8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 9, 2009

ZST DIGITAL NETWORKS, INC.

(Exact name of registrant as specified in its charter)

Delaware	000-52934	20-8057756
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

Building 28, Huzhu Road

Zhongyuan District, Zhengzhou, People’s Republic of China

(Address, including zip code, of principal executive offices)

Registrant’s telephone number, including area code (86) 371-67716850

SRKP 18, Inc.

4737 North Ocean Drive, Suite 207, Lauderdale by the Sea, FL 33308

(Former name or former address, if changed since last report.)

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

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

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

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

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

Item 1.01   Entry into a Material Definitive Agreement.

See Item 2.01, below, regarding the discussion of the Share Exchange Agreement dated December 11, 2008, as amended on January 9, 2009 (the “Exchange Agreement”), as reported in the Current Report on Form 8-K filed with the Securities Exchange Commission on December 12, 2008.  A copy of the Exchange Agreement is attached hereto as Exhibit 2.2.

See Item 2.01, below, regarding the discussion of the subscription agreements relating to the private placement of shares of our Series A Convertible Preferred Stock, a form of which is attached hereto as Exhibit 10.1.

Item 2.01   Completion of Acquisition or Disposition of Assets.

OVERVIEW

As used in this report, unless otherwise indicated, the terms “we”, “our”, “Company” and “ZST” refer to ZST Digital Networks, Inc., a Delaware corporation, formerly known as SRKP 18, Inc. (“SRKP 18”), World Orient Universal Limited, a company organized under the laws of the British Virgin Islands and a wholly-owned subsidiary of SRKP 18 (“World Orient”), Global Asia Universal Limited, a company organized under the laws of the British Virgin Islands and a wholly-owned subsidiary of World Orient (“Global Asia”), Everfair Technologies, Ltd., a company organized under the laws of Hong Kong and a wholly-owned subsidiary of Global Asia (“Everfair”) and Zhengzhou Shenyang Technology Company Limited, a company organized under the laws of the People’s Republic of China and a wholly-owned subsidiary of Everfair (“Zhengzhou ZST”).  “China” or “PRC” refers to the People’s Republic of China.  “RMB” or “Renminbi” refers to the legal currency of China and “$” or “U.S. Dollars” refers to the legal currency of the United States.

The corporate structure of the Company is illustrated as follows:

The Company was incorporated in the State of Delaware on December 7, 2006 and was originally organized as a “blank check” shell company to investigate and acquire a target company or business seeking the perceived advantages of being a publicly held corporation.

On January 9, 2009, the Company (i) closed a share exchange transaction, described below, pursuant to which the Company became the 100% parent of World Orient, (ii) assumed the operations of World Orient and its subsidiaries, including Zhengzhou ZST, and (iii) changed its name from SRKP 18, Inc. to ZST Digital Networks, Inc.  Zhengzhou ZST was founded in May 1996 in Zhengzhou, China.  Everfair is primarily a holding company and was founded in November 2007 in Hong Kong.  Global Asia and World Orient are primarily holding companies and were founded in August 2008 in the British Virgin Islands.

1

Established in 1996, the Company is principally engaged in supplying digital and optical network equipment to cable system operators in Henan Province, China.  The Company offers a line of internet protocol television (“IPTV”) set-top boxes that are used to provide bundled cable television, Internet and telephone services to residential and commercial customers, as well as other networking equipment.  The Company has assisted in the installation and construction of over 400 local cable networks covering more than 90 municipal districts, counties, townships, and enterprises.  The Company’s services and products have been recognized with various certifications, including “integrated computer information system qualification class III” issued by the Ministry of Industry and Information Technology (formerly the Ministry of Industry Information), “communication user cable construction enterprise qualification” issued by the Ministry of Industry and Information Technology, “Henan Province Security Technology Prevention Engineering Qualification Class III”, a certificate of “ISO9001:2000 Quality System Authentication”, and “Double High” certification, high-tech product and high-tech enterprise issued by Henan Province government.

At present, the Company’s main clients are broadcasting TV bureaus and cable network operators serving various cities and counties.  The Company has over 30 main customers, including the broadcasting TV bureaus and cable network operators of Nanyang, Mengzhou, Xuchang, Pingdingshan, Kaifeng, Zhoukou, Gongyi, Yuanyang County, Luoning County, Neihuang County, Yinyang County, Xixia County, Kaifeng County, Nanzhao County, and Gushi County.

In the near future, the Company plans to joint venture with cable network operators to provide bundled television programming, Internet and telephone services to residential customers in cities and counties located in Henan Province.

The Company’s corporate offices are located at Building 28, Huzhu Road, Zhongyuan District, Zhengzhou, People’s Republic of China.

PRINCIPAL TERMS OF THE SHARE EXCHANGE

On December 11, 2008, SRKP 18 entered into a share exchange agreement, as amended on January 9, 2009 (the “Exchange Agreement”), with World Orient and the shareholders of World Orient.  Pursuant to the Exchange Agreement, SRKP 18 agreed to issue an aggregate of 1,985,000 shares of its common stock to the shareholders of World Orient and/or his designees in exchange for all of the issued and outstanding shares of World Orient (the “Share Exchange”).  The Share Exchange closed on January 9, 2009.  SRKP 18 issued no fractional shares in connection with the Share Exchange.

Immediately after the closing of the Share Exchange but prior to the Private Placement, the Company had outstanding 9,081,390 shares of common stock, no shares of preferred stock, no options, and warrants to purchase 7,096,390 shares of common stock at an exercise price of $0.0001 per share.

Pursuant to the terms of the Share Exchange, the Company agreed to register a total of 2,940,000 shares of common stock and 420,000 shares of common stock issuable upon the exercise of outstanding warrants held by stockholders of SRKP 18 immediately prior to the Share Exchange.  Of the shares, 600,055 shares of common stock and 85,723 shares of common stock underlying the warrants would be covered by the registration statement filed in connection with the Private Placement (described below) and 2,339,945 shares of common stock and 334,277 shares of common stock underlying the warrants will be included in a subsequent registration statement filed by us within 10 days after the end of the 6-month period that immediately follows the date on which the Company files the registration statement to register the shares issued in the Private Placement.

Immediately after the closing of the Share Exchange, on January 9, 2009, the Company changed its corporate name from “SRKP 18, Inc.” to “ZST Digital Networks, Inc.” Our shares of common stock are not currently listed or quoted for trading on any national securities exchange or national quotation system.  The Company intends to apply for the listing of its common stock on the NYSE Alternext.  The transactions contemplated by the Exchange Agreement were intended to be a “tax-free” incorporation pursuant to the provisions of Section 351 of the Internal Revenue Code of 1986, as amended.

The execution of the Exchange Agreement was reported in a Current Report on Form 8-K filed with the Securities and Exchange Commission on December 12, 2008 and a copy of the Exchange Agreement is filed as Exhibit 2.2 to this Current Report on Form 8-K.

THE PRIVATE PLACEMENT

On January 9, 2009, concurrently with the close of the Share Exchange, the Company conducted an initial closing of a private placement transaction (the “Private Placement”).  Pursuant to subscription agreements entered into with the investors, the Company sold an aggregate of 1,097,500 shares of Series A Convertible Preferred Stock (the “Series A Preferred Stock”) at $1.60 per share, for gross proceeds of approximately $1,756,000; up to $5 million of Series A Preferred Stock is being offered in the Private Placement.  In connection with the initial closing of the Private Placement, the Company issued a promissory note in the principal amount of $170,000, bearing no interest, to the placement agent (the “Note”). The principal shall be due and payable by the Company on or before the earlier of (a) thirty (30) days from the date of issuance of this Note or (b) upon the receipt by the Company of at least $4 million in the Private Placement.

2

The Company agreed to file a registration statement covering the common stock underlying the Series A Preferred Stock sold in the Private Placement within 60 days of the closing of the Share Exchange pursuant to the subscription agreement with each investor, a form of which is attached hereto as Exhibit 10.1.  The investors in the Private Placement also entered into a lock up agreement pursuant to which they agreed not to sell their shares until 90 days after the Company’s common stock begins to be listed or quoted on either the New York Stock Exchange, NYSE Alternext, NASDAQ Global Market, NASDAQ Capital Market or the OTC Bulletin Board, when one-twelfth of their shares are released from the lock up, after which their shares will automatically be released from the lock up on a monthly basis pro rata over an 11-month period.  After commissions and expenses, the Company received net proceeds of approximately $1.77 million in the Private Placement.

Upon the final closing of the Private Placement, the placement agent will be paid a commission equal to 12% of the gross proceeds from the financing and a 4% non-accountable expense allowance, in addition to a $122,750 success fee for the Share Exchange.  Some of the controlling stockholders and control persons of the placement agent were also, prior to the completion of the Share Exchange, controlling stockholders and control persons of the Company, including Richard Rappaport, who is the Chief Executive Officer of the placement agent and was the President and a significant stockholder of the Company prior to the Share Exchange, and Anthony C. Pintsopoulos, who is the Chief Financial Officer of the placement agent and was Chief Financial Officer and an officer and director prior to the Share Exchange.  Each of Messrs.  Rappaport and Pintsopoulos resigned from all of their executive and director positions with the Company upon the closing of the Share Exchange.

THE PURCHASE RIGHT AND SHARE AND WARRANT CANCELLATION

After the Share Exchange, we intend to offer Zhong Bo, our Chief Executive Officer and Chairman of the Board, Wu Dexiu, Huang Jiankang, Sun Hui and Li Yuting  (the “ZST Management”), a thirty (30) day right to purchase up to 12,530,000 shares of our common stock at a per share purchase price of $0.2806 (the “Purchase Right”).  Each of the shareholders and warrantholders of SRKP 18 prior to the Share Exchange agreed to cancel 0.3317 shares of common stock and warrants to purchase 0.5328 shares of common stock held by each of them for each one (1) share of common stock purchased by the ZST Management pursuant to the Purchase Right (the “SRKP 18 Share and Warrant Cancellation”).  Assuming the exercise in full of the Purchase Right, we will cancel an aggregate of 4,156,390 shares of common stock and warrants to purchase 6,676,390 shares of common stock held by certain of our stockholders and warrantholders prior to the Share Exchange.  Upon the full exercise of the Purchase Right, we will have issued and outstanding 17,455,000 shares of our common stock, 1,097,500 shares of Series A Preferred Stock, and warrants to purchase 420,000 shares of our common stock.

RESTRUCTURING OF THE COMPANY

Our BVI subsidiary, World Orient, was owned by non-PRC individuals.  Everfair obtained all the equity interests of Zhengzhou ZST further to an Equity Purchase Agreement dated October 10, 2008 (the “Equity Purchase Agreement”) by and among Everfair, Zhong Bo, our Chief Executive Officer and Chairman of the Board, Wu Dexiu, Huang Jiankang, Sun Hui and Li Yuting.  The Equity Purchase Agreement received approval by the Zhengzhou Municipal Bureau of Commerce on November 10, 2008 and Zhengzhou ZST filed all required applications and received all appropriate SAFE approvals from the Henan branch of SAFE.

Following the Share Exchange, we intend to offer the ZST Management, the Purchase Right described above. Assuming the full exercise of the Purchase Right, Mr. Zhong will own approximately 54.5% of our outstanding common stock (assuming the sale of the maximum number of Series A Convertible Preferred Stock offered in the Private Placement and full conversion of the maximum number of shares of Series A Convertible Preferred Stock in the Private Placement).  See “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Recent Events” beginning on page 30 and “Risk Factors” beginning on page 12 below for a more complete description of the aforementioned restructuring and risks associated therewith.

This current report is not an offer of securities for sale.  Any securities sold in the private placement have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States unless registered under the Securities Act of 1933, as amended, or pursuant to an exemption from such registration.

ZST’S BUSINESS

Overview

With respect to this discussion, the terms “ZST” and the “Company” refer to ZST Digital Networks, Inc. and its wholly-owned subsidiary, World Orient Universal Limited, a company organized under the laws of the British Virgin Islands (“World Orient”), Global Asia Universal Limited, a company organized under the laws of the British Virgin Islands and a wholly-owned subsidiary of World Orient (“Global Asia”), Everfair Technologies, Ltd., a company organized under the laws of Hong Kong and a wholly-owned subsidiary of Global Asia (“Everfair”), and Zhengzhou Shenyang Technology Company Limited., a company organized under the laws of the People’s Republic of China and a wholly-owned subsidiary of Everfair (“Zhengzhou ZST”).  Zhengzhou ZST and Everfair were founded in 1996 and 2007, respectively, and are based in Zhengzhou, China and Hong Kong, respectively.  Global Asia and World Orient were founded in August 2008 in the British Virgin Islands.

3

Established in 1996, the Company is principally engaged in supplying digital and optical network equipment to cable system operators in Henan Province, China.  The Company has developed a line of internet protocol television (“IPTV”) set-top boxes that are used to provide bundled cable television, Internet and telephone services to residential and commercial customers.  The Company has assisted in the installation and construction of over 400 local cable networks covering more than 90 municipal districts, counties, townships, and enterprises.  The Company’s services and products have been recognized with various certifications, including “integrated computer information system qualification class III” issued by the Ministry of Industry Information, “communication user cable construction enterprise qualification” issued by Henan Province Administration of Communication, “Henan Province Security Technology Prevention Engineering Qualification Class III”, a certificate of “ISO9001:2000 Quality System Authentication”, and “Double High” certification, high-tech product and high-tech enterprise issued by Henan Province government.

At present, the Company’s main clients are broadcasting TV bureaus and cable network operators serving various cities and counties.  The Company has over 30 main customers, including the broadcasting TV bureaus and cable network operators of Nanyang, Mengzhou, Xuchang, Pingdingshan, Kaifeng, Zhoukou, Gongyi, Yuanyang County, Luoning County, Neihuang County, Yinyang County, Xixia County, Kaifeng County, Nanzhao County, and Gushi County.

In the near future, the Company plans to joint venture with cable network operators to provide bundled television programming, Internet and telephone services to residential customers in cities and counties located in Henan Province.

Industry

Over the past ten years, technological advancements in the electronic industry have greatly expanded the capabilities of cable TV devices and cable systems.  Cable network devices include amplifiers, optical receivers, IPTV set-top boxes and other related products.  The popularity of these devices benefits from reductions in cost, size and weight, and improvements in functionality and reliability.

China’s consumer market for cable TV devices and electronics has been growing, due in part to the country’s rapid growing electronic industry.  Economic growth in China has led to greater levels of personal disposable income and increased spending among China’s expanding middle-class consumer base.  Notwithstanding China’s economic growth, China’s economic output and consumption rates are still relatively low on a per capita basis compared to developed countries.  As China’s economy develops, we believe that disposable income and consumer spending levels will continue to become closer to that of developed countries like the United States.

China’s market share of cable TV devices and electronics is expected to increase, especially with the analog to digital conversion taking place over the next several years.  According to the Report of the State Administrative of Movie and Television, as of 2007, there were over 250 million families who own television sets and over 80 million families who subscribed to cable TV service in China with 750 million and 240 million viewers respectively.  This subscriber market is growing at approximately 10% to 15% CAGR.  Owing to the extensive use of cable TV and the explosive growth of internet and broadband applications in China, the market for delivery of Internet service through cable modem or set-top box appears extremely promising in China in the near future.

Henan Province has a total population of 130 million residing in 118 counties, with over 2,500 villages and more than 10,000 administrative villages.  Of the 30 counties in Henan serviced by the Company.  According to the Report of the State Administrative of Movie and Television, there were approximately 1.5 million cable TV subscribers in 2007 and this market is expected to increase to over three million subscribers in the next 3 to 5 years.  The Henan Department of Movies and Television Broadcasting (“HDMTB”) has approved the extension of cable networks to counties and villages, with the purpose of bringing digital TV broadcasting and broadband services to the residents of Henan Province.

China has a number of benefits in the manufacture electronic devices, which are expected to drive this growth:

— Low costs.  China continues to have a significant low cost of labor as well as easy access to raw materials and land.

— Proximity to electronics supply chain.  Electronics manufacturing in general continues to shift to China, giving China-based manufacturers a further cost and cycle time advantage.

— Proximity to end-markets.  China has focused in recent years on building its research, development and engineering skill base in all aspects of higher end manufacturing, including electronic devices.

4

Competitive Strengths

Experienced management team

Our senior management team has extensive business and industry experience, including an understanding of changing market trends, consumer needs, technologies which gives us the ability to capitalize on the opportunities resulting from these market changes.  Our Chief Executive Officer, Zhong Bo, has over 15 years of experience in the design and installation of cable television systems, which we believe has been a key factor in our ability to establish long-lasting and valuable business relationships in the cable television industry.  Other members of our senior management team also have significant experience with respect to key aspects of our operations, including research and development, product design, and sales and marketing.

Design capabilities and manufacturing oversight

We employ a rigorous and systematic approach to product design and manufacturing oversight.  We employ a senior design team with members educated by top colleges in China, with an average of 8 to 10 years of experience.  Our design team develops and tracks new concepts and ideas from a variety of sources, including direct customer feedback, trade shows, domestic research institutions and our key core suppliers.  We can rapidly modify our design function to accommodate new customer requests, designs and specifications.  We subcontract all manufacturing on a turnkey basis, with our suppliers delivering fully assembled and tested products based on our proprietary designs.  We also achieve quality control over products manufactured under our contract manufacturing arrangements by sending our technicians on site to supervise the production and testing of our products.  The use of this model allows us to focus substantially all of our resources on determining customer requirements and on the design, development and support of our products.

Well-established distribution channels

We sell our products through a well-established network of distributors and resellers which allows us to access the customer markets of Henan province as well as other markets in China.  We have distributors throughout Henan, and in other key provinces in China.  We attended various trade fairs for electronic products, including China Hi-tech Fair (Shenzhen), Canton Fair, Hong Kong Electronics Fair and International CES Las Vegas to promote our products.

Our Strategy

Our goal is to be a domestic leader in the development and manufacturer of cable television systems devices and related electronic products through the following strategies:

Enhance brand awareness.  We believe that continuing to strengthen our brand will be critical to increasing demand for, and achieving widespread acceptance of, our cable TV network devices and electronics.  We believe a strong brand offers a competitive advantage and so we intend to devote additional resources to strategic marketing promotion in an effort to increase brand awareness and product recognition and heighten consumer loyalty.  We aim to develop the brand “Zhengzhou Shenyang” into a both domestically and internationally recognizable one.

Expand sales network and distribution channels.  We continue to seek additional penetration in existing markets as well as commencing sales in additional domestic and international markets.  We intend to expand our sales and customer service networks of agents and dealers in China and into new and international markets.  We also intend to develop relationships with a broader set of wholesalers, distributors and resellers, all in order to expand the market availability of our products.  We expect that these relationships will allow us to diversify our customer base and increase the availability and exposure of our products.

Offer comprehensive network infrastructure solutions.  Our expertise in the design and installation of cable television systems has afforded us the ability to offer customized telecommunications systems for a variety of customers.  For example, we offer a customer the ability to deliver a fully integrated video programming solution, customized set-top boxes and network design and management.  We intend to devote additional resources towards expanding this segment of our business.

Pursue strategic partnerships, joint ventures and acquisitions.  We intend to selectively pursue partnerships, joint ventures and strategic acquisition opportunities that we believe may allow us to increase our existing market share, expand into new markets, broaden our portfolio of products and intellectual property, and strengthen our relationships with our customers.  For example, we plan to joint venture with cable network operators and target selected acquisitions that will allow us the ability to provide bundled television programming, internet and telephone services to residential customers in cities and counties located in the Henan province.

Act on the set-top box replacement cycle.  The broader adoption of high definition television by consumers will require more advanced compression (e.g., MPEG-4) and security technologies within set-top boxes.  This may launch a replacement cycle, particularly among direct-to-home and cable providers with substantial bases of legacy equipment, which may create additional market opportunities for us.

5

Products

We currently offer a range of branded cable television devices and related networking products including set-top boxes, optical receivers, optical transmitters and cable transmission amplifiers.

Set-top Boxes and Related Products

Our line of internet protocol television (“IPTV”) set-top boxes integrate Internet, multi-media, and communication technologies, provides residential customers with high definition digital multi-media service, and provides extensive freedom to choose video programs offered by the network video providers on broadband IP network.  These devices allow consumers who subscribe to television service from multi-channel video distributors to access encrypted digital video and audio content and make use of a variety of interactive applications.  These applications include an on-screen interactive program guide, pay-per-view offerings, games and shopping and parental control.

In addition to the functionality of a basic digital set-top box, these devices enable subscribers to pause, stop, reverse, fast forward, record and replay live or recorded digital television content using a built-in hard drive capable of storing up to 200 hours of content.  They also include the ability to support video-on-demand services.  Our devices also enable subscribers to access the enhanced picture quality and sound of high-definition content, in addition to the functionality of a standard-definition digital set-top box.  In addition, our line of IPTV devices can also deliver customized multi-media service functions according to user configurations, and delivers performance and additional value to customers through network and applications software upgrades.

In addition to set-top boxes we also design and develop related products such as power supplies, remote controls and other devices and accessories.

Digital Network Equipment

We offer a line of fiber-optic receivers and transmitters, cable transmissionamplifiers and other network products which provide the flexibility, speed and clarity necessary in communications systems.  Our optical receivers, amplifiers and power supply products have been recognized by the Ministry of Broadcasting and TV and the Henan Municipality Bureau of Broadcasting and TV.  We have implemented stringent quality control systems covering each phase of production, from the purchase of raw materials through oversight of each step in the manufacturing process.  Quality and reliability is monitored in accordance with the requirements of ISO 9001 systems.  We have also passed stringent quality reviews and our products meet digital electronic product standards in China, the United States and Europe.

· Optical receivers.  Our optical receivers convert a fiber-optic transmission into digital RF signals that are amplified and distributed through a 750-1000MHz optical cable system.

· Optical transmitters.We have developed a range of optical transmitters, including the 1310nm and 1550nm series products, used in the transmission of cable system front optical fiber signal.

· Cable transmission amplifiers.  Our main bus amplifier and end user amplifier products are used to improve the signal quality in cable networks.

Net revenues for each of our revenue segments as a percentage of net revenues is set forth below:

	Nine Months Ended			YearEndedDecember31,
	September30,2008			2007			2006
Products
IPTV		53	%		38	%		0	%
Optical devices		24	%		26	%		28	%
Cable devices		2	%		6	%		3	%
Others		13	%		28	%		67	%
Subtotal		92	%		98	%		98	%
Technical Support		1	%		0	%		0	%
Construction		0	%		0	%		2	%
Warranty		7	%		2	%		0	%
Total		100	%		100	%		100	%

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Manufacturing and Suppliers

Manufacturing

Our manufacturing operations consist of the procurement and inspection of raw materials and components, final system quality control testing and packaging.  We subcontract all manufacturing on a turnkey basis, with our suppliers delivering fully assembled and tested products based on our proprietary designs.  The use of this model allows us to focus substantially all of our resources on determining customer requirements and on the design, development and support of our products.  This model also allows us to have significantly reduced capital requirements.  The assembled products are then delivered to our facilities for final system quality control testing against product specifications and product configuration, including software installation.

We subcontract our manufacturing to a number of manufacturers.  Our manufacturers were selected based on the breadth  of available technology, quality, manufacturing capacity and support for design tools that we use.  None of our products are currently manufactured by more than one supplier.  However, in the event one of our suppliers notifies us that it intends to cease manufacturing a product, we expect that we will have an adequate opportunity to order sufficient quantities of the affected products so that shipments to customers will not be adversely affected while we qualify a new manufacturer.

For the foreseeable future, we intend to continue to rely on our contract manufacturers for substantially all of our manufacturing and assembly and the substantial portion of our test requirements.  All of our contract manufacturers produce products for other companies.  We do not have long-term manufacturing agreements with any of our contract manufacturers.  Our contract manufacturers are not obligated to supply products to us for any specific period, in any specific quantity or at any specific price, except as may be provided in a particular purchase order that has been accepted by one of our contract manufacturers.

We generally place orders approximately 3 to 4 weeks in advance of expected delivery.  We work closely with our contract manufacturers to manage costs and delivery times.  However, we have only a limited ability to react to fluctuations in demand for our products, which could cause us to have an excess or a shortage of inventory of a particular product.

Suppliers

We have established long-term partnership relationships with our main raw material suppliers.  The raw materials used in our product include LCDs, ICs, flash memories, WiFi modules, GPS modules, capacitors, resistors, switches, connectors and batteries.  We purchase such materials to satisfy our customers’ requirement.  For special products and large orders, we typically quote our prices and delivery the goods ahead of time after receiving the orders.

Currently, our primary suppliers of raw materials are located in South Korea, Taiwan, United States, and China.  Two suppliers are our largest suppliers of components for our products, each of which accounted for more than 10% of our purchases of components for our products for the nine months ended September 30, 2008 and the fiscal year ended December 31, 2007.  We believe that the raw materials and components used in manufacturing our products are available from enough sources to be able to satisfy our needs.  Presently, our relationships with our current suppliers are generally good and we expect that our suppliers will be able to meet the anticipated demand for our products in the future.

At times, the pricing and availability of raw materials can be volatile, attributable to numerous factors beyond our control, including general economic conditions, currency exchange rates, industry cycles, production levels or a supplier’s tight supply.  To the extent that we experience cost increases we may seek to pass such cost increases on to our customers, but cannot provide any assurance that we will be able to do so successfully or that our business, results of operations and financial condition would not be adversely affected by increased volatility of the cost and availability of raw materials.

Quality Control

We consider quality control an important element of our business practices.  We have stringent quality control systems that are implemented by various Company-trained staff members to ensure quality control over the production process, from the purchase of raw materials through oversight of each stage of the manufacturing process.  Our quality control department executes the following functions:

· testing samples of raw materials from suppliers;

· implementing sampling systems and sample files;

· setting internal controls and regulations for the testing of finished products; and

· articulating the responsibilities of quality control staff.

We also achieve quality control over products manufactured under our contract manufacturing arrangements by sending our technicians on site to supervise the production and testing of our products.

7

Sales and Marketing

We have a broad sales network throughout China.  Our sales network spans throughout Henan Province and in several major provincial-level and municipal cities in China.  Our distribution network includes exclusive provincial and regional distributors, resellers and brand-name counters.

We are highly dependent upon sales of our products to certain of our customers.  During our nine months ended September 30, 2008, two customers both accounted for approximately 10% of our net revenues. During the fiscal year ended December 31, 2007, three customers accounted for approximately 16%, 14% and 13%, respectively, of our net revenues. During the fiscal year ended December 31, 2006, five customers accounted for approximately 24%, 24%, 19%, 13% and 10%, respectively, of our net revenues.  No other customer accounted for greater than 10% of our net revenues during these periods.  All purchases of our products by customers are made through purchase orders and we do not have long-term contracts with any of our customers.  The loss of any customers to which we sell a significant amount of our products, or from which we receive significant portion of orders, or any material adverse change in the financial condition of such customers could negatively affect our revenues and decrease our earnings.

The focus of our marketing plan is print advertising and participation in tradeshows and exhibitions.  With a targeted approach, our print advertisements appear regularly in popular consumer and industry publications and trade journals.  To better showcase our diverse products to potential customers, we regularly exhibit at leading trade shows and exhibitions.  Our dynamic, state-of-the-art trade show exhibits are developed internally to showcase our latest product offerings.

Research and Development

Companies such as us are under pressure for customers to respond more quickly with new designs and product innovations to support rapidly changing consumer tastes and regulatory requirements.  We believe that the engineering and technical expertise of our management and key personnel, together with our emphasis on continuing research and development, allows us to efficiently and timely identify and bring new, innovative products to market for our customers using the latest technologies, materials and processes.  We believe that continued research and development activities are critical to maintaining our offering of technologically-advanced products to serve a broader array of our customers.

We focus our product design efforts on both improving our existing products and developing new products.  In an effort to enhance our product quality, reduce costs and keep up with emerging product trends, we work with our key customers to identify emerging product trends and implement new solutions intended to meet the current and future needs of the markets we serve.

For the nine months ended September 30, 2008 and the years ended December 31, 2007 and 2006, we have invested approximately $0, $88,864 and $48, respectively, in research and development.

Acquisitions

To supplement our internal growth, we intend to pursue a targeted acquisition strategy that will seek acquisition candidates that fulfill one or more of the following objectives.

· increase our penetration of existing markets;

· expand into new markets;

· increase our service offerings;

· add customers and cash flow to our existing network services business; and

· enhance our ability to sell and delivery value-added services

We initially intend to focus our acquisition efforts on cable system providers and enhanced service providers and on interconnect companies in Henan Province that sell, install and maintain data and voice networks for customers.  Our initial goal is to be a vertically integrated service provider, providing bundled television programming, internet and telephone services to residential customers in cities and counties located in the Henan Province.

Competition

The market for set-top boxes and digital networking products is highly competitive, especially with respect to pricing and the introduction of new products and features.  Our products compete primarily on the basis of:

· reliability;

· brand recognition;

· quality;

· price;

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· design; and

· quality service and support to retailers and our customers.

Currently, there are many significant competitors in the set-top box business including several established companies who have sold set-top boxes to major cable operators for many years.  These competitors include companies such as Motorola, Cisco Systems, and Pace.  In addition, a number of rapidly growing companies have recently entered the market, many of them with set-top box offerings similar to our existing set-top box products.  We also expect additional competition in the future from new and existing companies who do not currently compete in the market for set-top boxes.  As the set-top box business evolves, our current and potential competitors may establish cooperative relationships among themselves or with third parties, including software and hardware companies that could acquire significant market share, which could adversely affect our business.  We also face competition from set-top boxes that have been internally developed by digital video providers.

In recent years, we and many of our competitors, have regularly lowered prices, and we expect these pricing pressures to continue.  If these pricing pressures are not mitigated by increases in volume, cost reductions from our supplier or changes in product mix, our revenues and profits could be substantially reduced.  As compared to us, many of our competitors have:

· significantly longer operating histories;

· significantly greater managerial, financial, marketing, technical and other competitive resources; and

· greater brand recognition.

As a result, our competitors may be able to:

· adapt more quickly to new or emerging technologies and changes in customer requirements;

· devote greater resources to the promotion and sale of their products and services; and

· respond more effectively to pricing pressures.

Intellectual Property

We rely on a combination of patent and trade secret protection and other unpatented proprietary information to protect our intellectual property rights and to maintain and enhance our competitiveness in the portable electronic product industry.  Our Chief Executive Officer, Mr. Zhong Bo, has legal ownership of one patent in China.  This patent is applied in the operations of our company and Mr. Zhong has granted the company a license to use such patent.

Some of our products are also designed to include software or other intellectual property licensed from third parties.  While it may be necessary in the future to seek or renew licenses relating to various aspects of our products and business methods, based on past experience and industry practice we believe that such licenses generally could be obtained on commercially reasonable terms.  However, there is no guarantee that such licenses could be obtained at all.  Because of technological changes in the portable electronics industry, current extensive patent coverage and the rapid rate of issuance of new patents, it is possible certain components of our products may unknowingly infringe existing patents or intellectual property rights of others.

We have implemented enhanced file management procedures at the company in an effort to protect our proprietary rights; however, there can be no assurance that our patents and other proprietary rights will not be challenged, invalidated, or circumvented, that others will not assert intellectual property rights to technologies that are relevant to us, or that our rights will give us a competitive advantage.  In addition, the laws of some foreign countries may not protect our proprietary rights to the same extent as the laws of the China.

We have one registered trademark in China, with expiration date of December 2011.

PRC Government Regulations

Environmental Regulations

The major environmental regulations applicable to us include the PRC Environmental Protection Law, the PRC Law on the Prevention and Control of Water Pollution and its Implementation Rules, the PRC Law on the Prevention and Control of Air Pollution and its Implementation Rules, the PRC Law on the Prevention and Control of Solid Waste Pollution, and the PRC Law on the Prevention and Control of Noise Pollution.

We have not been named as a defendant in any legal proceedings alleging violation of environmental laws.  We have no reasonable basis to believe that there is any threatened claim, action or legal proceedings against us that would have a material adverse effect on our business, financial condition or results of operations due to any non-compliance with environmental laws.

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Patent Protection in China

The PRC’s intellectual property protection regime is consistent with those of other modern industrialized countries.  The PRC has domestic laws for the protection of rights in copyrights, patents, trademarks and trade secrets.

The PRC is also a signatory to most of the world’s major intellectual property conventions, including:

· Convention establishing the World Intellectual Property Organization (WIPO Convention) (June 4, 1980);

· Paris Convention for the Protection of Industrial Property (March 19, 1985);

· Patent Cooperation Treaty (January 1, 1994); and

· The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) (November 11, 2001).

Patents in the PRC are governed by the China Patent Law and its Implementing Regulations, each of which went into effect in 1985.  Amended versions of the China Patent Law and its Implementing Regulations came into effect in 2001 and 2003, respectively.

The PRC is signatory to the Paris Convention for the Protection of Industrial Property, in accordance with which any person who has duly filed an application for a patent in one signatory country shall enjoy, for the purposes of filing in the other countries, a right of priority during the period fixed in the convention (12 months for inventions and utility models, and 6 months for industrial designs).

The Patent Law covers three kinds of patents, i.e., patents for inventions, utility models and designs respectively.  The Chinese patent system adopts the principle of first to file.  This means that, where more than one person files a patent application for the same invention, a patent can only be granted to the person who first filed the application.  Consistent with international practice, the PRC only allows the patenting of inventions or utility models that possess the characteristics of novelty, inventiveness and practical applicability.  For a design to be patentable, it should not be identical with or similar to any design which, before the date of filing, has been publicly disclosed in publications in the country or abroad or has been publicly used in the country, and should not be in conflict with any prior right of another.

PRC law provides that anyone wishing to exploit the patent of another must conclude a written licensing contract with the patent holder and pay the patent holder a fee.  One rather broad exception to this, however, is that, where a party possesses the means to exploit a patent but cannot obtain a license from the patent holder on reasonable terms and in reasonable period of time, the PRC State Intellectual Property Office, or SIPO, is authorized to grant a compulsory license.  A compulsory license can also be granted where a national emergency or any extraordinary state of affairs occurs or where the public interest so requires.  SIPO, however, has not granted any compulsory license up to now.  The patent holder may appeal such decision within three months from receiving notification by filing a suit in a people’s court.

PRC law defines patent infringement as the exploitation of a patent without the authorization of the patent holder.  A patent holder who believes his patent is being infringed may file a civil suit or file a complaint with a PRC local Intellectual Property Administrative Authority, which may order the infringer to stop the infringing acts.  Preliminary injunction may be issued by the People’s Court upon the patentee’s or the interested parties’ request before instituting any legal proceedings or during the proceedings.  Evidence preservation and property preservation measures are also available both before and during the litigation.  Damages in the case of patent infringement is calculated as either the loss suffered by the patent holder arising from the infringement or the benefit gained by the infringer from the infringement.  If it is difficult to ascertain damages in this manner, damages may be reasonably determined in an amount ranging from one to three times of the license fee under a contractual license.  The infringing party may be also fined by the Administration of Patent Management in an amount of up to three times the unlawful income earned by such infringing party.  If there is no unlawful income so earned, the infringing party may be fined in an amount of up to RMB 500,000, or approximately $62,500.  

Tax

Pursuant to the Provisional Regulation of China on Value Added Tax and their implementing rules, all entities and individuals that are engaged in the sale of goods, the provision of repairs and replacement services and the importation of goods in China are generally required to pay VAT at a rate of 17.0% of the gross sales proceeds received, less any deductible VAT already paid or borne by the taxpayer.  Further, when exporting goods, the exporter is entitled to a portion of or a full refund of the VAT that it has already paid or borne.  Our imported raw materials that are used for manufacturing export products and are deposited in bonded warehouses are exempt from import VAT.

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Foreign Currency Exchange

Under the PRC foreign currency exchange regulations applicable to us, the Renminbi is convertible for current account items, including the distribution of dividends, interest payments, trade and service-related foreign exchange transactions.  Conversion of Renminbi for capital account items, such as direct investment, loan, security investment and repatriation of investment, however, is still subject to the approval of the PRC State Administration of Foreign Exchange, or SAFE.  Foreign-invested enterprises may only buy, sell and/or remit foreign currencies at those banks authorized to conduct foreign exchange business after providing valid commercial documents and, in the case of capital account item transactions, obtaining approval from the SAFE.  Capital investments by foreign-invested enterprises outside of China are also subject to limitations, which include approvals by the Ministry of Commerce, the SAFE and the State Reform and Development Commission.

Dividend Distributions

Under applicable PRC regulations, foreign-invested enterprises in China may pay dividends only out of their accumulated profits, if any, determined in accordance with PRC accounting standards and regulations.  In addition, a foreign-invested enterprise in China are required to set aside at least 10.0% of their after-tax profit based on PRC accounting standards each year to its general reserves until the accumulative amount of such reserves reach 50.0% of its registered capital.  These reserves are not distributable as cash dividends. The board of directors of a foreign-invested enterprise has the discretion to allocate a portion of its after-tax profits to staff welfare and bonus funds, which may not be distributed to equity owners except in the event of liquidation.

Employees

At September 30, 2008, we had approximately 78 employees.  All of our employees are based in China.  There are no collective bargaining contracts covering any of our employees.  We believe our relationship with our employees is satisfactory.

We are required to contribute a portion of our employees’ total salaries to the Chinese government’s social insurance funds, including pension insurance, medical insurance, unemployment insurance, and work-related injury insurance, and maternity insurance, in accordance with relevant regulations.  Total contributions to the funds are approximately $4,045 for the nine months ended September 30, 2008 and $130,549 and $396 for the years ended December 31, 2007 and 2006, respectively.  We expect that the amount of our contribution to the government’s social insurance funds will increase in the future as we expand our workforce and operations.

We also provide housing facilities for our employees.  At present, approximately 2% of our employees live in company-provided housing facilities.  Under PRC laws, we may be required to make contributions to a housing assistance fund for employees.  Presently, a housing assistance fund is not required by the Zhengzhou Municipal Government and therefore, we provide free housing facilities to all employees who need accommodation.  If in the future, a housing assistance fund is required by the Zhengzhou Municipal Government, we will commence contributions to the housing assistance fund.

Effective January 1, 2008, the PRC introduced a new labor contract law that enhances rights for the nation's workers, including open-ended work contracts and severance pay.  The legislation requires employers to provide written contracts to their workers, restricts the use of temporary laborers and makes it harder to lay off employees.  It also requires that employees with a fixed-term contracts shall be entitled to an indefinite-term contract after a fixed-term contract is renewed twice.  Although the new labor contract law would increase our labor costs, we do not anticipate there will be any significantly effects on our overall profitability in the near future since such amount was historically not material to our operating cost.  Management anticipates this may be a step toward improving candidate retention for skilled workers.

Properties

Our registered office in China is located at Building 28, Huzhu Road, Zhongyuan District, Zhengzhou, China.  We lease our registered office from Zhong Bo, our Chief Executive Officer and Chairman of the Board, who owns such property.

Legal Proceedings

We are not aware of any pending or threatened legal proceedings involving the Company or its assets.

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RISK FACTORS

Any investment in our common stock involves a high degree of risk.  Investors should carefully consider the risks described below and all of the information contained in this Current Report on Form 8-K before deciding whether to purchase our common stock.  Our business, financial condition or results of operations could be materially adversely affected by these risks if any of them actually occur.  Our shares of common stock are not currently listed or quoted for trading on any national securities exchange or national quotation system.  If and when our common stock is traded, the trading price could decline due to any of these risks, and an investor may lose all or part of his or her investment.  Some of these factors have affected our financial condition and operating results in the past or are currently affecting us.  This Current Report on Form 8-K also contains forward-looking statements that involve risks and uncertainties.  Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks described below and elsewhere in this Current Report on Form 8-K.

RISKS RELATED TO OUR OPERATIONS

We derive substantially all of our revenues from sales in the PRC and any downturn in the Chinese economy could have a material adverse effect on our business and financial condition.

Substantially all of our revenues are generated from sales in the PRC.  We anticipate that revenues from sales of our products in the PRC will continue to represent the substantial portion of our total revenues in the near future.  Our sales and earnings can also be affected by changes in the general economy since purchases of cable television services are generally discretionary for consumers.  Our success is influenced by a number of economic factors which affect disposable consumer income, such as employment levels, business conditions, interest rates, oil and gas prices and taxation rates.  Adverse changes in these economic factors, among others, may restrict consumer spending, thereby negatively affecting our sales and profitability.

We are and will continue to be subject to rapidly declining average selling prices, which may harm our results of operations.

Set-top boxes and networking products such as those we offer are often subject to declines in average selling prices due to rapidly evolving technologies, industry standards and consumer preferences.  These products are also subject to rapid technological changes which often cause product obsolescence.  Companies within our industry are continuously developing new products with heightened performance and functionality.  This puts pricing pressure on existing products and constantly threatens to make them, or causes them to be, obsolete.  Our typical product’s life cycle is short, typically generating lower average selling prices as the cycle matures.  If we fail to accurately anticipate the introduction of new technologies, we may possess significant amounts of obsolete inventory that can only be sold at substantially lower prices and profit margins than we anticipated.  In addition, if we fail to accurately anticipate the introduction of new technologies, we may be unable to compete effectively due to our failure to offer products most demanded by the marketplace.  If any of these failures occur, our sales, profit margins and profitability will be adversely affected.

In addition, network systems operators expect suppliers, such as our company, to cut their costs and lower the price of their products to lessen the negative impact on their own profit margins.  As a result, we have previously reduced the price of some of our products and expect to continue to face market-driven downward pricing pressures in the future.  Our results of operations will suffer if we are unable to offset any declines in the average selling prices of our products by developing new or enhanced products with higher selling prices or gross profit margins, increasing our sales volumes or reducing our production costs.

If we do not correctly forecast demand for our products, we could have costly excess production or inventories and we may not be able to secure sufficient or cost effective quantities of our products or production materials and our revenues, cost of revenues and financial condition could be adversely affected.

The demand for our products depends on many factors, including pricing and inventory levels, and is difficult to forecast due in part to variations in economic conditions, changes in consumer and business preferences, relatively short product life cycles, changes in competition, seasonality and reliance on key third party carriers.  It is particularly difficult to forecast demand by individual product.  Significant unanticipated fluctuations in demand, the timing and disclosure of new product releases or the timing of key sales orders could result in costly excess production or inventories or the inability to secure sufficient, cost-effective quantities of our products or production materials.  These inventory risks are particularly acute during end product transitions in which a new generation of set-top boxes is being deployed and inventory of older generation set-top boxes is at a higher risk of obsolescence.  Furthermore, because of the competitive nature of the set-top box business and the short-term nature of our purchase orders, we could in the future be required to reduce the average selling-prices of our set-top boxes, which in turn would adversely affect our gross margins and profitability.  This could adversely impact our revenues, cost of revenues and financial condition.

