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): August 25, 2006

MGCC INVESTMENT STRATEGIES INC.

(Exact name of registrant as specified in its charter)

Nevada	0-50883	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):

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

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

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

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

ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.

Credit Facility Agreement

On August 21, 2006, Jinzhou Halla Electrical Equipment Co., Ltd. (“Halla”), a wholly-owned subsidiary of MGCC Investment Strategies Inc. (the “Company”), entered into a Credit Facility Agreement (the “Credit Facility Agreement”) with the Bank of China Jinzhou Tiebei branch (the “Bank”) pursuant to which the Bank has agreed to provide Halla a RMB 80 million (approximately US$10 million) revolving credit facility. The Credit Facility Agreement permits Halla to request loans under the line of credit facility until August 8, 2007 and may be renewed upon the Bank’s approval of Halla’s application for such renewal. A separate agreement will be entered into each time advances are made pursuant to the Credit Facility Agreement. The interest rate on amounts drawn under the line of credit will be established at the time each advance is made under the line of credit. The date of repayment of the principal and interest advanced under the line of credit likewise will be established at the time amounts are advanced. Halla’s obligations under the Credit Facility Agreement will be secured by a mortgage on Halla’s property.

Share Purchase Agreement

On August 23, 2006, the Company’s wholly owned subsidiary, Wonder Auto Limited (“Wonder”) entered into a Share Purchase Agreement (the “Share Purchase Agreement”) with Winning International Development Limited (“Winning”), a British Virgin Islands corporation, which holds 50% of the total shares of Jinzhou Dong Woo Precision Co. Ltd. (“Dong Woo”). Dong Woo is a supplier of raw materials to Wonder.

Pursuant to the Share Purchase Agreement, Winning will sell all of its shares of Dong Woo, representing 50% of the total shares of Dong Woo, to Wonder in exchange for a cash payment in the amount of US$ 4.85 million (the “Purchase Price”), US$2.42 million of which will be paid within one month after the signing of the Share Purchase Agreement and the remaining US$2.43 million will be paid within 5 days after the confirmation by Wonder that Dong Woo attains a net income of no less than RMB13 million for the fiscal year of 2006. If Dong Woo fails to attain a net income of RMB 13 million, Wonder is entitled to deduct the Purchase Price proportionately with the amount of the unfulfilled net profit. Wonder will have all the rights as a shareholder of Dong Woo with respect to the shares covered by the Share Purchase Agreement as of the signing date of the Share Purchase Agreement.

The foregoing description does not purport to be a complete statement of the parties’ rights and obligations under the Credit Facility Agreement, the Share Purchase Agreement or the transactions contemplated thereby or a complete explanation of the material terms thereof. The foregoing description is qualified in its entirety by reference to the Credit Facility Agreement and the Share Purchase Agreement attached hereto as Exhibits 10.1 and 10.2.

ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT

The information set forth above in Item 1.01 with respect to Credit Facility Agreement is hereby incorporated into this Item 2.03 by reference.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

Exhibit 10.1 Credit Facility Agreement, dated August 21, 2006, by and between Jinzhou Halla Electrical Equipment Co., Ltd. and the Bank of China Jinzhou Tiebei branch.

Exhibit 10.2 Share Purchase Agreement, dated August 23, 2006, by and between Wonder Auto Limited and Winning International Development Limited.

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: August 25, 2006

/s/ Qingjie Zhao

Chief Executive Officer

EX-10.1

Exhibit 10.1

Credit Facility Agreement

Reduced Revolving Line of Credit of up to RMB 80,000,000

The Borrower: Jinzhou Halla Electrical Equipment Co., Ltd.

The Lender: Bank of China (Jinzhou Tiebei Branch)

1.   Scope of Business

Subject to the terms of this Credit Facility Agreement (the “Agreement”) and separate agreements to be entered into by the Borrower and Lender (collectively, the “Parties”), Lender hereby agrees to make loans to the Borrower for purposes of RMB short-term loan and foreign currency short-term loan, etc.

2.   Types of Loan and Commitment Amount

The Lender hereby grants to the Borrower the following line of credit of up to RMB 80 million:

(i)   RMB Short-Term Loan: RMB 30 million

(ii)   Bank’s Credit: RMB 20 million

(iii)   Commercial Invoice Discount: RMB 30 million

3.   Use of the Loans

Within the term of the Agreement as specified in Section 5, the Borrower may use the loans in a revolving way up to the amount as provided under Section 2.

