONTACT: Mr. James H. Groh (843-277-0024)        

MGCC Investment Strategies, Inc. Jinzhou City, Liaoning People’s Republic of China       NEWS RELEASE

WONDER AUTO LIMITED UTILIZES APO^sm SERVICE TO GO PUBLIC AND COMPLETE $12 MILLION PRIVATE FINANCING

Jinzhou City, China, June 23, 2006 -MGCC Investment Strategies, Inc. (“MGCC”) (OTCBB: MGIS.OB) announced today the closing of a share exchange transaction with the stockholders of Wonder Auto Limited (“Wonder Auto”), a British Virgin Islands corporation. The companies will operate on a consolidated basis, executing upon the current business plan of Wonder Auto’s subsidiary company located in the People’s Republic of China. Immediately preceding the consummation of the share exchange transaction, Wonder Auto closed a private placement of its capital stock whereby it received $12 million in gross offering proceeds, before payment of commissions and fees. Also, one of the stockholders of Wonder Auto sold shares of Wonder Auto’s common stock resulting in gross proceeds of $8 million.

As a result of the share exchange transaction, Wonder Auto’s stockholders, including participants in its private offering and stock transfer, were issued 2,654,449 shares of MGCC’s common stock in exchange for their shares of Wonder Auto. As a result of the share exchange transaction, Wonder Auto became a wholly-owned subsidiary of MGCC, Wonder Auto’s Chairman and CEO, Mr. Qingjie Zhao , was appointed to the board of directors of MGCC which will become effective upon the 10^th day following the mailing by MGCC to its stockholders of an information statement that complies with the requirements of Rule 14f-1 under the Securities Exchange Act of 1934. Executive officers of Wonder Auto were elected as executive officers of MGCC, and MGCC’s sole director and officer resigned. MGCC’s shares are listed on the Over-the-Counter Bulletin Board (“OTCBB”) under the symbol “MGIS.OB”.

Wonder Auto is a leading manufacturer of automotive electrical parts located in China. The company produces broad product lines of alternators and starters which are sold through both vehicle OEMs and distributors. Wonder Auto currently employs over 290 people and manufactures their products in their Jinzhou City factory. The company has two research and development centers, one in Jinzhou City and one in Beijing. Wonder Auto plans to invest $8 million to increase its production capacities and R&D infrastructure. Wonder’s customers include Beijing Hyundai Motor Company, Shenyang Aerospace Mitsubishi Motors Engine Manufacturing Co. Ltd. and Dongfeng Yueda Kia Motors Co., Ltd.

For the twelve months ended December 31, 2005 Wonder Auto reported consolidated net sales of approximately $48.1 million and consolidated net income of approximately $6.4 million.

Mr. Qingjie Zhao, the Chief Executive Officer of MGCC stated, "we want to thank our financial advisor, Halter Financial Group, for facilitating our efforts in connection with our private financing and the going public transaction. These transactions have given us access to the U.S. capital markets, with the intent of capitalizing on significant growth opportunities.”

Global Hunter Securities, Inc and Sterne, Agee & Leach, Inc. acted as the placement agents in the $20 million transaction.

Wonder Auto has engaged Heritage Management Consultants, Inc. to provide executive management resources resident in the United States.

The combined $20 million transaction includes “make good” provisions based on the achievement of certain net income targets for Wonder Auto’s 2006 and 2007 fiscal years. Should Wonder Auto not achieve $8.14 million in fiscal 2006 net income, purchasing shareholders in this transaction will receive 673,822 shares from original shareholders. Should Wonder Auto not achieve $12.71 million in fiscal 2007 net income, purchasing shareholders in this transaction will receive 673,822 million shares from original shareholders. The company expects to achieve gross revenues of approximately $66.0 million and $92.5 million in fiscal 2006 and 2007, respectively, to support achievement of these “make good” net income targets.

APO^sm is a service mark of Halter Financial Group, Inc. (“HFG”). HFG’s APO services allow privately held corporations to go public via the reverse merger process and simultaneously complete a private capital raising transaction.

FORWARD LOOKING STATEMENTS

This release contains certain “forward-looking statements” relating to the business of Wonder Auto and its subsidiary companies, which can be identified by the use of forward-looking terminology such as "believes, expects" or similar expressions. Such forward looking statements involve known and unknown risks and uncertainties, including all business uncertainties relating to reliance on a limited number of customers, market demand, cyclical nature of the vehicular markets, reliance on key personnel, future capital requirements, competition in general and other factors that may cause actual results to be materially different from those described herein as anticipated, believed, estimated or expected. Certain of these risks and uncertainties are or will be described in greater detail in our filings with the Securities and Exchange Commission. . These forward-looking statements are based on MGCC’s current expectations and beliefs concerning future developments and their potential effects on Wonder Auto. There can be no assurance that future developments affecting MGCC will be those anticipated by MGCC. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond the control of the Company) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by such forward-looking statements. MGCC undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.