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We depend on sales of set-top boxes for a substantial portion of our revenue, and if sales of our set-top boxes decline or we are not able to penetrate new markets for set-up boxes, our business and financial position will suffer.

The substantial portion of our revenues consists primarily of sales of our set-top boxes.  In addition, we currently derive, and expect to continue to derive in the near term, revenue from sales of our set-top boxes to a limited number of customers.  Continued market acceptance of our set-top boxes is critical to our future success.  If we are not able to expand sales of our set-top boxes to other providers of digital television, our growth prospects will be limited, and our revenues will be substantially impacted.

Our set-up boxes were initially designed for, and have been deployed mostly by, providers of cable-delivered digital television.  To date, we have not made any sales of our set-top boxes to direct-to-home satellite providers.  In addition, the set-top box market is highly competitive and we expect competition to intensify in the future.  In particular, we believe that most set-top boxes are sold by a small number of well entrenched competitors who have long-standing relationships with direct-to-home satellite providers.  This competition may make it more difficult for us to sell home satellite set-top boxes, and may result in pricing pressure, small profit margins, high sales and marketing expenses and failure to obtain market share, any of which could likely seriously harm our business, operating results and financial condition.

Our business may suffer if cable television operators, who currently comprise our customer base, do not compete successfully with existing and emerging alternative platforms for delivering digital television, including terrestrial networks, internet protocol television and direct-to-home satellite service providers.

Our existing customers are cable television operators, which compete with direct-to-home satellite video providers and terrestrial broadcasters for the same pool of viewers.  As technologies develop, other means of delivering information and entertainment to television viewers are evolving.  For example, some telecommunications companies are seeking to compete with terrestrial broadcasters, cable television network operators and direct-to-home satellite services by offering internet protocol television, which allows telecommunications companies to stream television programs through telephone lines or fiber optic lines.  To the extent that the terrestrial television networks, telecommunications companies and direct-to-home satellite providers compete successfully against cable television networks services for viewers, the ability of our existing customer base to attract and retain subscribers may be adversely affected.  As a result, demand for our set-top boxes could decline and we may not be able to sustain our current revenue levels.

Growth in our set-top box business likely requires commencement of sales to international customers and we may be unsuccessful in commencing or thereafter expanding international sales.

We believe that in order to grow our revenue and business and to build a larger customer base, we need to commence sales of our set-top boxes and networking products in international markets.  We have no prior experience selling our set-top boxes or networking products internationally.  To succeed in these sales efforts, we believe we must hire additional sales personnel and develop and manage new relationships with cable operators and other providers of digital television in international markets.  If we do not succeed in our efforts to sell to these target markets and customers, the size of our total addressable market may be limited.  This, in turn, would harm our ability to grow our customer base and revenue.

Our products may contain errors or defects, which could result in the rejection of our products, damage to our reputation, lost revenues, diverted development resources and increased service costs, warranty claims and litigation.

Our products are complex and must meet stringent user requirements.  In addition, we must develop our products to keep pace with the rapidly changing markets.  Sophisticated products like ours are likely to contain undetected errors or defects, especially when first introduced or when new models or versions are released.  Our products may not be free from errors or defects after commercial shipments have begun, which could result in the rejection of our products and jeopardize our relationship with carriers.  End users may also reject or find issues with our products and have a right to return them even if the products are free from errors or defects.  In either case, returns or quality issues could result in damage to our reputation, lost revenues, diverted development resources, increased customer service and support costs, and warranty claims and litigation which could harm our business, results of operations and financial condition.

We intend to make significant investments in new products and services that may not be profitable.

We have made and will continue to make significant investments in research, development, and marketing for new products, services, and technologies.  Investments in new technology are inherently speculative and commercial success depends on many factors including novelty, service and support, and effective sales and marketing.  We may not achieve significant revenue from new product and service investments for a number of years, if at all.  Moreover, new products and services may not be profitable, and even if they are profitable, operating margins for new products and businesses may be minimal.

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We are subject to intense competition in the industry in which we operate, which could cause material reductions in the selling price of our products or losses of our market share.

The market for set-top boxes and networking products is highly competitive, especially with respect to pricing and the introduction of new products and features.  Our products compete primarily on the basis of:

· reliability;

· brand recognition;

· quality;

· price;

· design; and

· quality service and support to retailers and our customers.

Currently, there are many significant competitors in the set-top box business including several established companies who have sold set-top boxes to major cable operators for many years.  These competitors include companies such as Motorola, Cisco Systems, and Pace.  In addition, a number of rapidly growing companies have recently entered the market, many of them with set-top box offerings similar to our existing set-top box products.  We also expect additional competition in the future from new and existing companies who do not currently compete in the market for set-top boxes.  As the set-top box business evolves, our current and potential competitors may establish cooperative relationships among themselves or with third parties, including software and hardware companies that could acquire significant market share, which could adversely affect our business.  We also face competition from set-top boxes that have been internally developed by digital video providers.

In recent years, we and many of our competitors, have regularly lowered prices, and we expect these pricing pressures to continue.  If these pricing pressures are not mitigated by increases in volume, cost reductions from our supplier or changes in product mix, our revenues and profits could be substantially reduced.  As compared to us, many of our competitors have:

· significantly longer operating histories;

· significantly greater managerial, financial, marketing, technical and other competitive resources; and

· greater brand recognition.

As a result, our competitors may be able to:

· adapt more quickly to new or emerging technologies and changes in customer requirements;

· devote greater resources to the promotion and sale of their products and services; and

· respond more effectively to pricing pressures.

These factors could materially adversely affect our operations and financial condition.  In addition, competition could increase if:

· new companies enter the market;

· existing competitors expand their product mix; or

· we expand into new markets.

An increase in competition could result in material price reductions or loss of our market share.

Changes in existing technologies or the emergence of new products or technologies could significantly harm our business.

Our businesses change rapidly as new technologies are developed.  These new technologies may cause our services and products to become obsolete.  Changes in existing technologies could also cause demand for our products and services to decline.  For example, if changes in technology allow digital television subscribers to use devices such as personal computers, cable ready televisions and network based digital video recording services in place of set-top boxes, our customers may not need to purchase our set-top boxes to provide their digital television subscribers with digital video recording and other set-top box features.  One or more new technologies also could be introduced that compete favorably with our set-top boxes or that cause our set-top boxes to no longer be of significant benefit to our customers.

We and our suppliers also may not be able to keep pace with technological developments.  Alternatively, if the new technologies on which we intend to focus our research and development investments fail to achieve acceptance in the marketplace, we could suffer a material adverse effect on our future competitive position that could cause a reduction in our revenues and earnings.  Our competitors could also obtain or develop proprietary technologies that are perceived by the market as being superior to ours.  Further, after we have incurred substantial research and development costs, one or more of the technologies under development could become obsolete prior to its introduction.  Finally, delays in the delivery of components or other unforeseen problems may occur that could materially and adversely affect our ability to generate revenue, offer new products and services and remain competitive.

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Technological innovation is important to our success and depends, to a significant degree, on the work of technically skilled employees.  Competition for the services of these types of employees is intense.  We may not be able to attract and retain these employees.  If we are unable to attract and maintain technically skilled employees, our competitive position could be materially and adversely affected.

The loss or significant reduction in business of any of our key customers could materially and adversely affect our revenues and earnings.

We are highly dependent upon sales of our products to certain of our customers.  During our nine months ended September 30, 2008, Neihuang Radio & Television Bureau and Kaifeng Radio & Television Bureau both accounted for approximately 10% of our net revenues.  During the fiscal year ended December 31, 2007, Nanyang Radio & Television Bureau, Mengzhou Radio & Television Bureau and Xuchang Radio & Television Bureau accounted for approximately 16%, 14% and 13%, respectively, of our net revenues.  During the fiscal year December 31, 2006, Kaifeng Radio & Television Bureau, Xinye Radio & Television Bureau, Xuchang Radio & Television Bureau, Huaxian Radio & Television Bureau and Nanyang Radio & Television Bureau accounted for approximately 24%, 24%, 19%, 13% and 10%, respectively, of our net revenues.  No other customer accounted for greater than 5% of our net revenues during these periods.  All purchases of our products by customers are made through purchase orders and we do not have long-term contracts with any of our customers.  The loss of Neihuang County Broadcasting Television Information Network Center and Henan Cable TV Network Group Co., Ltd. Kaifeng Branch, or any of our other customers to which we sell a significant amount of our products or any significant portion of orders from Cable TV Station of Pingdingshan and Cable TV Station of Nanyang , or such other customers or any material adverse change in the financial condition of such customers could negatively affect our revenues and decrease our earnings.

We cannot rely on long-term purchase orders or commitments to protect us from the negative financial effects of a decline in demand for our products.  The limited certainty of product orders can make it difficult for us to forecast our sales and allocate our resources in a manner consistent with our actual sales.  Moreover, our expense levels are based in part on our expectations of future sales and, if our expectations regarding future sales are inaccurate, we may be unable to reduce costs in a timely manner to adjust for sales shortfalls.  Cancellations or reductions of customer orders could result in the loss of anticipated sales without allowing us sufficient time to reduce our inventory and operating expenses.  Furthermore, because we depend on a small number of customers for the vast majority of our sales, the magnitude of the ramifications of these risks is greater than if our sales were less concentrated with a small number of customers.  As a result of our lack of long-term purchase orders and purchase commitments we may experience a rapid decline in our sales and profitability.

In addition, there is a relatively small number of potential new customers for our set-top boxes and we expect this customer concentration to continue for the foreseeable future.  Therefore, our operating results will likely continue to depend on sales to a relatively small number of customers, as well as the continued success of these customers.  If we do not develop relationships with new customers, we may not be able to expand our customer base or maintain or increase our revenue.

We depend on a limited number of suppliers for components for our products.  The inability to secure components for our products could reduce our revenues and adversely affect our relationship with our customers.  

We rely on a limited number of suppliers for our component parts and raw materials.  Although there are many suppliers for each of our component parts and raw materials, we are dependent on a limited number of suppliers for many of the significant components and raw materials.  This reliance involves a number of significant potential risks, including:

· lack of availability of materials and interruptions in delivery of components and raw materials from our suppliers;

· manufacturing delays caused by such lack of availability or interruptions in delivery;

· fluctuations in the quality and the price of components and raw materials, in particular due to the petroleum price impact on such materials; and

· risks related to foreign operations.

We generally do not have any long-term or exclusive purchase commitments with any of our suppliers.  Farway Electronics Factory and Henan Hui-ke Electronics Co., Ltd. are our largest suppliers of components for our products, each of which accounted for more than 10% of our purchases of components for our products for the nine months ended September 30, 2008 and the fiscal year ended December 31, 2007.  Our failure to maintain existing relationships with our suppliers or to establish new relationships in the future could also negatively affect our ability to obtain our components and raw materials used in our products in a timely manner.  If we are unable to obtain ample supply of products from our existing suppliers or alternative sources of supply, we may be unable to satisfy our customers’ orders which could materially and adversely affect our revenues and our relationship with our customers.

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Certain disruptions in supply of and changes in the competitive environment for components and raw materials integral to our products may adversely affect our profitability.

We use a broad range of materials and supplies, including LCDs, ICs, flash memories, WiFi modules, GPS modules, capacitors, resistors, switches, connectors, batteries and other electronic components in our products.  A significant disruption in the supply of these materials could decrease production and shipping levels, materially increase our operating costs and materially adversely affect our profit margins.  Shortages of materials or interruptions in transportation systems, labor strikes, work stoppages, war, acts of terrorism or other interruptions to or difficulties in the employment of labor or transportation in the markets in which we purchase materials, components and supplies for the production of our products, in each case may adversely affect our ability to maintain production of our products and sustain profitability.  If we were to experience a significant or prolonged shortage of critical components and raw materials from any of our suppliers and could not procure the components from other sources, we would be unable to meet our production schedules for some of our key products and to ship such products to our customers in a timely fashion, which would adversely affect our sales, margins and customer relations.

Substantial defaults by our customers on accounts receivable or the loss of significant customers could have a material adverse effect on our business.

A substantial portion of our working capital consists of accounts receivable from customers.  If customers responsible for a significant amount of accounts receivable were to become insolvent or otherwise unable to pay for products and services, or to make payments in a timely manner, our business, results of operations or financial condition could be materially adversely affected.  An economic or industry downturn could materially adversely affect the servicing of these accounts receivable, which could result in longer payment cycles, increased collection costs and defaults in excess of management’s expectations.  A significant deterioration in our ability to collect on accounts receivable could also impact the cost or availability of financing available to us.

In addition, our business is characterized by long periods for collection from our customers and short periods for payment to our suppliers, the combination of which may cause us to have liquidity problems.  We experience an average accounts settlement period ranging from one month to as high as four months from the time we sell our products to the time we receive payment from our customers.  In contrast, we typically need to place certain deposits and advances with our suppliers on a portion of the purchase price in advance and for some suppliers we must maintain a deposit for future orders.  Because our payment cycle is considerably shorter than our receivable cycle, we may experience working capital shortages.  Working capital management, including prompt and diligent billing and collection, is an important factor in our results of operations and liquidity.  We cannot assure you that system problems, industry trends or other issues will not extend our collection period, adversely impact our working capital.

Our operations would be materially adversely affected if third-party carriers were unable to transport our products on a timely basis.

All of our products are shipped through third party carriers.  If a strike or other event prevented or disrupted these carriers from transporting our products, other carriers may be unavailable or may not have the capacity to deliver our products to our customers.  If adequate third party sources to ship our products were unavailable at any time, our business would be materially adversely affected.

Changes in consumer spending and economic conditions, may cause our quarterly operating results to fluctuate and cause our stock price to decline.

Our net revenue and operating results may vary significantly from quarter to quarter.  The main factors that may cause these fluctuations are:

· seasonal variations in operating results;

· variations in the sales of our products to our significant customers;

· variations in manufacturing and supplier relationships;

· if we are unable to correctly anticipate and provide for inventory requirements from quarter to quarter, we may not have sufficient inventory to deliver our products to our customers in a timely fashion or we may have excess inventory that we are unable to sell;

· the discretionary nature of our customers’ demands and spending patterns;

· changes in market and economic conditions; and

· competition.

In addition, our quarterly operating results could be materially adversely affected by political instability, war, acts of terrorism or other disasters.

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As a result of these and other factors, revenues for any quarter are subject to significant variation, which may adversely affect our results of operations and the market price for our common stock.

We depend upon a patent we license from a third party, Zhong Bo, our Chief Executive Officer and Chairman of the Board. The loss of this license, an increase in the costs of this license or Mr. Zhong’s failure to properly maintain or enforce the patent underlying such license may require us to suspend our operations until we obtain replacements and/or redesign our products.

We rely upon certain patents licensed from our Chief Executive Officer and Chairman of the Board, Zhong Bo, which gives us rights to third party intellectual property that is necessary or useful for our business. We may also enter into additional licenses to third party intellectual property in the future. In addition, because we do not own any patents relating to our technologies, we do not have the right to defend perceived infringements of patents relating to such technologies. Thus, our success will depend in part on the ability and willingness of our licensors to obtain, maintain and enforce patent protection for our licensed intellectual property, in particular, those patents to which we have secured exclusive rights. Our licensors may not successfully prosecute the patent applications for the intellectual property we have licensed. Even if patents issue in respect of these patent applications, our licensors may fail to maintain these patents, may determine not to pursue litigation against other companies that are infringing these patents, or may pursue such litigation less aggressively than we would. Without protection for the intellectual property we license, other companies might be able to offer substantially identical products for sale, which could adversely affect our competitive business position and harm our business prospects.

Our ability to compete partly depends on the superiority, uniqueness and value of our technologies, including both internally developed technology and technology licensed from third parties. To protect our proprietary rights, we rely on a combination of trademark, patent, copyright and trade secret laws, confidentiality agreements with our employees and third parties, and protective contractual provisions. Despite our efforts to protect our intellectual property, any of the following occurrences may reduce the value of our intellectual property:

· our applications for trademarks or patents may not be granted and, if granted, may be challenged or invalidated;

· issued patents, copyrights and trademarks may not provide us with any competitive advantages;

· our efforts to protect our intellectual property rights may not be effective in preventing misappropriation of our technology or dilution of our trademarks;

· our efforts may not prevent the development and design by others of products or technologies similar to or competitive with, or superior to those that we develop; or

· another party may obtain a blocking patent that would force us to either obtain a license or design around the patent to continue to offer the contested feature or service in our technologies.

We rely on trade secret protections through confidentiality agreements with our employees, customers and other parties; the breach of such agreements could adversely affect our business and results of operations.

We also rely on trade secrets, which we seek to protect, in part, through confidentiality and non-disclosure agreements with our employees, customers and other parties.  There can be no assurance that these agreements will not be breached, that we would have adequate remedies for any such breach or that our trade secrets will not otherwise become known to or independently developed by competitors.  To the extent that consultants, key employees or other third parties apply technological information independently developed by them or by others to our proposed projects, disputes may arise as to the proprietary rights to such information that may not be resolved in our favor.  We may be involved from time to time in litigation to determine the enforceability, scope and validity of our proprietary rights.  Any such litigation could result in substantial cost and diversion of effort by our management and technical personnel.

We intend to pursue future acquisitions. Our business may be adversely affected if we cannot consummate acquisitions on satisfactory terms, or if we cannot effectively integrate acquired operations.

Part of our growth strategy involves the acquisition of other companies.  Any future growth through acquisitions will be partially dependent upon the availability of suitable acquisition candidates at favorable prices and upon advantageous terms and conditions. We intend to pursue acquisitions that we believe will present opportunities consistent with our overall business strategy. However, we may not be able to find suitable acquisition candidates to purchase or may be unable to acquire desired businesses or assets on economically acceptable terms. In addition, we may not be able to raise the capital necessary to fund future acquisitions. In addition, acquisitions involve risks that the businesses acquired will not perform in accordance with expectations and that business judgments concerning the value, strengths and weaknesses of businesses acquired will prove incorrect.

We regularly engage in discussions with respect to potential acquisition and investment opportunities. If we consummate an acquisition, our capitalization and results of operations may change significantly. Future acquisitions could likely result in the incurrence of additional debt and contingent liabilities and an increase in interest and amortization expenses or periodic impairment charges related to goodwill and other intangible assets as well as significant charges relating to integration costs.

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In addition, we may not be able to successfully integrate any business we acquire into our existing business. The successful integration of new businesses depends on our ability to manage these new businesses and cut excess costs. The successful integration of future acquisitions may also require substantial attention from our senior management and the management of the acquired business, which could decrease the time that they have to service and attract customers and develop new products and services. In addition, because we may actively pursue a number of opportunities simultaneously, we may encounter unforeseen expenses, complications and delays, including difficulties in employing sufficient staff and maintaining operational and management oversight.

We will need additional capital to implement our current business strategy, which may not be available to us, and if we raise additional capital, it may dilute your ownership in us.

Although in connection with the Share Exchange we had an initial closing of a private placement whereby we received gross proceeds of $1.77 million, we currently depend on bank loans and net revenues to meet our short-term cash requirements.  In order to grow revenues and sustain profitability, we will need additional capital.  As of the date of this filing, we do intend to conduct a public offering financing.  Obtaining additional financing will be subject to a number of factors, including market conditions, our operating performance and investor sentiment.  These factors may make the timing, amount, terms and conditions of additional financing unattractive to us.  We cannot assure you that we will be able to obtain any additional financing.  If we are unable to obtain the financing needed to implement our business strategy, our ability to increase revenues will be impaired and we may not be able to sustain profitability.

The capital and credit markets have been experiencing extreme volatility and disruption for more than twelve months.  In recent weeks, the volatility and disruption have reached unprecedented levels.  In some cases, the markets have exerted downward pressure on availability of liquidity and credit capacity for certain issuers.  We have historically relied on credit to fund our business and we need liquidity to pay our operating expenses.  Without sufficient liquidity, we will be forced to curtail our operations, and our business will suffer.  Disruptions, uncertainty or volatility in the capital and credit markets may also limit our access to capital required to operate our business.  Such market conditions may limit our ability to replace, in a timely manner, maturing liabilities and access the capital necessary to operate and grow our business.  As such, we may be forced to delay raising capital or bear an unattractive cost of capital which could decrease our profitability and significantly reduce our financial flexibility.  Our results of operations, financial condition, cash flows and capital position could be materially adversely affected by disruptions in the financial markets.

Our failure to effectively manage growth could harm our business.

We have rapidly and significantly expanded the number and types of products we sell, and we will endeavor to further expand our product portfolio.  We must continually introduce new products and technologies, enhance existing products in order to remain competitive, and effectively stimulate customer demand for new products and upgraded versions of our existing products.

This expansion of our products places a significant strain on our management, operations and engineering resources.  Specifically, the areas that are strained most by our growth include the following:

· New Product Launch. With the growth of our product portfolio, we experience increased complexity in coordinating product development, manufacturing, and shipping.  As this complexity increases, it places a strain on our ability to accurately coordinate the commercial launch of our products with adequate supply to meet anticipated customer demand and effective marketing to stimulate demand and market acceptance.  If we are unable to scale and improve our product launch coordination, we could frustrate our customers and lose retail shelf space and product sales;

· Forecasting, Planning and Supply Chain Logistic. With the growth of our product portfolio, we also experience increased complexity in forecasting customer demand and in planning for production, and transportation and logistics management.  If we are unable to scale and improve our forecasting, planning and logistics management, we could frustrate our customers, lose product sales or accumulate excess inventory; and

· Support Processes.  To manage the growth of our operations, we will need to continue to improve our transaction processing, operational and financial systems, and procedures and controls to effectively manage the increased complexity.  If we are unable to scale and improve these areas, the consequences could include: delays in shipment of product, degradation in levels of customer support, lost sales, decreased cash flows, and increased inventory.  These difficulties could harm or limit our ability to expand.

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We are dependent on certain key personnel and loss of these key personnel could have a material adverse effect on our business, financial condition and results of operations.

Our success is, to a certain extent, attributable to the management, sales and marketing, and operational and technical expertise of certain key personnel.  Each of the named executive officers performs key functions in the operation of our business.  The loss of a significant number of these employees could have a material adverse effect upon our business, financial condition, and results of operations.

We are dependent on a technically trained workforce and an inability to retain or effectively recruit such employees could have a material adverse effect on our business, financial condition and results of operations.

We must attract, recruit and retain a sizeable workforce of technically competent employees to develop and manufacture our products and provide service support.  Our ability to implement effectively our business strategy will depend upon, among other factors, the successful recruitment and retention of additional highly skilled and experienced engineering and other technical and marketing personnel.  There is significant competition for technologically qualified personnel in our business and we may not be successful in recruiting or retaining sufficient qualified personnel consistent with our operational needs.

Our facilities and information systems could be damaged as a result of disasters or unpredictable events, which could have an adverse effect on our business operations.

Our headquarters and major facilities including manufacturing plants, sales offices and research and development centers are located in China.  We also operate procurement, logistics, sales and marketing facilities in other parts of the world.  If major disasters such as earthquakes, fires, floods, wars, terrorist attacks, computer viruses, transportation disasters or other events occur, or our information system or communications network breaks down or operates improperly as a result of such events, our facilities may be seriously damaged, and we may have to stop or delay production and shipment.  We may incur expenses relating to such damages.

Our quarterly results may fluctuate because of many factors and, as a result, investors should not rely on quarterly operating results as indicative of future results.

Fluctuations in operating results or the failure of operating results to meet the expectations of public market analysts and investors may negatively impact the value of our securities.  Quarterly operating results may fluctuate in the future due to a variety of factors that could affect revenues or expenses in any particular quarter.  Fluctuations in quarterly operating results could cause the value of our securities to decline.  Investors should not rely on quarter-to-quarter comparisons of results of operations as an indication of future performance.  As a result of the factors listed below, it is possible that in future periods results of operations may be below the expectations of public market analysts and investors.  This could cause the market price of our securities to decline.  Factors that may affect our quarterly results include:

· vulnerability of our business to a general economic downturn in China;

· fluctuation and unpredictability of costs related to the components and raw materials used to manufacture our products;

· seasonality of our business;

· changes in the laws of the PRC that affect our operations;

· competition from our competitors; and

· our ability to obtain necessary government certifications and/or licenses to conduct our business.

RISKS RELATED TO US DOING BUSINESS IN CHINA

Substantially all of our assets are located in the PRC and substantially all of our revenues are derived from our operations in China, and changes in the political and economic policies of the PRC government could have a significant impact upon the business we may be able to conduct in the PRC and accordingly on the results of our operations and financial condition.

Our business operations may be adversely affected by the current and future political environment in the PRC.  The Chinese government exerts substantial influence and control over the manner in which we must conduct our business activities.  Our ability to operate in China may be adversely affected by changes in Chinese laws and regulations, including those relating to taxation, import and export tariffs, raw materials, environmental regulations, land use rights, property and other matters.  Under the current government leadership, the government of the PRC has been pursuing economic reform policies that encourage private economic activity and greater economic decentralization.  There is no assurance, however, that the government of the PRC will continue to pursue these policies, or that it will not significantly alter these policies from time to time without notice.

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Our operations are subject to PRC laws and regulations that are sometimes vague and uncertain.  Any changes in such PRC laws and regulations, or the interpretations thereof, may have a material and adverse effect on our business.

The PRC’s legal system is a civil law system based on written statutes.  Unlike the common law system prevalent in the United States, decided legal cases have little value as precedent in China.  There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations, including but not limited to, the laws and regulations governing our business, or the enforcement and performance of our arrangements with customers in the event of the imposition of statutory liens, death, bankruptcy or criminal proceedings.  The Chinese government has been developing a comprehensive system of commercial laws, and considerable progress has been made in introducing laws and regulations dealing with economic matters such as foreign investment, corporate organization and governance, commerce, taxation and trade.  However, because these laws and regulations are relatively new, and because of the limited volume of published cases and judicial interpretation and their lack of force as precedents, interpretation and enforcement of these laws and regulations involve significant uncertainties.  New laws and regulations that affect existing and proposed future businesses may also be applied retroactively.

Our principal operating subsidiary, Zhengzhou Shenyang Technology Company Limited., (“Zhengzhou ZST”) is considered a foreign invested enterprise under PRC laws, and as a result is required to comply with PRC laws and regulations, including laws and regulations specifically governing the activities and conduct of foreign invested enterprises.  We cannot predict what effect the interpretation of existing or new PRC laws or regulations may have on our businesses.  If the relevant authorities find us in violation of PRC laws or regulations, they would have broad discretion in dealing with such a violation, including, without limitation:

· levying fines;

· revoking our business license, other licenses or authorities;

· requiring that we restructure our ownership or operations; and

· requiring that we discontinue any portion or all of our business.

Investors may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing original actions in China based upon U.S. laws, including the federal securities laws or other foreign laws against us or our management.

Most of our current operations, including the manufacturing and distribution of our products, are conducted in China.  Moreover, all of our directors and officers are nationals and residents of China.  All or substantially all of the assets of these persons are located outside the United States and in the PRC.  As a result, it may not be possible to effect service of process within the United States or elsewhere outside China upon these persons.  In addition, uncertainty exists as to whether the courts of China would recognize or enforce judgments of U.S. courts obtained against us or such officers and/or directors predicated upon the civil liability provisions of the securities laws of the United States or any state thereof, or be competent to hear original actions brought in China against us or such persons predicated upon the securities laws of the United States or any state thereof.

The scope of our business license in China is limited, and we may not expand or continue our business without government approval and renewal, respectively.

Our principal operating subsidiary, Zhengzhou ZST, is a wholly foreign-owned enterprise, commonly known as a WFOE.  A WFOE can only conduct business within its approved business scope, which ultimately appears on its business license.  Our license permits us to design, manufacture, sell and market portable electronic products throughout the PRC.  Any amendment to the scope of our business requires further application and government approval.  In order for us to expand our business beyond the scope of our license, we will be required to enter into a negotiation with the PRC authorities for the approval to expand the scope of our business.  We cannot assure investors that Zhengzhou ZST will be able to obtain the necessary government approval for any change or expansion of its business.

We are subject to a variety of environmental laws and regulations related to our manufacturing operations.  Our failure to comply with environmental laws and regulations may have a material adverse effect on our business and results of operations.

We cannot assure you that at all times we will be in compliance with environmental laws and regulations or that we will not be required to expend significant funds to comply with, or discharge liabilities arising under, environmental laws, regulations and permits.

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Recent PRC regulations relating to acquisitions of PRC companies by foreign entities may create regulatory uncertainties that could restrict or limit our ability to operate.  Our failure to obtain required prior approval for the share exchange, reverse merger and the listing and trading of our common stock could have a material adverse effect on our business, operating results, reputation and trading price of our common stock.

The PRC State Administration of Foreign Exchange, or “SAFE,” issued a public notice in November 2005, known as Circular 75, concerning the use of offshore holding companies controlled by PRC residents in mergers and acquisitions in China.  This circular requires that (1) a PRC resident shall register with a local branch of the SAFE before he or she establishes or controls an overseas special purpose vehicle, or SPV, for the purpose of overseas equity financing (including convertible debt financing); (2) when a PRC resident contributes the assets of or his or her equity interests in a domestic enterprise to an SPV, or engages in overseas financing after contributing assets or equity interests to an SPV, such PRC resident must register his or her interest in the SPV and any changes in such interest with a local branch of the SAFE; and (3) when the SPV undergoes a material change outside of China, such as a change in share capital or merger or acquisition, the PRC resident shall, within 30 days from the occurrence of the event that triggers the change, register such change with a local branch of the SAFE.  In addition, SAFE issued updated internal implementing rules, or the Implementing Rules in relation to Circular 75.  The Implementing Rules were promulgated and became effective on May 29, 2007.  Such Implementing Rules provide more detailed provisions and requirements regarding the overseas investment foreign exchange registration procedures.  However, even after the promulgation of Implementing Rules there still exist uncertainties regarding the SAFE registration for PRC residents’ interests in overseas companies.  If any PRC resident stockholder of a SPV fails to make the required SAFE registration and amended registration, the onshore PRC subsidiaries of that offshore company may be prohibited from distributing their profits and the proceeds from any reduction in capital, share transfer or liquidation to the offshore entity.  Failure to comply with the SAFE registration and amendment requirements described above could result in liability under PRC laws for evasion of applicable foreign exchange restrictions.  Because of uncertainty in how the SAFE notice will be interpreted and enforced, we cannot be sure how it will affect our business operations or future plans.  For example, Zhengzhou ZST’s ability to conduct foreign exchange activities, such as the remittance of dividends and foreign currency-denominated borrowings, may be subject to compliance with the SAFE notice by our PRC resident beneficial holders over whom we have no control.  In addition, we cannot assure you that such PRC residents will be able to complete the necessary approval and registration procedures required by the SAFE regulations.  Failure by any PRC resident beneficial holder to register as required with the relevant branch of SAFE could subject these PRC resident beneficial holders to fines or legal sanctions, restrict our overseas or cross-border investment activities, limit Zhengzhou ZST’s ability to make distributions or pay dividends or affect our ownership structure, which could adversely affect our business and prospects.

On August 8, 2006, the PRC Ministry of Commerce (“MOFCOM”), joined by the State-owned Assets Supervision and Administration Commission of the State Council, the State Administration of Taxation, the State Administration for Industry and Commerce, the China Securities Regulatory Commission and SAFE, released a substantially amended version of the Provisions for Foreign Investors to Merge with or Acquire Domestic Enterprises (the “Revised M&A Regulations”), which took effect September 8, 2006.  These new rules significantly revised China’s regulatory framework governing onshore-to-offshore restructurings and foreign acquisitions of domestic enterprises.  These new rules signify greater PRC government attention to cross-border merger, acquisition and other investment activities, by confirming MOFCOM as a key regulator for issues related to mergers and acquisitions in China and requiring MOFCOM approval of a broad range of merger, acquisition and investment transactions.  Further, the new rules establish reporting requirements for acquisition of control by foreigners of companies in key industries, and reinforce the ability of the Chinese government to monitor and prohibit foreign control transactions in key industries.

Among other things, the revised M&A Regulations include new provisions that purport to require that an offshore special purpose vehicle, or a SPV, formed for listing purposes and controlled directly or indirectly by PRC companies or individuals must obtain the approval of the CSRC prior to the listing and trading of such SPV’s securities on an overseas stock exchange.  On September 21, 2006, the CSRC published on its official website procedures specifying documents and materials required to be submitted to it by SPVs seeking CSRC approval of their overseas listings.  However, the application of this PRC regulation remains unclear with no consensus currently existing among the leading PRC law firms regarding the scope and applicability of the CSRC approval requirement.

According to the M&A Regulations, a “Related Party Acquisition” is defined as having taken place when a PRC business that is owned by PRC individual(s) is sold to a non-PRC entity that is established or controlled, directly or indirectly, by those same PRC individual(s).  Under the M&A Regulations, any Related Party Acquisition must be approved by MOFCOM and any indirect arrangement or series of arrangements which achieves the same end result without the approval of MOFCOM is a violation of PRC law.

Our BVI subsidiary, World Orient, was owned by non-PRC individuals.  Everfair obtained all the equity interests of Zhengzhou ZST further to an Equity Purchase Agreement dated October 10, 2008 (the “Equity Purchase Agreement”) by and among Everfair, Zhong Bo, Wu Dexiu, Huang Jiankang, Sun Hui and Li Yuting.  The Equity Purchase Agreement received approval by the Zhengzhou Municipal Bureau of Commerce on November 10, 2008 and Zhengzhou ZST filed all required applications and received all appropriate SAFE approvals from the Henan branch of SAFE.

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Following the Share Exchange, we intend to offer Zhong Bo, our Chief Executive Officer, Wu Dexiu, Huang Jiankang, Sun Hui and Li Yuting (the “ZST Management”) a thirty (30) day right to purchase up to  12,530,000 shares of our common stock at a per share purchase price of $0.2806 (the “Purchase Right”).  Each of the shareholders and warrantholders of SRKP 18 prior to the Share Exchange has agreed to cancel 0.3317shares of common stock and warrants to purchase 0.5328 shares of common stock held by each of them for each one (1) share of common stock purchased by the ZST Management pursuant to the Purchase Right.  Assuming the full exercise of the Purchase Right, Mr. Zhong will own approximately 54.5% of our outstanding common stock (assuming the sale of the maximum number of shares of Series A Preferred Stock offered in the Private Placement and full conversion of the maximum number of shares of Series A Preferred Stock in the Private Placement).

The PRC regulatory authorities may take the view that the acquisition of Zhengzhou ZST by Everfair, the Share Exchange and the Purchase Right are part of an overall series of arrangements which constitute a Related Party Acquisition, because at the end of these transactions, PRC individuals become majority owners and effective controlling parties of a foreign entity that acquired ownership of Zhengzhou ZST.  The PRC regulatory authorities may also take the view that the registration of the acquisition of Zhengzhou ZST by Everfair with the Zhengzhou Municipal Bureau of Commerce and the filings with the Henan SAFE may not evidence that the acquisition has been properly approved because the relevant parties did not fully disclose to the Zhengzhou Bureau of Commerce or Henan SAFE of the overall restructuring arrangements, the existence of the Share Exchange and its link with the acquisition of Zhengzhou ZST by Everfair.  The PRC legal counsel of Zhengzhou ZST has opined that: (1) the Equity Purchase Agreement and the transactions thereunder have received all requisite approvals from the competent authorities, and all required registrations, certifications and approvals for the Equity Purchase Agreement and the transactions thereunder have been received by Zhengzhou ZST; (2) Zhengzhou ZST has filed all required applications for the Equity Purchase Agreement and the transactions thereunder and has received any and all required foreign exchange registrations, certifications and approvals as required, including, but not limited to, those as required from the appropriate national and local branches of SAFE and MOFCOM;  and (3) to their best knowledge, the Equity Purchase Agreement and the transactions thereunder do not (a) contravene or circumvent any provision of applicable PRC laws and regulations, including without limitation, the M&A Regulations, Circular 75 and its implementing rules; or (b) contravene the articles of association, business license or other constituent documents of Zhengzhou ZST.

We, however, cannot assure you that the PRC regulatory authorities, MOFCOM in particular, may take the same view as the PRC legal counsel.  If the PRC regulatory authorities take the view that the acquisition constitutes a Related Party Acquisition under the M&A Regulations, we cannot assure you we may be able to obtain the approval required from the national offices of MOFCOM.

If the PRC regulatory authorities take the view that the acquisition of Zhengzhou ZST by Everfair constitutes a Related Party Acquisition without the approval of the national offices of MOFCOM, they could invalidate our acquisition and ownership of Zhengzhou ZST.  Additionally, the PRC regulatory authorities may take the view that the Share Exchange constitutes a transaction which requires the prior approval of the China Securities Regulatory Commission, or CSRC.  If this takes place, we would attempt to find a way to re-establish control of Zhengzhou ZST’s business operations through a series of contractual arrangements rather than an outright purchase of Zhengzhou ZST.  But we cannot assure you that any such contractual arrangements will be protected by PRC law or that the Company can receive as complete or effective economic benefit and overall control of Zhengzhou ZST’s business than if the Company had direct ownership of Zhengzhou ZST.  In addition, we cannot assure you that any such contractual arrangements can be successfully effected under PRC law.  If we cannot obtain MOFCOM or CSRC approval if required by the PRC regulatory authorities to do so, and if we cannot put in place or enforce relevant contractual arrangements as an alternative and equivalent means of control of Zhengzhou ZST, our business and financial performance will be materially adversely affected.

If the CSRC approval is not obtained, we may face regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies.  These regulatory agencies may impose fines and penalties on our operations in the PRC, limit our operating privileges in the PRC, delay or restrict the repatriation of the proceeds from this offering into the PRC, or take other actions that could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects, as well as the trading price of our common stock.  The CSRC or other PRC regulatory agencies also may take actions requiring us, or making it advisable for us, to halt the proposed public offering before settlement and delivery of the common stock offered thereby.  Consequently, if investors engage in market trading or other activities in anticipation of and prior to settlement and delivery, they do so at the risk that settlement and delivery may not occur.

Any uncertainties and/or negative publicity regarding this CSRC approval requirement could have a material adverse effect on the trading price of our common stock.  Furthermore, published news reports in China recently indicated that the CSRC may have curtailed or suspended overseas listings for Chinese private companies.  These news reports have created further uncertainty regarding the approach that the CSRC and other PRC regulators may take with respect to us.

It is uncertain how our business operations or future strategy will be affected by the interpretations and implementation of the aforementioned rules and regulations.  It is anticipated that application of the new rules will be subject to significant administrative interpretation, and we will need to closely monitor how MOFCOM and other ministries apply the rules to ensure that our domestic and offshore activities continue to comply with PRC law.  Given the uncertainties regarding interpretation and application of the new rules, we may need to expend significant time and resources to maintain compliance.

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Our labor costs are likely to increase as a result of changes in Chinese labor laws.

We expect to experience an increase in our cost of labor.  Recent changes in Chinese labor laws that are effective January 1, 2008 are likely to increase costs further and impose restrictions on our relationship with our employees.  There can be no assurance that the labor laws will not change further or that their interpretation and implementation will vary, which may have a negative effect upon our business and results of operations.

The foreign currency exchange rate between U.S. Dollars and Renminbi could adversely affect our financial condition.

To the extent that we need to convert U.S. Dollars into Renminbi for our operational needs, our financial position and the price of our common stock may be adversely affected should the Renminbi appreciate against the U.S. Dollar at that time.  Conversely, if we decide to convert our Renminbi into U.S. Dollars for the operational needs or paying dividends on our common stock, the dollar equivalent of our earnings from our subsidiaries in China would be reduced should the U.S. Dollar appreciate against the Renminbi.

Until 1994, the Renminbi experienced a gradual but significant devaluation against most major currencies, including U.S. Dollars, and there was a significant devaluation of the Renminbi on January 1, 1994 in connection with the replacement of the dual exchange rate system with a unified managed floating rate foreign exchange system.  Since 1994, the value of the Renminbi relative to the U.S. Dollar has remained stable and has appreciated slightly against the U.S. Dollar.  Countries, including the United States, have argued that the Renminbi is artificially undervalued due to China’s current monetary policies and have pressured China to allow the Renminbi to float freely in world markets.  In July 2005, the PRC government changed its policy of pegging the value of the Renminbi to the U.S. Dollar.  Under the new policy the Renminbi is permitted to fluctuate within a narrow and managed band against a basket of designated foreign currencies.  While the international reaction to the Renminbi revaluation has generally been positive, there remains significant international pressure on the PRC government to adopt an even more flexible currency policy, which could result in further and more significant appreciation of the Renminbi against the U.S. Dollar.

Inflation in the PRC could negatively affect our profitability and growth.

While the PRC economy has experienced rapid growth, such growth has been uneven among various sectors of the economy and in different geographical areas of the country.  Rapid economic growth can lead to growth in the money supply and rising inflation.  During the past decade, the rate of inflation in China has been as high as approximately 20% and China has experienced deflation as low as approximately minus 2%.  If prices for our products and services rise at a rate that is insufficient to compensate for the rise in the costs of supplies such as raw materials, it may have an adverse effect on our profitability.  In order to control inflation in the past, the PRC government has imposed controls on bank credits, limits on loans for fixed assets and restrictions on state bank lending.  The implementation of such policies may impede economic growth.  In October 2004, the People’s Bank of China, the PRC’s central bank, raised interest rates for the first time in nearly a decade and indicated in a statement that the measure was prompted by inflationary concerns in the Chinese economy.  In April 2006, the People’s Bank of China raised the interest rate again.  Repeated rises in interest rates by the central bank would likely slow economic activity in China which could, in turn, materially increase our costs and also reduce demand for our products and services.

Failure to comply with the United States Foreign Corrupt Practices Act could subject us to penalties and other adverse consequences.