4.   Separate Agreements Required:

The Parties shall enter into a separate agreement as follows each time advances are made pursuant to this Agreement:

4.1   For RMB Short-Term Loan: RMB Loan Agreement (Short Term)

4.2   For Bank’s Credit: Bank’s Credit Agreement

4.3   For Commercial Invoice Discount: Domestic Commercial Invoice Discount Agreement and Application for Commercial Invoice Discount

5.   Term of the Agreement

The term of this Agreement shall commence from the date as specified under Section 19 and expires on August 8, 2007;

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The term of this Agreement shall not be extended automatically. The term of this Agreement may be extended upon a written approval by the Lender of the Borrower’s application for extension and satisfaction of security interest provided by the Borrower. The written agreement on extension shall provide a new term of the loans.

6.   Conditions Precedent on Extending Credit Facility:

The obligation of the Lender to extend any credit facility under this Agreement is subject to the satisfaction of the following conditions by the Borrower:

6.1   Submit an application for the specific type of loan to the Lender before the expiration date of the Agreement under Section 5;

6.2   Reserve and execute relevant corporate documents, record, seal, lists of personnel, sample of signature, etc.;

6.3   Set up accounts necessary for drawing credit facility as required by the Lender; and

6.4   Complete all necessary legal and administrative procedures and submit to the Lender copies or appropriate photocopies of documents concerned.

7.   Obligations of the Lender

Pursuant to the Agreement and respective agreements, promptly process applications for loans from the Borrower.

8.   Obligations of the Borrower

8.1   Timely payment of all necessary fees pursuant to the Agreement and respective specific agreements;

8.2   Timely payment of all debts, including but not limited to, principals, interests, fees pursuant to the Agreement and respective specific agreements.

9.   Security Interest: with respect to obligations arising from this Agreement and/or specific agreements, the Parties hereby agrees to adopt the following ways of guarantee:

9.1   The Borrower provides mortgage to secure the fully payment of its obligation under the Agreement and signs the Agreement on Mortgage of the Highest Amount;

9.2   If the Lender believes that the occurrence of certain events could affect adversely the capacity of the Borrower or the Mortgagor to perform the Agreement or result in insufficiency of collateral, the Lender shall have the right to request the Borrower to provide additional collaterals to secure the Lender’s interests.

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10.   Representations and Warranties

10.1   The Borrower is duly organized, validly existing and in good standing under Chinese laws, and is duly qualified to conduct business and the performance of this Agreement and respective specific agreements is within the Borrower’s powers;

10.2   All documents, financial statements, and other materials provided by the Borrower to the Lender pursuant to this Agreement and specific agreements are true, complete, accurate and valid;

10.3   The business conducted by the Borrower is legitimate, not for the purpose of money laundry;

10.4   The Borrower hereby covenants:

(i)   To provide the Lender financial statements on a regular basis (including, but limited to, annul, quarterly and monthly reports) and other related materials;

(ii)   To immediately inform the Lender of any material change of the Borrower which would affect the Borrower’s financial status or capability to perform its obligations pursuant to this Agreement;

(iii)   Not to enter into any merger, acquisition, reorganizes, or joint venture, etc. without written consent from the Lender;

11.   Adjustment or Termination of the Line of Credit: the Lender shall have the right to adjust or terminate the line of credit at, if any of the following events occurs:

11.1   Occurrence of Events of Default under Section 12;

11.2   The Lender believes there is material negative news with regard to the market or of the industry that the Borrower is engaged in;

11.3   The Lender believes that certain restrictive policies or laws enacted by the domestic government, foreign governments or international organizations have or could have material adverse impact on the industry that the Borrower is engaged in.

12.   Events of Default

12.1   The occurrence of any of the following will constitute an Event of Default by the Borrower:

(i)   The Borrower fails to pay when the payment is due under the Agreement or any other specific agreements;

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(ii)   The Borrower uses the proceeds of the loan for purposes outside of the scope as agreed upon by the Parties under the Agreement and specific agreements;

(iii)   Any representation furnished by Borrower proves to be incorrect or the Borrower breaches any of its representations/warranties;

(iv)   The Borrower breaches other obligations contained in the Agreement or specific agreements.