As our ultimate holding company is a Delaware corporation, we are subject to the United States Foreign Corrupt Practices Act, which generally prohibits United States companies from engaging in bribery or other prohibited payments to foreign officials for the purpose of obtaining or retaining business.  Foreign companies, including some that may compete with us, are not subject to these prohibitions.  Corruption, extortion, bribery, pay-offs, theft and other fraudulent practices may occur from time-to-time in the PRC.  We can make no assurance, however, that our employees or other agents will not engage in such conduct for which we might be held responsible.  If our employees or other agents are found to have engaged in such practices, we could suffer severe penalties and other consequences that may have a material adverse effect on our business, financial condition and results of operations.

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

On April 6, 2007, SAFE issued the “Operating Procedures for Administration of Domestic Individuals Participating in the Employee Stock Ownership Plan or Stock Option Plan of An Overseas Listed Company, also know as “Circular 78.” It is not clear whether Circular 78 covers all forms of equity compensation plans or only those which provide for the granting of stock options.  For any plans which are so covered and are adopted by a non-PRC listed company after April 6, 2007, Circular 78 requires all participants who are PRC citizens to register with and obtain approvals from SAFE prior to their participation in the plan.  In addition, Circular 78 also requires PRC citizens to register with SAFE and make the necessary applications and filings if they participated in an overseas listed company’s covered equity compensation plan prior to April 6, 2007.  We intend to adopt an equity compensation plan in the future and make substantial option grants to our officers and directors, most of who are PRC citizens.  In particular, further to the Purchase Right, we intend to offer our Chief Executive Officer and Chairman of the Board, a thirty (30) day right to purchase up to 11,223,121 shares of our common stock.  Circular 78 may require our officers and directors who receive option grants and are PRC citizens to register with SAFE.  We believe that the registration and approval requirements contemplated in Circular 78 will be burdensome and time consuming.  If it is determined that any of our equity compensation plans are subject to Circular 78, failure to comply with such provisions may subject us and participants of our equity incentive plan who are PRC citizens, including or Chief Executive Officer, to fines and legal sanctions and prevent us from being able to grant equity compensation to our PRC employees.  In that case, our ability to compensate our employees and directors through equity compensation would be hindered and our business operations may be adversely affected.

Any recurrence of Severe Acute Respiratory Syndrome (SARS), Avian Flu, or another widespread public health problem in the PRC could adversely affect our operations.

A renewed outbreak of SARS, Avian Flu or another widespread public health problem in China, where our manufacturing facilities are located and where the substantial portion of our sales occur, could have a negative effect on our operations.  Our business is dependent upon its ability to continue to manufacture products.  Such an outbreak could have an impact on our operations as a result of:

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

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

· a general slowdown in the Chinese economy.

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

A downturn in the economy of the PRC may slow our growth and profitability.

The growth of the Chinese economy has been uneven across geographic regions and economic sectors.  There can be no assurance that growth of the Chinese economy will be steady or that any downturn will not have a negative effect on our business, especially if it results in either a decreased use of our products or in pressure on us to lower our prices.

Because our business is located in the PRC, we may have difficulty establishing adequate management, legal and financial controls, which we are required to do in order to comply with U.S. securities laws.

PRC companies have historically not adopted a Western style of management and financial reporting concepts and practices, which includes strong corporate governance, internal controls and, computer, financial and other control systems.  Most of our middle and top management staff are not educated and trained in the Western system, and we may difficulty hiring new employees in the PRC with such training.  In addition, we may have difficulty in hiring and retaining a sufficient number of qualified employees to work in the PRC.  As a result of these factors, we may experience difficulty in establishing management, legal and financial controls, collecting financial data and preparing financial statements, books of account and corporate records and instituting business practices that meet Western standards.  Therefore, we may, in turn, experience difficulties in implementing and maintaining adequate internal controls as required under Section 404 of the Sarbanes-Oxley Act of 2002.  This may result in significant deficiencies or material weaknesses in our internal controls which could impact the reliability of our financial statements and prevent us from complying with SEC rules and regulations and the requirements of the Sarbanes-Oxley Act of 2002.  Any such deficiencies, weaknesses or lack of compliance could have a materially adverse effect on our business.

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Investors may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing original actions in China based upon U.S. laws, including the federal securities laws or other foreign laws against us or our management.

Most of our current operations, including the manufacturing and distribution of our products, are conducted in China.  Moreover, most of our directors and officers are nationals and residents of China.  All or substantially all of the assets of these persons are located outside the United States and in the PRC.  As a result, it may not be possible to effect service of process within the United States or elsewhere outside China upon these persons.  In addition, uncertainty exists as to whether the courts of China would recognize or enforce judgments of U.S. courts obtained against us or such officers and/or directors predicated upon the civil liability provisions of the securities laws of the United States or any state thereof, or be competent to hear original actions brought in China against us or such persons predicated upon the securities laws of the United States or any state thereof.

RISKS RELATED TO OUR CAPITAL STRUCTURE

There is no current trading market for our common stock, and there is no assurance of an established public trading market, which would adversely affect the ability of our investors to sell their securities in the public market.

Our common stock is not currently listed or quoted for trading on any national securities exchange or national quotation system.  We intend to apply for the listing of our common stock on the NYSE Alternext in the future.  There is no guarantee that the NYSE Alternext, or any other exchange or quotation system, will permit our shares to be listed and traded.  If we fail to obtain a listing on the NYSE Alternext, we may seek quotation on the OTC Bulletin Board.  The NASD has enacted changes that limit quotations on the OTC Bulletin Board to securities of issuers that are current in their reports filed with the Securities and Exchange Commission.  The effect on the OTC Bulletin Board of these rule changes and other proposed changes cannot be determined at this time.  The OTC Bulletin Board is an inter-dealer, over-the-counter market that provides significantly less liquidity than the NASDAQ Global Market (the “NASDAQ Global Market”).  Quotes for stocks included on the OTC Bulletin Board are not listed in the financial sections of newspapers as are those for the NASDAQ Global Market.  Therefore, prices for securities traded solely on the OTC Bulletin Board may be difficult to obtain and holders of common stock may be unable to resell their securities at or near their original offering price or at any price.

Shares eligible for future sale may adversely affect the market price of our common stock, as the future sale of a substantial amount of outstanding stock in the public marketplace could reduce the price of our common stock.

Pursuant to the terms of the Share Exchange, we agreed to file a registration statement with the Securities and Exchange Commission to register the shares of our common stock issued in an equity financing that was conducted in connection with the Exchange.  The registration statement must be filed with 60 days of the closing of the Share Exchange.  We also agreed to register all of the 2,940,000 shares of common stock and 420,000 shares of common stock issuable upon the exercise of outstanding warrants held by our shareholders immediately prior to the Share Exchange.  Of these shares, 600,055 shares of common stock and 85,723 shares of common stock underlying warrants would be covered by the registration statement filed in connection with the Private Placement, and 2,339,945 shares of common stock and 334,277 shares of common stock underlying warrants, which are beneficially owned by affiliates of the placement agent would be included in a subsequent registration statement filed by us within 10 days after the end of the six-month period that immediately follows the date on which we file the registration statement to register the shares issued in the Private Placement.  All of the shares included in an effective registration statement as described above may be freely sold and transferred except if subject to a lock up agreement.  This current report is not an offer of securities for sale.  Any securities sold in the private placement have not be registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States unless registered under the Securities Act of 1933, as amended, or pursuant to an exemption from such registration.

Additionally, following the Share Exchange, the former stockholders of World Orient may be eligible to sell all or some of our shares of common stock by means of ordinary brokerage transactions in the open market pursuant to Rule 144, promulgated under the Securities Act (“Rule 144”), subject to certain limitations.  In general, pursuant to Rule 144, a stockholder (or stockholders whose shares are aggregated) who has satisfied a six-month holding period may, under certain circumstances, sell within any three-month period a number of securities which does not exceed the greater of 1% of the then outstanding shares of common stock or the average weekly trading volume of the class during the four calendar weeks prior to such sale.  As of the closing of the Share Exchange, 1% of our issued and outstanding shares of common stock was approximately 90,814 shares.  Rule 144 also permits, under certain circumstances, the sale of securities, without any limitations, by a non-affiliate that has satisfied a one-year holding period.  Any substantial sale of common stock pursuant to any resale prospectus or Rule 144 may have an adverse effect on the market price of our common stock by creating an excessive supply.

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Following the Share Exchange, Private Placement and Purchase Right, our Chief Executive Officer and Chairman of the Board exercises significant influence over us.

Our Chief Executive Officer and Chairman of the Board, Zhong Bo, will beneficially own or control approximately 54.5% of our outstanding shares as of the close of the Share Exchange, the sale of the maximum number of shares of Series A Preferred Stock offered in the Private Placement (assuming full conversion of the maximum number of shares of Series A Convertible Preferred Stock) and exercise in full of the Purchase Right.  Mr. Zhong has a controlling influence in determining the outcome of any corporate transaction or other matters submitted to our stockholders for approval, including mergers, consolidations and the sale of all or substantially all of our assets, election of directors, and other significant corporate actions.  Mr. Zhong may also have the power to prevent or cause a change in control.  In addition, without the consent of Mr. Zhong, we could be prevented from entering into transactions that could be beneficial to us.  The interests of Mr. Zhong may differ from the interests of our other stockholders.

If we fail to maintain effective internal controls over financial reporting, the price of our common stock may be adversely affected.

We are required to establish and maintain appropriate internal controls over financial reporting.  Failure to establish those controls, or any failure of those controls once established, could adversely impact our public disclosures regarding our business, financial condition or results of operations.  Any failure of these controls could also prevent us from maintaining accurate accounting records and discovering accounting errors and financial frauds.  Rules adopted by the SEC pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 require annual assessment of our internal control over financial reporting, and attestation of this assessment by our independent registered public accountants.  The SEC extended the compliance dates for non-accelerated filers, as defined by the SEC.  Accordingly, we believe that the annual assessment of our internal controls requirement will first apply to our annual report for the 2008 fiscal year and the attestation requirement of management’s assessment by our independent registered public accountants will first apply to our annual report for the 2009 fiscal year.  The standards that must be met for management to assess the internal control over financial reporting as effective are new and complex, and require significant documentation, testing and possible remediation to meet the detailed standards.  We may encounter problems or delays in completing activities necessary to make an assessment of our internal control over financial reporting.  In addition, the attestation process by our independent registered public accountants is new and we may encounter problems or delays in completing the implementation of any requested improvements and receiving an attestation of our assessment by our independent registered public accountants.  If we cannot assess our internal control over financial reporting as effective, or our independent registered public accountants are unable to provide an unqualified attestation report on such assessment, investor confidence and share value may be negatively impacted.

In addition, management’s assessment of internal controls over financial reporting may identify weaknesses and conditions that need to be addressed in our internal controls over financial reporting or other matters that may raise concerns for investors.  Any actual or perceived weaknesses and conditions that need to be addressed in our internal control over financial reporting, disclosure of management’s assessment of our internal controls over financial reporting, or disclosure of our public accounting firm’s attestation to or report on management’s assessment of our internal controls over financial reporting may have an adverse impact on the price of our common stock.

We may not be able to achieve the benefits we expect to result from the Share Exchange.

On December 11, 2008, we entered into the Exchange Agreement, as amended on January 9, 2009, with all of the shareholders of World Orient, pursuant to which we agreed to acquire 100% of the issued and outstanding securities of World Orient in exchange for shares of our common stock.  On January 9, 2009, the Share Exchange closed, World Orient became our 100%-owned subsidiary and our sole business operations became that of World Orient and its subsidiaries.  We also have a new Board of Directors and management consisting of persons from Zhengzhou ZST and changed our corporate name from SRKP 18, Inc. to ZST Digital Networks, Inc.

We may not realize the benefits that we hoped to receive as a result of the Share Exchange, which include:

· access to the capital markets of the United States;

· the increased market liquidity expected to result from exchanging stock in a private company for securities of a public company that may eventually be traded;

· the ability to use registered securities to make acquisition of assets or businesses;

· increased visibility in the financial community;

· enhanced access to the capital markets;

· improved transparency of operations; and

· perceived credibility and enhanced corporate image of being a publicly traded company.

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There can be no assurance that any of the anticipated benefits of the Share Exchange will be realized in respect to our new business operations.  In addition, the attention and effort devoted to achieving the benefits of the Share Exchange and attending to the obligations of being a public company, such as reporting requirements and securities regulations, could significantly divert management’s attention from other important issues, which could materially and adversely affect our operating results or stock price in the future.

Compliance with changing regulation of corporate governance and public disclosure will result in additional expenses.

Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002 and related SEC regulations, have created uncertainty for public companies and significantly increased the costs and risks associated with accessing the public markets and public reporting.  Our management team will need to invest significant management time and financial resources to comply with both existing and evolving standards for public companies, which will lead to increased general and administrative expenses and a diversion of management time and attention from revenue generating activities to compliance activities.

Our common stock may be considered a “penny stock,” and thereby be subject to additional sale and trading regulations that may make it more difficult to sell.

Our common stock, which is not currently listed or quoted for trading, may be considered to be a “penny stock” if it does not qualify for one of the exemptions from the definition of “penny stock” under Section 3a51-1 of the Securities Exchange Act for 1934, as amended (the “Exchange Act”) once, and if, it starts trading.  Our common stock may be a “penny stock” if it meets one or more of the following conditions: (i) the stock trades at a price less than $5.00 per share; (ii) it is NOT traded on a “recognized” national exchange; (iii) it is NOT quoted on the Nasdaq Capital Market, or even if so, has a price less than $5.00 per share; or (iv) is issued by a company that has been in business less than three years with net tangible assets less than $5 million.

The principal result or effect of being designated a “penny stock” is that securities broker-dealers participating in sales of our common stock will be subject to the “penny stock” regulations set forth in Rules 15-2 through 15g-9 promulgated under the Exchange Act.  For example, Rule 15g-2 requires broker-dealers dealing in penny stocks to provide potential investors with a document disclosing the risks of penny stocks and to obtain a manually signed and dated written receipt of the document at least two business days before effecting any transaction in a penny stock for the investor’s account.  Moreover, Rule 15g-9 requires broker-dealers in penny stocks to approve the account of any investor for transactions in such stocks before selling any penny stock to that investor.  This procedure requires the broker-dealer to (i) obtain from the investor information concerning his or her financial situation, investment experience and investment objectives; (ii) reasonably determine, based on that information, that transactions in penny stocks are suitable for the investor and that the investor has sufficient knowledge and experience as to be reasonably capable of evaluating the risks of penny stock transactions; (iii) provide the investor with a written statement setting forth the basis on which the broker-dealer made the determination in (ii) above; and (iv) receive a signed and dated copy of such statement from the investor, confirming that it accurately reflects the investor’s financial situation, investment experience and investment objectives.  Compliance with these requirements may make it more difficult and time consuming for holders of our common stock to resell their shares to third parties or to otherwise dispose of them in the market or otherwise.

We do not foresee paying cash dividends in the foreseeable future and, as a result, our investors’ sole source of gain, if any, will depend on capital appreciation, if any.

We do not plan to declare or pay any cash dividends on our shares of common stock in the foreseeable future and currently intend to retain any future earnings for funding growth.  As a result, investors should not rely on an investment in our securities if they require the investment to produce dividend income.  Capital appreciation, if any, of our shares may be investors’ sole source of gain for the foreseeable future.  Moreover, investors may not be able to resell their shares of the Company at or above the price they paid for them.

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

The information contained in this report, including in the documents incorporated by reference into this report, includes some statement that are not purely historical and that are “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995.  Such forward-looking statements include, but are not limited to, statements regarding the Company, World Orient and Zhengzhou ZSTand its management’s expectations, hopes, beliefs, intentions or strategies regarding the future, including Zhengzhou ZST’s financial condition, results of operations, and the expected impact of the Share Exchange on the parties’ individual and combined financial performance.  In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements.  The words “anticipates,” “believes,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “might,” “plans,” “possible,” “potential,” “predicts,” “projects,” “seeks,” “should,” “will,” “would” and similar expressions, or the negatives of such terms, may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

The forward-looking statements contained in this report are based on current expectations and beliefs concerning future developments and the potential effects on the parties and the transaction.  There can be no assurance that future developments actually affecting us will be those anticipated.  These forward-looking statements involve a number of risks, uncertainties (some of which are beyond the parties’ control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements, including the following:

· our ability to maintain and increase revenues and sales of our products;

· our ability to develop and market new products;

· competitive nature of our industry;

· market acceptance of our products;

· our reliance on intellectual property, some of which is owned by third parties;

· our strategic investments and acquisitions;

· compliance and changes in the laws of the PRC that affect our operations;

· continued maintenance of certificates, permits and licenses required to conduct business in China;

· vulnerability of our business to general economic downturn, especially in the PRC; and

· the other factors referenced in this Current Report, including, without limitation, under the sections entitled “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Business

These risks and uncertainties, along with others, are also described above under the heading “Risk Factors.” Should one or more of these risks or uncertainties materialize, or should any of the parties’ assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements.  We undertake no obligation to 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.

ADDITIONAL DISCLOSURE

For additional information that would be required if the Company were filing a general form for registration of securities on Form 10, see Item 2.02 for “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” Item 3.02 for a description of the Company’s securities post-Share Exchange, Private Placement and Purchase Right and related discussion of market price, and Item 4.01 regarding changes in the Company’s accountant, all incorporated by reference herein.  Required disclosure regarding the change in control of the Company, the impact on its directors, executive officers, control persons and related compensation and beneficial ownership issues are addressed in Item 5.01, incorporated by reference herein.  Attention is also directed to Item 9.01, which provides ZST’s audited financial statements as of and for the period ended December 31, 2007, the unaudited financial statements as of and for the nine months ended September 30, 2008, and World Orient’s unaudited financial statements as of and for the nine months ended September 30, 2008.

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Item 2.02   Results of Operations and Financial Condition.

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

The following discussion relates to a discussion of the financial condition and results of operations of World Orient Universal Limited, a company organized in the British Virgin Islands (“World Orient”), its wholly-owned subsidiary, Global Asia Universal Limited, a company organized in the British Virgin Islands (“Global Asia”), its wholly-owned subsidiary, EverFair Technologies, Ltd., a company organized in Hong Kong (“EverFair”), and its wholly-owned subsidiary Zhengzhou Shenyang Technology Company Limited, a company organized in the People’s Republic of China (“Zhengzhou ZST”).  This management’s discussion and analysis of financial condition and results of operations should be read in conjunction with the Company’s financial statements and the related notes, and the other financial information included in this current report.

Forward-Looking Statements

This filing contains forward-looking statements.  The words “anticipated,” “believe,” “expect, “plan,” “intend,” “seek,” “estimate,” “project,” “could,” “may,” and similar expressions are intended to identify forward-looking statements.  These statements include, among others, information regarding future operations, future capital expenditures, and future net cash flow.  Such statements reflect our management’s current views with respect to future events and financial performance and involve risks and uncertainties, including, without limitation, general economic and business conditions, changes in foreign, political, social, and economic conditions, regulatory initiatives and compliance with governmental regulations, the ability to achieve further market penetration and additional customers, and various other matters, many of which are beyond our control.  Should one or more of these risks or uncertainties occur, or should underlying assumptions prove to be incorrect, actual results may vary materially and adversely from those anticipated, believed, estimated or otherwise indicated.  Consequently, all of the forward-looking statements made in this filing are qualified by these cautionary statements and there can be no assurance of the actual results or developments.

Overview

Business Summary

Established in 1996, the Company is principally engaged in supplying digital and optical network equipment to cable system operators in Henan Province, China.  The Company has developed a line of internet protocol television (“IPTV”) set-top boxes that are used to provide bundled cable television, Internet and telephone services to residential and commercial customers.  The Company has assisted in the installation and construction of over 400 local cable networks covering more than 90 municipal districts, counties, townships, and enterprises.  The Company’s services and products have been recognized with various certifications, including “integrated computer information system qualification class III” issued by the Ministry of Industry Information, “communication user cable construction enterprise qualification” issued by Henan Province Administration of Communication, “Henan Province Security Technology Prevention Engineering Qualification Class III”, a certificate of “ISO9001:2000 Quality System Authentication”, and “Double High” certification, high-tech product and high-tech enterprise issued by Henan Province government.

At present, the Company’s main clients are broadcasting TV bureaus and cable network operators serving various cities and counties.  The Company has over 30 main customers, including the broadcasting TV bureaus and cable network operators of Nanyang, Mengzhou, Xuchang, Pingdingshan, Kaifeng, Zhoukou, Gongyi, Yuanyang County, Luoning County, Neihuang County, Yinyang County, Xixia County, Kaifeng County, Nanzhao County, and Gushi County.

In the near future, the Company plans to joint venture with cable network operators to provide bundled television programming, Internet and telephone services to residential customers in cities and counties located in Henan Province.

General Factors

We expect that for the foreseeable future that the largest source of revenue for our business will be the sale of set-top boxes sold to cable system operators. Because the number of potential new customers for our set-top box and fixed satellite services businesses is small, our current customer concentration is likely to continue for the foreseeable future and our operating results will consequently likely continue to depend on sales to a relatively small number of customers and on the continued success of these customers relative to their competitors.

Our profitability will be affected by costs associated with our efforts to expand our sales, marketing, product development and general and administrative capabilities in all of our businesses, as well as expenses that we incur as a publicly-traded company.  These costs include costs associated with, among other things, financial reporting, information technology, complying with federal securities laws (including compliance with the Sarbanes-Oxley Act of 2002), tax administration and human resources related functions.  As we expand internationally, we may also incur additional costs to conform our set-top boxes to comply with local laws or local specifications and to ship our set-top boxes to our international customers.

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In order to grow or even maintain our current level of revenue we will be required to attract new customers and to increase sales to existing customers which may require us to design, market and sell new set-top boxes.  If we do not develop relationships with new customers, we may not be able to expand our customer base and our ability to increase or even maintain our revenue will be impacted.

We believe that there are substantial opportunities for developing potential new customers lie in international markets and we expect our performance in international markets to be a significant factor in determining whether we will be able to generate revenue and income growth in future periods.  However, there can be no assurance we will be able to successfully commence or grow an international business.

In addition, unfavorable events in the economy, including a continuation or further deterioration in the current downturn in real estate mortgage and credit markets, could cause consumer demand for subscription TV services and consequently sales of our set-top boxes to materially decline because consumers may delay purchasing decisions or change or reduce their discretionary spending.

Our ability to sustain or increase profitability will also depend in large part on our ability to control or reduce our costs of producing our set-top boxes.  The market for our set-top boxes, like other electronic products, has been characterized by regular reductions in selling prices and production costs.  Therefore, we will likely be required to reduce production costs in order to maintain the margins we earn on set-top boxes and the profitability of oru set-top box business.

Recent Events

On December 11, 2008, SRKP 18, Inc., a Delaware corporation (“SRKP 18”), entered into a share exchange agreement as amended on January 9, 2009 (the “Exchange Agreement”), with World Orient and its shareholders, pursuant to which the shareholders would transfer all of the issued and outstanding shares of World Orient to SRKP 18 in exchange for 1,985,000 shares of SRKP 18’s common stock (the “Share Exchange”).  On January 9, 2009, the Share Exchange closed and World Orient became a wholly-owned subsidiary of SRKP 18, which immediately changed its name to “ZST Digital Networks, Inc.” A total of 1,985,000 shares were issued to the former shareholders of World Orient.

In addition, on January 9, 2009, concurrently with the close of the Share Exchange, we conducted an initial closing of a private placement transaction (the “Private Placement”).  Pursuant to subscription agreements entered into with the investors, we sold an aggregate of 1,097,500 shares of Series A Convertible Preferred Stock at $1.60 per share.  As a result, we received gross proceeds in the amount of approximately $1,756,000; up to $5 million of Series A Convertible Preferred Stock is being offered in the Private Placement.  In connection with the initial closing of the Private Placement, the Company issued a promissory note in the principal amount of $170,000, bearing no interest, to the placement agent (the “Note”). The principal shall be due and payable by the Company on or before the earlier of (a) thirty (30) days from the date of issuance of this Note or (b) upon the receipt by the Company of at least $4 million in the Private Placement.

After the Share Exchange, we intend to offer Zhong Bo, our Chief Executive Officer and Chairman of the Board, Wu Dexiu, Huang Jiankang, Sun Hui and Li Yuting (the “ZST Management”) a thirty (30) day right to purchase up to 12,530,000 shares of our common stock at a per share purchase price of $0.2806 (the “Purchase Right”).  Each of the shareholders and warrantholders of SRKP 18 prior to the Share Exchange agreed to cancel 0.3317 shares of common stock and warrants to purchase 0.5328 shares of common stock held by each of them for each one (1) share of common stock purchased by the ZST Management pursuant to the Purchase Right (the “SRKP 18 Share and Warrant Cancellation”).  Assuming the exercise in full of the Purchase Right, we will cancel an aggregate of 4,156,390 shares of common stock and warrants to purchase 6,676,390 shares of common stock held by certain of our stockholders and warrantholders prior to the Share Exchange.

Our BVI subsidiary, World Orient, was owned by non-PRC individuals.  Everfair obtained all the equity interests of Zhengzhou ZST further to an Equity Purchase Agreement dated October 10, 2008 (the “Equity Purchase Agreement”) by and among Everfair, Zhong Bo, our Chief Executive Officer and Chairman of the Board, Wu Dexiu, Huang Jiankang, Sun Hui and Li Yuting.

Following the Share Exchange, we intend to offer the ZST Management the Purchase Right described above.  Assuming the full exercise of the Purchase Right, Mr. Zhong will own approximately 54.5% of our outstanding common stock (assuming the sale of the maximum number of shares of Series A Preferred Stock offered in the Private Placement and the full conversion of the maximum number of shares of Series A Preferred Stock).  See “Risk Factors” beginning on page 12 above for a more complete description of the aforementioned restructuring and risks associated therewith.

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Critical Accounting Policies and Estimates

The discussion and analysis of our financial condition and results of operations is based upon our financial statements which have been prepared in accordance with accounting principles generally accepted in the United States.  The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities.  On an on-going basis, we evaluate our estimates including the allowance for doubtful accounts, the salability and recoverability of inventory, income taxes and contingencies.  We base our estimates on historical experience and on other assumptions that we believes to be reasonable under the circumstances, the results of which form our basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.  Actual results may differ from these estimates under different assumptions or conditions.

We cannot predict what future laws and regulations might be passed that could have a material effect on our results of operations.  We assess the impact of significant changes in laws and regulations on a regular basis and update the assumptions and estimates used to prepare our financial statements when we deem it necessary.

Revenue recognition.  We recognize product sales revenue when the significant risks and rewards of ownership have been transferred pursuant to PRC law, including such factors as when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, sales and value-added tax laws have been complied with, and collectibility is reasonably assured. The Company generally recognizes revenue when products are shipped.  Our set-top sales contracts include one year warranty period. The Company recorded the warranty as unearned revenue when the sales occurred and then amortized and recognized warranty revenues on a straight-line basis over the warranty period. The warranty costs were mainly the costs of materials used for repairing those sold products and were expensed when incurred. As the costs associated with such warranty revenues were immaterial in monetary terms and the time spent for repair work on those warranty items was minimal, no warranty liability was accrued at all periods.  Revenues from fixed-price construction contracts are recognized on the completed-contract method. This method is used because most of the construction and engineering contracts are completed within six months or less and financial position and results of operations do not vary significantly from those which would result from using the percentage-of-completion method. A contract is considered complete when all costs have been incurred and the installation is operating according to specifications or has been accepted by the customer. Contract costs include all direct material and labor costs and those indirect costs related to contract performance, such as indirect labor, suppliers, tools, repairs, and depreciation costs. General and administrative costs are charged to expenses as incurred. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Claims are included in revenues when received.

Allowance for doubtful accounts.  In estimating the collectability of accounts receivable we analyze historical write-offs, changes in our internal credit policies and customer concentrations when evaluating the adequacy of our allowance for doubtful accounts periodically.  Differences may result in the amount and timing of expenses for any period if we make different judgments or uses difference estimates.  Our accounts receivable represent a significant portion of our current assets and total assets.  Our realization on accounts receivable, expressed in terms of United States dollars may be affected by fluctuations in currency rates since the customer’s currency is frequently a currency other than United States dollars.

Inventories.  Inventories comprise raw materials and finished goods are stated at the lower of cost or net realizable value, using the first-in first-out (FIFO) method.  Substantially all inventory costs are determined using the weighted average basis.  Costs of finished goods include direct labor, direct materials, and production overhead before the goods are ready for sale.  We evaluate the need for reserves associated with obsolete, slow-moving and non-salable inventory by reviewing net realizable values on a periodic basis. Inventory costs do not exceed net realizable value.

Taxation.  Under the tax laws of PRC, Zhengzhou ZST has had tax advantages granted by local government for corporate income taxes and sales taxes commencing from the establishment of the Company.  As a manufacturing enterprise established in Zhengzhou, PRC, the Company was entitled to a preferential Enterprise Income Tax (”EIT”) rate, 15%.  On March 16, 2007, the National People’s Congress of China enacted a new PRC Enterprise Income Tax Law, under which foreign invested enterprises and domestic companies will be subject to enterprise income tax at a uniform rate of 25%.  The new law became effective on January 1, 2008.  Since 2008, the local government has increased the EIT rate from 15% to 18%.  During the transition period for enterprises established before March 16, the tax rate will be gradually increased starting in 2008 and be equal to the new tax rate in 2012.  We believe that our profitability will be negatively affected in the near future as a result of the new EIT Law.

Recently Issued Accounting Pronouncements

On December 4, 2007, the FASB issued SFAS No. 160, Noncontrolling interest in Consolidated Financial Statements (SFAS No. 160).  SFAS No. 160 requires all entities to report noncontrolling (minority) interests in subsidiaries as equity in the consolidated financial statements.  The statement establishes a single method of accounting for changes in a parent ’ s ownership interest in a subsidiary that do not result in deconsolidation and expands disclosures in the consolidated financial statements.  SFAS No. 160 is effective for fiscal years beginning after December 15, 2008 and interim periods within those fiscal years.  We have not yet determined the impact of the adoption of SFAS No. 160 on our consolidated financial statements and footnote disclosures.

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On December 4, 2007, the FASB issued SFAS No. 141R, Business Combinations (SFAS No. 141R). SFAS No. 141R requires the acquiring entity in a business combination to recognize all the assets acquired and liabilities assumed, establishes the acquisition date fair value as the measurement objective for all assets acquired and liabilities assumed, and requires the acquirer to expand disclosures about the nature and financial effect of the business combination.  SFAS No. 141R is effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008.  We have adopted SFAS No. 141R on our consolidated financial statements and footnote disclosures.

In March 2008, the FASB issued SFAS 161, “Disclosures about Derivative Instruments and Hedging Activities”.  The new standard is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’ s financial position, financial performance, and cash flows.  It is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged.  We are currently evaluating the impact of adopting SFAS 161 on its consolidated financial statements.

Recently Adopted Accounting Pronouncements

In July 2006, the FASB issued FASB Interpretation (“FIN”) No. 48, “Accounting for Uncertainty in Income Taxes,” which prescribes a comprehensive model for how a company should recognize, measure, present and disclose in its financial statements uncertain tax positions that the company has taken or expects to take on a tax return (including a decision whether to file or not to file a return in a particular jurisdiction).  The accounting provisions of FIN No. 48 are effective for fiscal years beginning after December 15, 2006.  The adoption of this Interpretation had no impact on our financial position or results of operations.

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements" ("SFAS 157").  SFAS 157 defines fair value, establishes a framework and gives guidance regarding the methods used for measuring fair value, and expands disclosures about fair value measurements.  In February 2008, the FASB issued FASB Staff Position 157-1, "Application of FASB Statement No. 157 to FASB Statement No. 13 and Other Accounting Pronouncements That Address Fair Value Measurements for Purposes of Lease Classification or Measurement under Statement 13" ("FSP 157-1") and FASB Staff Position 157-2, "Effective Date of FASB Statement No. 157" ("FSP 157-2").  FSP 157-1 amends SFAS 157 to remove certain leasing transactions from its scope.  FSP 157-2 delays the effective date of SFAS 157 for all non-financial assets and non-financial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually), until fiscal years beginning after November 15, 2008.  SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years.  The Company adopted SFAS 157 effective January 1, 2008 for all financial assets and liabilities as required.  The adoption of SFAS 157 was not material to our financial statements or results of operations.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities — Including an Amendment of FASB Statement No. 115,” (“SFAS 159”) which is effective for fiscal years beginning after November 15, 2007.  SFAS 159 is an elective standard which permits an entity to choose to measure many financial instruments and certain other items at fair value at specified election dates.  Subsequent unrealized gains and losses on items for which the fair value option has been elected will be reported in earnings.  We have not elected the fair value option for any assets or liabilities under SFAS 159.

In April 2008, the FASB issued Staff Position FAS 142-3, Determination of the Useful Life of Intangible Assets (“FSP FAS 142-3”) which amends the factors an entity should consider in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FAS No. 142, Goodwill and Other Intangible Assets (“FAS No. 142”). FSP FAS 142-3 applies to intangible assets that are acquired individually or with a group of assets and intangible assets acquired in both business combinations and asset acquisitions. It removes a provision under FAS No. 142, requiring an entity to consider whether a contractual renewal or extension clause can be accomplished without substantial cost or material modifications of the existing terms and conditions associated with the asset. Instead, FSP FAS 142-3 requires that an entity consider its own experience in renewing similar arrangements. An entity would consider market participant assumptions regarding renewal if no such relevant experience exists. FSP FAS 142-3 is effective for year ends beginning after December 15, 2008 with early adoption prohibited. The adoption of this statement is not expected to have a material effect on the Company’s financial statements.

In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles”. SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles in the United States. It is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, “The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles”. The adoption of this statement is not expected to have a material effect on the Company’s financial statements.

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In May 2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 163, “Accounting for Financial Guarantee Insurance Contracts – An interpretation of FASB Statement No. 60”. SFAS No. 163 requires that an insurance enterprise recognize a claim liability prior to an event of default when there is evidence that credit deterioration has occurred in an insured financial obligation. It also clarifies how Statement 60 applies to financial guarantee insurance contracts, including the recognition and measurement to be used to account for premium revenue and claim liabilities, and requires expanded disclosures about financial guarantee insurance contracts. It is effective for financial statements issued for fiscal years beginning after December 15, 2008, except for some disclosures about the insurance enterprise’s risk-management activities. SFAS No. 163 requires that disclosures about the risk-management activities of the insurance enterprise be effective for the first period beginning after issuance. Except for those disclosures, earlier application is not permitted. The adoption of this statement is not expected to have a material effect on the Company’s financial statements.

In June 2008, the Financial Accounting Standards Board (“FASB”) issued FSP No. EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities (“FSP EITF 03-6-1”). FSP EITF 03-6-1 concludes that unvested share-based payment awards that contain rights to receive non-forfeitable dividends or dividend equivalents are participating securities, and thus, should be included in the two-class method of computing earnings per share (“EPS”). FSP EITF 03-6-1 is effective for fiscal years beginning after December 15, 2008, and interim periods within those years. Early application of EITF 03-6-1 is prohibited. It also requires that all prior-period EPS data be adjusted retrospectively. The adoption of this statement is not expected to have a material effect on the Company’s financial statements.

Results of Operations

The following table sets forth information from our statements of operations for the nine months ended September 30, 2008 and 2007 and years ended December 31, 2007 and 2006.

Nine months ended September 30, 2008 and 2007

Revenues consist of sales of our set-top and digital networking products and revenues recorded under network installation projects.  Revenues from product sales were $41.2 million for the nine months ended September 30, 2008, an increase of $25.6 million, or 164%, compared to $15.6 million for the same period in 2007.  The increase in revenue was attributed mainly to the increased demand for our set-top and digital networking products, which we believe is a result of our market expansion efforts as well as price increases of some of our products.  We believe the increases in sales revenue and volume are a result of our emphasis on brand promotion and utilizing our sales channels to continually increase our market share.

Cost of goods sold, which include raw material, labor and amounts due to contract manufacturers, was $33.6 million for the nine months ended September 30, 2008, an increase of $21.0 million, or 166%, compared to $12.6 million for the same period in 2007.  This increase in cost of sales was caused by an increase in sales and was consistent with the increase in revenues.  As a percentage of revenues, cost of sales for the nine months ended September 30, 2008 and 2007 were 82% and 81%, respectively.

Gross profit for the nine months ended September 30, 2008 was $7.7 million, or 19% of revenues, compared to $3.0 million, or 19% of revenues, for the comparable period in 2007.  Management considers gross profit to be a key performance indicator in managing our business.  Gross profit margins are a factor of cost of sales, product mix and product demand.

Selling expenses, which mainly include marketing, shipping, insurance, wage and other expenses, were $107,000 for the nine months ended September 30, 2008, an increase of $66,000, or 161%, compared to $41,000 for the same period in 2007.  The increase was primarily due to increased shipping costs.

Other general and administrative expenses, which include wage, benefit, bad debts, utility, consulting, turnover taxes, professional fees and other expenses, were $620,000 for the nine months ended September 30, 2008, an increase of $292,000, or 89% , compared to $328,000 for the same period in 2007.  The increase was primarily a result of an increase in office expenses.  We expect our general and administrative expenses to increase as a result of professional fees incurred as a result of being a publicly reporting company in the United States.

Interest expenses for interest-bearing debts for the nine months ended September 30, 2008 was $246,000, an increase of $154,000, or 167%, compared to $92,000 in 2007.  The increase is mainly the result of increased bank debt.

For the nine months ended September 30, 2008, we recorded a provision for income taxes of $2.2 million, compared to $825,000 for the same period in 2007.  The tax rate for the year ended December 31, 2007 was 33%.  Our income tax rate for the year ended December 31, 2008 was 25%.

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Years Ended December 31, 2007 and 2006

Revenues were $27.9 million for the year ended December 31, 2007, an increase of $22.2 million, or 389%, compared to $5.7 million for the year ended December 31, 2006.  The increase in revenue was attributed mainly due to the increased demand for our products, which we believe is a result of market expansion efforts.

Cost of goods sold was $23.1 million for the year ended December 31, 2007, an increase of $18.6 million, or 413%, compared to $4.5 million for the year ended December 31, 2006.  The increase was primarily a result of the increase in sales and was consistent with the increase in the net revenue.  As a percentage of the net revenue, cost of sales for the years ended December 31, 2007 and 2006 were 83% and 79%, respectively.  The increase as a percentage of revenues was due to the increased purchase price of our products.

Gross profit for the year ended December 31, 2007 was $ 4.8 million, or 17% of revenues, compared to $1.2 million, or 21% of revenues, for the year ended December 31, 2006.  The decrease in our gross profit margin for the year ended December 31, 2007 as a percentage of revenues was primarily due to the increased purchase price of our products and no corresponding increase in the sales price of our products.

Selling expenses were $2,600 for the year ended December 31, 2007, a drop of $16,400, or 86%, compared to $19,000 for the year ended December 31, 2006.  The decrease in selling expenses was attributable to a decrease in wages.

Other general and administrative expenses were $715,000 for the year ended December 31, 2007, an increase of $485,000, or 211%, compared to $230,000 for the year ended December 31, 2006.  The increase is mainly due to increased personnel salaries.

Interest expenses for interest-bearing debts for the year ended December 31, 2007 was $196,000, an increase of $184,000 or 1,533%, compared to $12,000 in 2006.  The increase is mainly the result of increased bank debt.

For the year ended December 31, 2007, we recorded a provision for income taxes of $1,231,000, compared to $315,000 for the same period in 2006.  The tax rate for the year ended December 31, 2007 was 33%.  Our income tax rate for the year ended December 21, 2008 was 25%.

Liquidity and Capital Resources

We had cash and cash equivalents of $847,000 as of September 30, 2008, as compared to $1,126,000 as of December 31, 2007.

We had a working capital of approximately $6,830,099, $3,712,882, $2,145,357 and $1,707,386 as at September 30, 2008 and 2007 and as of December 31, 2007 and 2006, respectively.

Our accounts receivable has been an increasingly significant portion of our current assets, representing $18,213,473, $5,737,914, $9,419,029 and $3,417,763, or 92%, 50%, 55%, 42% of current assets, as at September 30, 2008 and 2007 and as of December 31, 2007 and 2006, respectively.  If customers responsible for a significant amount of accounts receivable were to become insolvent or otherwise unable to pay for our products, or to make payments in a timely manner, our liquidity and results of operations could be materially adversely affected.  An economic or industry downturn could materially adversely affect the servicing of these accounts receivable, which could result in longer payment cycles, increased collections costs and defaults in excess of management’s expectations.  A significant deterioration in our ability to collect on accounts receivable could affect our cash flow and working capital position and could also impact the cost or availability of financing available to us.

We provide our major customers with payment terms ranging from 30 to 90 days.  Additionally, our production lead time is approximately three weeks, from the inspection of incoming materials, to production, testing and packaging.  We need to keep a large supply of raw materials and work in process and finished goods inventory on hand to ensure timely delivery of our products to our customers.  We typically offer certain of our customers 30 to 90 days credit terms for payment.  Allowance for doubtful accounts is based on our assessment of the collectability of specific customer accounts, the aging of accounts receivable, our history of bad debts, and the general condition of the industry.  If a major customer’s credit worthiness deteriorates, or our customers’ actual defaults exceed historical experience, our estimates could change and impact our reported results.  We have not experienced any significant amount of bad debt since the inception of our operation.

As of September 30, 2008, inventories amounted to $391,000, compared to $1.8 million at September 30, 2007.  As of December 31, 2007, inventories amounted to $5.5 million, compared to $2.6 million as of December 31, 2006.  The decrease is primarily due to the completion of sales contracts.  We keep certain reserve amounts of raw materials in our inventories and engage in long-term agreements with certain suppliers to assure minimum additional expense from any condition of rising prices and shortages of raw materials used to manufacture our products.

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As of September 30, 2008, trade receivable amounted to $18.2 million, compared to $5.7 million at September 30, 2007.  As of December 31, 2007, trade receivable amounted to $9.4 million, compared to $3.4 million as of December 31, 2006.  As our sales volume increases, accounts receivable increases accordingly.

As of September 30, 2008, accounts payable and accrued liabilities amounted to $7,694,742, compared to $1,103,366 at September 30, 2007.  As of December 31, 2007, accounts payable and accrued liabilities amounted to $3,249,012, compared to $5,500,238 as of December 31, 2006.  The increase in accounts payable and accrued liabilities is due to an increase of payment periods.

As of September 30, 2008, various taxes payable amounted to $15,678, compared to $65,948 at September 30, 2007.  As of December 31, 2007, various taxes payable amounted to $165,947, compared to $21,220 as of December 31, 2006.  The increase in various taxes payable is due to the rise of sales.

As of September 30, 2008, wages payable amounted to $50,910, compared to nil at September 30, 2007.  As of December 31, 2007, wages payable amounted to $23,890, compared to $7,775 as of December 31, 2006.  The increase in wages payable is due to increased personal costs.

As of September 30, 2008, corporate taxes payable amounted to $576,342, compared to $149,319 at September 30, 2007.  The increase in corporate taxes payable is due to an increase of taxable income.

On January 9, 2009, upon an initial closing of a private placement, we received gross proceeds of approximately $1,756,000 in a private placement transaction (the “Private Placement”); up to $5 million of Series A Convertible Preferred Stock (the “Series A Preferred Stock”) is being offered in the Private Placement.  Pursuant to subscription agreements entered into with the investors, we sold an aggregate of 1,097,500 shares of Series A Preferred Stock at $1.60 per share.  In connection with the initial closing of the Private Placement, the Company issued a promissory note in the principal amount of $170,000, bearing no interest, to the placement agent (the “Note”). The principal shall be due and payable by the Company on or before the earlier of (a) thirty (30) days from the date of issuance of this Note or (b) upon the receipt by the Company of at least $4 million in the Private Placement.

We agreed to file a registration statement covering the common stock underlying the Series A Preferred Stock sold in the Private Placement within 60 days of the closing of the Share Exchange pursuant to the subscription agreement with each investor.  For its services as placement agent, the placement agent will receive an aggregate commission equal to 12% of the gross proceeds from the financing and a 4% non-accountable expense allowance, in addition to a $122,750 success fee for the Share Exchange, upon the final closing of the Private Placement.

We are required to contribute a portion of our employees’ total salaries to the Chinese government’s social insurance funds, including pension insurance, medical insurance, unemployment insurance, and job injuries insurance, and maternity insurance, in accordance with relevant regulations.  Total contributions to the funds are approximately $4,045 for the nine months ended September 30, 2008 and $130,549 and $396 for the years ended December 31, 2007 and 2006, respectively.  We expect that the amount of our contribution to the government’s social insurance funds will increase in the future as we expand our workforce and operations and commence contributions to an employee housing fund.

The ability of Zhengzhou ZST to pay dividends may be restricted due to the foreign exchange control policies and availability of cash balance.  A majority of our revenue being earned and currency received are denominated in RMB, which is subject to the exchange control regulation in China, and, as a result, we may be unable to distribute any dividends outside of China due to PRC exchange control regulations that restrict our ability to convert RMB into US Dollars.  Accordingly, Zhengzhou ZST’s funds may not be readily available to us to satisfy obligations which have been incurred outside the PRC, which could adversely affect our business and prospects or our ability to meet our cash obligations.

Net cash provided by operating activities was $5.4 million for the nine months ended September 30, 2008, compared to net cash used in operating activities of $3.9 million for the nine months ended September 30, 2007.  The increase was primarily due to an increase of account payables and a decrease in inventory.  Net cash used in operating activities was $7.7 million for the year ended December 31, 2007, compared to net cash provided by operations of $1.1 million for the year ended December 31, 2006.  The decrease was primarily due to an increase of account receivables and inventory and a decrease of account payables.

Net cash provided by investing activities amounted to approximately $72,000 for the nine months ended September 30, 2008, compared to net cash provided by investing activities of $1.0 million for the nine months ended September 30, 2007.  Net cash provided by investing activities amounted to approximately $1.0 million for the year ended December 31, 2007, compared to net cash used in investing activities of $150,000 for the year ended December 31, 2006.  The change was due to a new acquisition in 2007 and the disposal of production lines in 2006.

Net cash used by financing activities amounted to $5.9 million for the nine months ended September 30, 2008, compared to net cash provided by financing activities of $4.4 million for the nine months ended September 30, 2007.  The decrease was primarily a result of a decrease in bank loans and dividends paid in 2008.  Net cash  provided by financing activities amounted to $6.2 million for the year ended December 31, 2007, compared to net cash used in financing activities of $120,000 for the year ended December 31, 2006.  The increase of cash provided was primarily a result of an increase in bank loans.

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Based upon our present plans, we believe that cash on hand, cash flow from operations and funds available to use through low-cost domestic financing will be sufficient to fund our capital needs for the next 12 months.  Our ability to maintain sufficient liquidity depends partially on our ability to achieve anticipated levels of revenue, while continuing to control costs.  If we did not have sufficient available cash, we would have to seek additional debt or equity financing through other external sources, which may not be available on acceptable terms, or at all.  Failure to maintain financing arrangements on acceptable terms would have a material adverse effect on our business, results of operations and financial condition.

Our ability to maintain sufficient liquidity depends partially on our ability to achieve anticipated levels of revenue, while continuing to control costs.  If we did not have sufficient available cash, we would have to seek additional debt or equity financing through other external sources, which may not be available on acceptable terms, or at all.  Failure to maintain financing arrangements on acceptable terms would have a material adverse effect on our business, results of operations and financial condition.

Off-Balance Sheet Arrangements

We have no material off-balance sheet transactions.

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Item 3.02   Unregistered Sales of Equity Securities.

On January 9, 2009, pursuant to the terms of the Exchange Agreement entered into by and among SRKP 18, Inc. (“SRKP 18”), World Orient Universal Limited, a British Virgin Islands corporation (“World Orient”), and shareholders of World Orient (as described in Item 2.01 above), SRKP 18 issued 1,985,000 shares of common stock to the shareholders of World Orient in exchange for all of the issued and outstanding shares of World Orient.  The securities were offered and issued in reliance upon an exemption from registration pursuant to Section 4(2) under the Securities Act of 1933, as amended, and Rule 506 promulgated thereunder.  The shareholders of World Orient are qualified as accredited investors (as defined by Rule 501 under the Securities Act of 1933, as amended).

On January 9, 2009, we conducted an initial closing of a private placement (the “Private Placement”).  We received gross proceeds of approximately $1,756,000 in a private placement transaction; up to $5 million of Series A Convertible Preferred Stock is being offered in the Private Placement.  Pursuant to subscription agreements entered into with the investors, we sold an aggregate of 1,097,500 shares of Series A Convertible Preferred Stock at a price of $1.60 per share.  In connection with the initial closing of the Private Placement, the Company issued a promissory note in the principal amount of $170,000, bearing no interest, to the placement agent (the “Note”). The principal shall be due and payable by the Company on or before the earlier of (a) thirty (30) days from the date of issuance of this Note or (b) upon the receipt by the Company of at least $4 million in the Private Placement.  The securities were offered and sold to investors in reliance upon exemptions from registration pursuant to Section 4(2) under the Securities Act of 1933, as amended, and Rule 506 promulgated thereunder.  Each of the persons and/or entities receiving our securities qualified as an accredited investor (as defined by Rule 501 under the Securities Act of 1933, as amended).

Upon the final closing of the Private Placement, the placement agent will earn a placement fee equal to 12% of the funds placed in the Private Placement and a 4% non-accountable expense allowance, in addition to a success fee of $122,750.

This current report is not an offer of securities for sale.  Any securities sold in the private placement have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States unless registered under the Securities Act of 1933, as amended, or pursuant to an exemption from registration.

On January 3, 2007, SRKP 18 issued 7,096,390 shares of common stock for an aggregate cash consideration of $5,000 and warrants to purchase 7,096,390 shares of common stock at an exercise price of $0.0001 per share for an aggregate cash consideration of $2,500.  SRKP 18 sold these shares of common stock and warrants under the exemption from registration provided by Section 4(2) of the Securities Act and/or Rule 506 of Regulation D promulgated thereunder.  Upon the full exercise of the Purchase Right, the shareholders of SRKP 18 agreed to the cancellation of an aggregate of 5,971,390 shares of common stock and warrants to purchase 6,431,299 shares of common stock held by them.

POST-SHARE EXCHANGE, PRIVATE PLACEMENT AND PURCHASE RIGHT DESCRIPTION OF SECURITIES

Common Stock

We are authorized to issue 100,000,000 shares of common stock, $0.0001 par value per share, of which 17,455,000 shares are issued and outstanding as of the close of the Share Exchange, Private Placement and Purchase Right.  Each outstanding share of common stock is entitled to one vote, either in person or by proxy, on all matters that may be voted upon by their holders at meetings of the stockholders.

Holders of our common stock:

· have equal ratable rights to dividends from funds legally available therefore, if declared by our Board of Directors;

· are entitled to share ratably in all of the Company’s assets available for distribution to holders of common stock upon our liquidation, dissolution or winding up;

· do not have preemptive, subscription or conversion rights or redemption or sinking fund provisions; and

· are entitled to one non-cumulative vote per share on all matters on which stockholders may vote at all meetings of our stockholders.

The holders of shares of our common stock do not have cumulative voting rights, which means that the holders of more than fifty percent (50%) of outstanding shares voting for the election of directors can elect all of our directors if they so choose and, in such event, the holders of the remaining shares will not be able to elect any of our directors.

At the completion of the Share Exchange, the sale of the maximum number of shares offered in the Private Placement and Purchase Right, our Chief Executive Officer and Chairman of the Board, Zhong Bo, will own approximately 54.5% of the outstanding shares of our common stock (assuming the full conversion of the maximum number of shares of Series A Convertible Preferred Stock).  Accordingly, after completion of the Share Exchange, Private Placement and Purchase Right, Mr. Zhong will be in a position to control all of our affairs.

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Preferred Stock

We may issue up to 10,000,000 shares of our preferred stock, par value $0.0001 per share, from time to time in one or more series.  Upon completion of the initial closing of the Private Placement, we have issued 1,097,500 shares of our Series A Convertible Preferred Stock; an aggregate of up to 3,125,000 shares of our Series A Convertible Preferred Stock may be issued further to the Private Placement.  Our Board of Directors, without further approval of our stockholders, is authorized to fix the dividend rights and terms, conversion rights, voting rights, redemption rights, liquidation preferences and other rights and restrictions relating to any series.  Issuances of shares of preferred stock, while providing flexibility in connection with possible financings, acquisitions and other corporate purposes, could, among other things, adversely affect the voting power of the holders of our common stock and prior series of preferred stock then outstanding.

Each share of the Series A Convertible Preferred Stock is convertible into shares of common stock at a conversion price equal to the purchase price of such shares.  However, if the Company at any time prior to the first trading day on which its common stock is quoted on the NYSE Alternext, the Nasdaq Capital Market, the Nasdaq Global Market or the New York Stock Exchange (each a “Trading Market”) sells or issues any shares of common stock in one or a series of transactions at an effective price less than such conversion price where the aggregate gross proceeds to the Company are at least $1.0 million, then the aforementioned conversion price shall be reduced to such effective price.  Each share of Series A Convertible Preferred Stock shall automatically convert into shares of common stock if (i) the closing price of the Company’s common stock on the Trading Market for any 10 consecutive trading day period exceeds $3.00 per share, and (ii) the shares of common stock underlying the Series A Convertible Preferred Stock are subject to an effective registration statement.

If the Company pays a stock dividend on its shares of common stock, subdivides outstanding shares of common stock into a larger number of shares, combines, through a reverse stock split, outstanding shares of its common stock into a smaller number of shares or issues, in the event of a reclassification of shares of the common stock, any shares of its capital stock, then the conversion price of the Series A Convertible Preferred Stock will be adjusted as follows: the conversion price will be multiplied by a fraction, of which (i) the numerator will be the number of shares of common stock outstanding immediately before one of the events described above and (ii) the denominator will be the number of shares of common stock outstanding immediately after such event.

Holder of the Series A Convertible Preferred Stock have the right to one vote per share of common stock issuable upon conversion of the shares underlying any shares of Preferred Stock outstanding as of the record date for purposes of determining which holders have the right to vote with respect to any matters brought to a vote before the Company’s holders of common stock.

In the event of any liquidation, dissolution or winding up of the Company, the holders of the Series A Convertible Preferred Stock shall receive $1.10 per share of Series A Convertible Preferred Stock and are entitled to receive in preference to the holders of common stock an amount per share of $1.10 plus any accrued but unpaid dividends.  If the Company’s assets are insufficient to pay the above amounts in full, then all of its assets will be ratably distributed among the holders of the Series A Convertible Preferred Stock in accordance with the respective amounts that would be payable on such shares if all amounts payable were paid in full.

There are no additional specific dividend rights or redemption rights of holders of the Series A Convertible Preferred Stock.

If any shares of the Company’s Series A Convertible Preferred Stock are redeemed or converted, those shares will resume the status of authorized but unissued shares of preferred stock and will no longer be designated as Series A Convertible Preferred Stock.

As long as any shares of Series A Convertible Preferred Stock are outstanding, the Company cannot alter or adversely change the powers, preference or rights given to the Series A Convertible Preferred Stock holders, without the affirmative vote of those holders.

A copy of the Certificate of Designations, Preferences and Rights of Series A Convertible Preferred Stock is attached hereto as Exhibit 3.3.

Warrants

Prior to the Share Exchange, Private Placement and Purchase Right, the shareholders of SRKP 18 held an aggregate of 7,096,390 warrants to purchase shares of our common stock, and an aggregate of 6,676,390 warrants will be cancelled in conjunction with the full exercise of the Purchase Right.  Upon the full exercise of the Purchase Right, the shareholders will hold an aggregate of 420,000 warrants with an exercise price of $0.0001.

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MARKET PRICE OF THE COMPANY’S COMMON STOCK

The shares of our common stock are not currently listed or quoted for trading on any national securities exchange or national quotation system.  We intend to apply for the listing of our common stock on the NYSE Alternext.  If and when our common stock is listed or quoted for trading, the price of our common stock will likely fluctuate in the future.  The stock market in general has experienced extreme stock price fluctuations in the past few years.  In some cases, these fluctuations have been unrelated to the operating performance of the affected companies.  Many companies have experienced dramatic volatility in the market prices of their common stock.  We believe that a number of factors, both within and outside our control, could cause the price of our common stock to fluctuate, perhaps substantially.  Factors such as the following could have a significant adverse impact on the market price of our common stock:

· Our ability to obtain additional financing and, if available, the terms and conditions of the financing;

· Our financial position and results of operations;

· Concern as to, or other evidence of, the reliability and safety of our products and services or our competitors’ products and services;

· Announcements of innovations or new products or services by us or our competitors;

· U.S. federal and state governmental regulatory actions and the impact of such requirements on our business;

· The development of litigation against us;

· Period-to-period fluctuations in our operating results;

· Changes in estimates of our performance by any securities analysts;

· The issuance of new equity securities pursuant to a future offering or acquisition;

· Changes in interest rates;

· Competitive developments, including announcements by competitors of new products or services or significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments;

· Investor perceptions of us; and

· General economic and other national conditions.

DELAWARE ANTI-TAKEOVER LAW AND CHARTER AND BYLAW PROVISIONS

We are subject to Section 203 of the Delaware General Corporation Law.  This provision generally prohibits a Delaware corporation from engaging in any business combination with any interested stockholder for a period of three years following the date the stockholder became an interested stockholder, unless:

· prior to such date, the Board of Directors approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder;

· upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding those shares owned by persons who are directors and also officers and by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or

· on or subsequent to such date, the business combination is approved by the Board of Directors and authorized at an annual meeting or special meeting of stockholders and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock that is not owned by the interested stockholder.

Section 203 defines a business combination to include:

· any merger or consolidation involving the corporation and the interested stockholder;

· any sale, transfer, pledge or other disposition of 10% or more of the assets of the corporation involving the interested stockholder;

· subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder;

· any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series of the corporation beneficially owned by the interested stockholder; or

· the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation.

In general, Section 203 defines an “interested stockholder” as any entity or person beneficially owning 15% or more of the outstanding voting stock of a corporation, or an affiliate or associate of the corporation and was the owner of 15% or more of the outstanding voting stock of a corporation at any time within three years prior to the time of determination of interested stockholder status; and any entity or person affiliated with or controlling or controlled by such entity or person.

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Our certificate of incorporation and bylaws contain provisions that could have the effect of discouraging potential acquisition proposals or making a tender offer or delaying or preventing a change in control of our company, including changes a stockholder might consider favorable.  In particular, our certificate of incorporation and bylaws, as applicable, among other things, will:

· provide our board of directors with the ability to alter its bylaws without stockholder approval;

· provide for an advance notice procedure with regard to the nomination of candidates for election as directors and with regard to business to be brought before a meeting of stockholders; and

· provide that vacancies on our board of directors may be filled by a majority of directors in office, although less than a quorum.

Such provisions may have the effect of discouraging a third-party from acquiring us, even if doing so would be beneficial to our stockholders.  These provisions are intended to enhance the likelihood of continuity and stability in the composition of our board of directors and in the policies formulated by them, and to discourage some types of transactions that may involve an actual or threatened change in control of our company.  These provisions are designed to reduce our vulnerability to an unsolicited acquisition proposal and to discourage some tactics that may be used in proxy fights.  We believe that the benefits of increased protection of our potential ability to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure our company outweigh the disadvantages of discouraging such proposals because, among other things, negotiation of such proposals could result in an improvement of their terms.

However, these provisions could have the effect of discouraging others from making tender offers for our shares that could result from actual or rumored takeover attempts.  These provisions also may have the effect of preventing changes in our management.

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Item 5.01   Changes in Control of Registrant.

OVERVIEW

On December 11, 2008, SRKP 18, Inc. (“SRKP 18”) entered into a share exchange agreement with World Orient Universal Limited, a company organized under the laws of the British Virgin Islands (“World Orient”) and the shareholders of World Orien.  Pursuant to the share exchange agreement, as amended on January 9, 2009 (the “Exchange Agreement”), SRKP 18 issued an aggregate of 1,985,000 shares of its common stock to the World Orient shareholder in exchange for all of the issued and outstanding shares of World (the “Share Exchange”).  The Share Exchange closed on January 9, 2009.  Upon the closing of the Share Exchange, SRKP 18 (i) became the 100% parent of World Orient, (ii) assumed the operations of World Orient and its subsidiaries, including Zhengzhou ZST and (iii) changed its name from SRKP 18, Inc. to ZST Digital Networks, Inc.

On January 9, 2009, concurrently with the close of the Share Exchange, we conducted an initial closing of a private placement transaction (the “Private Placement”).  We received gross proceeds of approximately $1,756,000 in the Private Placement; up to $5 million of Series A Convertible Preferred Stock (the “Series A Preferred Stock”) is being offered in the Private Placement.  Pursuant to subscription agreements entered into with the investors, we sold an aggregate of 1,097,500 shares of our Series A Preferred Stock at a price of $1.60 per share.  In connection with the initial closing of the Private Placement, the Company issued a promissory note in the principal amount of $170,000, bearing no interest, to the placement agent (the “Note”). The principal shall be due and payable by the Company on or before the earlier of (a) thirty (30) days from the date of issuance of this Note or (b) upon the receipt by the Company of at least $4 million in the Private Placement.  We agreed to file a registration statement covering the common stock underlying the Series A Preferred Stock sold in the private placement within 60 days of the closing of the Share Exchange pursuant to the subscription agreement with each investor.

After the Share Exchange, we intend to offer Zhong Bo, our Chief Executive Officer and Chairman of the Board, Wu Dexiu, Huang Jiankang, Sun Hui and Li Yuting (the “ZST Management”) a thirty (30) day right to purchase up to 12,530,000 shares of our common stock at a per share purchase price of $0.2806 (the “Purchase Right”).  Each of the shareholders and warrantholders of SRKP 18 prior to the Share Exchange agreed to cancel 0.3317 shares of common stock and warrants to purchase 0.5328 shares of common stock held by each of them for each one (1) share of common stock purchased by the ZST Management pursuant to the Purchase Right (the “SRKP 18 Share and Warrant Cancellation”).  Assuming the exercise in full of the Purchase Right, we will cancel an aggregate of 4,156,390 shares of common stock and warrants to purchase 6,676,390 shares of common stock held by certain of our stockholders and warrantholders prior to the Share Exchange.

Immediately following the closing of the Share Exchange, the sale of the maximum number of shares of Series A Preferred Stock in the Private Placement and Purchase Right, Mr. Zhong Bo will beneficially own approximately 54.5% of our issued and outstanding common stock, the pre-existing shareholders of SRKP 18 will own approximately 14.3% and investors in the Private Placement (assuming the sale of the maximum number of shares of Series A Preferred Stock offered in the Private Placement and full conversion of the maximum number of shares of the Series A Preferred Stock) will own 15.2%.  We issued no fractional shares in connection with the Share Exchange.

Pursuant to the terms of the Share Exchange, we agreed to register a total of 2,940,000 shares of common stock and 420,000 shares of common stock issuable upon the exercise of outstanding warrants held by stockholders of SRKP 18 immediately prior to the Share Exchange.  Of these shares, 600,055 shares of common stock and 85,723 shares of common stock underlying warrants would be covered by the registration statement filed in connection with the Private Placement and 2,339,945 shares of common stock and 334,277 shares of common stock underlying warrants will be included in a subsequent registration statement filed by us within 10 days after the end of the six-month period that immediately follows the date on which we file the registration statement to register the shares issued in the Private Placement.

The shares of our common stock are not currently listed or quoted for trading on any national securities exchange or national quotation system.  We intend to apply for the listing of its common stock on the NYSE Alternext.

The shares of our common stock issued to the shareholders of World Orient in connection with the Share Exchange were not registered under the Securities Act of 1933, as amended (the “Securities Act”) and, as a result, are “restricted securities” that may not be offered or sold in the United States absent registration or an applicable exemption from registration.

We intend to carry on the business of Zhengzhou ZST.  Our relocated executive offices are at Building 28, Huzhu Road, Zhongyuan District, Zhengzhou, China.

For accounting purposes, the acquisition was accounted for using the purchase method of accounting in accordance with SFAS 141R, Business Combinations.  A change of control of our company shall occur upon the full exercise of the Purchase Right by Zhong Bo, our Chief Executive Officer and Chairman of the Board, Wu Dexiu, Huang Jiankang, Sun Hui and Li Yuting (the “ZST Management”)

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At the consummation of the Share Exchange, SRKP 18’s board of directors immediately prior to the Share Exchange, which consisted of Richard A. Rappaport and Anthony C. Pintsopoulos, appointed Zhong Bo, Zhong Lin, Yang Ai Mei, Tian Li Zhi, Sheng Yong and Liu Hui Fang to the board of directors of our company, with Zhong Bo serving as Chairman.  The directors and officers of SRKP 18 prior to the Share Exchange then resigned as officers and directors of our company upon the closing of the Share Exchange.  In addition, concurrent with the closing of the Share Exchange, our company’s board appointed Zhong Bo as Chief Executive Officer, Zeng Yun Su as Chief Financial Officer and Corporate Secretary, Zhong Lin as Chief Operating Officer and Xue Na as Deputy General Manager and President of the Labor Union.

The execution of the Exchange Agreement was reported in a Current Report on Form 8-K filed with the Securities and Exchange Commission on December 12, 2008 and a copy of the Exchange Agreement is filed as Exhibit 2.2 to this Current Report on Form 8-K.  The transactions contemplated by the Exchange Agreement, as amended, were intended to be a “tax-free” incorporation pursuant to the provisions of Section 351 of the Internal Revenue Code of 1986, as amended.

EXECUTIVE OFFICERS, DIRECTORS AND KEY EMPLOYEES

Prior to the Share Exchange, Richard A. Rappaport and Anthony C. Pintsopoulos served as directors of SRKP 18 and Mr. Pintsopoulos served as Chief Financial Officer and Secretary and Mr. Rappaport served as President of SRKP 18.

Upon closing of the Share Exchange, the following individuals were named to the board of directors and executive management of our company:

Name	Age	Position
Zhong Bo	58	Chairman of the Board of Directors and Chief Executive Officer
Zhong Lin	28	Director and Chief Operating Officer
Yang Ai Mei	58	Director
Tian Li Zhi	35	Director
Sheng Yong	46	Director
Liu Hui Fang	30	Director
Zeng Yun Su	45	Chief Financial Officer and Corporate Secretary
Xue Na	30	Deputy General Manager and President of the Labor Union

Zhong Bo has been chairman of the board of ZST since 1996.  He has also served as the director of the Henan Association for the Promotion of Non-Governmental Entrepreneurs since July 1999, as the President of the Federation of Industry and Commerce (General Chamber of Commerce) since January 2001 and as a committee member of the Chinese People’s Political Consultative Conference since January 2004.  From October 1989 to September 1992, Mr. Zhong served as the manager of the Zhengzhou and Luoyang Offices of Beijing CEC Video & Audio Technology Jointly Developed Corporation.   From September 1970 to September 1989, Mr. Zhong served as the technical principal of the Zhumadian Branch of the Wuhan Times Academy of Sciences.  Mr. Zhong obtained a degree in Electronics in September 1989 from the Electronic Engineering Department of Tsinghua University and a Master’s degree in Business Management in 2003 from Asia International Open University in Macau.

Zhong Lin has served as general manager of ZST since January 2008.  Prior to serving as general manager, from april 2005 to December 2007, Mr. Zhong served as the manager of the system integration department of ZST.  Mr. Zhong received his MBA in 2005 from University of Manhatten B.C.  From 1997 to 2001, Mr. Zhong studied Computer Information Management at Nanjing University of Science and Technology.

Yang Ai Mei has served as managing director of Zhengzhou Guangda Textiles Co., Ltd., a cotton manufacturing company, since May 1995, where she has worked since 1988.  From January 1978 to January 1988, Ms. Yang was the manager of Zhongyuan Labour Services Company, a company which engages in the sale and trade of textiles.  Ms. Yang received a Bachelor of Economics in the field of Management in 1975 from Zheng Zhau University.

Tian Li Zhi has been employed as an attorney for the Henan Image Law Firm since May 2000.  From May 1997 to May 2000, Ms. Tian was a legal consultant for Zhengzhou Asia Group, a company which manages commercial properties.  Ms. Tian received a law degree in 1997 from Zheng Zhau University.

Sheng Yong has served as the general manager of Iaoning Unified Biological Energy Sources Co., Ltd., a biological energy company, since January 2004.  From January 1988 to January 2004, Mr. Sheng was the deputy general manager of Zhengzhou Yinhe Joint-Stock Co., Ltd., a textile manufacturing company.  Mr. Sheng received a Bachelor of Economics in Management from the Air Force Polities Academy of the Chinese People’s Liberation Army in 1999.

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Liu Hui Fang has served as finance manager of Henan Zhongfu Container Co., Ltd., a company which engages in the production and sale of plastic packaging, since August 2002.  From July 1999 to August 2002, Ms. Liu served as chief accountant of Zhengzhou Fukang Medical Equipment Co., Ltd., a distributor of medical equipment. Ms. Liu received a degree in business accounting in 1999 from Henan Business College.  She is also a member of The Chinese Institute of Certified Public Accountants.

Zeng Yun Su has served as the chief financial officer of ZST since September 2008.  Prior to his employment with ZST, from November 1992 to July 2008, Mr. Zeng served as assistant director and then as the office director and director of the comprehensive plan department for the Henan General Construction Investment Company.  In 1992, Mr. Zeng worked at the Commodity Grain Base Office of the Henan Provincial Department of Agriculture.  Mr. Zheng received a diploma in politics and economics in 1999 from Henan University.

Xue Na has served as deputy general manager of ZST since September 2005 and as president of the labor union for ZST since 2003.  From January 2002 to August 2005, Ms. Xue served as the assistant general manager of ZST and from July 1997 to December 2001, she held the position of office director of ZST.  Ms. Xue received her MBA in 2002 from Asia International Open University (Macau).  From 1995 to 1997, Ms. Xue studied public relations at Zhengzhou Huanghe Science and Technology College.

Except as noted above, the above persons do not hold any other directorships in any company with a class of securities registered pursuant to Section 12 of the Exchange Act or subject to the requirements of Section 15(d) of the Exchange Act.

Family Relationships

Zhong Bo is the father of Zhong Lin.

Involvement in Certain Legal Proceedings

There have been no events under any bankruptcy act, no criminal proceedings and no judgments, injunctions, orders or decrees material to the evaluation of the ability and integrity of any director, executive officer, promoter or control person of the Company during the past five years.

There have been no material proceedings to which any director, officer or affiliate of the Company, any owner of record or beneficially of more than five percent of any class of voting securities of the Company, or any associate of any such director, officer, affiliate of the Company, or security holder is a party adverse to the Company or any of its subsidiaries or has a material interest adverse to the Company or any of its subsidiaries.

The Board of Directors and Committees

Our Board of Directors does not maintain a separate audit, nominating or compensation committee.  Functions customarily performed by such committees are performed by our Board of Directors as a whole.  Our company is not required to maintain such committees under the rules applicable to companies that do not have securities listed or quoted on a national securities exchange or national quotation system.  We intend to create board committees, including an independent audit committee, in the near future.  If we are successful in listing our common stock on the NYSE Alternext, we would be required to have, prior to listing, an independent audit committee formed, in compliance with the requirements for listing on the NYSE Alternext and in compliance with Rule 10A-3 of the Securities Exchange Act of 1934.

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Prior to the closing of the Share Exchange on January 9, 2009, we were a “blank check” shell company that was formed to investigate and acquire a target company or business seeking the perceived advantages of being a publicly held corporation.  The officers and directors of our company prior to the Share Exchange are no longer employed by or affiliated with our company.  Richard Rappaport, our President, and Anthony Pintsopoulos, our Chief Financial Officer and Secretary, during 2007 and 2008 prior to the Share Exchange, received no compensation or other perquisites for serving in such capacity.

Our Chief Executive Officer and Chairman of the Board, Zhong Bo, determined the compensation for our current executive officers that was earned and paid in fiscal 2007.  Compensation for our current executive officers, which currently consists of Zhong Bo, Zhong Lin, Zeng Yun Su and Xue Na, is determined with the goal of attracting and retaining high quality executive officers and encouraging them to work as effectively as possible on our behalf.  Key areas of corporate performance taken into account in setting compensation policies and decisions are growth of sales, cost control, profitability, and innovation.  The key factors may vary depending on which area of business a particular executive officer’s work is focused on.  Compensation is designed to reward executive officers for successfully meeting their individual functional objectives and for their contributions to our overall development.  For these reasons, the elements of compensation of our executive officers are salary and bonus.  Salary is paid to cover an appropriate level of living expenses for the executive officers and the bonus is paid to reward the executive officer for individual and company achievement.  With respect to the amount of a bonus, Zhong Bo evaluates our company’s achievements for the fiscal year based on performance factors and results of operations such as revenues generated, cost of revenues, net income, and whether we obtain significant contracts.  Zhong Bo also conducts a monthly and annual evaluation of the achievement level of an executive based on individual performance measurements, such as contribution to the achievement of the company’s goals and individual performance metrics based on their positions and responsibilities.  Bonuses are paid at the end of each fiscal year.

We believe that the salaries paid to our executive officers during 2007 and 2006 are indicative of the objectives of our compensation program and reflect the fair value of the services provided to our company, as measured by the local market in China.  We determine market rate by conducting a comparison with the local geographic area averages and industry averages in China.  Currently, we have no specific plans to provide raises after we have become a company with securities publicly traded in the United States.  Although no specific plans have yet been discussed, we may adopt such a plan to provide raises to our executive officers in the future.  Adopting higher compensation in the future may be based on the increased amount of responsibilities to be assumed by each of the executive officers after we become a publicly listed company.  Executive compensation for 2008 will follow the same evaluation methods as were used for 2007.  We may also expand the scope of our compensation, such as the possibility of granting options to executive officers and tying compensation to predetermined performance goals.

Our Board of Directors does not currently have a compensation committee.  We anticipate that our Board of Directors will establish a compensation committee in the near future that will be comprised of non-employee members of our Board of Directors.  Our current expectation is that the compensation committee of our Board of Directors will perform, at least annually, a strategic review of the compensation program for our executive officers to determine whether it provides adequate incentives and motivation to our executive officers and whether it adequately compensates our executive officers relative to comparable officers in other companies with which we compete for executives.  Those companies may or may not be public companies or companies located in the PRC or even, in all cases, companies in a similar business.

Until such time as a formal compensation program and committee is established, which we expect will occur in the near future, Zhong Bo will structure compensation and bonus levels and our Board of Directors will approve the structure.  After the compensation committee is formed, it will determine the structure.  Our Board of Directors has established a compensation program for executive officers for 2008 that is designed to attract, as needed, individuals with the skills necessary for us achieve our business plan, to motivate those individuals, to reward those individuals fairly over time, and to retain those individuals who continue to perform at or above the levels that we expect.  For 2008, bonuses for executive officers will be based on company and individual performance factors, as described above.  If we successfully complete our proposed listing on the NYSE Alternext and offering in 2008, we may adjust our bonus evaluations upwards in 2008, but, in such case, we do not intend to increase it by more than 20%.  That determination would likely be made towards the end of the fiscal year 2008.

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Summary Compensation Tables

The following table sets forth information concerning the compensation for the two fiscal years ended December 31, 2007 of the principal executive officer, principal financial officer, and up to two additional individuals for whom disclosure would have been required but for the fact that the individual was not serving as an executive officer of the registrant at the end of the last fiscal year.

Name and Position	Year	Salary		Bonus		All other compensation (1)		Total
Zhong Bo	2007	$	6,297	$	-	$	-	$	6,297
Chief Executive Officer	2006		2,703		-		-		2,703
Zeng Yun Su	2007	$	-	$	-	$	-	$	-
Chief Financial Officer and Corporate Secretary	2006		-		-		-		-
Richard Rappaport (2)	2007	$	-	$	-	$	-	$	-
Former Chief Executive Officer	2006		-		-		-		-
and Former Director
Anthony Pintsopoulos (2)	2007	$	-	$	-	$	-	$	-
Form Chief Financial Officer,	2006		-		-		-		-
Former Secretary, and
Former Director

(1) Relates to automobile, housing and medical personal benefits.

(2) Messrs. Rappaport and Pintsopoulos resigned from all positions with the Company upon the close of the Share Exchange on January 9, 2009.

Grants of Plan-Based Awards in 2007

There were no option grants in 2007.

Outstanding Equity Awards at 2007 Fiscal Year End

There were no option exercises or options outstanding in 2007.

Option Exercises and Stock Vested in 2007

There were no option exercises or stock vested in 2007.

Pension Benefits

There were no pension benefit plans in effect in 2007.

Nonqualified defined contribution and other nonqualified deferred compensation plans

There were no nonqualified defined contribution or other nonqualified deferred compensation plans in effect in 2007.

Employment Agreements

Each of Zhong Bo, Zhong Lin, Zeng Yun Su and Xue Na are parties to employment agreements with durations of one year from January 1, 2008 to December 31, 2008, further to which each employee is paid a monthly salary as follows:

· Zhong Bo is paid a monthly salary of RMB 4,500, which is approximately US$661.76.

· Zhong Lin is paid a monthly salary of RMB 3,200, which is approximately US$470.59.

· Zeng Yun Su is paid a monthly salary of RMB 3,200, which is approximately US$470.59.

· Xue Na is paid a monthly salary of RMB 2,500, which is approximately US$367.65.

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The employment agreements provide that the parties may terminate the agreement upon mutual agreement or upon one month prior written notice to the other party. An employee may terminate his or her employment immediately under certain circumstances including if the Company fails to provide certain required labor protection or working conditions, fails to pay compensation on time and in full, or acts in such a way to harm the employee’s right and interests or threaten his or her personal safety.  The employment agreements also provide that the Company may terminate such agreement immediately under certain circumstances including if the employee does not satisfy the conditions for employment during the probation period, materially breaches the Company’s rules and regulations, or neglects his or her duties thereby causing substantial damage to the Company.  The employment agreements restrict the Company’s ability to terminate the employment agreements under certain circumstances including if the employee has proven that he is unable to work due to a work-related injury, or has contracted an illness or sustained a non-work-related injury and the prescribed period of medical care has not yet expired.  In addition, the employment agreements provide that under certain circumstances, the employee may have to compensate the Company for economic losses incurred.  Under the employment agreements, the employees have an obligation to maintain commercial secrets of the Company.  The employment agreements contain general provisions for mediation and arbitration in the case of any dispute arising out of the employment agreements that cannot first be settled by consultation and negotiation.

Director Compensation

The Company did not and does not currently have an established policy to provide compensation to members of its Board of Directors for their services in that capacity.  The Company intends to develop such a policy in the near future.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

World Orient Universal Limited and Subsidiaries

Upon closing of the Share Exchange, World Orient Universal Limited (“World Orient”) became a wholly-owned subsidiary of ZST Digital Networks, Inc.  Global Asia Universal Limited (“Global Asia”) is a wholly-owned subsidiary of World Orient, EverFair Technologies, Ltd. (“EverFair”) is a wholly-owned subsidiary of Global Asia and Zhengzhou Shenyang Technology Company Limited (“Zhengzhou ZST”) is a wholly-owned subsidiary of EverFair.  Each of the foregoing companies has interlocking executive and director positions with the other.

Share Exchange

On January 9, 2009, SRKP 18 completed the Share Exchange with World Orient and the former shareholders of World Orient.  At the closing, World Orient became a wholly-owned subsidiary of SRKP 18 and 100% of the issued and outstanding securities of World Orient were exchanged for securities of SRKP 18.  An aggregate of 1,985,000 shares of common stock were issued to the shareholders of World Orient.  As of the close of the Share Exchange, the former shareholders of World Orient owned approximately 9.6% of the issued and outstanding stock of SRKP 18.

The Company’s Board of Directors resigned in full and appointed Zhong Bo, Zhong Lin, Yang Ai Mei, Tian Li Zhi, Sheng Yong and Liu Hui Fang to the board of directors of our company, with Zhong Bo serving as Chairman.  The Company’s Board of Directors also appointed Zhong Bo as Chief Executive Officer, Zeng Yun Su as Chief Financial Officer and Corporate Secretary, Zhong Lin as Chief Operating Officer and Xue Na as Deputy General Manager and President of the Labor Union.

Private Placement

The placement agent for the $1,756,000 equity financing conducted by the Company on the close of the Share Exchange will receive a commission equal to 12% of the gross proceeds from the financing and a 4% non-accountable expense allowance, in addition to a success fee of $122,750, upon the final closing of the Private Placement.  Up to $5 million of Series A Preferred Stock is being offering in the Private Placement.  Furthermore, in connection with the initial closing of the Private Placement, the Company issued a promissory note in the principal amount of $170,000, bearing no interest, to the placement agent (the “Note”). The principal shall be due and payable by the Company on or before the earlier of (a) thirty (30) days from the date of issuance of this Note or (b) upon the receipt by the Company of at least $4 million in the Private Placement.

Richard Rappaport, the President of SRKP 18 and one of its controlling stockholders prior to the Share Exchange, indirectly holds a 100% interest in the placement agent.  Anthony C. Pintsopoulos, an officer, director and significant shareholder of SRKP 18 prior to the Share Exchange, is the Chief Financial Officer of the placement agent.  Kevin DePrimio and Jason Stern, each employees of the placement agent, are also shareholders of SRKP 18.  Thomas J. Poletti is a former shareholder of SRKP 18 and a partner of K&L Gates LLP, ZST’s U.S. legal counsel.  Each of Messrs. Rappaport and Pintsopoulos resigned from all of their executive and director positions with the Company upon the closing of the Share Exchange.  This current report is not an offer of securities for sale.  Any securities sold in the private placement have not be registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States unless registered under the Securities Act of 1933, as amended, or pursuant to an exemption from such registration.

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Purchase Right and Share and Warrant Cancellation

After the Share Exchange, we intend to offer Zhong Bo, our Chief Executive Officer and Chairman of the Board, Wu Dexiu, Huang Jiankang, Sun Hui and Li Yuting (the “ZST Management”) a thirty (30) day right to purchase up to 12,530,000 shares of our common stock at a per share purchase price of $0.2806 (the “Purchase Right”).  Each of the shareholders and warrantholders of SRKP 18 prior to the Share Exchange agreed to cancel 0.3317 shares of common stock and warrants to purchase 0.5328 shares of common stock held by each of them for each one (1) share of common stock purchased by the ZST Management pursuant to the Purchase Right (the “SRKP 18 Share and Warrant Cancellation”).  Assuming the exercise in full of the Purchase Right, we will cancel an aggregate of 4,156,390 shares of common stock and warrants to purchase 6,676,390 shares of common stock held by certain of our stockholders and warrantholders prior to the Share Exchange.

Patent License Agreement

Our Chief Executive Officer, Zhong Bo, has legal ownership of one patent in China that we rely on in the operation of our business. On January 9, 2009, we entered into patent license agreement with Mr. Zhong for the right to use such patent in the operation of our business. We and Mr. Zhong also intend to file appropriate certificates with the Bureau of Intellectual Property in the PRC, which, after approved by the Bureau, would result in the legal license of the patent by us. Mr. Zhong did not receive any additional consideration for the license of the intellectual property rights to us, other than the execution of the patent license agreement being a condition to the closing of Share Exchange.

INDEMNIFICATION OF DIRECTORS AND EXECUTIVE OFFICERS AND LIMITATION OF LIABILITY

Under Section 145 of the General Corporation Law of the State of Delaware, we can indemnify our directors and officers against liabilities they may incur in such capacities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Our certificate of incorporation provides that, pursuant to Delaware law, our directors shall not be liable for monetary damages for breach of the directors’ fiduciary duty of care to us and our stockholders. This provision in the certificate of incorporation does not eliminate the duty of care, and in appropriate circumstances equitable remedies such as injunctive or other forms of non-monetary relief will remain available under Delaware law. In addition, each director will continue to be subject to liability for breach of the director’s duty of loyalty to us or our stockholders, for acts or omissions not in good faith or involving intentional misconduct or knowing violations of the law, for actions leading to improper personal benefit to the director, and for payment of dividends or approval of stock repurchases or redemptions that are unlawful under Delaware law. The provision also does not affect a director’s responsibilities under any other law, such as the federal securities laws or state or federal environmental laws.