12.2   In the event of 12.1(i), the Lender is entitled to take one or all of following actions:

(i)   Without any prior notice to the Borrower, declare the principal of and accrued interest on the loans, and any other amount payable due immediately and payable in full;

(ii)   Without any prior notice, deduct payment (including principal, interests, fees, etc) due directly from any accounts the Borrower has with the Lender;

(iii)   Other action deemed necessary by the Lender.

13.   Change of Exchange Rate - Borrower takes the risk of the change of exchange rates

14.   Others

14.1   Without prior written consent from the Lender, the Borrower shall not assign any rights or obligations under the Agreement to a third party;

14.2   The Borrower acknowledges that Lender is entitled to assign and delegate rights or obligations under the Agreement to other branches of Bank of China if necessary. Upon the Lender’s authorization, any other branch of Bank of China is entitled to all rights under the Agreement, including but not limited to, the right to file claims with a court or submit disputes under the Agreement to certain arbitral institutions.

15.   Reservation

Failure to exercise any rights under the Agreement by the Lender does not constitute waiver of such rights.

16.   Amendment, Termination and Interpretation of Contract

16.1   In the absence of provisions to the contrary, the Agreement may be amended, supplemented or terminated based on mutual agreement between parties. This Agreement, together with any amendments or supplements, constitutes the entire agreement of the parties;

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16.2   Any unenforceable provision of the Agreement will not affect the enforceability of all the remaining provisions of the Agreement.

17.   Dispute Settlement

17.1   The Agreement will be governed by laws of People’s Republic of China;

17.2   Disputes, which cannot be settled through consultation shall be adjudicated by the court in the jurisdiction where Lender or the branch of Bank of China that exercises the rights and obligations under the Agreement domiciles.

18.   Notarization: no notarization is required under the Agreement

19.   Effectiveness of the Agreement - the Agreement is executed as of the date when both parties sign and attach the seals to the Agreement. There are two official copies of the Agreement.

20.   Special Note:

The Parties have conducted sufficient negotiations on the terms of the Agreement and other specific agreements. Lender has informed and explained all terms to Borrower.

Jinzhou Halla Electrical Equipment Co., Ltd.

/s/ Yuncong Ma

Seal

August 21, 2006

Bank of China (Jingzhou Tiebei Branch)

/s/ Jun Wang

Seal

August 21, 2006

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EX-10.2

Exhibit 10.2

Share Purchase Agreement

Between: WINNING INTERNATIONAL DEVELOPMENT LIMITED, a corporation duly formed under the British laws with its legal address at Palm Grove House, P.O.Box 438, Road Town, Tortola, British Virgin Islands (the “Seller”);

And: Wonder Auto Limited, corporation duly formed under the British laws with its legal address at P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands (the “Purchaser”, and together with the Seller, the “Parties”);

WHEREAS, the Seller holds 50% of the total shares of Jinzhou Dong Woo Precision Co. Ltd. (the “Dong Woo”), which is engaged on manufacturing, marketing, developing, selling, supplying and distributing regulator, rectifiers, and related products for automotive alternators within the territory of the People’s Republic of China;

WHEREAS, the Seller, Ms. Shuzi Quan, a Korean natural person, and Ms. Zhenshu Lee, a Korean natural person have signed all the necessary articles of association and agreements for implementing the business objectives and business scopes of Dong Woo. These necessary articles of association and agreements and other related agreements and documents shall be collectively referred to as the “Dong Woo Corporation Documents”;

WHEREAS, Dong Woo has received all approvals necessary for its establishment and operation from the relevant governmental authorities of the PRC, including its business license;

WHEREAS, according to the seventeenth (17) provision of the Articles of Association, the Board of Dong Woo is the supreme authority in Dong Woo and responsible for decision-making for all important issues in various activities, businesses, and operations of Dong Woo;

WHEREAS, the Board members of Dong Woo have unanimously adopted a resolution at August 23, 2006, which agreed and approved the Seller to transfer its 50% shares in Dong Woo and all its rights and obligations stipulated in the Dong Woo Corporation Documents (collectively referred to as the “Seller’s Rights and Interests”) to the Purchaser, and agreed and approved to make relevant amendments to the Dong Woo Corporation Documents. The Board has agreed to do all such things and to sign all such documents as may be necessary and proper to give effect to such resolutions;

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Adhering to the principle of equality and mutual benefit and through friendly consultations, the Parties have signed this Agreement as follows at Jinzhou City, Liaoning Province of PRC at this 23^rd date of August 2006 (the “Signing Date”) :

Article 1 Share Transfer

1.1   The Seller hereby agrees to sell and the Purchaser agrees to buy the Seller’s Rights and Interests in accordance with stipulations of this Agreement.