Our bylaws provide for the indemnification of our directors to the fullest extent permitted by the Delaware General Corporation Law. Our bylaws further provide that our Board of Directors has discretion to indemnify our officers and other employees. We are required to advance, prior to the final disposition of any proceeding, promptly on request, all expenses incurred by any director or executive officer in connection with that proceeding on receipt of an undertaking by or on behalf of that director or executive officer to repay those amounts if it should be determined ultimately that he or she is not entitled to be indemnified under the bylaws or otherwise.  We are not, however, required to advance any expenses in connection with any proceeding if a determination is reasonably and promptly made by our Board of Directors by a majority vote of a quorum of disinterested Board members that (i) the party seeking an advance acted in bad faith or deliberately breached his or her duty to us or our stockholders and (ii) as a result of such actions by the party seeking an advance, it is more likely than not that it will ultimately be determined that such party is not entitled to indemnification pursuant to the applicable sections of its bylaws.

We have been advised that in the opinion of the Securities and Exchange Commission, insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.  In the event a claim for indemnification against such liabilities (other than our payment of expenses incurred or paid by our director, officer or controlling person in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, 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 of whether such indemnification by us is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

We may enter into indemnification agreements with each of our directors and officers that are, in some cases, broader than the specific indemnification provisions permitted by Delaware law, and that may provide additional procedural protection.  As of the Effective Time of the Exchange, we have not entered into any indemnification agreements with our directors or officers, but may choose to do so in the future.  Such indemnification agreements may require us, among other things, to:

47

· indemnify officers and directors against certain liabilities that may arise because of their status as officers or directors;

· advance expenses, as incurred, to officers and directors in connection with a legal proceeding, subject to limited exceptions; or

· obtain directors’ and officers’ insurance.

At present, there is no pending litigation or proceeding involving any of our directors, officers or employees in which indemnification is sought, nor are we aware of any threatened litigation that may result in claims for indemnification.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT FOLLOWING THE SHARE EXCHANGE

Beneficial ownership is determined in accordance with the rules of the SEC.  In computing the number of shares beneficially owned by a person and the percentage of ownership of that person, shares of common stock subject to options and warrants held by that person that are currently exercisable or become exercisable within 60 days of the closing of the Share Exchange on January 9, 2009 are deemed outstanding even if they have not actually been exercised.  Those shares, however, are not deemed outstanding for the purpose of computing the percentage ownership of any other person.

Immediately prior to the closing of the Share Exchange, Private Placement and Purchase Right, we had outstanding 7,096,390 shares of common stock, warrants to purchase 7,096,390 shares of common stock and no options to purchase shares of common stock.  Immediately after the closing of the Share Exchange, the sale of all shares offered in the Private Placement and Purchase Right, we will have 17,455,000 issued and outstanding shares of common stock, 3,125,000 shares of Series A Preferred Stock, no options and warrants to purchase 420,000 shares of common stock at an exercise price of $0.0001 per share.

The following table sets forth certain information with respect to beneficial ownership of our common stock immediately after the closing of the Share Exchange and assuming the sale of all shares offered in the Private Placement based on 20,580,000 issued and outstanding shares of common stock (assuming the full conversion of the maximum number of shares of Series A Preferred Stock), by:

· Each person known to be the beneficial owner of 5% or more of our outstanding common stock;

· Each executive officer;

· Each director; and

· All of the executive officers and directors as a group.

Unless otherwise indicated, the persons and entities named in the table have sole voting and sole investment power with respect to the shares set forth opposite the stockholder’s name, subject to community property laws, where applicable.  Unless otherwise indicated, the address of each stockholder listed in the table is c/o ZST Digital Networks, Inc., Building 28, Huzhu Road, Zhongyuan District, Zhengzhou, China.

48

Name and Address  of Beneficial Owner	Title	Beneficially Owned  Post-Share Exchange, Private Placement Offering (assuming the sale of all shares offered in the Private Placement) and Purchase Right			Percent of Class
Directors and Executive Officers:
Zhong Bo	Chairman of the Board of Directors and Chief Executive Officer		11,223,121			54.5	%
Zhong Lin	Director and Chief Operating Officer		0			0	%
Yang Ai Mei	Director		0			0	%
Tian Li Zhi	Director		0			0	%
Sheng Yong	Director		0			0	%
Liu Hui Fang	Director		0			0	%
Zeng Yun Su	Chief Financial Officer and Corporate Secretary		0			0	%
Xue Na	Deputy General Manager and President of the Labor Union		0			0	%
All Officers and Directors as a Group (total of eight (8) persons)			11,223,121			54.5	%
5% Stockholders:
Richard Rappaport 1900 Avenue of the Stars, Suite 310 Los Angeles, CA 90067			2,153,422	(1)		10.3	%
WestPark Financial Services, LLC (2) 1900 Avenue of the Stars, Suite 310 Los Angeles, CA 90067			1,313,423	(3)		6.3	%
Wu Dexiu No. 5, Unit 6, Block 28 Huzhu Road, Zhongyuan District Zhengzhou, PRC			1,090,110			5.3	%

* Indicates less than 1%.

(1) Includes 470,399 shares of common stock and a warrant to purchase 67,200 shares of common stock owned by Mr. Rappaport.  Also includes 132,300 shares of common stock and warrants to purchase 18,900 shares of common stock owned by each the Amanda Rappaport Trust and the Kailey Rappaport Trust as well as the shares of common stock and warrants to purchase shares of common stock owned by WestPark Financial Services, LLC.  Mr. Rappaport, as Trustee of the Rappaport Trusts and Chief Executive Officer and Chairman of WestPark Financial Services, LLC, may be deemed the indirect beneficial owner of these securities since he has sole voting and investment control over the securities.

(2) Mr. Rappaport serves as Chief Executive Officer and Chairman of WestPark Financial Services, LLC.

(3) Includes 1,149,246 shares of common stock and a warrant to purchase 164,177 shares of common stock.

49

Item 5.02           Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

At the consummation of the Share Exchange, SRKP 18’s board of directors immediately prior to the Share Exchange, which consisted of Richard A. Rappaport and Anthony C. Pintsopoulos, appointed Zhong Bo, Zhong Lin, Yang Ai Mei, Tian Li Zhi, Sheng Yong and Liu Hui Fang to the Company’s Board of Directors, with Zhong Bo serving as Chairman.  The directors and officers of SRKP 18 prior to the Share Exchange then resigned as officers and directors of the Company upon the closing of the Share Exchange.  In addition, concurrent with the closing of the Share Exchange, the Company’s board appointed Zhong Bo as Chief Executive Officer, Zeng Yun Su as Chief Financial Officer and Corporate Secretary, Zhong Lin as Chief Operating Officer and Xue Na as Deputy General Manager and President of the Labor Union.

For complete information regarding our new officers and directors, refer to “Executive Officers, Directors and Key Employees” under Item 5.01, above.

Item 5.03           Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

Immediately after the closing of the Share Exchange, SRKP 18 changed its corporate name from “SRKP 18, Inc.” to “ZST Digital Networks, Inc.” by the filing of a Certificate of Ownership and Merger with the Delaware Secretary of State’s Office on January 9, 2009.  SRKP 18 effected the name change to better reflect the nature of its new business operations following the Share Exchange.  The Certificate of Ownership and Merger is attached hereto as Exhibit 3.4.  Holders of stock certificates bearing the name “SRKP 18, Inc.” may continue to hold them and will not be required to exchange them for new certificates or take any other action.

Item 5.06           Change in Shell Company Status.

Prior to the closing of the Share Exchange, SRKP 18 was a “shell company” as defined in Rule 405 of the Securities Act and Rule 12b-2 of the Exchange Act.  As described in Item 2.01 above, which is incorporated by reference into this Item 5.06, SRKP 18 ceased being a shell company upon completion of the Share Exchange.

Item 9.01            Financial Statements and Exhibits.

(a) Financial Statements of Businesses Acquired.

We are providing financial and other information for informational purposes only.  It does not necessarily represent or indicate what the financial position and results of operations of our company will be now that the Share Exchange is concluded.

FINANCIAL STATEMENTS OF ZHENGZHOU SHENYANG TECHNOLOGY COMPANY LIMITED

The financial statements for Zhengzhou Shenyang Technology Limited, a company organized under the laws of the People’s Republic of China, for the years ended December 31, 2007, 2006 and 2005 and the nine months ended September 30, 2008, are provided below.  You are encouraged to review the financial statements and related notes.

50

ZHENGZHOU SHENYANG TECHNOLOGY COMPANY LIMITED

FINANCIAL STATEMENTS

DECEMBER 31, 2005, 2006 AND 2007 AND SEPTEMBER 30, 2008

51

ZHENGZHOU SHENYANG TECHNOLOGY COMPANY LIMITED

INDEX

	PAGE
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	53
BALANCE SHEETS	54
STATEMENTS OF OPERATIONS	55
STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY AND COMPREHENSIVE INCOME	56
STATEMENTS OF CASH FLOWS	57
NOTES TO FINANCIAL STATEMENTS	58-69

52

KEMPISTY & COMPANY

CERTIFIED PUBLIC ACCOUNTANTS, P.C.

15 MAIDEN LANE - SUITE 1003 - NEW YORK, NY 10038 - TEL (212) 406-7272 - FAX (212) 513-1930

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors

Zhengzhou Shenyang Technology Company Limited

We have audited the accompanying balance sheets of Zhengzhou Shenyang Technology Company Limited as of December 31, 2007, 2006 and 2005 and the related statements of operations, changes in stockholders’ equity and comprehensive income and cash flows for each of the years in the three year period ended December 31, 2007. These financial statements are the responsibility of the company 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. The company is not required at this time, to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides 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 Zhengzhou Shenyang Technology Company Limited at December 31, 2007, 2006 and 2005 and the results of its operations and its cash flows for each of the years in the three year period ended December 31, 2007 in conformity with accounting principles generally accepted in the in the United States of America.

Kempisty & Company

Certified Public Accountants PC

New York, New York

October 2, 2008

53

Zhengzhou Shenyang Technology Company Limited

Balance Sheets

(In US Dollars)

	September 30,							December 31,
		2008			2007			2007			2006			2005
		(Unaudited)			(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents		$	846,864		$	2,817,355		$	1,125,804		$	1,183,665		$	222,828
Trade receivables (Note 3)			18,213,473			5,737,914			9,419,029			3,417,763			1,400,590
Contract receivable (Note 4)			108,315			98,744			101,499			94,946			51,697
Short-term demand loans receivable (Note 6)			7,944			885,529			769,855			731,645			589,574
Inventories, net (Note 5)			391,094			1,757,655			5,488,794			2,622,909			813,880
Taxes recoverable			74,508			-			129,567			6,713			-
Prepaid expenses and other receivables			154,528			98,393			12,930			11,579			24,762
Total Current Assets			19,796,726			11,395,590			17,047,478			8,069,220			3,103,331
Property, plant and equipment, net (Note 7)			20,930			43,575			62,520			81,048			304,586
Total Assets		$	19,817,656		$	11,439,165		$	17,109,998		$	8,150,268		$	3,407,917
LIABILITIES AND STOCKHOLDERS'
Current Liabilities
Accounts payable-trade		$	7,425,614		$	778,771		$	3,026,572		$	5,353,267		$	926,499
Customer deposit			1,463			181,828			36,854			3,206			11,808
Billings in excess of costs on uncompleted projects (Note 9)			31,550			27,991			18,635			1,943			-
Accrued liabilities and other payable			269,128			324,595			222,440			146,971			106,381
Various taxes payable			15,678			65,948			165,947			21,220			78,694
Short-term demand loans payable (Note 8)			3,916,793			6,142,445			7,933,436			814,621			554,850
Employee security deposit payable			18,954			11,810			12,281			12,831			14,981
Unearned warranty revenues			660,195			-			837,800			-			-
Wages payable			50,910			-			23,890			7,775			-
Dividend payable			-			-			2,624,266			-			-
Corporate tax payable			576,342			149,319			-			-			93,092
Total current liabilities			12,966,627			7,682,707			14,902,121			6,361,834			1,786,305
Due to related parties (Note 11)			-			34,134			-			19,237			22,730
Due to affiliated company (Note 11)			19,885			22,770			23,405			-			233,746
Total Liabilities			12,986,512			7,739,611			14,925,526			6,381,071			2,042,781
Commitments and Contingencies (Note 12)			-			-			-			-			-
Stockholders' Equity
Authorized capital			1,321,556			1,321,556			1,321,556			2,177,411			2,177,411
Additional paid-in capital			145,894			70,614			96,889			26,810			6,905
Accumulated other comprehensive income			525,664			277,547			408,513			138,200			49,963
Retained earnings (restricted) (Note 10)			575,010			123,126			575,010			123,126			39,688
Retained earnings (unrestricted)			4,270,335			2,040,088			(148,948	)		427,807			(127,443	)
Due from related parties (Note 11)			(7,315	)		(133,377	)		(68,548	)		(1,124,157	)		(781,388	)
Total stockholders' equity			6,831,144			3,699,554			2,184,472			1,769,197			1,365,136
Total Liabilities and Stockholders'		$	19,817,656		$	11,439,165		$	17,109,998		$	8,150,268		$	3,407,917

The accompanying notes are an integral part of these financial statements.

54

Zhengzhou Shenyang Technology Company Limited

Statements of Operations

(In US Dollars)

	For the Nine Months Ended						For the Year Ended
	September 30,						December 31,
	2008			2007			2007			2006			2005
	(Unaudited)			(Unaudited)
Revenue	$	41,216,505		$	15,610,549		$	27,912,616		$	5,650,246		$	2,128,922
Cost of goods sold		(33,563,129	)		(12,638,629	)		(23,069,191	)		(4,477,671	)		(1,500,811	)
Gross Profit		7,653,376			2,971,920			4,843,425			1,172,575			628,111
Operating Costs and Exp
Selling expenses		107,235			40,799			2,587			19,381			56,564
Depreciation		33,637			30,183			43,546			42,047			25,531
Other general and administrative		620,159			328,005			715,066			230,337			303,840
Research and development		-			-			88,864			48			125
Total operating costs and exp		761,031			398,987			850,063			291,813			386,060
Income from Operations		6,892,345			2,572,933			3,993,362			880,762			242,051
Other Income (Expenses)
Gain (loss) on disposal of assets		-			-			(319	)		48,183			-
Interest income		-			10			3,489			473			43,837
Interest expense		(246,377	)		(91,650	)		(196,322	)		(11,616	)		-
Imputed interest		(49,005	)		(43,804	)		(70,079	)		(19,905	)		(6,905	)
Sundry income (expense), net		(1,018	)		(88	)		310			55,368			(28	)
Total Other Income (Expenses)		(296,400	)		(135,532	)		(262,921	)		72,503			36,904
Income before Income Tax		6,595,945			2,437,401			3,730,441			953,265			278,955
Income Taxes		(2,176,662	)		(825,119	)		(1,231,046	)		(314,577	)		(92,055	)
Net Income	$	4,419,283		$	1,612,282		$	2,499,395		$	638,688		$	186,900

The accompanying notes are an integral part of these financial statements.

55

Zhengzhou Shenyang Technology Company Limited

Statements of Changes in Stockholders’ Equity and Comprehensive Income

(In US Dollars)

						Accumulated							Due
				Additional		Statutory		Other		Retained			from			Total
				Paid-in		Reserve		Comprehensive		Earnings			Related			Stockholders’			Comprehensive
	Capital			Capital		Fund		Income		(Unrestricted)			Parties			Equity			Income
Balance at December 31, 2004	$	2,177,411		$	-	$	3,888	$	152	$	(278,543	)	$	(316,661	)	$	1,586,247
Allocation of retained earnings to statutory reserve fund		-			-		35,800		-		(35,800	)		-			-
Imputed interest allocated		-			6,905		-		-		-			-			6,905
Net income for the year		-			-		-		-		186,900			-			186,900		$	186,900
Foreign currency translation adjustment		-			-		-		49,811		-			-			49,811			49,811
Comprehensive income		-			-		-		-		-			-			-		$	236,711
Due from related parties		-			-		-		-		-			(464,727	)		(464,727	)
Balance at December 31, 2005		2,177,411			6,905		39,688		49,963		(127,443	)		(781,388	)		1,365,136
Allocation of retained earnings to statutory reserve fund		-			-		83,438		-		(83,438	)		-			-
Imputed interest allocated		-			19,905		-		-		-			-			19,905
Net income for the year		-			-		-		-		638,688			-			638,688		$	638,688
Foreign currency translation adjustment		-			-		-		88,237		-			-			88,237			88,237
Comprehensive income		-			-		-		-		-			-			-		$	726,925
Due from related parties		-			-		-		-		-			(342,769	)		(342,769	)
Balance at December 31, 2006		2,177,411			26,810		123,126		138,200		427,807			(1,124,157	)		1,769,197
Authorized capital withdrew from shareholders		(855,855	)		-		-		-		-			-			(855,855	)
Allocation of retained earnings to statutory reserve fund		-			-		451,884		-		(451,884	)		-			-
Imputed interest allocated		-			70,079		-		-		-			-			70,079
Dividend declared		-			-		-		-		(2,624,266	)		-			(2,624,266	)
Net income for the year		-			-		-		-		2,499,395			-			2,499,395		$	2,499,395
Foreign currency translation adjustment		-			-		-		270,313		-			-			270,313			270,313
Comprehensive income		-			-		-		-		-			-			-		$	2,769,708
Due from related parties		-			-		-		-		-			1,055,608			1,055,608
Balance at December 31, 2007		1,321,556			96,889		575,010		408,513		(148,948	)		(68,548	)		2,184,472
Imputed interest allocated		-			49,005		-		-		-			-			49,005
Net income for nine months ended September 30, 2008		-			-		-		-		4,419,283			-			4,419,283		$	4,419,283
Foreign currency translation adjustment		-			-		-		117,151		-			-			117,151			117,151
Comprehensive income		-			-		-		-		-			-			-		$	4,536,434
Due from related parties		-			-		-		-		-			61,233			61,233
Balance at September 30, 2008	$	1,321,556		$	145,894	$	575,010	$	525,664	$	4,270,335		$	(7,315	)	$	6,831,144

The accompanying notes are an integral part of these financial statements.

56

Zhengzhou Shenyang Technology Company Limited

Statements of Cash Flows

(In US Dollars)

	For the Nine Months Ended						For the Year Ended
	September 30,						December 31,
	2008			2007			2007			2006			2005
	(Unaudited)			(Unaudited)
Cash Flows from Operating Activities
Net income	$	4,419,283		$	1,612,282		$	2,499,395		$	638,688		$	186,900
Adjustments to reconcile net income to net cash provided (used) by operating activities
Depreciation		33,637			30,183			43,546			42,047			125,993
Imputed interest		49,005			43,804			70,079			19,905			6,905
Gain/Loss on disposal of assets		-			316			319			(48,183	)		-
Changes in operating assets and liabilities
Accounts receivable-trade, net		(8,794,444	)		(2,320,151	)		(6,001,266	)		(2,017,173	)		(468,994	)
Contract receivable		(6,816	)		(3,798	)		(6,553	)		(43,249	)		(51,697	)
Prepaid expenses and other receivables		(141,598	)		(86,814	)		(1,351	)		13,183			(9,017	)
Inventories, net		5,097,700			865,254			(2,865,885	)		(1,809,029	)		(514,828	)
Accounts payable and accrued liabilities		4,417,012			(4,219,270	)		(2,218,128	)		4,456,606			(822,362	)
Billings in excess of costs on uncompleted projects		12,915			26,048			16,692			1,943			-
Various taxes payable		(95,210	)		51,441			21,873			(64,187	)		76,553
Unearned revenues		(177,605	)		-			837,800			-			-
Wages payable		27,020			(7,775	)		16,116			7,775			-
Corporate tax payable		576,342			149,319			-			(93,092	)		93,092
Net cash provided (used) by operating activities		5,417,241			(3,859,161	)		(7,587,363	)		1,105,234			(1,377,455	)
Cash Flows from Investing Activities
Purchases of property and equipment		-			(10,451	)		(43,082	)		-			(5,110	)
Proceeds of disposal of fixed assets		11,234			22,209			22,661			193,186			-
Due from related parties		61,233			990,780			1,055,608			(342,769	)		(464,727	)
Net cash provided (used) by investing activities		72,467			1,002,538			1,035,187			(149,583	)		(469,837	)
Cash Flows from Financing Activities
Changes in short-term demand loans receivable		761,911			(153,884	)		(38,210	)		(142,071	)		716,230
Changes in short-term demand loans payable		(4,016,643	)		5,327,824			7,118,815			259,771			554,850
Decrease in authorized capital		-			(855,855	)		(855,855	)		-			-
Dividend paid		(2,624,266	)		-			-			-			-
Due to related parties		(3,520	)		37,667			4,168			(237,239	)		255,395
Net cash provided (used) by financing activities		(5,882,518	)		4,355,752			6,228,918			(119,539	)		1,526,475
Effect of exchange rate changes on cash
and cash equivalents		113,869			134,561			265,397			124,725			41,229
Increase (decrease) in cash and cash equivalents		(278,941	)		1,633,690			(57,861	)		960,837			(279,588	)
Cash and cash equivalents, beginning of period		1,125,805			1,183,665			1,183,665			222,828			502,416
Cash and cash equivalents, end of period	$	846,864		$	2,817,355		$	1,125,804		$	1,183,665		$	222,828
Supplemental disclosure information:
Interest paid	$	246,377		$	91,650		$	196,322		$	11,616		$	-
Income taxes paid	$	2,176,662		$	825,119		$	1,231,046		$	314,577		$	92,055

The accompanying notes are an integral part of these financial statements.

57

Zhengzhou Shenyang Technology Company Limited

Notes to Financial Statements

(Amounts and disclosures at and for the nine months ended September 30, 2008 and 2007 are unaudited)

NOTE 1 – DESCRIPTION OF BUSINESS AND ORGANIZATION

Zhengzhou Shenyang Technology Company Limited (“the Company”) was established on May 20, 1996 as a private domestic corporation in Zhengzhou, Henan Province, PRC with an authorized capital of Reminbi (the Chinese currency, “RMB”) 1.5 million. On April 8, 1999, the Company increased its authorized capital from RMB 1.5 million to RMB 8 million. On July 27, 2004, the Company further increased its authorized capital to RMB 18 million. On March 15, 2007, the Company decreased its authorized / invested capital to RMB 11.5 million.

In 2005, the Company’s primary revenues were from sales of broadcasting equipment, hi-tech optical transmission devices, and telecommunication products. The Company had one construction project in 2005 to provide design and install monitoring and telecommunication system. The Company also provided testing and technician consulting services.

In 2006, the Company’s sales of hi-tech optical transmission devices and telecommunication products increased significantly, the Company sold its raw materials and production line, and shifted into wholesale business. The Company also had several small construction projects and some testing services.

In 2007, the Company focused its business development efforts on sales of Internet Protocol Television (“IPTV”) and hi-tech optical transmission devices. The Company also sold one-year warranties along with the sales of IPTV devices.  In 2008, the Company carried the same policy and all revenues only from sales and warranty.  There are still several construction projects in process but no revenues recorded yet since the Company adopted the completed contract method of accounting for its construction projects.

In 2008, the Company continued its focus on sales of IPTV devices and related warranties. The Company has several construction projects in process but no revenues recorded due to adoption of the completed contract method of accounting for construction projects.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Use of Estimates

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

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, cash on deposit with various financial institutions in PRC, and all highly-liquid investments with original maturities of three months or less at the time of purchase.  Banks and other financial institutions in PRC do not provide insurance for funds held on deposit.

Accounts Receivable

Accounts receivable are carried at original invoice amount less an estimate made for doubtful accounts based on a review of all outstanding amounts on a monthly basis. The Company analyzes the aging of accounts receivable balances, historical bad debts, customer concentrations, customer credit-worthiness, current economic trends and changes in our customer payment terms. Significant changes in customer concentration or payment terms, deterioration of customer credit-worthiness or weakening in economic trends could have a significant impact on the collectability of receivables and our operating results. The Management’s judgment and assessment on customers credit is severely to approve. The Company does not provide for a bad debt allowance but uses the direct write-off method due to its historical collection experience. There were no bad debts as at December 31, 2007, 2006 and 2005 and as at September 30, 2008 and 2007.

58

Zhengzhou Shenyang Technology Company Limited

Notes to Financial Statements

(Amounts and disclosures at and for the nine months ended September 30, 2008 and 2007 are unaudited)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (continued)

Inventories

Inventories, which are primarily comprised of raw materials and finished goods, are stated at the lower of cost or net realizable value, using the first-in first-out (FIFO) method. Cost is determined on the basis of a moving average. The Company evaluates the need for reserves associated with obsolete, slow-moving and non-salable inventory by reviewing net realizable values on a periodic basis.

Property and Equipment

Property and equipment are recorded at cost and depreciated using the straight-line method, with an estimated 5% salvage value of original cost, over the estimated useful lives of the assets as follows:

Machinery and equipment	5 years
Office equipment	5 years
Automobile	5 years
Other equipment	10 years

Expenditures for repairs and maintenance, which do not improve or extend the expected useful lives of the assets, are expensed as incurred while major replacements and improvements are capitalized.

When property or equipment is retired or disposed of, the cost and accumulated depreciation are removed from the accounts, with any resulting gains or losses being included in net income or loss in the year of disposition.

Revenue Recognition

The Company recognizes product sales revenue when the significant risks and rewards of ownership have been transferred pursuant to PRC law, including such factors as when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, sales and value-added tax laws have been complied with, and collectability is reasonably assured. The Company generally recognizes revenue when its products are shipped.

The IPTV sales contracts include one year warranty period. The Company recorded the warranty as unearned revenue when the sales occurred and then amortized and recognized warranty revenues on a straight-line basis over the warranty period. The warranty costs were mainly the costs of materials used for repairing those sold products and were expensed when incurred. As the costs associated with such warranty revenues were immaterial in monetary terms and the time spent for repair work on those warranty items was minimal, no warranty liability was accrued at all periods.

Revenues from fixed-price construction contracts are recognized on the completed-contract method. This method is used because most of the construction and engineering contracts are completed within six months or less and financial position and results of operations do not vary significantly from those which would result from using the percentage-of-completion method. A contract is considered complete when all costs have been incurred and the installation is operating according to specifications or has been accepted by the customer.

Contract costs include all direct material and labor costs and those indirect costs related to contract performance, such as indirect labor, suppliers, tools, repairs, and depreciation costs. General and administrative costs are charged to expenses as incurred. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Claims are included in revenues when received.

Comprehensive Income

The Company has adopted SFAS No. 130, “Reporting Comprehensive Income”, which establishes standards for reporting and displaying comprehensive income, its components, and accumulated balances in a full-set of general-purpose financial statements. Accumulated other comprehensive income represents the accumulated balance of foreign currency translation adjustments.

59

Zhengzhou Shenyang Technology Company Limited

Notes to Financial Statements

(Amounts and disclosures at and for the nine months ended September 30, 2008 and 2007 are unaudited)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (continued)

Concentration of Credit Risk

The Company maintains cash balances at various financial institutions in PRC which do not provide insurance for amounts on deposit. The Company operates principally in PRC and grants credit to its customers. Although the PRC is economically stable, it is always possible that unanticipated events both domestically and in foreign countries could disrupt either the Company’s operations or those of its customers.

Foreign Currency Translation

The functional currency of the Company is RMB. The Company maintains its financial statements using 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 dates. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange 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 (loss) for the respective periods.

For financial reporting purposes, the financial statements of the Company, which are prepared in RMB, are translated into the Company’s reporting currency, United States Dollars (“USD”). Balance sheet accounts are translated using the closing exchange rate in effect at the balance sheet date and income and expense accounts are translated using the average exchange rate prevailing during the reporting period. Adjustments resulting from the translation, if any, are included in accumulated other comprehensive income (loss) in the owners’ equity.

The exchange rates used for foreign currency translation were as follows (USD$1 = RMB):

Period Covered	Balance Sheet Date Rates	Average Rates
Year ended December 31, 2005	8.06704	8.18197
Year ended December 31, 2006	7.79750	7.96369
Year ended December 31, 2007	7.29410	7.59474
9 Months ended September 30, 2008	6.83510	6.97496
9 Months ended September 30, 2007	7.49756	7.65462

Fair Value of Financial Instruments

The Company's financial instruments include cash equivalents, accounts receivable, other receivables, accounts payable, accrued expenses, value-added taxes, short-term and long-term bank loans, and loans payable to related parties. The carrying amounts of financial instruments other than long-term obligations approximate fair value due to their short maturities. Long-term obligations approximate fair value based upon rates currently available for similar instruments.

Recently Adopted Accounting Pronouncements

In July 2006, the FASB issued FASB Interpretation (“FIN”) No. 48, “Accounting for Uncertainty in Income Taxes,” which prescribes a comprehensive model for how a company should recognize, measure, present and disclose in its financial statements uncertain tax positions that the company has taken or expects to take on a tax return (including a decision whether to file or not to file a return in a particular jurisdiction). The accounting provisions of FIN No. 48 are effective for fiscal years beginning after December 15, 2006. The adoption of this Interpretation had no impact on the Company’s financial position or results of operations.

60

Zhengzhou Shenyang Technology Company Limited

Notes to Financial Statements

(Amounts and disclosures at and for the nine months ended September 30, 2008 and 2007 are unaudited)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (continued)

Recently Adopted Accounting Pronouncements – (continued)

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements" ("SFAS 157"). SFAS 157 defines fair value, establishes a framework and gives guidance regarding the methods used for measuring fair value, and expands disclosures about fair value measurements. In February 2008, the FASB issued FASB Staff Position 157-1, "Application of FASB Statement No. 157 to FASB Statement No. 13 and Other Accounting Pronouncements That Address Fair Value Measurements for Purposes of Lease Classification or Measurement under Statement 13" ("FSP 157-1") and FASB Staff Position 157-2, "Effective Date of FASB Statement No. 157" ("FSP 157-2"). FSP 157-1 amends SFAS 157 to remove certain leasing transactions from its scope. FSP 157-2 delays the effective date of SFAS 157 for all non-financial assets and non-financial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually), until fiscal years beginning after November 15, 2008. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The Company adopted SFAS 157 effective January 1, 2008 for all financial assets and liabilities as required. The adoption of SFAS 157 was not material to the Company's financial statements or results of operations.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities — Including an Amendment of FASB Statement No. 115,” (“SFAS 159”) which is effective for fiscal years beginning after November 15, 2007. SFAS 159 is an elective standard which permits an entity to choose to measure many financial instruments and certain other items at fair value at specified election dates. Subsequent unrealized gains and losses on items for which the fair value option has been elected will be reported in earnings. The Company has not elected the fair value option for any assets or liabilities under SFAS 159.

Recent Accounting Pronouncements

On December 4, 2007, the Financial Accounting Standards Board (FASB) issued SFAS No. 160, Non-controlling interest in Consolidated Financial Statements (SFAS No. 160). SFAS No. 160 requires all entities to report non-controlling (minority) interests in subsidiaries as equity in the consolidated financial statements. The statement establishes a single method of accounting for changes in a parent’s ownership interest in a subsidiary that do not result in deconsolidation and expands disclosures in the consolidated financial statements. SFAS No. 160 is effective for fiscal years beginning after December 15, 2008 and interim periods within those fiscal years. We have not yet determined the impact of the adoption of SFAS No. 160 on our consolidated financial statements and footnote disclosures.

On December 4, 2007, the FASB issued SFAS No.141R, Business Combinations (SFAS No. 141R). SFAS No. 141R requires the acquiring entity in a business combination to recognize all the assets acquired and liabilities assumed, establishes the acquisition date fair value as the measurement objective for all assets acquired and liabilities assumed, and requires the acquirer to expand disclosures about the nature and financial effect of the business combination. SFAS No. 141R is effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. We have not yet determined the impact of the adoption of SFAS No. 141R on our consolidated financial statements and footnote disclosures.

In March 2008, the FASB issued SFAS 161, “Disclosures about Derivative Instruments and Hedging Activities”. The new standard is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position, financial performance, and cash flows. It is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. The Company is currently evaluating the impact of adopting SFAS 161 on its consolidated financial statements.

61

Zhengzhou Shenyang Technology Company Limited

Notes to Financial Statements

(Amounts and disclosures at and for the nine months ended September 30, 2008 and 2007 are unaudited)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (continued)

Recent Accounting Pronouncements – (continued)

In April 2008, the FASB issued Staff Position FAS 142-3, Determination of the Useful Life of Intangible Assets (“FSP FAS 142-3”) which amends the factors an entity should consider in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FAS No. 142, Goodwill and Other Intangible Assets (“FAS No. 142”). FSP FAS 142-3 applies to intangible assets that are acquired individually or with a group of assets and intangible assets acquired in both business combinations and asset acquisitions. It removes a provision under FAS No. 142, requiring an entity to consider whether a contractual renewal or extension clause can be accomplished without substantial cost or material modifications of the existing terms and conditions associated with the asset. Instead, FSP FAS 142-3 requires that an entity consider its own experience in renewing similar arrangements. An entity would consider market participant assumptions regarding renewal if no such relevant experience exists. FSP FAS 142-3 is effective for year ends beginning after December 15, 2008 with early adoption prohibited. The adoption of this statement is not expected to have a material effect on the Company’s financial statements.

In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles”. SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles in the United States. It is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, “The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles”. The adoption of this statement is not expected to have a material effect on the Company’s financial statements.

In May 2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 163, “Accounting for Financial Guarantee Insurance Contracts – An interpretation of FASB Statement No. 60”. SFAS No. 163 requires that an insurance enterprise recognize a claim liability prior to an event of default when there is evidence that credit deterioration has occurred in an insured financial obligation. It also clarifies how Statement 60 applies to financial guarantee insurance contracts, including the recognition and measurement to be used to account for premium revenue and claim liabilities, and requires expanded disclosures about financial guarantee insurance contracts. It is effective for financial statements issued for fiscal years beginning after December 15, 2008, except for some disclosures about the insurance enterprise’s risk-management activities. SFAS No. 163 requires that disclosures about the risk-management activities of the insurance enterprise be effective for the first period beginning after issuance. Except for those disclosures, earlier application is not permitted. The adoption of this statement is not expected to have a material effect on the Company’s financial statements.

In June 2008, the Financial Accounting Standards Board (“FASB”) issued FSP No. EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities (“FSP EITF 03-6-1”). FSP EITF 03-6-1 concludes that unvested share-based payment awards that contain rights to receive non-forfeitable dividends or dividend equivalents are participating securities, and thus, should be included in the two-class method of computing earnings per share (“EPS”). FSP EITF 03-6-1 is effective for fiscal years beginning after December 15, 2008, and interim periods within those years. Early application of EITF 03-6-1 is prohibited. It also requires that all prior-period EPS data be adjusted retrospectively. The adoption of this statement is not expected to have a material effect on the Company’s financial statements.

NOTE 3 – ACCOUNTS RECEIVABLE

Accounts receivable consist of the following:

	September 30,				December 31,
	2008		2007		2007		2006		2005
Trade receivables	$	18,213,473	$	5,737,914	$	9,419,029	$	3,417,763	$	1,400,590

There was no allowance for a bad debt provision for all periods as the Company has adopted the direct write-off method for bad debts. There was no bad debt provided for in all periods.

62

Zhengzhou Shenyang Technology Company Limited

Notes to Financial Statements

(Amounts and disclosures at and for the nine months ended September 30, 2008 and 2007 are unaudited)

NOTE 4 – CONTRACTS RECEIVABLE

Contracts receivable consist of the following:

	September 30,				December 31,
	2008		2007		2007		2006		2005
Completed contracts, including retentions	$	108,315	$	98,744	$	101,499	$	94,946	$	51,697

The Company started to provide construction services for Henan Siqi Technology Company in 2005 under separated contracts. The contracts receivables were from several completed projects. Since the Company still has ongoing projects with Henan Siqi Technology Company in 2008, there was no allowance provided for in all periods.

NOTE 5 – INVENTORY, NET

Inventory consists of the following:

	September 30,				December 31,
	2008		2007		2007		2006		2005
Raw materials	$	391,094	$	1,757,655	$	5,488,794	$	2,622,909	$	728,088
Production costs		-		-		-		-		9,804
Finished goods		-		-		-		-		75,021
Supplies and other		-		-		-		-		967
Total	$	391,094	$	1,757,655	$	5,488,794	$	2,622,909	$	813,880

The Company sold its production lines in 2006 and has operated as a retailer since then. There was no reserve for obsolete inventory for all the periods as the Company has purchased inventory based on customers’ orders.

The cost of any inventory item does not include any general and administrative cost or license fees.

NOTE 6 – SHORT-TERM DEMAND LOANS RECEIVABLE

Short-term interest-free loans receivable consist of the following:

	September 30,				December 31,
	2008		2007		2007		2006		2005
Short-term interest-free loans receivable	$	7,944	$	885,529	$	769,855	$	731,645	$	589,574

Short-term interest-free loans were borrowed by the Company’s customers who were short of working capitals with terms less than six months in order to maintain customer relations, and were payable on demand. Since the customers usually have a long-time business relationship with the Company, the Company did not charge for any interests. The Company has not experienced any problems of collections.

63

Zhengzhou Shenyang Technology Company Limited

Notes to Financial Statements

(Amounts and disclosures at and for the nine months ended September 30, 2008 and 2007 are unaudited)

NOTE 7 – PROPERTY AND EQUIPMENT, NET

Property and equipment consist of the following:

	September 30,						December 31,
	2008			2007			2007			2006			2005
Machinery and equipment	$	89,231		$	83,774		$	83,616		$	83,024		$	536,278
Office equipment		32,363			45,024			48,775			41,846			41,846
Automobiles		101,561			62,045			95,173			97,034			97,034
Accumulated depreciation		(202,225	)		(147,268	)		(165,044	)		(140,856	)		(370,572	)
Total	$	20,930		$	43,575		$	62,520		$	81,048		$	304,586

The depreciation expenses are $43,546, $42,047, $25,531, $33,637, and $30,183 in the years ended 2007, 2006 and 2005, and in the nine months ended September 30, 2008 and 2007, respectively.

NOTE 8 – SHORT-TERM DEMAND LOANS PAYABLE

Since 2005, the Company had several outstanding short-term demand loans which were used primarily for general working capital purposes. These short-term unsecured loans were borrowed from long-term relationship customers bearing no interest. The balances of such short-term demand loans as of December 31, 2007, 2006, and 2005 and as of September 30, 2008 and 2007 were $1,590,203, $429,871, $554,850, $585,986, and $1,546,871, respectively. The imputed interests are assessed as an expense to the business operation and addition to the paid-in capital. The calculation is performed monthly by annual rate in the rage from 5.58 to7.30% with the reference to the one-year loan rate from The People’s Bank of China. The imputed interests as of December 31, 2007, 2006, and 2005 and as of September 30, 2008 and 2007 were $70,079, $19,905, $6,905, $49,005, and 43,804, respectively.

To expand the Company’s business, it borrowed one-year bank loans from Bank of Communication in 2006 and from Austria Central Cooperation Bank in 2007. These loans carried at an annual interest rate of 6.7275% for loans from Bank of Communication and 6.6975% for loans from Austria Central Cooperation Bank Beijing Branch. These loans were secured by insurance companies. The balances of such short-term demand loans as of December 31, 2007, 2006, and 2005 and as of September 30, 2008 and 2007 were $6,343,233, $384,750, $0, $3,330,807, and $4,595,574, respectively.

The outstanding loans are as follows:	September 30,				December 31,
Bank Loan:	2008		2007		2007		2006		2005
Bank of Communication	$	-	$	-	$	-	$	384,750	$	-
Austria Central Cooperation Bank		3,330,807		4,595,574		6,343,233		-		-
Corporation Loan:
Henan Siqi Technology Company		43,891		40,013		41,129		179,545		309,903
ZZ Huashitong Company		340,199		728,055		1,209,923		-		-
Yancity Television Department		12,584		11,472		11,792		11,030		-
Shanghai Post-communication Equipment		131,673		120,039		123,387		115,422		111,565
Xinhao Electronic Company		-		-		144,473		-		-
Tonghua Tianma Company		57,639		361,622		54,012		-		-
Yunnan Qingzhong Company		-		186,838		-		-		-
ZZ Boqing Technology Company		-		93,364		-		89,772		-
Henan Yuantong Textile Company		-		-		-		-		37,188
ZZ Yulu Steel Company		-		-		-		-		24,792
Others		-		5,468		5,487		34,102		71,402
Total	$	3,916,793	$	6,142,445	$	7,933,436	$	814,621	$	554,850

Interest expense incurred for the above short-term bank loans for the years ended December 31, 2007 and 2006 and for the nine months then ended September 30, 2008 and 2007 were $196,322, $11,616, $246,377, and $91,650, respectively.

64

Zhengzhou Shenyang Technology Company Limited

Notes to Financial Statements

(Amounts and disclosures at and for the nine months ended September 30, 2008 and 2007 are unaudited)

NOTE 9 – COSTS AND BILLINGS ON UNCOMPLETED CONTRACTS

	September 30,				December 31,
	2008		2007		2007		2006		2005
Billings on uncompleted contracts	$	207,811	$	102,700	$	105,565	$	34,626	$	-
Costs incurred on uncompleted contracts		176,261		74,709		86,930		32,683		-
Billings in excess of costs on uncompleted contracts	$	31,550	$	27,991	$	18,635	$	1,943	$	-

The Company had two uncompleted construction projects with Henan Siqi Technology Company. One started in 2006 and other one started in 2008. The Company has billed its client more than costs incurred on each projects.

NOTE 10 – STATUTORY RESERVES

As stipulated by the relevant laws and regulations for enterprises operating in PRC, the subsidiaries of the Company are required to make annual appropriations to a statutory surplus reserve fund. Specifically, the subsidiaries of the Company are required to allocate 10% their profits after taxes, as determined in accordance with the PRC accounting standards applicable to the subsidiaries of the Company, to a statutory surplus reserve until such reserve reaches 50% of the registered capital of the subsidiaries of the Company.

NOTE 11 – DUE FROM (TO) RELATED PARTIES

Transactions with related individuals

For the year then ended December 31, 2007 and 2006 and for the nine months then ended September 30, 2008 and 2007, the Company had an outstanding payable to Mr. Zhong, the President and CEO, totaling $0, $12,183, $0 and $26,798, respectively. The amount due to Mr. Zhong was incurred for the Company’s regularly business activities expenses that were amounts owed to him for reimbursements. These amounts are non-secured, no interest bearing, and are considered to be short-term with no fixed repayment date.