1.2   The Purchaser hereby agrees to undertake all the responsibilities and obligations related with the Seller Rights and Interests and under the Dong Woo Corporation Documents in accordance with stipulations of this Agreement.

Article 2 Purchase Price and Payments Terms

2.1.   The Seller hereby agrees to pay a sum of 4.85 Million U.S. Dollars (US$4,850,000) (the “Purchase Price”) in exchange for the Seller’s Rights and Interests as specified in this Agreement.

2.2   Within one (1) month from the signing date of this Agreement, the Purchaser shall deposit US$2.43 million (US$2,430,000) as the first payment of the Purchase Price to the designated bank account of the Seller.

2.3   The Parties hereby agree that the Purchaser shall deposit the remaining Purchase Price US$2.42 million (US$2,420,000) to the designated bank account of the Seller within 5 days after the confirmation by the Purchaser that Dong Woo attains a net income of no less than RMB13 million ($13,000,000) for the fiscal year 2006, provided, however, that if Dong Woo’s 2006 net income for the fiscal year of 2006 is less than RMB 13 million ($13,000,000), the Purchaser is entitled to deduct the Purchase Price proportionally with the amount of unfulfilled profit

2.4   Within three (3) business days after the first payment by the Purchaser as stipulated in Clause 2.2 above, the Parties shall:

2.4.1   Prepare, execute and file all necessary or required documents to the relevant governmental authorities of the PRC for the alternation of shareholding.

2.4.2   The Seller shall provide the Purchaser with all documents and cooperation necessary or required in order to let the purchaser takeover the Seller’s Rights and Interests when this Agreement is signed.

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2.5   The Seller agrees that after signing of this Agreement, the Purchaser shall become the owner of the 50% interest in Dong Woo and participate in the management and operation of Dong Woo immediately.

2.6   From the Signing Date of this Agreement, the Seller shall no longer retain any rights and interests in Dong Woo, including its former power in Dong Woo, and the Purchaser shall have all the rights as a shareholder with respect to the 50% of the total shares of Dong Woo covered by this Agreement.

Article 3 Disposition of the Distributable Profit Accrued Before Signing of This Agreement

After this Agreement becomes effective on the Signing Date, all the distributable profit of Dong Woo in 2005 shall be disposed as follows:

3.1   All the distributable profit of Dong Woo in 2005 shall be owned by the shareholders in Dong Woo before the Signing Date of this Agreement.

3.2   All the distributable profit of Dong Woo in 2005 shall be distributed under the condition without any shortages of Dong Woo’s working capital.

Article 4 Liabilities

4.1   From the Signing Date of this Agreement, the Seller shall not be responsible for any liabilities of Dong Woo whether arising before, on or after the consummation of the transactions contemplated by this Agreement. In case this Agreement is not effected, the Seller shall resume the relevant liabilities of Dong Woo.

Article 5 Board of Dong Woo

5.1   From the Signing Date of this Agreement, whereat the dispatched director of the Seller shall resign; The Seller covenants that it will cause three (3) of the Purchaser’s designees to be appointed to the board of the directors of Dong Woo and such appointments shall become effective upon the resignation of the directors designated by the Seller.

Article 6 Confirmation of Profit and Loss

6.1   The Parties hereby confirm that they intend that the Purchase Price represents the fair value of the Seller’s Rights and Interests. Consequently, the interests of the Parties’ in the course of the share transfer in this Agreement are fair.

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Article 7 Responsibilities of the Parties

7.1   From the Signing Date of this Agreement, the Parties shall take appropriate commercial measures to avoid any adverse consequences of the share transfer in this Agreement on the employees and the customers of Dong Woo.

7.2   From the Signing Date of this Agreement, the Parties shall properly exercise their obligations as shareholders in light of their pre-existing ownership, and warrant that its designated directors shall comply with the terms of this Agreement.