For the year then ended December 31, 2007 and 2006 and for the nine months then ended September 30, 2008 and 2007, the Company had an outstanding payable to Ms. Sen, the Executive Secretary to CEO and Cash Manager, totaling $0, $7,054, $0, and $7,336, respectively. The amount due to Ms. Sen was incurred for the Company’s regularly business activities expenses that were amounts owed to her for reimbursements. These amounts are non-secured, no interest bearing, and are considered to be short-term with no fixed repayment date.

For the year then ended December 31, 2007 and 2006 and for the nine months then ended September 30, 2008 and 2007, there were no outstanding balances to other related individuals. The compensation of related individuals recorded by the Company were summarized as following:

	September 30,				December 31,
	2008		2007		2007		2006
Zhong, Bo (Chairman & CEO)	$	4,623	$	2,599	$	6,297	$	2,703
Huang, Jenkang (Vice President)		3,317		2,809		4,630		2,948
Wu, Dexio (Warehousing, CEO's Spouse)		1,618		1,264		2,183		993
Li, Yuting (Executive Secretary to CEO)		3,006		2,822		4,050		1,738
Sen, Hui (Executive Secretary to CEO)		2,805		1,257		3,809		1,671
Wang, Weiping (VP, Operations)		3,131		2,421		4,637		1,925
Zhong, Lin (GM and CEO's Son)		3,384		-		4,576		2,022

65

Zhengzhou Shenyang Technology Company Limited

Notes to Financial Statements

(Amounts and disclosures at and for the nine months ended September 30, 2008 and 2007 are unaudited)

NOTE 11 – DUE FROM (TO) RELATED PARTIES (continued)

Transactions with related companies

For the year ended December 31, 2007 and 2006 and for the nine months ended September 30, 2008 and 2007, the Company had an outstanding receivable from Shenyang Real Estate (ZZ) Co., Ltd, Mr. Zhong Bo holds 60% of the ownership, totaling $ 68,548, $384,750, $0 and $133,377, respectively. Due to its shortage of working capital, Shenyang Real Estate borrowed loans from the Company with non-interest bearing and no fixed repayment date.

For the year ended December 31, 2007 and for the nine months ended September 30, 2008 and 2007, the Company had an outstanding payable of $23,405, $19,885 and $22,770 to Henan Jingbuo Electronics Co., Ltd (“Jingbuo”), Mr. Zhong, Bo holds 98.84% of the ownership. The Company had an outstanding receivable of $473,929 from Jingbuo as of December 31, 2006.  The demand loans were used primarily for general working capital purposes with non-interest bearing and no fixed repayment date.

For the year ended December 31, 2007 and 2006 and for the nine months ended September 30, 2008 and 2007, the Company had an outstanding receivable from Shenyang Cables (ZZ) Co., Ltd, Mr. Zhong, Lin holds 91.4% of the ownership, totaling $0, $265,478, $0 and $0, respectively. The demand loans were used primarily for general working capital purposes with non-interest bearing and no fixed repayment date.

Due to related parties and affiliated companies consist of the following:

	September 30,				December 31,
	2008		2007		2007		2006		2005
Henan Jingbuo Electronics Co., Ltd.
(Mr. Zhong, Bo owns 98.84%)	$	19,885	$	22,770	$	23,405	$	-	$	-
Sen, Hui (shareholder)		-		7,336		-		7,054		20,251
Zhong, Bo (CEO)		-		26,798		-		12,183		-
Shenyang Electric Automobiles (ZZ) Co., Ltd.
(Ms. Li, Yuting owns 99.5%)		-		-		-		-		233,746
Zhong, Lin (CEO's son)		-		-		-		-		2,479
Total	$	19,885	$	56,904	$	23,405	$	19,237	$	256,476

Due from related parties and affiliated companies consist of the following:

	September 30,				December 31,
	2008		2007		2007		2006		2005
Shenyang Real Estate (ZZ) Co., Ltd.
(Mr. Zhong, Bo owns 60%)	$	-	$	133,377	$	68,548	$	384,750	$	-
Henan Jingbuo Electronics Co., Ltd.
(Mr. Zhong, Bo owns 98.84%)		-		-		-		473,929		520,336
Shenyang Cables (ZZ) Co., Ltd.
(Mr. Zhong, Lin owns 91.4%)		-		-		-		265,478		64,135
Jingang Investment (ZZ) Co., Ltd
(Mr. Zhong, Bo owns 40%)		7,315		-		-		-		-
Zhong, Bo (CEO)		-		-		-		-		192,514
Huang, Jenkang (shareholder)		-		-		-		-		1,690
Wu, Dexio (CEO's wife and shareholder)		-		-		-		-		1,690
Li, Yuting (shareholder)		-		-		-		-		1,023
Total	$	7,315	$	133,377	$	68,548	$	1,124,157	$	781,388

66

Zhengzhou Shenyang Technology Company Limited

Notes to Financial Statements

(Amounts and disclosures at and for the nine months ended September 30, 2008 and 2007 are unaudited)

NOTE 12 – COMMITMENTS AND CONTINGENCIES

Office lease commitments                                                      

The Company has entered into two office lease agreements.  The Company’s commitments for minimum lease payments under these leases for the next five years and thereafter are as follows as follows:

For The year Ended December 31,
2008	$	6,855
2009		6,855
2010		4,856
2011		-
2012		-
thereafter		-
	$	18,566

During 2007, an officer of the Company provided administrative office space valued at approximately $2,000.As the amount was not material,   no expense was recorded for this amount.

NOTE 13 – PROVISION FOR INCOME TAXES

The Company is registered in PRC and has no tax advantages granted by local government for corporate income taxes and sales taxes because it is a domestic corporation.

The tax authority of the PRC Government conducts periodic and ad hoc tax filing reviews on business enterprises operating in the PRC after those enterprises had completed their relevant tax filings, hence the Company’s tax filings may not be finalized. It is therefore uncertain as to whether the PRC tax authority may take different views about the Company’s tax filings which may lead to additional tax liabilities.

The provision for taxes on earnings consisted of:

	September 30,				December 31,
	2008		2007		2007		2006		2005
PRC Corporate Income Tax	$	2,176,662	$	825,119	$	1,231,046	$	314,577	$	92,055
Total	$	2,176,662	$	825,119	$	1,231,046	$	314,577	$	92,055

A reconciliation between the income tax computed at the PRC statutory rate and the Company’s provision for income taxes for the years of 2006, 2007 and 2008 is as follows:

	2007	2006	2005
PRC corporate income tax rate	33%	33%	33%
Provision for income tax	33%	33%	33%

67

Zhengzhou Shenyang Technology Company Limited

Notes to Financial Statements

(Amounts and disclosures at and for the nine months ended September 30, 2008 and 2007 are unaudited)

NOTE 14 – SEGMENT INFORMATION

SFAS No. 131, “Disclosures About Segments of an Enterprise and Related Information”, requires certain financial and supplementary information to be disclosed on an annual and interim basis for each reportable segment of an enterprise. The Company believes that it operates in one business segment (research, development, production, marketing and sales of electronic products) and in one geographical segment (China), as all of the Company’s current operations are carried out in China.

The Company’s revenues, costs and gross profits were broken into the following categories:

Product Sales:	September 30,						December 31,
	2008			2007			2007			2006			2005
Sales revenues	$	37,789,898		$	15,610,549		$	27,337,876		$	5,547,875		$	1,825,251
Cost of sales		33,431,881			12,638,629			23,005,696			4,462,387			1,443,544
Gross Profit	$	4,358,017		$	2,971,920		$	4,332,180		$	1,085,488		$	381,707
Gross Margin		11.53	%		19.04	%		15.85	%		19.57	%		20.91	%

Technical Support Revenues:	September 30,					December 31,
	2008			2007		2007		2006			2005
Services revenues	$	609,602		$	-	$	-	$	5,503		$	33,491
Service cost		33,528			-		-		-			6,398
Gross Profit	$	576,074		$	-	$	-	$	5,503		$	27,093
Gross Margin		94.50	%		-		-		100.00	%		80.90	%

Construction Revenues:	September 30,				December 31,
	2008		2007		2007		2006			2005
Construction revenues	$	-	$	-	$	-	$	96,868		$	270,180
Construction costs		-		-		-		15,284			50,869
Gross Profit	$	-	$	-	$	-	$	81,584		$	219,311
Gross Margin		-		-		-		84.22	%		81.17	%

Warranty Revenues:	September 30,					December 31,
	2008			2007		2007			2006		2005
Warranty revenues	$	2,817,005		$	-	$	574,740		$	-	$	-
Warranty costs		97,720			-		63,495			-		-
Gross Profit	$	2,719,285		$	-	$	511,245		$	-	$	-
Gross Margin		96.53	%		-		88.95	%		-		-

Total revenues:	September 30,						December 31,
	2008			2007			2007			2006			2005
Total revenues	$	41,216,505		$	15,610,549		$	27,912,616		$	5,650,246		$	2,128,922
Total costs		33,563,129			12,638,629			23,069,191			4,477,671			1,500,811
Total Gross Profit	$	7,653,376		$	2,971,920		$	4,843,425		$	1,172,575		$	628,111
Total Gross Margin		18.57	%		19.04	%		17.35	%		20.75	%		29.50	%

68

Zhengzhou Shenyang Technology Company Limited

Notes to Financial Statements

(Amounts and disclosures at and for the nine months ended September 30, 2008 and 2007 are unaudited)

NOTE 15 – OPERATING RISK

Country risk

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

69

(c)           Pro Forma Financial Information.

On December 11, 2008, SRKP 18 entered into a share exchange agreement, as amended on January 9, 2009 (the “Exchange Agreement”), with World Orient and the shareholders of World Orient.  Pursuant to the Exchange Agreement, SRKP 18 agreed to issue an aggregate of 1,985,000 shares of its common stock to the shareholders of World Orient and/or his designees in exchange for all of the issued and outstanding shares of World Orient (the “Share Exchange”).  The Share Exchange closed on January 9, 2009.  SRKP 18 issued no fractional shares in connection with the Share Exchange.

Immediately after the closing of the Share Exchange but prior to the Private Placement, the Company had outstanding 9,081,390 shares of common stock, no shares of preferred stock, no options, and warrants to purchase 7,096,390 shares of common stock at an exercise price of $0.0001 per share.

On January 9, 2009, concurrently with the close of the Share Exchange, the Company conducted an initial closing of a private placement transaction (the “Private Placement”).  Pursuant to subscription agreements entered into with the investors, the Company sold an aggregate of 1,097,500 shares of Series A Convertible Preferred Stock (the “Series A Preferred Stock”) at $1.60 per share, for gross proceeds of approximately $1,756,000; up to $5 million of Series A Preferred Stock is being offered in the Private Placement.  In connection with the initial closing of the Private Placement, the Company issued a promissory note in the principal amount of $170,000, bearing no interest, to the placement agent (the “Note”). The principal shall be due and payable by the Company on or before the earlier of (a) thirty (30) days from the date of issuance of this Note or (b) upon the receipt by the Company of at least $4 million in the Private Placement.

The unaudited pro forma balance sheets below at December 31, 2007 and at September 30, 2008 and statements of operations for year ended December 31, 2007 and nine months ended September 30,2008, assume that the Share Exchange and the Private Placement occurred at the beginning of the period presented. The Company believes the assumptions used provide a reasonable basis for presenting the significant effects directly attributable to such transactions. The pro forma financial results are presented for informational purposes only and are not intended to be indicative of either future results of the Company’s operations or results that might have been achieved had the transactions actually occurred since the beginning of each reporting period.

70

ZST Digital Networks, Inc.

Pro Forma Balance Sheets

(In US Dollars)

	September 30,2008
	ZST Digital Networks, Inc (formerly SRKP 18, Inc.)			World Asia Universal Limited		Global Asia Universal Limited		EverFair Technologies, Ltd.			Zhengzhou Shenyang Technology Company Limited			Adjustment			Consolidated
Assets
Current Assets
Cash and cash equivalents	$	23,625		$	-	$	-	$	1,204		$	846,864		$	1,770,902		$	2,642,595
Trade receivables, net		-			-		-		-			18,213,473			-			18,213,473
Contract receivable		-			-		-		-			108,315			-			108,315
Short-term demand loans receivable		-			-		-		-			7,944			-			7,944
Inventories, net		-			-		-		-			391,094			-			391,094
Taxes recoverable		-			-		-		-			74,508			-			74,508
Prepaid expenses and other receivables		-			-		-		-			154,528			-			154,528
Deferred acquisition costs		75,000			-		-		-			-			-			75,000
Total current assets		98,625			-		-		1,204			19,796,726			1,770,902			21,667,457
Property and Equipments, Net		-			-		-		-			20,930			-			20,930
Total Assets	$	98,625		$	-	$	-	$	1,204		$	19,817,656		$	1,770,902		$	21,688,387
Liabilities & Shareholders' Equity
Current Liabilities
Accounts payable - trade	$	-		$	-	$	-	$	-		$	7,425,614		$	1,041,131		$	8,466,745
Customer deposit		-			-		-		-			1,463			-			1,463
Billings in excess of costs on uncompleted projects		-			-		-		-			31,550			-			31,550
Accrued liabilities and other payable		-			-		-		-			269,128			(200,000	)		69,128
Various taxes payable		-			-		-		-			15,678			-			15,678
Short-term demand loans payable		-			-		-		-			3,916,793			-			3,916,793
Employee security deposit payable		-			-		-		-			18,954			-			18,954
Unearned warranty revenues		-			-		-		-			660,195			-			660,195
Wages payable		-			-		-		-			50,910			-			50,910
Corporate tax payable		-			-		-		-			576,342			-			576,342
Notes payable		-			-		-		-			-			170,000			170,000
Due to stockholders		147,500			-		-		-			-			(50,000	)		97,500
Total current liabilities		147,500			-		-		-			12,966,627			961,131			14,075,258
Due to Related Parties		0			-		-		-			-			0			0
Due to Affiliated Company		0			-		-		-			19,885			0			19,885
Total liabilities		147,500			-		-		-			12,986,512			961,131			14,095,143
Shareholders' Equity
Common stock(9,081,390 shares issued and  outstanding, 0.0001 par value)		710			-		-		-			-			198			908
Preferred stock(1,097,500 shares issued and outstanding, at par value of 0.0001)		-			-		-		-			-			100			100
Authorized capital		-			-		-		1,286			1,321,556			(1,322,842	)		-
Additional paid-in capital		6,790			-		-		-			145,894			2,146,315			2,298,999
Accumulated other comprehensive income		-			-		-		(1	)		525,664			-			525,663
Retained earnings (restricted)		-			-		-		-			575,010			-			575,010
Retained earnings (unrestricted)		(56,375	)		-		-		(81	)		4,270,335			(14,000	)		4,199,879
Due from Related Parties		-			-		-		-			(7,315	)		-			(7,315	)
Total Shareholders' Equity		(48,875	)		-		-		1,204			6,831,144			809,771			7,593,244
Total Liabilities & Shareholders' Equity	$	98,625		$	-	$	-	$	1,204		$	19,817,656		$	1,770,902		$	21,688,387

71

ZST Digital Networks, Inc.

Fro Forma Statements of Operations

(In US Dollars)

	September 30, 2008
	ZST Digital Networks, Inc (formerly SRKP 18, Inc.)			World Asia Universal Limited		Global Asia Universal Limited		EverFair Technologies, Ltd.			Zhengzhou Shenyang Technology Company Limited			Adjustment			Consolidated
Revenue
Sales	$	-		$	-	$	-	$	-		$	41,216,505		$	-		$	41,216,505
Cost of Goods Sold		-			-		-		-			(33,563,129	)		-			(33,563,129	)
Gross Profit		-			-		-		-			7,653,376			-			7,653,376
General and administrative
Selling Expenses		-			-		-		-			107,235			-			107,235
Depreciation		-			-		-		-			33,637			-			33,637
Others General and administrative		2,273			-		-		-			620,159			14,000			636,432
Total General and administravive		2,273			-		-		-			761,031			14,000			777,304
Income from operations		(2,273	)		-		-		-			6,892,345			(14,000	)		6,876,072
Other income (expenses)
Interest income		-			-		-		1			-			-			1
Interest expense		-			-		-		-			(246,377	)		-			(246,377	)
Imputed interest		-			-		-		-			(49,005	)		-			(49,005	)
Bank charges		-			-		-		(82	)		-			-			(82	)
Sundry income (expense), net		-			-		-		-			(1,018	)		-			(1,018	)
Total other income (expenses)		-			-		-		(81	)		(296,401	)		-			(296,482	)
Income before income taxes		(2,273	)		-		-		(81	)		6,595,944			(14,000	)		6,579,590
Income taxes									-			(2,176,662	)					(2,176,662	)
Net Income	$	(2,273	)	$	-	$	-	$	(81	)	$	4,419,283		$	(14,000	)	$	4,402,929

72

ZST Digital Networks, Inc.

Pro Forma Balance Sheets

(In US Dollars)

	December 31, 2007
	ZST Digital Networks, Inc (formerly SRKP 18, Inc.)			World Asia Universal Limited		Global Asia Universal Limited		EverFair Technologies, Ltd.			Zhengzhou Shenyang Technology Company Limited			Adjustment			Consolidated
Assets
Current Assets
Cash and cash equivalents	$	776		$	-	$	-	$	-		$	1,125,804		$	1,770,902		$	2,897,482
Trade receivables, net		-			-		-		-			9,419,029			-			9,419,029
Contract receivable		-			-		-		-			101,499			-			101,499
Short-term demand loans receivable		-			-		-		-			769,855			-			769,855
Inventories, net		-			-		-		-			5,488,794			-			5,488,794
Taxes recoverable		-			-		-		-			129,567			-			129,567
Prepaid expenses and other receivables		-			-		-		-			12,930			-			12,930
Total current assets		776			-		-		-			17,047,478			1,770,902			18,819,156
Property and Equipments, Net		-			-		-		-			62,520			-			62,520
Total Assets	$	776		$	-	$	-	$	-		$	17,109,998		$	1,770,902		$	18,881,676
Liabilities & Shareholders' Equity
Current Liabilities
Accounts payable - trade	$	-		$	-	$	-	$	-		$	3,026,572		$	1,041,131		$	4,067,703
Customer deposit		-			-		-		-			36,854			-			36,854
Billings in excess of costs on uncompleted projects		-			-		-		-			18,635			-			18,635
Accrued liabilities and other payable		-			-		-		-			222,440			(200,000	)		22,440
Various taxes payable		-			-		-		-			165,947			-			165,947
Short-term demand loans payable		-			-		-		-			7,933,436			-			7,933,436
Employee security deposit payable		-			-		-		-			12,281			-			12,281
Unearned warranty revenues		-			-		-		-			837,800			-			837,800
Wages payable		-			-		-		-			23,890			-			23,890
Divident payable		-			-		-		-			2,624,266			-			2,624,266
Notes payable		-			-		-		-			-			170,000			170,000
Due to stockholders		32,500			-		-		-			-			(50,000	)		(17,500	)
Total current liabilities		32,500			-		-		-			14,902,121			961,131			15,895,752
Due to Related Parties		-			-		-		-			0			0			0
Due to Affiliated Company		-			-		-		-			23,405			0			23,405
Total liabilities		32,500			-		-		-			14,925,526			961,131			15,919,157
Shareholders' Equity
Common stock(9,081,390 shares issued and  outstanding, 0.0001 par value)		710			-		-		-			-			198			908
Preferred stock(1,097,500 shares issued and outstanding, at par value of 0.0001)		-			-		-		-			-			100			100
Authorized capital		-			-		-		1,286			1,321,556			(1,322,842	)		-
Additional paid-in capital		6,790			-		-		-			96,889			2,146,315			2,249,994
Accumulated other comprehensive income		-			-		-		-			408,513			-			408,513
Retained earnings (restricted)		-			-		-		-			575,010			-			575,010
Retained earnings (unrestricted)		(39,224	)		-		-		(1,286	)		(148,948	)		(14,000	)		(203,458	)
Subscription receivable		-			-		-		-			-			-			-
Due from Related Parties		-			-		-		-			(68,548	)		-			(68,548	)
Total Shareholders' Equity		(31,724	)		-		-		-			2,184,472			809,771			2,962,519
Total Liabilities & Shareholders' Equity	$	776		$	-	$	-	$	-		$	17,109,998		$	1,770,902		$	18,881,676

73

 ZST Digital Networks, Inc.

Fro Forma Statements of Operations

 (In US Dollars)

	December 31, 2007
	ZST Digital Networks, Inc (formerly SRKP 18, Inc.)			World Asia Universal Limited		Global Asia Universal Limited		EverFair Technologies, Ltd.		Zhengzhou Shenyang Technology Company Limited			Adjustment			Consolidated
Revenue
Sales	$	-		$	-	$	-	$	-	$	27,912,616		$	-			27,912,616
Cost of Goods Sold		-			-		-		-		(23,069,191	)		-			(23,069,191	)
Gross Profit		-			-		-		-		4,843,425			-			4,843,425
General and administrative
Selling Expenses		-			-		-		-		2,587			-			2,587
Depreciation		-			-		-		-		43,546			-			43,546
Others General and administrative		39,224			-		-		-		715,066			14,000			768,290
Research and development		-			-		-		-		88,864			-			88,864
		-			-		-		-		-			-			-
Total General and administrative		39,224			-		-		-		850,063			14,000			903,287
Income from operations		(39,224	)		-		-		-		3,993,362			(14,000	)		3,940,138
Other income (expenses)
Gain (loss) on disposal of assets		-			-		-		-		(319	)		-			(319	)
Interest income		-			-		-		-		3,489			-			3,489
Interest expense		-			-		-		-		(196,322	)		-			(196,322	)
Imputed interest		-			-		-		-		(70,079	)		-			(70,079	)
Bank charges		-			-		-		-		-			-			-
Sundry income (expense), net		-			-		-		-		310			-			310
Total other income (expenses)		-			-		-		-		(262,921	)		-			(262,921	)
Income before income taxes		(39,224	)		-		-		-		3,730,441			(14,000	)		3,677,217
Income taxes									-		(1,231,046	)					(1,231,046	)
Net Income	$	(39,224	)	$	-	$	-	$	-	$	2,499,395		$	(14,000	)	$	2,446,171

74

(d) Exhibits.

Exhibit No.	Exhibit Description
2.1	Equity Purchase Agreement dated October 10, 2008 by and among Zhong Bo, Wu Dexiu, Huang Jiankang, Sun Hui, Li Yuting and Everfair Technologies, Ltd. (translated to English).
2.2	Share Exchange Agreement dated December 11, 2008 by and among the Registrant, World Orient Universal Limited and all of the shareholders of World Orient Universal Limited.
2.3	Amendment No. 1 to Share Exchange Agreement dated January 9, 2009 by and among the Registrant, World Orient Universal Limited and all of the shareholders of World Orient Universal Limited.
3.1	Certificate of Incorporation (incorporated by reference from Exhibit 3.1 to the Registration Statement on Form 10-SB (File No. 000-52934) filed with the Securities and Exchange Commission on November 26, 2007).
3.2	Bylaws (incorporated by reference from Exhibit 3.2 to the Registration Statement on Form 10-SB (File No. 000-52934) filed with the Securities and Exchange Commission on November 26, 2007).
3.3	Certificate of Designations, Preferences and Rights of Series A Convertible Preferred Stock as filed with the Office of Secretary of State of Delaware on January 5, 2009.
3.4	Certificate of Ownership and Merger effecting name change filed with the Office of Secretary of State of Delaware on January 9, 2009.
10.1	Form of Subscription Agreement.
10.2	Registration Rights Agreement dated January 9, 2009 by and between the Registrant and the Shareholders.
10.3	Share and Warrant Cancellation Agreement dated January 9, 2009 by and between the Registrant and the Shareholders.
10.4	Promissory Note dated January 9, 2009 by and between SRKP 18, Inc. and WestPark Capital, Inc.
10.5	Form of 2008 Employment Agreement entered into with executive officers indicated in Schedule A attached to the Form of Agreement (translated to English).
10.6	Patent License Agreement dated January 9, 2009 by and between Zhengzhou Shenyang Technology Company Limited and Zhong Bo (translated to English).
10.7	House Lease Agreement dated August 29, 2007 by and between Zhengzhou Green City Advertisement Co., Ltd. and Zhengzhou Shenyang Technology Company Limited (translated to English).
10.8	Accounts Receivable Financing Agreement dated January 4, 2008, as amended, by and between Zhengzhou Shenyang Technology Company Limited and Raiffeisen Zentralbank Oesterreich AG Beijing Branch (translated to English).
10.9	Receivable Pledge Agreement dated January 4, 2008 by and between Zhengzhou Shenyang Technology Company Limited and Austria Central Cooperation Bank Beijing Branch (translated to English).
21.1	List of Subsidiaries.

75

SIGNATURES

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

	ZST Digital Networks, Inc.
Dated: January 15, 2009		/s/ Zhong Bo
	By:	Zhong Bo
	Its:	Chief Executive Officer

76

EXHIBIT INDEX

Exhibit No.	Exhibit Description
2.1	Equity Purchase Agreement dated October 10, 2008 by and among Zhong Bo, Wu Dexiu, Huang Jiankang, Sun Hui, Li Yuting and Everfair Technologies, Ltd. (translated to English).
2.2	Share Exchange Agreement dated December 11, 2008 by and among the Registrant, World Orient Universal Limited and all of the shareholders of World Orient Universal Limited.
2.3	Amendment No. 1 to Share Exchange Agreement dated January 9, 2009 by and among the Registrant, World Orient Universal Limited and all of the shareholders of World Orient Universal Limited.
3.1	Certificate of Incorporation (incorporated by reference from Exhibit 3.1 to the Registration Statement on Form 10-SB (File No. 000-52934) filed with the Securities and Exchange Commission on November 26, 2007).
3.2	Bylaws (incorporated by reference from Exhibit 3.2 to the Registration Statement on Form 10-SB (File No. 000-52934) filed with the Securities and Exchange Commission on November 26, 2007).
3.3	Certificate of Designations, Preferences and Rights of Series A Convertible Preferred Stock as filed with the Office of Secretary of State of Delaware on January 5, 2009.
3.4	Certificate of Ownership and Merger effecting name change filed with the Office of Secretary of State of Delaware on January 9, 2009.
10.1	Form of Subscription Agreement.
10.2	Registration Rights Agreement dated January 9, 2009 by and between the Registrant and the Shareholders.
10.3	Share and Warrant Cancellation Agreement dated January 9, 2009 by and between the Registrant and the Shareholders.
10.4	Promissory Note dated January 9, 2009 by and between SRKP 18, Inc. and WestPark Capital, Inc.
10.5	Form of 2008 Employment Agreement entered into with executive officers indicated in Schedule A attached to the Form of Agreement (translated to English).
10.6	Patent License Agreement dated January 9, 2009 by and between Zhengzhou Shenyang Technology Company Limited and Zhong Bo (translated to English).
10.7	House Lease Agreement dated August 29, 2007 by and between Zhengzhou Green City Advertisement Co., Ltd. and Zhengzhou Shenyang Technology Company Limited (translated to English).
10.8	Accounts Receivable Financing Agreement dated January 4, 2008, as amended, by and between Zhengzhou Shenyang Technology Company Limited and Raiffeisen Zentralbank Oesterreich AG Beijing Branch (translated to English).
10.9	Receivable Pledge Agreement dated January 4, 2008 by and between Zhengzhou Shenyang Technology Company Limited and Austria Central Cooperation Bank Beijing Branch (translated to English).
21.1	List of Subsidiaries.

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EX-2.1

EXHIBIT 2.1

EQUITY PURCHASE AGREEMENT

THIS EQUITY PURCHASE AGREEMENT (this “Agreement”) is made and entered into  on October 10, 2008 in Zhengzhou, the People’s Republic of China (the “PRC”), by and among:

A. Mr. Zhong Bo, a citizen of the People’s Republic of China (the “PRC”)with the ID card number /passport number of 412801195008100614 ;

Mr. Wu Dexiu, a citizen of the PRC with the ID card number /passport number of 412801195309170667;

Mr. Huang Jiankang, a citizen of the PRC with the ID card number /passport number of 410102195706231036;

Ms. Sun Hui, a citizen of the PRC with the ID card number /passport number of 410102194612101025;

Mr. Li Yuting, a citizen of the PRC with the ID card number /passport number of 411023196106064014;

(Each Party A hereinafter is collectively referred to as the “ZST Sellers”, and the shareholding percentage held by each Party A is attached hereto as Annex 1);

B. Everfair Technologies, Ltd., a company established and existing under the laws of Hong Kong (hereinafter be referred to as the “ZST Purchaser”).

Address: Room 801, Stanhope House, 738 King’s Road, Hong Kong

Legal Representative: Chen Dong

ZST Sellers and ZST Purchaser shall be referred to individually as a “Party” or collectively as the “Parties”.

WITNESSETH

WHEREAS, ZHENGZHOU SHENYANG TECHNOLOGY CO., LTD. (郑州市神阳科技有限公司) (“ZST”) is duly organized and existing under the laws of the PRC with the status of a legal person, registered with the Administration for Industry and Commerce of Zhengzhou (Business License 410100100008310) with its registered address at Building 28, Huzhu Road, Zhongyuan District, Zhengzhou, PRC.  The business scope of ZST is the development of electronic products, cable television equipments and industrial monitor products, relevant technology transfer and technology consultation; computer technology services; computer information system integration; software design and development; research and development of the digital television equipments; construction of internet engineering (subject to effective qualifications); the sale of shooting and recording equipment and telecommunication products (excluding those operated only by the state).

WHEREAS,ZST’s registered capital is RMB11,500,000, all of which has been fully contributed.  The net asset value of ZST is RMB  12, 569,900 based on the Asset Evaluation Report (“Asset Evaluation Report”) issued by Henan Dazhong Accounting Firm Co., Ltd. (河南大众会计师事务所有限公司) on May 19, 2008;

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WHEREAS, ZST Sellers legally and beneficially hold 100% of the registered capital in ZST (the “ZST Equity”).

WHEREAS,a shareholders’ meeting and a board meeting of ZST have been convened and the shareholders and board of ZST have approved the terms and conditions of this Agreement and the transactions contemplated herein；

NOW, THEREFORE, in consideration of the premises and agreements set forth herein, and intending to be legally bound, the Parties hereby agree as follows:

Section 1                      Sale and Purchase of Equity

1.1 Subject to the terms of this Agreement, each of the ZST Sellers as legal and beneficial owners shall transfer and sell to the ZST Purchaser and the ZST Purchaser shall acquire and purchase from each of the ZST Sellers the ZST Equity set forth in Table One, Appendix 1 hereto, which in the aggregate represents hundred percent (100%) of the ownership interest of ZST together with all rights attaching to them free and clear of all Liens and all Encumbrances.

1.2 Upon the completion of the registration proceeding and carrying out of the necessary formalities contemplated pursuant to Section 2.1 and 2.2, the ZST Purchaser shall pay in cash to the ZST Sellers as consideration for the equity transfer hereof the amount as set forth in Table Two, Appendix 1 hereto within three (3) months following the date of issuance of the new business license.  The amount is determined based on the aforesaid Asset Evaluation Report.

Section 2                      Applications for Approval and Registration

2.1 In order to effectuate the Equity Transfer, the Parties hereby agree that the existing Articles of Association of ZST shall be amended to reflect the change effected by the Equity Transfer in the ownership of ZST. Promptly after the execution of this Agreement, the Parties shall use all reasonable endeavors to execute appropriate documents to effectuate such changes.

2.2 ZST Sellers shall use their best efforts to procure ZST to file with and obtain the approval for such transfer from the approval authority and to complete the registration process with the original registration authority with the ZST Purchaser registered as the new shareholder of ZST, and shall provide any assistance whenever necessary in such transfer.

2.3 Promptly after ZST Sellers have received the payment of the consideration pursuant to Article 1.2 hereof, ZST Sellers shall surrender their Capital Contribution Certificates to ZST for cancellation and the ZST Sellers shall use their best efforts to procure ZST to cancel such Capital Contribution Certificates.  The ZST Sellers shall provide any assistance whenever necessary to the ZST Purchaser in the registration of the Purchasers’ Capital Contribution Certificates.

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2.4 Following the date hereof, each Party agrees to cooperate fully with the other Parties and to execute such further instruments, documents and agreements and to give such further written assurances, as may be reasonably requested by other Parties to better evidence and reflect the transactions described herein and contemplated hereby and to carry into effect the intents and purposes of this Agreement.

Section 3                      Fees and Expenses

Each Party shall pay its own costs incurred in connection with the preparation and negotiations of this Agreement, and shall pay all taxes payable by it in respect of the execution of this Agreement.

Section 4 Confidentiality

4.1 Each Party shall maintain confidential the fact that the Parties have executed this Agreement and the terms of this Agreement.

4.2 The obligations under this Section 4 shall survive the expiration or early termination of this Agreement and shall remain in effect for a period of one (1) year from the date of expiration or early termination.

Section 5                      General Provisions

5.1 Interpretation.  Unless the context requires otherwise, the following applies:  The plural of any defined term will have a meaning correlative to such defined term, and words denoting any gender will include all genders.  Where a word or phrase is defined herein, each of its other grammatical forms will have a corresponding meaning.  Expressions in the singular will include the plural and vice versa.

5.2 Language; Counterparts. This Agreement is written in both English and Chinese. Both versions are hereby deemed equally authentic.

5.3 Governing Law; Jurisdiction. This Agreement will be governed and construed in accordance with the laws of the PRC without regard to any conflicts of law principles.  Any and all disputes, controversies and conflicts between the Parties hereto in connection with this Agreement and the performance or non-performance of the obligations set forth herein which cannot be resolved by good faith negotiation shall be submitted to the people’s court located in the place of the wholly foreign-owned enterprise .  

5.4 Entire Agreement. This Agreement and all Appendices and Schedules attached hereto, constitute the entire understanding of the Parties with respect to the subject matter hereof and supersede all prior agreements and understandings, both written and oral, of the Parties with respect to the subject matter of such documents.

5.5           Amendments – Waiver.

(a) Any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed by each of the Parties.

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(b) No failure or delay by any Party in exercising any right, power or privilege under this Agreement will operate as a waiver of such right, power or privilege, nor will any single or partial exercise of any right, power or privilege preclude any other or further exercise of such right, power or privilege or the exercise of any other right power or privilege.

5.6 Assignment.  No Party may assign any of its rights or delegate any of its duties under this Agreement without first obtaining the written consent of all other Parties.  Subject to the foregoing, this Agreement will be binding upon and inure to the benefit of the Parties and their respective successors and assigns, and no other Person will have any right, benefit or obligation under this Agreement.

5.7 Severability.  In the event that any provision of this Agreement, including any sentence, section or part hereof, shall be deemed contrary to law or invalid or unenforceable in any respect by a court of competent jurisdiction, the remaining provisions will remain in force and effect to the extent that such provisions can still reasonably be given effect in accordance with the intentions of the Parties, and any invalid and unenforceable provisions will be deemed, without further action on the part of Parties, modified, amended and limited solely to the extent necessary to render the same valid and enforceable.

5.8 BreachRemedy/Specific Performance.  Each Party acknowledges and agrees that the other Parties would be damaged irreparably in the event any of the provisions of this Agreement are not performed in accordance with their specific terms or otherwise are breached.  Accordingly, each Party agrees that the other Parties will be entitled to seek an injunction or injunctions to prevent breaches of the provisions of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof in any action instituted in any court of competent jurisdiction over the Parties and the matter, in addition to any other remedy to which they may be entitled.

5.9 Notice. All notices or communications given under this Agreement by the Parties will be in writing and may be sent by facsimile, overnight or delivery, to the Parties at the following addresses:

(a)           To the ZST Purchaser, as follows:

Everfair Technologies, Ltd.

Address: Room 801, Stanhope House, 738 King’s Road, Hong Kong

(b)           To each of ZST Sellers, as follows:

Mr. Zhong Bo

Address: No.5 of Unit 6, Building 28, Huzhu Road, Zhongyuan District, Zhengzhou

Facsimile: 0371- 6771 3121

Telephone: 13513719999

Mr. Wu Dexiu

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Address: No.5 of Unit 6, Building 28, Huzhu Road, Zhongyuan District, Zhengzhou

Facsimile: 0371- 6771 3121

Telephone: 13303827888

Mr. Huang Jiankang

Address: Fu 12, Building 9, Xiangrong Street, Zhongyuan District, Zhengzhou

Facsimile: 0371- 6771 3121

Telephone: 13383843682

Ms. Sun Hui

Address: Fu 30, Building 42, Fourth Street, Fifth Factory, Zhongyuan District, Zhengzhou

Facsimile: 0371- 6771 3121

Telephone: 13383717069

Mr. Li Yuting

Address: No.96, Gongren Road, Zhongyuan District, Zhengzhou

Facsimile: 0371- 6771 3121

Telephone: 13323821111

Such notice or communication will be deemed to have been delivered on the date of receipt by the recipient.  The above addresses and facsimile numbers may be changed by the addressee by written notice to the other Parties.

5.10 This Agreement shall become effective upon approval by the approval authority and shall be submitted to the original Administration for Industry and Commerce for the change of registration.

[Signatures Appear on the Following Pages]

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

ZST SELLERS:	Mr. Zhong Bo
	By:	/s/ Zhong Bo
ZST SELLERS:	Mr. Wu Dexiu
	By:	/s/ Wu Dexiu
ZST SELLERS:	Mr. Huang Jiankang
	By:	/s/ Hunag Jiankang
ZST SELLERS:	Ms. Sun Hui
	By:	/s/ Sun Hui
ZST SELLERS:	Mr. Li Yuting
	By:	/s/ Li Yuting

[Remainder of Page Intentionally Left Blank]

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

ZST PURCHASER:	Everfair Technologies, Ltd.
	By:	/s/ Chen Dong
	Name: Chen Dong Title: Director

[Remainder of Page Intentionally Left Blank]

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Appendix 1

ZST EQUITY TO TRANSFER (Table One)

Name	ZSTEquity to Everfair Technologies, Ltd.
Mr. Zhong Bo	89.57%
Mr. Wu Dexiu	8.70%
Mr. Huang Jiankang	0.87%
Ms. Sunhui	0.43%
Mr. Li Yuting	0.43%

ZST EQUITY TRASFER PURCHASER’S PAYMENT (Table Two)

Name	Payment ( RMB)
Mr. Zhong Bo	10,748,400
Mr. Wu Dexiu	1,044,000
Mr. Huang Jiankang	104,400
Ms. Sun Hui	51,600
Mr. Li Yuting	51,600

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EX-2.2

EXHIBIT 2.2

SHARE EXCHANGE AGREEMENT

THIS SHARE EXCHANGE AGREEMENT, dated as of the 11th day of December, 2008 (the “Agreement”), by and among SRKP 18, Inc., a Delaware corporation (the “Company”); World Orient Universal Limited, a company organized under the laws of the British Virgin Islands (“World Orient”); and all of the shareholders of World Orient, each of whom has executed a counterpart signature page to this Agreement (each, a “Shareholder” and collectively, the “Shareholders”). The Company, World Orient, and the Shareholders are collectively referred to herein as the “Parties.”

WITNESSETH:

WHEREAS, the Shareholders own all of the issued and outstanding shares of the capital of World Orient (the “World Orient Shares”); which is the 100% parent of Global Asia Universal Limited, a company organized under the laws of the British Virgin Islands (“Global Asia”), which is the 100% parent of EverFair Technologies Limited, a company organized under the laws of Hong Kong (“EverFair”), which is the 100% parent of Zhengzhou Shenyang Technology Limited, a company organized under the laws of the People’s Republic of China (“ZST”).

WHEREAS, the Company desires to acquire from Shareholders, and Shareholders desire to sell to the Company, the World Orient Shares in exchange for the issuance by the Company of an aggregate of 1,985,000 shares (the “Company Shares”) of the Company’s common stock, $0.0001 par value (“Common Stock”) to the Shareholders and/or their designees on the terms and conditions set forth herein (the “Share Exchange”).

WHEREAS, after giving effect to the Share Exchange and the Equity Financing as described herein, there will be approximately 9,081,390 shares of Company Common Stock issued and outstanding, 3,125,000 shares of the Company’s Series A Convertible Preferred Stock (each of which is immediately convertible into one (1) share of Company Common Stock) issued and outstanding, and warrants to purchase 7,096,390 shares of Company Common Stock issued and outstanding.

WHEREAS, the Parties intend, by executing this Agreement, to implement a tax-deferred exchange of property governed by Section 351 of the United States Internal Revenue Code of 1986, as amended (the “Code”).

NOW, THEREFORE, in consideration, of the promises and of the mutual representations, warranties and agreements set forth herein, the Parties hereto agree as follows:

ARTICLE I

THE SHARE EXCHANGE 

1.1           The Share Exchange.  Subject to the terms and conditions of this Agreement, on the Closing Date (as hereinafter defined):

(a)           the Company shall issue and deliver to the Shareholders and/or their designees the number of authorized but unissued shares of Company Common Stock set forth opposite their and/or their designee’s names set forth on Schedule I hereto or pursuant to separate instructions to be delivered prior to Closing, and

(b)           the Shareholders agree to deliver to the Company duly endorsed certificates representing the World Orient Shares.

1.2           Time and Place of Closing.  The closing of the transactions contemplated hereby (the “Closing”) shall take place at the offices of K&L Gates LLP, or at such place and time as mutually agreed upon by the Parties hereto.  The date upon which the Closing occurs is defined as the “Closing Date.”

1.3           Effective Time.  The Share Exchange shall become effective (the “Effective Time”) at such time as all of the conditions to set forth in Article VII hereof have been satisfied or waived by the Parties hereto.

1.4           Tax Consequences.  It is intended by the Parties hereto that for United States income tax purposes, the contribution and transfer of the World Orient Shares by the Shareholders to the Company in exchange for Company Shares constitutes a tax-deferred exchange within the meaning of Section 351 of the Code.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to World Orient and the Shareholders that now and/or as of the Closing:

2.1           Due Organization and Qualification; Due Authorization.

(a)           The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware, with full corporate power and authority to own, lease and operate its respective business and properties and to carry on its business in the places and in the manner as presently conducted or proposed to be conducted.  The Company is in good standing as a foreign corporation in each jurisdiction in which the properties owned, leased or operated, or the business conducted, by it requires such qualification except for any such failure, which when taken together with all other failures, is not likely to have a material adverse effect on the business of the Company.

(b)           The Company does not own, directly or indirectly, any capital stock, equity or interest in any corporation, firm, partnership, joint venture or other entity.

(c)           The Company has all requisite corporate power and authority to execute and deliver this Agreement, and to consummate the transactions contemplated hereby and thereby.  The Company has taken all corporate action necessary for the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, and this Agreement constitutes the valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as may be affected by bankruptcy, insolvency, moratoria or other similar laws affecting the enforcement of creditors’ rights generally and subject to the qualification that the availability of equitable remedies is subject to the discretion of the court before which any proceeding therefore may be brought, equitable remedies is subject to the discretion of the court before which any proceeding therefore may be brought.

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2.2           No Conflicts or Defaults.  The execution and delivery of this Agreement by the Company and the consummation of the transactions contemplated hereby do not and shall not (a) contravene the Certificate of Incorporation or By-laws of the Company or (b) with or without the giving of notice or the passage of time (i) violate, conflict with, or result in a breach of, or a default or loss of rights under, any material covenant, agreement, mortgage, indenture, lease, instrument, permit or license to which the Company is a party or by which the Company is bound, or any judgment, order or decree, or any law, rule or regulation to which the Company is subject, (ii) result in the creation of, or give any party the right to create, any lien, charge, encumbrance or any other right or adverse interest (“Liens”) upon any of the assets of the Company, (iii) terminate or give any party the right to terminate, amend, abandon or refuse to perform, any material agreement, arrangement or commitment to which the Company is a party or by which the Company’s assets are bound, or (iv) accelerate or modify, or give any party the right to accelerate or modify, the time within which, or the terms under which, the Company is to perform any duties or obligations or receive any rights or benefits under any material agreement, arrangement or commitment to which it is a party.

2.3           Capitalization.  The authorized capital stock of the Company immediately prior to giving effect to the transactions contemplated hereby consists of 110,000,000 shares of which 100,000,000 have been designated as Company Common Stock and 10,000,000 shares have been designated as preferred stock, $0.0001 par value (“Preferred Stock”).  As of the date hereof, there are 7,096,390 shares of Company Common Stock issued and outstanding, no shares of Preferred Stock outstanding and 7,096,390 warrants outstanding with an exercise price of $0.0001 (the “Warrants”).  All of the outstanding shares of Company Common Stock are, and the Company Shares when issued in accordance with the terms hereof, will be, duly authorized, validly issued, fully paid and nonassessable, and have not been or, with respect to the Company Shares will not be issued in violation of any preemptive right of stockholders.  Other than as set forth herein, there is no outstanding voting trust agreement or other contract, agreement, arrangement, option, warrant, call, commitment or other right of any character obligating or entitling the Company to issue, sell, redeem or repurchase any of its securities, and there is no outstanding security of any kind convertible into or exchangeable for Company Common Stock.  The Company has not granted registration rights to any person.

2.4           Financial Statements.  The Company has provided World Orient and the Shareholders copies of the (i) balance sheet of the Company at December 31, 2007, and the related statements of operations, stockholders’ equity (deficit) and cash flows for the period from December 7, 2006 (inception) to December 31, 2007, including the notes thereto, as audited by AJ. Robbins, P.C., independent registered public accounting firm and (ii) balance sheet of the Company at September 30, 2008 and the related statements of operations, and cash flows for the nine (9)-month period then ended (the “Financial Statements”).  The Financial Statements, together with the notes thereto, have been prepared in accordance with U.S. generally accepted accounting principles applied on a basis consistent throughout all periods presented.  The Financial Statements present fairly the financial position of the Company as of the dates and for the periods indicated.  The books of account and other financial records of the Company have been maintained in accordance with good business practices.

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2.5           No Assets or Liabilities.  As of the Closing, the Company shall have no more than $50,000 in liabilities.  Except for the foregoing or as set forth on the Financial Statements, the Company does not have any (a) assets of any kind or (b) liabilities or obligations, whether secured or unsecured, accrued, determined, absolute or contingent, asserted or unasserted or otherwise.

2.6           Taxes.  The Company has filed all United States federal, state, county and local returns and reports which were required to be filed on or prior to the date hereof in respect of all income, withholding, franchise, payroll, excise, property, sales, use, value-added or other taxes or levies, imposts, duties, license and registration fees, charges, assessments or withholdings of any nature whatsoever (together, “Taxes”), and has paid all Taxes (and any related penalties, fines and interest) which have become due pursuant to such returns or reports or pursuant to any assessment which has become payable, or, to the extent its liability for any Taxes (and any related penalties, fines and interest) has not been fully discharged, the same have been properly reflected as a liability on the books and records of the Company and adequate reserves therefore have been established.

2.7           Indebtedness; Contracts; No Defaults.  Other than as set forth in Item 2.7 of the Disclosure Schedule, the Company has no material instruments, agreements, indentures, mortgages, guarantees, notes, commitments, accommodations, letters of credit or other arrangements or understandings, whether written or oral, to which the Company is a party.

2.8           Real Property.  The Company does not own or lease any real property.

2.9           Compliance with Law.  The Company is in compliance with all applicable federal, state, local and foreign laws and regulations relating to the protection of the environment and human health.  There are no claims, notices, actions, suits, hearings, investigations, inquiries or proceedings pending or, to the knowledge of the Company, threatened against the Company that are based on or related to any environmental matters or the failure to have any required environmental permits, and there are no past or present conditions that the Company has reason to believe are likely to give rise to any material liability or other obligations of the Company under any environmental laws.

2.10         Permits and Licenses.  The Company has all certificates of occupancy, rights, permits, certificates, licenses, franchises, approvals and other authorizations as are reasonably necessary to conduct its respective business and to own, lease, use, operate and occupy its assets, at the places and in the manner now conducted and operated, except those the absence of which would not materially adversely affect its respective business.

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2.11         Litigation.  There is no claim, dispute, action, suit, proceeding or investigation pending or, to the knowledge of the Company, threatened, against or affecting the business of the Company, or challenging the validity or propriety of the transactions contemplated by this Agreement, at law or in equity or admiralty or before any federal, state, local, foreign or other governmental authority, board, agency, commission or instrumentality, nor to the knowledge of the Company, has any such claim, dispute, action, suit, proceeding or investigation been pending or threatened, during the twelve month period preceding the date hereof.  There is no outstanding judgment, order, writ, ruling, injunction, stipulation or decree of any court, arbitrator or federal, state, local, foreign or other governmental authority, board, agency, commission or instrumentality, against or materially affecting the business of the Company.  The Company has not received any written or verbal inquiry from any federal, state, local, foreign or other governmental authority, board, agency, commission or instrumentality concerning the possible violation of any law, rule or regulation or any matter disclosed in respect of its business.

2.12         Insurance.  The Company does not currently maintain any form of insurance.

2.13         Patents; Trademarks and Intellectual Property Rights.  The Company does not own or possess any patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses, information, Internet web site(s) or proprietary rights of any nature.

2.14         Securities Law Compliance.  The Company has complied with all of the applicable requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the Securities Act of 1933, as amended (the “Securities Act”), and has complied with all applicable blue sky laws.

2.15         Conflicts of Interest.  The Company acknowledges that it is aware and understands the facts and circumstances of the Conflicts of Interest, as defined in Section 3.8, that may, individually and in the aggregate, create a Conflict of Interest.  The Company hereby waives each and all of the Conflicts of Interest, in addition to any other conflicts of interest that may arise may exist or arise by virtue of the Conflicts of Interest and acknowledges that it has carefully read this Agreement, that it is consistent with the terms previously negotiated by the parties, and understands that it is free at any time to obtain independent counsel for further guidance.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF WORLD ORIENT

World Orient represents and warrants to the Company that now and/or as of the Closing:

3.1           Due Organization and Qualification; Due Authorization.

(a)           World Orient is a corporation duly incorporated, validly existing and in good standing under the laws of the British Virgin Islands with full corporate power and authority to own, lease and operate its business and properties and to carry on its business in the places and in the manner as presently conducted or proposed to be conducted.  World Orient is in good standing as a foreign corporation in each jurisdiction in which the properties owned, leased or operated, or the business conducted, by it requires such qualification except for any such failure, which when taken together with all other failures, is not likely to have a material adverse effect on the business of World Orient.

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(b)           Other than as set forth in Item 3.1(b) of the Disclosure Schedules, World Orient does not have any subsidiaries (the “Subsidiaries”) and World Orient does not own, directly or indirectly, any capital stock, equity or interest in any corporation, firm, partnership, joint venture or other entity.  Other than as set forth in Item 3.1(b), each Subsidiary is wholly owned by World Orient, free and clear of all liens, and there is no contract, agreement, arrangement, option, warrant, call, commitment or other right of any character obligating or entitling World Orient to issue, sell, redeem or repurchase any of its securities, and there is no outstanding security of any kind convertible into or exchangeable for securities of World Orient or any of the Subsidiaries.

(c)           World Orient has all requisite power and authority to execute and deliver this Agreement, and to consummate the transactions contemplated hereby and thereby.  World Orient has taken all corporate action necessary for the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, and this Agreement constitutes the valid and binding obligation of World Orient, enforceable against it in accordance with its terms, except as may be affected by bankruptcy, insolvency, moratoria or other similar laws affecting the enforcement of creditors’ rights generally and subject to the qualification that the availability of equitable remedies is subject to the discretion of the court before which any proceeding therefore may be brought.

3.2           No Conflicts or Defaults.  The execution and delivery of this Agreement by World Orient and the consummation of the transactions contemplated hereby do not and shall not (a) contravene the governing documents of World Orient or its Subsidiaries, or (b) with or without the giving of notice or the passage of time, (i) violate, conflict with, or result in a breach of, or a default or loss of rights under, any material covenant, agreement, mortgage, indenture, lease, instrument, permit or license to which World Orient or its Subsidiaries is a party or by which World Orient or its Subsidiaries or any of their respective assets are bound, or any judgment, order or decree, or any law, rule or regulation to which their assets are subject, (ii) result in the creation of, or give any party the right to create, any lien upon any of the assets of World Orient or its Subsidiaries, (iii) terminate or give any party the right to terminate, amend, abandon or refuse to perform any material agreement, arrangement or commitment to which World Orient or its Subsidiaries is a party or by which World Orient or its Subsidiaries or any of their respective assets are bound, or (iv) accelerate or modify, or give any party the right to accelerate or modify, the time within which, or the terms under which World Orient or its Subsidiaries is to perform any duties or obligations or receive any rights or benefits under any material agreement, arrangement or commitment to which it is a party.

3.3           Capitalization.  The authorized capital stock of World Orient immediately prior to giving effect to the transactions contemplated hereby consists of 50,000 ordinary shares, of which, as of the date hereof, there were 50,000 shares issued and outstanding.  Except as set forth herein, all of the outstanding shares of World Orient are duly authorized, validly issued, fully paid and nonassessable, and have not been or, with respect to World Orient Shares, will not be transferred in violation of any rights of third parties.  Except as set forth in Item 3.3 of the Disclosure Schedule, the World Orient Shares are not subject to any preemptive or subscription right, any voting trust agreement or other contract, agreement, arrangement, option, warrant, call, commitment or other right of any character obligating or entitling World Orient to issue, sell, redeem or repurchase any of its securities that will survive Closing and there is no outstanding security of any kind convertible into or exchangeable for common shares.  All of the World Orient Shares are owned of record and beneficially by the Shareholders and free and clear of any liens, claims, encumbrances, or restrictions of any kind.

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3.4           Taxes.  World Orient has filed all returns and reports which were required to be filed on or prior to the date hereof, and has paid all Taxes (and any related penalties, fines and interest) which have become due pursuant to such returns or reports or pursuant to any assessment which has become payable, or, to the extent its liability for any Taxes (and any related penalties, fines and interest) has not been fully discharged, the same have been properly reflected as a liability on the books and records of World Orient and adequate reserves therefore have been established.  All such returns and reports filed on or prior to the date hereof have been properly prepared and are true, correct (and to the extent such returns reflect judgments made by World Orient such judgments were reasonable under the circumstances) and complete in all material respects.  No extension for the filing of any such return or report is currently in effect.  No tax return or tax return liability of World Orient has been audited or, presently under audit.  All taxes and any penalties, fines and interest which have been asserted to be payable as a result of any audits have been paid.  World Orient has not given or been requested to give waivers of any statute of limitations relating to the payment of any Taxes (or any related penalties, fines and interest).  There are no claims pending for past due Taxes.  All payments for withholding taxes, unemployment insurance and other amounts required to be paid for periods prior to the date hereof to any governmental authority in respect of employment obligations of World Orient have been paid or shall be paid prior to the Closing and have been duly provided for on the books and records of World Orient and in the World Orient Financial Statements.

3.5           Indebtedness; Contracts; No Defaults.  Other than as set forth in Item 3.5 of the Disclosure Schedule, neither World Orient nor its Subsidiaries have any material instruments, agreements, indentures, mortgages, guarantees, notes, commitments, accommodations, letters of credit or other arrangements or understandings, whether written or oral, to which World Orient or its Subsidiaries is a party.

3.6           Compliance with Law.  Except as specified in Item 3.6 of the Disclosure Schedule, World Orient and its Subsidiaries are conducting their respective businesses in material compliance with all applicable law, ordinance, rule, regulation, court or administrative order, decree or process, or any requirement of insurance carriers material to its business.  Except as specified in Item 3.6 of the Disclosure Schedule, neither World Orient nor its Subsidiaries has received any notice of violation or claimed violation of any such law, ordinance, rule, regulation, order, decree, process or requirement.

3.7           Litigation.

(a)           There is no claim, dispute, action, suit, proceeding or investigation pending or threatened, against or affecting World Orient or its Subsidiaries or challenging the validity or propriety of the transactions contemplated by this Agreement, at law or in equity or admiralty or before any federal, state, local, foreign or other governmental authority, board, agency, commission or instrumentality, has any such claim, dispute, action, suit, proceeding or investigation been pending or threatened, during the twelve (12)-month period preceding the date hereof, except as specified in Item 3.7 of the Disclosure Schedule; and

(b)           there is no outstanding judgment, order, writ, ruling, injunction, stipulation or decree of any court, arbitrator or federal, state, local, foreign or other governmental authority, board, agency, commission or instrumentality, against or materially affecting World Orient or its Subsidiaries.

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3.8           Conflicts of Interest.  Neither World Orient or its Subsidiaries has received any written or verbal inquiry from any federal, state, local, foreign or other governmental authority, board, agency, commission or instrumentality concerning the possible violation of any law, rule or regulation or any matter disclosed in respect of its business.  World Orient acknowledges that it is aware and understands the following facts and circumstances that may, individually and in the aggregate, create a conflict of interest:

(i) WestPark Capital, Inc., a FINRA member (“WestPark”), is the placement agent for the Equity Financing and WestPark will be paid a commission of the gross proceeds from the Equity Financing for its services;

(ii) Richard Rappaport, who is the founder, Chief Executive, and President and indirectly holds a 100% interest in WestPark, is also the President, a Director and a controlling stockholder of the Company beneficially holding approximately 78.1% of the Company’s Common Stock and Warrants (prior to the Share Exchange and excluding shares held by WestPark Financial Services LLC as described below);

(iii) Anthony C. Pintsopoulos, who is the President and Chief Financial Officer of WestPark, is also the Secretary, Chief Financial Officer, and a Director and a controlling stockholder of the Company beneficially holding approximately 18.2% of the Company’s Common Stock and Warrants (prior to the Share Exchange);

(iv) Debbie Schwartzberg is a controlling stockholder of the Company beneficially holding approximately 28.9% of the Company’s outstanding Common Stock and Warrants (prior to the Share Exchange);

(v) Kevin DePrimio, who is the Vice President of Corporate Finance of WestPark, is a stockholder of the Company beneficially holding approximately 6.8% of the Company’s Common Stock and Warrants (prior to the Share Exchange);

(vi)          Jason Stern, who is an employee of WestPark, is a stockholder of the Company beneficially holding approximately 3.9% of the Company’s outstanding Common Stock and Warrants (prior to the Share Exchange);

(vii)         Thomas Poletti, who is a partner of K&L Gates LLP, legal counsel for ZST, was, prior to the date of this Agreement, a stockholder of the Company beneficially holding approximately 6.8% of the Company’s outstanding Common Stock and Warrants (prior to the Share Exchange). The securities previously held by Mr. Poletti were transferred to an immediate family member and Mr. Poletti currently disclaims beneficial ownership of such securities; and

(vii)         WestPark LLC, which is the parent of WestPark and of which Richard Rappaport serves as CEO and Chairman, is a controlling stockholder of the Company beneficially holding approximately 56.2% of the Company’s Common Stock and Warrants (prior to the Share Exchange).

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(i) through (vii) in this Section are herein referred to as, the “Conflicts of Interest”).  World Orient hereby waives each and all of the Conflicts of Interest, in addition to any other conflicts of interest that may arise, may exist or arise by virtue of the Conflicts of Interest and acknowledges that it has carefully read this Agreement, that it is consistent with the terms previously negotiated by the parties, and understands that it is free at any time to obtain independent counsel for further guidance.

ARTICLE IV

REPRESENTATION AND WARRANTIES OF THE SHAREHOLDERS

The Shareholders hereby represent and warrant to the Company that now and/or as of the Closing:

4.1           Title to Shares.  Each of the Shareholders is the legal and beneficial owner of the World Orient Shares to be transferred to the Company by such Shareholders as set forth opposite each Shareholder’s name in Schedule II hereto, and upon consummation of the exchange contemplated herein, the Company will acquire from each of the Shareholders good and marketable title to the World Orient Shares, free and clear of all liens excepting only such restrictions hereunder upon future transfers by the Company, if any, as may be imposed by applicable law.  The information set forth on Schedule II with respect to each Shareholder is accurate and complete.

4.2           Due Authorization.  Each of the Shareholders has all requisite power and authority to execute and deliver this Agreement, and to consummate the transactions contemplated hereby and thereby.  This Agreement constitutes the valid and binding obligation of each of the Shareholders, enforceable against such Shareholders in accordance with its terms, except as may be affected by bankruptcy, insolvency, moratoria or other similar laws affecting the enforcement of creditors’ rights generally and subject to the qualification that the availability of equitable remedies is subject to the discretion of the court before which any proceeding therefore may be brought.

4.3           Purchase for Investment.

(a)           Each Shareholder is acquiring the Company Shares for investment for such Shareholder’s own account and not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and each Shareholder has no present intention of selling, granting any participation in, or otherwise distributing the same.  Each Shareholder further represents that he, she or it does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participation to such person or to any third person, with respect to any of the Company Shares.

(b)           Each Shareholder understands that the Company Shares are not registered under the Securities Act on the ground that the sale and the issuance of securities hereunder is exempt from registration under the Securities Act pursuant to Section 4(2) thereof, and that the Company’s reliance on such exemption is predicated on the each Shareholder’s representations set forth herein.

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4.4           Investment Experience.  Each Shareholder acknowledges that he, she or it can bear the economic risk of his, her or its investment, and has such knowledge and experience in financial and business matters that he, she or it is capable of evaluating the merits and risks of the investment in the Company Shares.

4.5           Information.  Each Shareholder has carefully reviewed such information as such he, she or it deemed necessary to evaluate an investment in the Company Shares.  To the full satisfaction of each Shareholder, he, she or it has been furnished all materials that he, she or it has requested relating to the Company and the issuance of the Company Shares hereunder, and each Shareholder has been afforded the opportunity to ask questions of representatives of the Company to obtain any information necessary to verify the accuracy of any representations or information made or given to him, her or it.  Notwithstanding the foregoing, nothing herein shall derogate from or otherwise modify the representations and warranties of the Company set forth in this Agreement, on which the Shareholders have relied in making an exchange of the World Orient Shares for the Company Shares.

4.6           Restricted Securities.  Each Shareholder understands that the Company Shares may not be sold, transferred, or otherwise disposed of without registration under the Securities Act or an exemption there from, and that in the absence of an effective registration statement covering the Company Shares or any available exemption from registration under the Securities Act, the Company Shares must be held indefinitely.  Each Shareholder is aware that the Company Shares may not be sold pursuant to Rule 144 promulgated under the Securities Act unless all of the conditions of that Rule are met.  Among the conditions for use of Rule 144 may be the availability of current information to the public about the Company.

4.7           Exempt Issuance.  Each of the Shareholders acknowledges that he, she or it must assure the Company that the offer and sale of the Company Shares to such Shareholder qualifies for an exemption from the registration requirements imposed by the Securities Act and from applicable securities laws of any state of the United States.  Each of the Shareholders agrees that he meets the criteria established in one or more of subsections (a) or (b), below.

(a)           Accredited Investor, Section 4(2) of the Securities Act and/or Rule 506 of Regulation D.  The Shareholder qualifies as an “accredited investor”, as that term is defined in Rule 501 of Regulation D, promulgated under the Securities Act.

(b)           Offshore Investor, Rule 903 of Regulation S.  The Shareholder is not a U.S. Person, as defined in Rule 901 of Regulation S, promulgated under the Securities Act, and the Shareholder, severally but not jointly, represents and warrants to the Company that:

(i)           The Shareholder is not acquiring the Company Shares as a result of, and such Shareholder covenants that he, she or it will not engage in any “directed selling efforts” (as defined in Regulation S under the Securities Act) in the United States in respect of the Company Shares which would include any activities undertaken for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the United States for the resale of any of the Company Shares;

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(ii)           The Shareholder is not acquiring the Company Shares for the account or benefit of, directly or indirectly, any U.S. Person;

(iii)           The Shareholder is a resident of the British Virgin Islands or Canada;

(iv)          the offer and the sale of the Company Shares to such Shareholder as contemplated in this Agreement complies with or is exempt from the applicable securities legislation of the British Virgin Islands and Canada;

(v)           the Shareholder is outside the United States when receiving and executing this Agreement and that the Shareholder will be outside the United States when acquiring the Company Shares,

(vi)          and the Shareholder covenants with Company that:

(1) offers and sales of any of the Company Shares prior to the expiration of a period of one year after the date of original issuance of the Company Shares (the six (6)-month period hereinafter referred to as the “Distribution Compliance Period”) shall only be made in compliance with the safe harbor provisions set forth in Regulation S, pursuant to the registration provisions of the Securities Act or an exemption therefrom, and that all offers and sales after the Distribution Compliance Period shall be made only in compliance with the registration provisions of the Securities Act or an exemption therefrom and in each case only in accordance with applicable state securities laws; and

(2) The Shareholder will not engage in hedging transactions with respect to the Company Shares until after the expiration of the Distribution Compliance Period.

4.8           Conflicts of Interest.  Each Shareholder acknowledges that he, she or it is aware and understands the facts and circumstances of the Conflicts of Interest, as defined in Section 3.8 that may, individually and in the aggregate, create a conflict of interest.  Each Shareholder hereby waives each and all of the Conflicts of Interest, in addition to any other conflicts of interest that may arise may exist or arise by virtue of the Conflicts of Interest and acknowledges that he, she or it has carefully read this Agreement, that it is consistent with the terms previously negotiated by the Parties, and understands that he, she or it is free at any time to obtain independent counsel for further guidance.

ARTICLE V

COVENANTS

5.1           Further Assurances.  Each of the Parties shall use its reasonable commercial efforts to proceed promptly with the transactions contemplated herein, to fulfill the conditions precedent for such party’s benefit or to cause the same to be fulfilled and to execute such further documents and other papers and perform such further acts as may be reasonably required or desirable to carry out the provisions of this Agreement and to consummate the transactions contemplated herein.

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ARTICLE VI

DELIVERIES

6.1           Items to be delivered to the Shareholders prior to or at Closing by the Company.

(a)           Certificate of Incorporation and amendments thereto, By-laws and amendments thereto, and certificate of good standing of the Company in Delaware;

(b)           all applicable schedules hereto;

(c)           all minutes and resolutions of board of director and shareholder meetings in possession of the Company;

(d)           shareholder list;

(e)           all financial statements and all tax returns in possession of the Company;

(f)            resolution from the Company’s Board appointing the designees of World Orient to the Company’s Board of Directors;

(g)           resolution from the Company’s Board, and if applicable, shareholder resolutions approving this transaction and authorizing the issuances of the shares hereto;

(h)           letters of resignation from the Company’s current officers and directors to be effective upon Closing and after the appointments described in this section;

(i)            certificates representing the shares of the Company Shares issued in the denominations set forth opposite the names of the Shareholders and/or their designees on Schedule I to this Agreement; and

(j)            any other document reasonably requested by the Shareholders that he, she or it deems necessary for the consummation of this transaction.

6.2           Items to be delivered to the Company prior to or at Closing by World Orient and the Shareholders.

(a)           all applicable schedules hereto;

(b)           instructions from World Orient appointing its designees to the Company’s Board of Directors;

(c)           share certificates and duly executed instruments of transfer and bought and sold notes from the Shareholders transferring the World Orient Shares to the Company;

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(d)           resolutions from the Board of Directors of World Orient, if applicable, and shareholder resolutions approving the transactions contemplated hereby;

(e)           payment of all liabilities of the Company of up to $50,000 directly out of the proceeds of the Equity Financing (as defined in Section 7.1(f) herein) to the appropriate creditors of the Company which shall include indebtedness owed to Company shareholders and fees owing to Company lawyers, accountants and similar parties; and

(f)            any other document reasonably requested by the Company that it deems necessary for the consummation of this transaction.

ARTICLE VII

CONDITIONS PRECEDENT

7.1           Conditions Precedent to Closing.  The obligations of the Parties under this Agreement shall be and are subject to fulfillment, prior to or at the Closing, of each of the following conditions:

(a)           That each of the representations and warranties of the Parties contained herein shall be true and correct at the time of the Closing Date as if such representations and warranties were made at such time except for changes permitted or contemplated by this Agreement;

(b)           That the Parties shall have performed or complied with all agreements, terms and conditions required by this Agreement to be performed or complied with by them prior to or at the time of the Closing;

(c)           That World Orient shall have received, and provided a copy to the Company, an opinion of each of the Han Kun Law Offices, World Orient’s counsel in the People’s Republic of China, and Conyers, Dill & Pearman, World Orient’s counsel in the British Virgin Islands, substantially in the forms attached hereto as Exhibit A;

(d)           That prior to Closing the Company shall have engaged a public relations firm, which shall conduct two (2) non-Share Exchange related road shows each year for two (2) years, that is mutually acceptable to the Company and World Orient;

(e)           That prior to Closing the Company shall have engaged a Company-sponsored equity research firm that is mutually acceptable to the Company and World Orient; and

(f)           The Company shall have concluded an equity financing of at least $5 million at the time of Closing (the “Equity Financing”).

7.2           Conditions to Obligations of Shareholders.  The obligations of Shareholders shall be subject to fulfillment prior to or at the Closing, of each of the following conditions:

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(a)           The Company shall have received all of the regulatory, shareholder and other third party consents, permits, approvals and authorizations necessary to consummate the transactions contemplated by this Agreement;

(b)           The Company shall have complied with Rule 14(f)(1) of the Exchange Act, if required; and

(c)           To the extent that the liabilities of the Company exceed $50,000 as of the Closing, the Company shareholders shall have satisfied and paid such excess liabilities in full.

7.3           Conditions to Obligations of the Company.  The obligations of the Company shall be subject to fulfillment at or prior to or at the Closing, of each of the following conditions:

(a)           World Orient and the Shareholders shall have received all of the regulatory, shareholder and other third party consents, permits, approvals and authorizations necessary to consummate the transactions contemplated by this Agreement;

(b)           The Shareholders shall have delivered to the Company the share certificates and duly executed instruments of transfer and bought and sold notes from the Shareholders transferring the World Orient Shares to the Company; and

(c)           All liabilities of the Company up to $50,000 shall be paid directly out of the proceeds of the Equity Financing to the appropriate creditors, which shall include indebtedness owed to the Company shareholders and fees owing to lawyers, accountants and similar parties.

ARTICLE VIII

TERMINATION

8.1           Termination.  This Agreement may be terminated at any time before or, at Closing, by:

(a)           The mutual agreement of the Parties;

(b)           Any party if:

(i)           Any provision of this Agreement applicable to a party shall be materially untrue or fail to be accomplished; or

(ii)           Any legal proceeding shall have been instituted or shall be imminently threatening to delay, restrain or prevent the consummation of this Agreement;

(c)           Upon termination of this Agreement for any reason, in accordance with the terms and conditions set forth in this paragraph, each said party shall bear all costs and expenses as each party has incurred.

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ARTICLE IX

COVENANTS SUBSEQUENT TO CLOSING

9.1           Registration Rights.  The Company shall file, within sixty (60) days after the Closing and at its expense, with the U.S. Securities and Exchange Commission (the “Commission”) a registration statement (the “Initial Registration Statement”) covering the resale of Common Stock held by those persons (and/or their designees) that are shareholders of the Company immediately prior to the Closing (“Pre-Existing Shareholders”), provided, however, that the Company shall not be required to register the Common Stock held by such shareholders who are affiliates of WestPark (“WestPark Affiliates”), as specified in Item 9.1 of the Disclosure Schedule, who shall instead receive registration rights to require the Company to file a registration statement (the “Second Registration Statement”) to register such Common Stock within ten (10) days following the end of the six (6) month period that immediately follows the date on which the Company files Initial Registration Statement with the Commission.  The Company shall enter into a Registration Rights Agreement acceptable to the WestPark Affiliates with respect to rights described in this Section 9.1.  In the event the Second Registration Statement is not timely filed to register the shares held by the WestPark Affiliates, or if the Second Registration Statement is not timely declared effective by the Commission, as described in the Registration Rights Agreement, the Company shall issue to such holders penalty shares (the “Penalty Shares”) equal to one percent (1%) of the shares on a monthly basis until the Second Registration Statement is filed with or declared effective by the Commission, as applicable.  However, no Penalty Shares shall be due to the WestPark Affiliates if the Company is using best efforts to cause the Second Registration Statement to be filed and declared effective in a timely manner.

9.2           NYSE Alternext Listing.  The Company shall take reasonable efforts to cause the Company’s securities to be listed on the NYSE Alternext as soon as practicable after the Closing.

ARTICLE X

MISCELLANEOUS

10.1           Survival of Representations, Warranties and Agreements.  Each of the Parties hereto is executing and carrying out the provisions of this Agreement in reliance upon the representations, warranties and covenants and agreements contained in this agreement or at the closing of the transactions herein provided for and not upon any investigation which it might have made or any representations, warranty, agreement, promise or information, written or oral, made by the other party or any other person other than as specifically set forth herein.  Except as specifically set forth in this Agreement, representations and warranties and statements made by a party to in this Agreement or in any document or certificate delivered pursuant hereto shall not survive the Closing Date, and no claims made by virtue of such representations, warranties, agreements and covenants shall be made or commenced by any party hereto from and after the Closing Date.

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10.2           Access to Books and Records.  During the course of this transaction through Closing, each party agrees to make available for inspection all corporate books, records and assets, and otherwise afford to each other and their respective representatives, reasonable access to all documentation and other information concerning the business, financial and legal conditions of each other for the purpose of conducting a due diligence investigation thereof.  Such due diligence investigation shall be for the purpose of satisfying each party as to the business, financial and legal condition of each other for the purpose of determining the desirability of consummating the proposed transaction.  The Parties further agree to keep confidential and not use for their own benefit, except in accordance with this Agreement any information or documentation obtained in connection with any such investigation.

10.3           Further Assurances.  If, at any time after the Closing, the parties shall consider or be advised that any further deeds, assignments or assurances in law or that any other things are necessary, desirable or proper to complete the merger in accordance with the terms of this agreement or to vest, perfect or confirm, of record or otherwise, the title to any property or rights of the parties hereto, the Parties agree that their proper officers and directors shall execute and deliver all such proper deeds, assignments and assurances in law and do all things necessary, desirable or proper to vest, perfect or confirm title to such property or rights and otherwise to carry out the purpose of this Agreement, and that the proper officers and directors the parties are fully authorized to take any and all such action.

10.4           Notice.  All communications, notices, requests, consents or demands given or required under this Agreement shall be in writing and shall be deemed to have been duly given when delivered to, or received by prepaid registered or certified mail or recognized overnight courier addressed to, or upon receipt of a facsimile sent to, the party for whom intended, as follows, or to such other address or facsimile number as may be furnished by such party by notice in the manner provided herein:

Attention:

If to the Shareholders and World Orient:

c/o Zhengzhou Shenyang Technology Limited

Building 28, Huzhu Road

Zhongyuan District, Zhengzhou

People’s Republic of China

Attention:  Zhong Bo

Fax: [(__) __________]

With a copy to:

K&L Gates LLP

10100 Santa Monica Blvd., Seventh Floor

Los Angeles, California 90067

Attn:  Thomas J. Poletti, Esq.

Fax.: (310) 552-5005

If to the Company:

SRKP 18, Inc.

1900 Avenue of the Stars, Suite 310

Los Angeles, CA 90067

Attn: Richard Rappaport

Fax: (310) 843-9304

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10.5           Entire Agreement.  This Agreement, the Disclosure Schedules and any instruments and agreements to be executed pursuant to this Agreement, sets forth the entire understanding of the Parties hereto with respect to its subject matter, merges and supersedes all prior and contemporaneous understandings with respect to its subject matter and may not be waived or modified, in whole or in part, except by a writing signed by each of the Parties hereto.  No waiver of any provision of this Agreement in any instance shall be deemed to be a waiver of the same or any other provision in any other instance.  Failure of any party to enforce any provision of this Agreement shall not be construed as a waiver of its rights under such provision.

10.6           Successors and Assigns.  This Agreement shall be binding upon, enforceable against and inure to the benefit of, the parties hereto and their respective heirs, administrators, executors, personal representatives, successors and assigns, and nothing herein is intended to confer any right, remedy or benefit upon any other person.  This Agreement may not be assigned by any party hereto except with the prior written consent of the other parties, which consent shall not be unreasonably withheld.

10.7           Governing Law.  This Agreement shall in all respects be governed by and construed in accordance with the laws of the State of Delaware are applicable to agreements made and fully to be performed in such state, without giving effect to conflicts of law principles.

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

10.9           Construction.  Headings contained in this Agreement are for convenience only and shall not be used in the interpretation of this Agreement.  References herein to Articles, Sections and Exhibits are to the articles, sections and exhibits, respectively, of this Agreement.  The Disclosure Schedule is hereby incorporated herein by reference and made a part of this Agreement.  As used herein, the singular includes the plural, and the masculine, feminine and neuter gender each includes the others where the context so indicates.

10.10         Severability.  If any provision of this Agreement is held to be invalid or unenforceable by a court of competent jurisdiction, this Agreement shall be interpreted and enforceable as if such provision were severed or limited, but only to the extent necessary to render such provision and this Agreement enforceable.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement as of the date first set forth above.

SRKP 18, INC.
By:	/s/ Richard Rappaport
Name: Richard Rappaport
Title: President
WORLD ORIENT UNIVERSAL LIMITED
By:	/s/ Zhong Bo
Name: Zhong Bo
Title: President

[SIGNATURE PAGES FOR SHAREHOLDERS FOLLOW]

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WORLD ORIENT UNIVERSAL LIMITED

SHAREHOLDERS’ SIGNATURE PAGE TO

SHARE EXCHANGE AGREEMENT

Dated December 11,  2008

Among SRKP 18, Inc., World Orient Universal Limited and

The Shareholders of World Orient Universal Limited

           The undersigned Shareholder hereby executes and delivers the Share Exchange Agreement (the “Agreement”) to which this Signature Page is attached, which, together with all counterparts of the Agreement and Signature Pages of the other parties named in said Agreement, shall constitute one and the same document in accordance with the terms of the Agreement.

/s/ Chaoying Li

(Signature)

By: Chaoying Li

Title: Director

Richever Limited

(Type or print name)

(Type or print name as it should appear on certificate, if different)

Address:                  Suite 906, Office Tower C1, Oriental Plaza, No. 1 East Chang An Ave., Beijing 100738, People’s Republic of China

Telephone:              (86 10) 8525 5518

Facsimile:                 (86 10) 8525 5511

Number of World Orient Shares Held:      344    

WORLD ORIENT UNIVERSAL LIMITED

SHAREHOLDERS’ SIGNATURE PAGE TO

SHARE EXCHANGE AGREEMENT

Dated December 11, 2008

Among SRKP 18, Inc., World Orient Universal Limited and

The Shareholders of World Orient Universal Limited

The undersigned Shareholder hereby executes and delivers the Share Exchange Agreement (the “Agreement”) to which this Signature Page is attached, which, together with all counterparts of the Agreement and Signature Pages of the other parties named in said Agreement, shall constitute one and the same document in accordance with the terms of the Agreement.

/s/ Chen Dong

(Signature)

Chen Dong

(Type or print name)

(Type or print name as it should appear on certificate, if different)

Address:                  #104 Hailong Garden, Eastern Longjing Road, Nanshan District, Shenzhen, 518000 Guangdong Province, People’s Republic of China

Telephone:              (86) 1351-0725234

Facsimile:                 (86) 755-26005718

Number of World Orient Shares Held:   43,508   

WORLD ORIENT UNIVERSAL LIMITED

SHAREHOLDERS’ SIGNATURE PAGE TO

SHARE EXCHANGE AGREEMENT

Dated December 11,  2008

Among SRKP 18, Inc., World Orient Universal Limited and

The Shareholders of World Orient Universal Limited

The undersigned Shareholder hereby executes and delivers the Share Exchange Agreement (the “Agreement”) to which this Signature Page is attached, which, together with all counterparts of the Agreement and Signature Pages of the other parties named in said Agreement, shall constitute one and the same document in accordance with the terms of the Agreement.

/s/ Steve Cheung Hung Hi

(Signature)

By: Steve Cheung Hung Hi

Title: Director

Easywell Limited

(Type or print name)

(Type or print name as it should appear on certificate, if different)

Address:_________________________________________________

________________________________________________________

Telephone: ______________________________________________

Facsimile: _______________________________________________

Number of World Orient Shares Held:    3,074   

WORLD ORIENT UNIVERSAL LIMITED

SHAREHOLDERS’ SIGNATURE PAGE TO

SHARE EXCHANGE AGREEMENT

Dated December 11,  2008

Among SRKP 18, Inc., World Orient Universal Limited and

The Shareholders of World Orient Universal Limited

The undersigned Shareholder hereby executes and delivers the Share Exchange Agreement (the “Agreement”) to which this Signature Page is attached, which, together with all counterparts of the Agreement and Signature Pages of the other parties named in said Agreement, shall constitute one and the same document in accordance with the terms of the Agreement.

/s/ William Kuk Kuk Sun

(Signature)

By: William Kuk Kuk Sun

Title: Director

Starlink AsiaLimited

(Type or print name)

(Type or print name as it should appear on certificate, if different)

Address:_________________________________________________

________________________________________________________

Telephone: ______________________________________________

Facsimile: _______________________________________________

Number of World Orient Shares Held:    3,074  

EXHIBIT A

FORMS OF OPINION LETTERS

5

SCHEDULE I

SHAREHOLDERS AND COMPANY SHARES

Name	Number of Company Shares
Chen Dong	100,000
Richever Limited, a company organized in the Seychelles Islands	100,000
Easywell Limited, a company organized in the British Virgin Islands	892,500
Starlink Asia Limited, a company organized in the British Virgin Islands	892,500

6

SCHEDULE II

SHAREHOLDERS AND WORLD ORIENT SHARES

Name	Number of World Orient Shares
Chen Dong	43,508
Richever Limited, a company organized in the Seychelles Islands	344
Easywell Limited, company organized in the British Virgin Islands	3,074
Starlink Asia Limited, a company organized in the British Virgin Islands	3,074

7

 DISCLOSURE SCHEDULES

ITEM 2.7 – INDEBTEDNESS; CONTRACTS; NO DEFAULTS

As set forth in the Financial Statements.

ITEM 3.1(b) – SUBSIDIARIES

Subsidiary	% Owned
Global Asia Universal Limited, a company organized in the British Virgin Islands	100% owned by World Orient Universal Limited
EverFair Technologies Limited, a company organized in Hong Kong	100% owned by Global Asia Universal Limited
Zhengzhou Shenyang Technology Company Limited, a company organized in the People’s Republic of China	100% owned by EverFair Technologies Limited

ITEM 3.3 - CAPITALIZATION

None.

ITEM 3.5 – INDEBTEDNESS; CONTRACTS; NO DEFAULTS

1.           Construction Agreement in Relation to Intelligent System of D District of Fengle Plaza dated December 17, 2007 by and between ZST and Henan Siqi Technology Investment Company Limited.

2.           Sale & Purchase Agreement dated July 18, 2008 by and between ZST and Gongyi City Electricity Supply Company.

3.           Secured Loan Agreement dated July 11, 2008 by and between ZST and Raiffeisen Zentralbank Sterreich AG Beijing Branch for a principal amount equal to RMB 63,000,000.

4.           Receivable Pledge Agreement dated January 4, 2008 by and between ZST and Raiffeisen Zentralbank Sterreich AG Beijing Branch for a secured obligation amount equal to RMB 50,000,000.

5.           EverFair Technologies Limited, a wholly-owned subsidiary of World Orient (“EverFair”), is a party to the Equity Transfer Agreement dated October 10, 2008 (the “Equity Transfer Agreement”) pursuant to which EverFair shall make payments to Zhong Bo, Wu Dexiu, Huang Jiankang, Sun Hui and Li Yuting (the “Sellers”) equal to RMB 12,000,000 (the “Debt”) within three (3) months following the date of the issuance of the new business license as contemplated by the Equity Transfer Agreement.  Upon the Closing of the Share Exchange, the Company shall assume the Debt and make the required payments to the Sellers in accordance with the terms of the Equity Transfer Agreement.

8

ITEM 3.6 – COMPLIANCE WITH THE LAW

None.

ITEM 3.7 – LITIGATION

None.