7.3   The Purchaser covenants and agrees that:

7.3.1   Undertaking all responsibilities and obligations relating to, in connection with or in respect of the Seller Rights and Interests under the Dong Woo Corporation Documents and promise to observe and perform.

7.3.2   Carrying on and conducting Dong Woo’s business in a proper and efficient manner so as to preserve and protect Dong Woo’s properties and assets, its business and its earnings, incomes, rents, issues and profits.

Article 8 Amendment

8.1 Any amendments to this Agreement shall be put forward in writing between the Parties.

Article 9 Termination

9.1   This Agreement can be terminated by written agreement between the Parties.

9.2   If one party commits a breach or delays performance of any of its obligation under this Agreement and fails to remedy such breach or performance delay within thirty (30) days after receiving a written notice of such breach or performance delay from the non-breaching or non-delaying party, the non- breaching or non-delaying party may terminate this Agreement.

9.3   If one party makes this Agreement impossible to perform, the other party may terminate this Agreement.

Article 10 Remedies

10.1   If one party commits a beach or does not perform its duties or obligations under this Agreement for any reason, such breaching or non-performing party shall be responsible for the breach or non-performance of its duties or

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obligations and shall compensate all losses suffered by the non-breaching party as a result thereof.

10.2   In the event the Purchaser fails to perform its obligations set forth in Clause 2.2 of this Agreement and such non-performance lasts up fifteen (15) calendar days, the Seller may unilaterally terminate this Agreement, and if this Agreement is so terminated by the Seller, the Purchaser shall compensate the Seller in the amount equal to ten percent (10%) of the Purchase Price.

Article 11 Force Majeure

11.1   If performance of this Agreement in whole or in part is prevented, restricted or interfered with by reason of an earthquake, storm, flood, fire, war, strike or any other cause beyond the reasonable control of the Parties (each a “Force Majeure condition”), the party suffering from the force majeure shall inform the other party in facsimile. The suffering party shall provide to the other party a valid evidentiary document setting forth in detail the Force Majeure Condition, its expected duration and the consequences, which should be effective and proved by the notarization agency in the place where the force majeure took place within fifteen (15) days after the incident. If the duration of the force majeure lasted for three (3) months, the Parties shall thereafter consult with each other so as to avoid or minimize the loss caused by the force majeure and possibility of terminating this agreement. If the Parties cannot agree on a mutually satisfying solution within three (3) months of such consultation, either party may send a thirty (30) days intent written notice to the other party to take a vote about whether terminate this Agreement or not.

Article 12 Dispute Resolution

12.1   All disputes between the Parties arising out of or in connection with this Agreement shall be settled between the Parties by discussion and mutual accord. If a mutual accord cannot be reached between the Parties within thirty (30) days of the receipt of the written notice by one of the Parties of the dispute to the other party, either party may submit the dispute to arbitration to the International Chamber of Commerce in Stockholm, Sweden for final resolution in accordance with its arbitration rules. The judgment of the arbitration panel shall be final and binding upon the Parties and both Parties agree to abide by such judgment of the arbitration panel. The arbitration fees shall be borne by the losing party.

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Article 13 Waiver

13.1   Any act of non-performance or delay on the performance of any rights, damages for breach, termination and any other rights under this Agreement shall not be deemed an act of waiver. The exclusive or partial performance of any rights, compensation, damages for breach and any other rights under this Agreement shall not affect the performance of these and other rights.

Article 14 Miscellaneous

14.1   This Agreement shall become effective as of the Signing Date.

14.1   This Agreement is written and executed in Chinese and English, and the two versions written in Chinese and in English with equal legal effect.

14.2   In case any one or more of the provisions of this Agreement is held invalid, illegal or unenforceable in whole or in part, the validity, legality and enforceability of the remaining provisions or the remaining applications shall not be affected or impaired.

14.3   The preamble forms are an integral part of this Agreement.

14.4   This Agreement shall be executed in seven (7) copies. The Seller and the Purchaser shall each keep two (2) copies, and the Dong Woo shall keep three (3) copies for purposes of going through relevant shareholder alternation formalities.

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.

The Seller: WINNING INTERNATIONAL DEVELOPMENT LIMITED

Representative’s Signature:
/s/ Xuhui Xie

The Purchaser: WONDER AUTO LIMITED

Representative’s Signature:

/s/ Qingjie Zhao

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