ITEM 9.1 – WESTPARK AFFILIATES

Richard Rappaport

Amanda Rappaport Trust

Kailey Rappaport Trust

Anthony C. Pintsopoulos

Kevin DePrimio

Jason Stern

WestPark Financial Services, LLC

9

TABLE OF CONTENTS

		Page
ARTICLE I THE SHARE EXCHANGE		1
1.1	The Share Exchange	1
1.2	Time and Place of Closing	2
1.3	Effective Time	2
1.4	Tax Consequences	2
ARTICLE II		2
2.1	Due Organization and Qualification; Due Authorization.	2
2.2	No Conflicts or Defaults	3
2.3	Capitalization	3
2.4	Financial Statements	3
2.5	No Assets or Liabilities	4
2.6	Taxes	4
2.7	Indebtedness; Contracts; No Defaults	4
2.8	Real Property	4
2.9	Compliance with Law	4
2.10	Permits and Licenses	4
2.11	Litigation	5
2.12	Insurance	5
2.13	Patents; Trademarks and Intellectual Property Rights	5
2.14	Securities Law Compliance	5
2.15	Conflicts of Interest	5
ARTICLE III REPRESENTATIONS AND WARRANTIES OF WORLD ORIENT		5
3.1	Due Organization and Qualification; Due Authorization.	5
3.2	No Conflicts or Defaults	6
3.3	Capitalization	6
3.4	Taxes	7
3.5	Indebtedness; Contracts; No Defaults	7
3.6	Compliance with Law	7
3.7	Litigation.	7
3.8	Conflicts of Interest	8
ARTICLE IV REPRESENTATION AND WARRANTIES OF THE SHAREHOLDERS		9
4.1	Title to Shares	9
4.2	Due Authorization	9
4.3	Purchase for Investment.	9
4.4	Investment Experience	10
4.5	Information	10
4.6	Restricted Securities	10
4.7	Exempt Issuance	10
4.8	Conflicts of Interest	11

- i - -

ARTICLE V COVENANTS		11
5.1	Further Assurances	11
ARTICLE VI DELIVERIES		12
6.1	Items to be delivered to the Shareholders prior to or at Closing by the Company.	12
6.2	Items to be delivered to the Company prior to or at Closing by World Orient and the Shareholders.	12
ARTICLE VII CONDITIONS PRECEDENT		13
7.1	Conditions Precedent to Closing	13
7.2	Conditions to Obligations of Shareholders	13
7.3	Conditions to Obligations of the Company	14
ARTICLE VIII TERMINATION		14
8.1	Termination	14
ARTICLE IX COVENANTS SUBSEQUENT TO CLOSING		15
9.1	Registration Rights	15
9.2	NYSE Alternext Listing	15
ARTICLE X MISCELLANEOUS		15
10.1	Survival of Representations, Warranties and Agreements	15
10.2	Access to Books and Records	16
10.3	Further Assurances	16
10.4	Notice	16
10.5	Entire Agreement	17
10.6	Successors and Assigns	17
10.7	Governing Law	17
10.8	Counterparts	17
10.9	Construction	17
10.10	Severability	17

- ii - -

EX-2.3

EXHIBIT 2.3

AMENDMENT NO. 1

TO THE

SHARE EXCHANGE AGREEMENT

This AMENDMENT NO. 1 TO THE SHARE EXCHANGE AGREEMENT, dated and effective as of January 9, 2009 (this "Amendment"), is entered into by and among SRKP 18, Inc., a Delaware corporation (the “Company”), World Orient Universal Limited, a company organized in the British Virgin Islands (“World Orient”), and all of the shareholders of World Orient, each of whom has executed a counterpart signature page to this Amendment (each, a “Shareholder” and collectively, the “Shareholders”). The Company, World Orient and the Shareholders are collectively referred to herein as the “Parties.” Terms not defined in this Amendment shall have such meanings as set forth in the Agreement (as defined below).

WITNESSETH:

WHEREAS, the Parties entered into that certain Share Exchange Agreement dated as of December 11, 2008 (the “Agreement”);

WHEREAS, the Parties desire to amend the Agreement by entering into this Amendment;

WHEREAS, the Shareholders own all of the issued and outstanding shares of the capital of World Orient (the “World Orient Shares”); which is the 100% parent of Global Asia Universal Limited, a company organized under the laws of the British Virgin Islands (“Global Asia”), which is the 100% parent of EverFair Technologies Limited, a company organized under the laws of Hong Kong (“EverFair”), which is the 100% parent of Zhengzhou Shenyang Technology Limited, a company organized under the laws of the People’s Republic of China (“ZST”);

WHEREAS, the Company desires to acquire from Shareholders, and Shareholders desire to sell to the Company, the World Orient Shares in exchange for the issuance by the Company of an aggregate of 1,985,000 shares (the “Company Shares”) of the Company’s common stock, $0.0001 par value (“Common Stock”) to the Shareholders and/or their designees on the terms and conditions set forth herein (the “Share Exchange”);

WHEREAS, after giving effect to the Share Exchange and the Equity Financing (if fully subscribed), there will be approximately 9,081,390 shares of Company Common Stock issued and outstanding, 3,125,000 shares of the Company’s Series A Convertible Preferred Stock (each of which is immediately convertible into one (1) share of Company Common Stock) issued and outstanding, and warrants to purchase 7,096,390 shares of Company Common Stock issued and outstanding; and

WHEREAS, Section 10.5 of the Agreement permits the parties to amend the Agreement only by a written instrument executed by the Parties.

NOW, THEREFORE, for good and valuable consideration and in consideration of the respective representations, warranties, covenants and agreements set forth in the Agreement, the parties hereby agree to amend the Agreement as follows:

AGREEMENT:

1.           Section 2.5 of the Agreement is hereby amended and restated in its entirety as follows:

2.5           No Assets or Liabilities.  As of the Closing, the Company shall have no more than $50,000 and the principal amount of that certain promissory note dated January 9, 2009 entered into by and between the Company and WestPark Capital, Inc. (the “Promissory Note”) in liabilities (the “Liabilities”).  Except for the foregoing or as set forth on the Financial Statements, the Company does not have any (a) assets of any kind or (b) liabilities or obligations, whether secured or unsecured, accrued, determined, absolute or contingent, asserted or unasserted or otherwise.

2.           Section 6.2(e) of the Agreement is hereby amended and restated in its entirety as follows:

(e)           payment of the Liabilities directly out of the proceeds of the Equity Financing (as defined in Section 7.1(f) herein) to the appropriate creditors of the Company which shall include indebtedness owed to Company shareholders and fees owing to Company lawyers, accountants and similar parties; and

3.           Section 7.2(c) of the Agreement is hereby amended and restated in its entirety as follows:

(c)           To the extent that the liabilities of the Company exceed the amount of the Liabilities as of the Closing, the Company shareholders shall have satisfied and paid such excess liabilities in full.

4.           Section 7.3(c) of the Agreement is hereby amended and restated in its entirety as follows:

(c)           All liabilities of the Company up to the amount of the Liabilities shall be paid directly out of the proceeds of the Equity Financing to the appropriate creditors, which shall include indebtedness owed to the Company shareholders and fees owing to lawyers, accountants and similar parties.

5.           The Disclosures Schedules to the Agreement are hereby amended and restated in its entirety as set forth on the Disclosure Schedules attached hereto.

6.           Except as amended herein, the Agreement shall remain in full force and effect.

7.           This Amendment may be executed in any number of facsimile counterparts, each of which shall be an original, but which together constitute one and the same instrument.  This Amendment may be executed and delivered by facsimile.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, each of the parties hereto has executed this Amendment as of the date first set forth above.

SRKP 18, INC.
By:	/s/ Richard Rappaport
Name:	Richard Rappaport
Title:	President
WORLD ORIENT UNIVERSAL LIMITED
By:	/s/ Zhong Bo
Name:	Zhong Bo
Title:	President

[SIGNATURE PAGES FOR SHAREHOLDERS FOLLOW]

WORLD ORIENT UNIVERSAL LIMITED

SHAREHOLDERS’ SIGNATURE PAGE TO

AMENDMENT NO.1 TO THE

SHARE EXCHANGE AGREEMENT

Dated January 9, 2009

Among SRKP 18, Inc., World Orient Universal Limited and

The Shareholders of World Orient Universal Limited

           The undersigned Shareholder hereby executes and delivers the Amendment No.1 to the Share Exchange Agreement (the “Amendment”) to which this Signature Page is attached, which, together with all counterparts of the Amendment and Signature Pages of the other parties named in said Amendment, shall constitute one and the same document in accordance with the terms of the Amendment.

/s/ Chen Dong

(Signature)

Chen Dong

(Type or print name)

(Type or print name as it should appear on certificate, if different)

Address:                  #104 Hailong Garden, Eastern Longjing Road, Nanshan District, Shenzhen, 518000 Guangdong Province, People’s Republic of China

Telephone:             (86) 1351-0725234

Facsimile:                (86) 755-26005718

Number of World Orient Shares Held:    43,508  

WORLD ORIENT UNIVERSAL LIMITED

SHAREHOLDERS’ SIGNATURE PAGE TO

AMENDMENT NO.1 TO THE

SHARE EXCHANGE AGREEMENT

Dated January 9, 2009

Among SRKP 18, Inc., World Orient Universal Limited and

The Shareholders of World Orient Universal Limited

The undersigned Shareholder hereby executes and delivers the Amendment No.1 to the Share Exchange Agreement (the “Amendment”) to which this Signature Page is attached, which, together with all counterparts of the Amendment and Signature Pages of the other parties named in said Amendment, shall constitute one and the same document in accordance with the terms of the Amendment.

/s/ Chaoying Li

(Signature)

By: Chaoying Li

Title: Director

Richever Limited

(Type or print name)

(Type or print name as it should appear on certificate, if different)

Address:                  Suite 906, Office Tower C1, Oriental Plaza, No. 1 East Chang An Ave., Beijing 100738, People’s Republic of China

Telephone:              (86 10) 8525 5518

Facsimile:                 (86 10) 8525 5511

Number of World Orient Shares Held:    344  

WORLD ORIENT UNIVERSAL LIMITED

SHAREHOLDERS’ SIGNATURE PAGE TO

AMENDMENT NO.1 TO THE

SHARE EXCHANGE AGREEMENT

Dated January 9, 2009

Among SRKP 18, Inc., World Orient Universal Limited and

The Shareholders of World Orient Universal Limited

The undersigned Shareholder hereby executes and delivers the Amendment No.1 to the Share Exchange Agreement (the “Amendment”) to which this Signature Page is attached, which, together with all counterparts of the Amendment and Signature Pages of the other parties named in said Amendment, shall constitute one and the same document in accordance with the terms of the Amendment.

/s/ Steve Cheung Hung Hi

(Signature)

By: Steve Cheung Hung Hi

Title: Director

Easywell Limited

(Type or print name)

(Type or print name as it should appear on certificate, if different)

Address:__________________________________________________

_______________________________________________________

Telephone: ______________________________________________

Facsimile: _______________________________________________

Number of World Orient Shares Held:                                                                                     3,074                                

WORLD ORIENT UNIVERSAL LIMITED

SHAREHOLDERS’ SIGNATURE PAGE TO

AMENDMENT NO.1 TO THE

SHARE EXCHANGE AGREEMENT

Dated January 9, 2009

Among SRKP 18, Inc., World Orient Universal Limited and

The Shareholders of World Orient Universal Limited

The undersigned Shareholder hereby executes and delivers the Amendment No.1 to the Share Exchange Agreement (the “Amendment”) to which this Signature Page is attached, which, together with all counterparts of the Amendment and Signature Pages of the other parties named in said Amendment, shall constitute one and the same document in accordance with the terms of the Amendment.

/s/ William Kuk Kuk Sun

(Signature)

By: William Kuk Kuk Sun

Title: Director

Starlink AsiaLimited

(Type or print name)

(Type or print name as it should appear on certificate, if different)

Address:_________________________________________________

________________________________________________________

Telephone: ______________________________________________

Facsimile: _______________________________________________

Number of World Orient Shares Held:    3,074   

DISCLOSURE SCHEDULES

ITEM 2.7 – INDEBTEDNESS; CONTRACTS; NO DEFAULTS

As set forth in the Financial Statements.

On January 9, 2009, the Company entered into a Promissory Note with WestPark Capital, Inc. (the “Lender”) whereby the Company issued the Lender a promissory note in a principal amount of $170,000 bearing no interest (the “Promissory Note”).

The Promissory Note shall be paid in full by the Company using the proceeds of the Equity Financing upon the termination of the Equity Financing.

ITEM 3.1(b) – SUBSIDIARIES

Subsidiary	% Owned
Global Asia Universal Limited, a company organized in the British Virgin Islands	100% owned by World Orient Universal Limited
EverFair Technologies Limited, a company organized in Hong Kong	100% owned by Global Asia Universal Limited
Zhengzhou Shenyang Technology Company Limited, a company organized in the People’s Republic of China	100% owned by EverFair Technologies Limited

ITEM 3.3 - CAPITALIZATION

None.

ITEM 3.5 – INDEBTEDNESS; CONTRACTS; NO DEFAULTS

1.           Construction Agreement in Relation to Intelligent System of D District of Fengle Plaza dated December 17, 2007 by and between ZST and Henan Siqi Technology Investment Company Limited.

2.           Sale & Purchase Agreement dated July 18, 2008 by and between ZST and Gongyi City Electricity Supply Company.

3.           Secured Loan Agreement dated July 11, 2008 by and between ZST and Raiffeisen Zentralbank Sterreich AG Beijing Branch for a principal amount equal to RMB 63,000,000.

4.           Receivable Pledge Agreement dated January 4, 2008 by and between ZST and Raiffeisen Zentralbank Sterreich AG Beijing Branch for a secured obligation amount equal to RMB 50,000,000.

5.           EverFair Technologies Limited, a wholly-owned subsidiary of World Orient (“EverFair”), is a party to the Equity Transfer Agreement dated October 10, 2008 (the “Equity Transfer Agreement”) pursuant to which EverFair shall make payments to Zhong Bo, Wu Dexiu, Huang Jiankang, Sun Hui and Li Yuting (the “Sellers”) equal to RMB 12,000,000 (the “Debt”) within three (3) months following the date of the issuance of the new business license as contemplated by the Equity Transfer Agreement.  Upon the Closing of the Share Exchange, the Company shall assume the Debt and make the required payments to the Sellers in accordance with the terms of the Equity Transfer Agreement.

ITEM 3.6 – COMPLIANCE WITH THE LAW

None.

ITEM 3.7 – LITIGATION

None.

ITEM 9.1 – WESTPARK AFFILIATES

Richard Rappaport

Amanda Rappaport Trust

Kailey Rappaport Trust

Anthony C. Pintsopoulos

Kevin DePrimio

Jason Stern

WestPark Financial Services, LLC

EX-3.3

EXHIBIT 3.3

CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS

OF

SERIES A CONVERTIBLE PREFERRED STOCK

($0.0001 PAR VALUE PER SHARE)

OF

SRKP 18, INC.

Pursuant to Section 151(g) of the

General Corporation Law of the

State of Delaware

           SRKP 18, Inc., a Delaware corporation (the “Corporation”), pursuant to authority conferred on the Board of Directors of the Corporation by the Certificate of Incorporation and in accordance with the provisions of Section 151 of the General Corporation Law of the State of Delaware, certifies that the Board of Directors of the Corporation, at a meeting duly called and held, at which a quorum was present and acting throughout, duly adopted the following resolution:

RESOLVED: That, pursuant to the authority expressly granted to and vested in the Board of Directors of the Corporation in accordance with the provisions of its Certificate of Incorporation, a series of Preferred Stock of the Corporation be and hereby is established, consisting of 3,750,000 shares, to be designated “Series A Convertible Preferred Stock” (hereinafter “Preferred Stock”); that the Board of Directors be and hereby is authorized to issue such shares of Preferred Stock from time to time and for such consideration and on such terms as the Board of Directors shall determine; and that, subject to the limitations provided by law and by the Certificate of Incorporation, the powers, designations, preferences and relative, participating, optional or other special rights of, and the qualifications, limitations or restrictions upon, the Preferred Stock shall be as follows:

TERMS OF PREFERRED STOCK

Section 1.                      Definitions.  Capitalized terms used and not otherwise defined herein that are defined in the Transaction Documents shall have the meanings given such terms in the Transaction Documents.  For the purposes hereof, the following terms shall have the following meanings:

“Alternate Consideration” shall have the meaning set forth in Section 6(e).

“Base Conversion Price” shall have the meaning set forth in Section 6(b).

“Business Day” means any day except Saturday, Sunday, any day which shall be a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

“California Courts” shall have the meaning set forth in Section 8(c).

“Common Stock” means the Corporation’s common stock, par value $0.0001 per share, and stock of any other class of securities into which such securities may hereafter be reclassified or changed into.

“Common Stock Equivalents” means any securities of the Corporation or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

“Conversion Amount” means the sum of the Stated Value at issue.

“Conversion Date” shall have the meaning set forth in Section 5(a).

“Conversion Price” shall have the meaning set forth in Section 5(b).

“Conversion Shares” means, collectively, the shares of Common Stock issuable upon conversion of the shares of Preferred Stock in accordance with the terms hereof.

“Conversion Shares Registration Statement” means a registration statement that registers the resale of all Conversion Shares of the Holders, who shall be named as “selling stockholders” therein and meets the requirements of the Registration Rights Agreement.

“Dilutive Issuance” shall have the meaning set forth in Section 6(b).

“Dilutive Issuance Notice” shall have the meaning set forth in Section 6(b).

“Equity Conditions” means, during the period in question, (i) the Corporation shall have duly honored all conversions scheduled to occur or occurring by virtue of one or more Notices of Conversion of the applicable Holder on or prior to the dates so requested or required, if any, (ii) there is an effective Conversion Shares Registration Statement pursuant to which the Holders are permitted to utilize the prospectus thereunder to resell all of the shares of Common Stock issuable pursuant to the Transaction Documents which Conversion Shares Registration Statement has been effective, (iii) the Common Stock is trading on a Trading Market and all of the shares issuable pursuant to the Transaction Documents are listed for trading on such Trading Market, (iv) there is a sufficient number of authorized, but unissued and otherwise unreserved, shares of Common Stock for the issuance of all of the shares of Common Stock issuable pursuant to the Transaction Documents, and (v) there has been no public announcement of a pending or proposed Fundamental Transaction that has not been consummated.

“Exempt Issuance” means the issuance of (a) shares of Common Stock or options to purchase Common Stock to employees, consultants, officers or directors of the Corporation pursuant to any equity incentive plan duly adopted by a majority of the non-employee members of the Board of Directors of the Corporation or a majority of the members of a committee of non-employee directors established for such purpose, (b) securities upon the exercise of or conversion of any securities issued hereunder and/or other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the Original Issue Date, provided that such securities have not been amended since the Original Issue Date to increase the number of such securities or to decrease the exercise or conversion price of any such securities, and (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors, provided that any such issuance shall only be to a Person which is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Corporation and shall provide to the Corporation additional benefits in addition to the investment of funds, but shall not include a transaction in which the Corporation is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities.

“Forced Conversion Amount” means 100% of the aggregate Stated Value then outstanding.

“Forced Conversion Date” shall have the meaning set forth in Section 7(a).

“Forced Conversion Notice” shall have the meaning set forth in Section 7(a).

“Forced Conversion Notice Date” shall have the meaning set forth in Section 7(a).

“Fundamental Transaction” shall have the meaning set forth in Section 6(c).

“Holder” shall have the meaning given such term in Section 2.

“Junior Securities” means the Common Stock and all other Common Stock Equivalents of the Corporation other than those securities which are explicitly senior to the Preferred Stock in dividend rights or liquidation preference.

“Liquidation” shall have the meaning set forth in Section 4.

“Notice of Conversion” shall have the meaning set forth in Section 5(a).

2

“Original Issue Date” shall mean the date on which Preferred Stock is issued to the Holder.

“Preferred Stock” shall have the meaning set forth in Section 2.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Share Delivery Date” shall have the meaning set forth in Section 5(c).

“Stated Value” shall have the meaning set forth in Section 2.

“Subscription Agreements” means the subscription agreements to which the Corporation and the original Holders are parties, setting forth the terms by which the Holders purchased the Preferred Stock, together with all exhibits, schedules, attachments and supplements thereto.

“Trading Day” means a day on which the principal Trading Market is open for business.

“Trading Market” means the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the American Stock Exchange, the Nasdaq Capital Market, the Nasdaq Global Market, or the New York Stock Exchange.

“Trading Market Listing Date” means the first Trading Day on which the Common Stock is listed or quoted for trading on a Trading Market.

“Transaction Documents” shall mean the Subscription Agreements and this Certificate of Designations.

Section 2.                      Designation, Amount and Par Value.  The series of preferred stock shall be designated as its Series A Convertible Preferred Stock (the “Preferred Stock”) and the number of shares so designated shall be up to 3,750,000.  The holders of the Preferred Stock shall be each, a “Holder” and collectively, the “Holders”.  Each share of Preferred Stock shall have a par value of $0.0001 per share and a stated value equal to $1.60 (the “Stated Value”).

Section 3.                      Voting Rights.  Holders shall have the right to receive notice of all regular and special meetings of shareholders simultaneously with provision of such notice to holders of Common Stock, and shall have the right to one vote per Conversion Share underlying any Preferred Stock outstanding as of the record date for purposes of determining which holders have the right to vote with respect to any matters brought to a vote before the Company’s holders of Common Stock.  In addition, as long as any shares of Preferred Stock are outstanding, the Corporation shall not, without the affirmative vote of the Holders of a majority of the then outstanding shares of the Preferred Stock, (a) alter or change adversely the powers, preferences or rights given to the Preferred Stock or alter or amend this Certificate of Designation or (b) enter into any agreement with respect to the foregoing.

Section 4.                      Liquidation.  Upon any liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary (a “Liquidation”), the Holders shall be entitled to receive out of the assets, whether capital or surplus, of the Corporation an amount equal to (a) 100% of the Stated Value, plus (b) any accrued and unpaid dividends thereon and any other fees or liquidated damages owing thereon, for each share of Preferred Stock before any distribution or payment shall be made to the holders of any Junior Securities, and if the assets of the Corporation shall be insufficient to pay in full such amounts, then the entire assets to be distributed to the Holders shall be ratably distributed among the Holders in accordance with the respective amounts that would be payable on such shares if all amounts payable thereon were paid in full.  The Corporation shall mail written notice of any Liquidation, not less than 45 days prior to the payment date stated therein, to each Holder.

3

Section 5.                      Conversion.

a)           Conversions at Option of Holder.  Each share of Preferred Stock shall be convertible at the option of the Holder thereof, at any time and from time to time from and after the Original Issue Date into that number of shares of Common Stock determined by dividing the Stated Value of such share of Preferred Stock by the Conversion Price.  Holders shall effect conversions by providing the Corporation, the Corporation’s transfer agent, or any other agent of the Corporation so designated by the Corporation to process the issuance of Conversion Shares (the “Preferred Agent”) with the form of conversion notice attached hereto as Annex A (a “Notice of Conversion”).  Each Notice of Conversion shall specify the number of shares of Preferred Stock to be converted, the number of shares of Preferred Stock owned prior to the conversion at issue, the number of shares of Preferred Stock owned subsequent to the conversion at issue and the date on which such conversion is to be effected, which shall be the date the applicable Holder transmits such Notice of Conversion to the Corporation, its Preferred Agent, or any agent of the Holder that is irrevocably instructed to process the conversion on the Holder’s behalf, unless a later date is specified by the Holder (the “Conversion Date”).  The calculations and entries set forth in the Notice of Conversion shall control in the absence of manifest or mathematical error.  To effect conversions of shares of Preferred Stock, a Holder shall be required to surrender the certificate(s) representing such shares of Preferred Stock to the Corporation, and, unless all of the shares of Preferred Stock represented thereby are so converted, the Corporation shall deliver to the Holder a certificate representing the balance of the shares of Preferred Stock not so converted promptly following the Conversion Date at issue.  Shares of Preferred Stock converted into Common Stock or redeemed in accordance with the terms hereof shall be canceled and shall not be reissued, and shall revert to the status of authorized but unissued and undesignated shares of preferred stock as contemplated by Section 9(h) hereof.

b)           Conversion Price.  The conversion price for the Preferred Stock shall equal $1.60, subject to adjustment herein (the “Conversion Price”).  Initially, each share of Preferred Stock shall be convertible into one share of Common Stock.

c)           Mechanics of Conversion

i.           Delivery of Certificate Upon Conversion.  Not later than three (3) Trading Days after the Corporation or its Preferred Agent has received the Holder’s Notice of Conversion (the “Share Delivery Date”), the Corporation shall deliver, or cause to be delivered, to the converting Holder (A) a certificate or certificates which, on or after the Effective Date, shall be free of restrictive legends and trading restrictions (other than those which may then be required by the Subscription Agreements) representing the number of shares of Common Stock being acquired upon the conversion of shares of Preferred Stock, and (B) a bank check, wire transfer, or corporate check in the amount of accrued and unpaid dividends as of the Conversion Date.  On or after the Effective Date, the Corporation shall, upon request of such Holder, use its best efforts to deliver any certificate or certificates required to be delivered by the Corporation under this Section 5 electronically through the Depository Trust Company or another established clearing corporation performing similar functions.  If in the case of any Notice of Conversion such certificate or certificates are not delivered to or as directed by the applicable Holder by the third (3 rd ) Trading Day after the Conversion Date, the applicable Holder shall be entitled to elect by written notice to the Corporation at any time on or before its receipt of such certificate or certificates, to rescind such Conversion Notice by written notice to the Corporation, in which event the Corporation shall promptly return to such Holder any original Preferred Stock certificate delivered to the Corporation and such Holder shall promptly return any Common Stock certificates representing the shares of Preferred Stock tendered for conversion to the Corporation.

ii.           Obligation Absolute.  The Corporation’s obligation to issue and deliver the Conversion Shares upon conversion of Preferred Stock in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by a Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by such Holder or any other Person of any obligation to the Corporation or any violation or alleged violation of law by such Holder or any other person, and irrespective of any other circumstance which might otherwise limit such obligation of the Corporation to such Holder in connection with the issuance of such Conversion Shares; provided, however, that such delivery shall not operate as a waiver by the Corporation of any such action that the Corporation may have against such Holder.

iii.           Reservation of Shares Issuable Upon Conversion.  The Corporation covenants that it will at all times reserve and keep available out of its authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of the Preferred Stock, each as herein provided, free from preemptive rights or any other actual contingent purchase rights of Persons other than the Holders of the Preferred Stock, not less than such aggregate number of shares of the Common Stock as shall (subject to the terms and conditions in the Subscription Agreement) be issuable (taking into account the adjustments and restrictions of Section 6) upon the conversion of all outstanding shares of Preferred Stock and payment of dividends hereunder.  The Corporation covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable.

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iv.           Fractional Shares.  Upon a conversion hereunder, the Corporation shall not be required to issue stock certificates representing fractions of shares of Common Stock, but may if otherwise permitted, make a cash payment in respect of any final fraction of a share based on the Conversion Price at such time.  If the Corporation elects not, or is unable, to make such a cash payment, the Holders shall be entitled to receive, in lieu of the final fraction of a share, one whole share of Common Stock.

v.           Transfer Taxes.  The issuance of certificates for shares of the Common Stock on conversion of this Preferred Stock shall be made without charge to any Holder for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such certificates, provided that the Corporation shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the Holders of such shares of Preferred Stock so converted and the Corporation shall not be required to issue or deliver such certificates unless or until the Person or Persons requesting the issuance thereof shall have paid to the Corporation the amount of such tax or shall have established to the satisfaction of the Corporation that such tax has been paid.

Section 6.                      Certain Adjustments.

a)           Stock Dividends and Stock Splits.  If the Corporation, at any time while this Preferred Stock is outstanding: (A) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any other Common Stock Equivalents (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Corporation upon conversion of, or payment of a dividend on, this Preferred Stock); (B) subdivides outstanding shares of Common Stock into a larger number of shares; (C) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares; or (D) issues, in the event of a reclassification of shares of the Common Stock, any shares of capital stock of the Corporation, then the Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding any treasury shares of the Corporation) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event.  Any adjustment made pursuant to this Section 6(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

b)           Subsequent Equity Sales.  If the Corporation at any time prior to the Trading Market Listing Date sells or issues any shares of Common Stock in one or a series of transactions at an effective price per share that is lower than the then Conversion Price where the aggregate gross proceeds to the Corporation are at least One Million Dollars ($1,000,000) (such lower price, the “Base Conversion Price” and such issuances collectively, a “Dilutive Issuance”), then the Conversion Price shall be reduced to equal the Base Conversion Price.  Notwithstanding the foregoing, no adjustment will be made under this Section 6(b) in respect of an Exempt Issuance.  The Corporation shall notify the Holders in writing, no later than the Business Day following the issuance of any Common Stock or Common Stock Equivalents subject to this Section 6(b), indicating therein the applicable issuance price, conversion price and other pricing terms (such notice, the “Dilutive Issuance Notice”).  For purposes of clarification, whether or not the Corporation provides a Dilutive Issuance Notice pursuant to this Section 6(b), upon the occurrence of any Dilutive Issuance, the Holders are entitled to receive a number of Conversion Shares based upon the Base Conversion Price on or after the date of such Dilutive Issuance, regardless of whether a Holder accurately refers to the Base Conversion Price in the Notice of Conversion.

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c)           Fundamental Transaction.  If, at any time while this Preferred Stock is outstanding, (A) the Corporation effects any merger or consolidation of the Corporation with or into another Person, (B) the Corporation effects any sale of all or substantially all of its assets in one transaction or a series of related transactions, (C) any tender offer or exchange offer (whether by the Corporation or another Person) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, or (D) the Corporation effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (in any such case, a “Fundamental Transaction”), then, upon any subsequent conversion of this Preferred Stock, the Holders shall have the right to receive, for each Conversion Share that would have been issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction, the same kind and amount of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of one share of Common Stock (the “Alternate Consideration”).  For purposes of any such conversion, the determination of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Corporation shall apportion the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration.  If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holders shall be given the same choice as to the Alternate Consideration it receives upon any conversion of this Preferred Stock following such Fundamental Transaction.  To the extent necessary to effectuate the foregoing provisions, any successor to the Corporation or surviving entity in such Fundamental Transaction shall file a new Certificate of Designation with the same terms and conditions and issue to the Holders new preferred stock consistent with the foregoing provisions and evidencing the Holders’ right to convert such preferred stock into Alternate Consideration.  The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this Section 6(c) and insuring that this Preferred Stock (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction.

d)           Calculations.  All calculations under this Section 6 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be.  For purposes of this Section 6, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the actual number of shares of Common Stock (excluding any treasury shares of the Corporation) issued and outstanding.

e)           Notice to the Holders.

           i.           Adjustment to Conversion Price.  Whenever the Conversion Price is adjusted pursuant to any provision of this Section 6, the Corporation shall promptly mail to each Holder a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.

           ii.           Notice to Allow Conversion by Holder.  If (A) the Corporation shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Corporation shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Corporation shall authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Corporation shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Corporation is a party, any sale or transfer of all or substantially all of the assets of the Corporation, of any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property or (E) the Corporation shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Corporation, then, in each case, the Corporation shall cause to be filed at each office or agency maintained for the purpose of conversion of this Preferred Stock, and shall cause to be delivered to each Holder at its last address as it shall appear upon the stock books of the Corporation, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange, provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice.  The Holder shall be entitled to convert the Conversion Amount of this Preferred Stock (or any part hereof) during the 20-day period commencing on the date of such notice through the effective date of the event triggering such notice.

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Section 7.                      Forced Conversion.  Notwithstanding anything herein to the contrary, if the closing price of the Common Stock on the Trading Market for each of any ten consecutive Trading Day period exceeds $3.50 (as adjusted for stock splits, recapitalizations and the like) above the then effective Conversion Price and on such date all of the Equity Conditions are met, the Corporation may, within one (1) Trading Day after the end of any such period, deliver a written notice to all Holders (a “Forced Conversion Notice” and the date such notice is delivered to the Holders, the “Forced Conversion Notice Date”) to cause each Holder to convert all or part of such Holder’s Preferred Stock (as specified in such Forced Conversion Notice), it being agreed that the “Conversion Date” for purposes of Section 5 shall be deemed to occur on the third (3 rd ) day following the Forced Conversion Notice Date (such third (3 rd ) day, the “Forced Conversion Date”).  The Corporation may not deliver a Forced Conversion Notice, and any Forced Conversion Notice delivered by the Corporation shall not be effective, unless all of the Equity Conditions have been met on each Trading Day occurring during the applicable period from the Forced Conversion Notice Date through and including the later of the Forced Conversion Date and the Trading Day after the date that the Conversion Shares issuable pursuant to such conversion are actually delivered to the Holders pursuant to the Forced Conversion Notice.  Any Forced Conversion Notices shall be applied ratably to all of the Holders based on each Holder’s initial purchases of Preferred Stock pursuant to the Subscription Agreement, provided that any voluntary conversions by a Holder shall be applied against such Holder’s pro-rata allocation, thereby decreasing the aggregate amount forcibly converted hereunder if less than all shares of the Preferred Stock are forcibly converted.  For purposes of clarification, a Forced Conversion shall be subject to all of the provisions of Section 5, including, without limitation, the provisions requiring payment of any dividends and, liquidated damages except that the Holder shall not be obligated to deliver a Notice of Conversion in order to effect such Forced Conversion.  Within three (3) Business Days following the Forced Conversion Date, the Corporation shall cause to be paid to the Holders, in cash, all accrued but unpaid dividends on the shares of Preferred Stock so converted, together with all unpaid liquidated damages and other amounts due in respect of the Preferred Stock.

Section 8.                      Miscellaneous.

a)           Notices.  Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without limitation, any Notice of Conversion, shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight courier service, addressed to the Corporation, at Building 28, Huzhu Road, Zhongyuan District, Zhengzhou, People’s Republic of China, facsimile number (86) 0371-067716850, Attn: Chief Executive Officer or such other facsimile number or address as the Corporation may specify for such purposes by notice to the Holders delivered in accordance with this Section 8.  Any and all notices or other communications or deliveries to be provided by the Corporation hereunder shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile number or address of such Holder appearing on the books of the Corporation, or if no such facsimile number or address appears on the books of the Corporation, at the principal place of business of the Holders.  Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section 8 prior to 5:00 p.m. (New York City time) on any date, (ii) the date immediately following the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section 8 between 5:00 p.m. and 11:59 p.m. (New York City time) on any date, (iii) the second Business Day following the date of mailing, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.

b)           Lost or Mutilated Preferred Stock Certificate.  If a Holder’s Preferred Stock certificate shall be mutilated, lost, stolen or destroyed, the Corporation shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated certificate, or in lieu of or in substitution for a lost, stolen or destroyed certificate, a new certificate for the shares of Preferred Stock so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such certificate, and of the ownership hereof reasonably satisfactory to the Corporation, together with an indemnity.

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c)           Governing Law.  All questions concerning the construction, validity, enforcement and interpretation of this Certificate of Designation shall be governed by and construed and enforced in accordance with the internal laws of the State of Delaware, without regard to the principles of conflict of laws thereof.  Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective Affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting in the City of Los Angeles, State of California  (the “California Courts”).  Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the Los Angeles Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such Los Angeles Courts, or such Los Angeles Courts are improper or inconvenient venue for such proceeding.  Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Certificate of Designation and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by applicable law.  Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Certificate of Designation or the transactions contemplated hereby.  If either party shall commence an action or proceeding to enforce any provisions of this Certificate of Designation, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys’ fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.

d)           Waiver.  Any waiver by the Corporation or a Holder of a breach of any provision of this Certificate of Designation shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Certificate of Designation or a waiver by any other Holders.  The failure of the Corporation or a Holder to insist upon strict adherence to any term of this Certificate of Designation on one or more occasions shall not be considered a waiver or deprive that party (or any other Holder) of the right thereafter to insist upon strict adherence to that term or any other term of this Certificate of Designation.  Any waiver by the Corporation or a Holder must be in writing.

e)           Severability.  If any provision of this Certificate of Designation is invalid, illegal or unenforceable, the balance of this Certificate of Designation shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances.  If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under applicable law.

f)           Next Business Day.  Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.

g)           Headings.  The headings contained herein are for convenience only, do not constitute a part of this Certificate of Designation and shall not be deemed to limit or affect any of the provisions hereof.

h)           Status of Converted or Redeemed Preferred Stock.  Shares of Preferred Stock may only be issued pursuant to the Subscription Agreement.  If any shares of Preferred Stock shall be converted, redeemed or reacquired by the Corporation, such shares shall resume the status of authorized but unissued shares of preferred stock and shall no longer be designated as Series A Convertible Preferred Stock.

*********************

FURTHER RESOLVED:  That the Chairman, the president or any vice-president, and the secretary or any assistant secretary, of the Corporation be and they hereby are authorized and directed to prepare and file a Certificate of Designation of Preferences, Rights and Limitations in accordance with the foregoing resolution and the provisions of Delaware law.

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IN WITNESS WHEREOF, the undersigned have executed this Certificate this 31st day of December 2008.

	/s/ Richard Rappaport		/s/ Anthony Pintsopoulis
Name:	Richard Rappaport	Name:	Anthony Pintsopoulis
Title:	President and Chief Executive Officer	Title:	Secretary

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ANNEX A

NOTICE OF CONVERSION

           (TO BE EXECUTED BY THE REGISTERED HOLDER IN ORDER TO CONVERT SHARES OF PREFERRED STOCK)

The undersigned hereby elects to convert the number of shares of Series A Convertible Preferred Stock indicated below into shares of common stock, par value $0.0001 per share (the “Common Stock”), of SRKP 18, Inc., a Delaware corporation (the “Corporation”), according to the conditions hereof, as of the date written below.  If shares are to be issued in the name of a Person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as may be required by the Corporation in accordance with the Subscription Agreement.  No fee will be charged to the Holders for any conversion, except for any such transfer taxes.

Conversion calculations:

           Date to Effect Conversion: _________________________________________________

           Number of shares of Preferred Stock owned prior to Conversion: ___________________

           Number of shares of Preferred Stock to be Converted: ____________________________

           Stated Value of shares of Preferred Stock to be Converted: ________________________

           Number of shares of Common Stock to be Issued: _______________________________

           (Initially 1 share Preferred Stock = 1 share Common Stock)

           Applicable Conversion Price: _______________________________________________

           Number of shares of Preferred Stock subsequent to Conversion: ____________________

[Holder]:

By:

Name:   

Title:

EX-3.4

EXHIBIT 3.4

CERTIFICATE OF OWNERSHIP AND

MERGER MERGING

ZST DIGITAL NETWORKS, INC.

INTO

SRKP 18, INC.

(Pursuant to section 253 of the General Corporation Law of the state of Delaware)

SRKP 18, Inc., (the “Company”) a corporation organized and existing under the laws of the state of Delaware, does hereby certify:

First: That this Company was incorporated on December 7, 2006 pursuant to the General Corporation Law of the state of Delaware.

Second: That this Company owns all of the issued and outstanding shares of stock of ZST Digital Networks, Inc., a corporation organized and existing under the laws of the state of Delaware.

Third: That this Company, by resolutions of its board of directors duly adopted by unanimous written consent on December 11, 2008 determined to merge into itself said ZST Digital Networks, Inc. which resolutions are set forth on Exhibit A, attached hereto and incorporated herein.

Fourth:  The Certificate of Incorporation of the Company is hereby amended by deleting Article I of the Certificate of Incorporation in its present form and substituting therefore new Article I in the following form:  The name of the Company is ZST Digital Networks, Inc.

Fifth:  The merger shall be effective upon filing with the Delaware Secretary of State.

IN WITNESS WHEREOF, SRKP 18, Inc. has caused this Certificate of Merger to be executed by a duly authorized officer this 31st day of December, 2008.

SRKP 18, Inc.
By:	/s/ Richard Rappaport
Name:	Richard Rappaport
Title:	President

Exhibit A

RESOLUTIONS OF MERGER

Name Change

WHEREAS, the Board believes it to be in the best interest of the Company to change its name to ZST Digital Networks, Inc. to better reflect the business of the Company in light of the Share Exchange;

WHEREAS, the Company owns 1,000 shares of common stock of ZST Digital Networks, Inc, constituting 100% of the outstanding common stock of ZST Digital Networks, Inc., the only class of capital stock outstanding;

WHEREAS, Section 253 of the Delaware General Corporation Law (“DGCL”) permits the “short-form” merger into a parent corporation of a subsidiary corporation where at least 90% of the outstanding shares of each class of stock of the subsidiary corporation are owned by the parent corporation by executing, acknowledging and filing, in accordance with Section 103 of the DGCL, a certificate of such ownership and merger setting forth a copy of the resolution of its board of directors to so merge and the date of adoption; and

WHEREAS, the Board believes, based on discussions with, the analysis of, and the recommendation of the Company’s management, and after consideration of the following factors, among others, that it is in the best interest of the Company’s stockholders to effect a short-form merger of Niveous to effectuate a name change to better reflect the Company’s line of business.

NOW, THEREFORE, BE IT RESOLVED, that the form of Certificate of Short Form Merger, (the “Certificate of Merger”), is hereby adopted and approved with such additions, modifications, or deletions as the officers of the Company deem necessary or appropriate and in the best interest of the Company and its stockholders;

RESOLVED FURTHER, that the officers of the Company be, and each of them hereby are, authorized and directed to cause the Certificate of Merger to be filed with the Secretary of State of the State of Delaware; and

RESOLVED FURTHER that the officers of the Company hereby are, and each of them with the full authority to act without the others hereby is, authorized, in the name and on behalf of the Company, to execute and deliver any and all contracts, deeds, and writings of any nature and to do any other act or thing that may be necessary or desirable to carry out the foregoing.

A-1

EX-10.1

EXHIBIT 10.1

SUBSCRIPTION AGREEMENT

SUBSCRIPTION AGREEMENT (“Subscription Agreement”) made as of this [__]th day of [__________], 2008, by and among SRKP 18, Inc., a Delaware corporation (the “Company”); World Orient Universal Limited, a company incorporated under the laws of the British Virgin Islands and upon the Closing Date (as defined below), a wholly-owned subsidiary of the Company (“World Orient”), and the undersigned (the “Subscriber”).

WHEREAS, the Company, World Orient and the shareholders of World Orient are parties to that certain Share Exchange Agreement dated as of December 11, 2008 (the “Exchange Agreement”), pursuant to which World Orient will become a wholly-owned subsidiary of the Company and 100% of the outstanding securities of World Orient will be exchanged for securities in the Company (the “Share Exchange”).  Immediately after the effective time of the Share Exchange (the “Closing Date”), the Company will assume the business and operations of World Orient and its wholly-owned subsidiaries.

WHEREAS, as a condition to the closing of the Share Exchange, the Company intends to obtain subscriptions for the purchase and sale, in a private placement transaction (the “Offering”) pursuant to Regulation D promulgated under the Securities Act of 1933, as amended (the “Act”), of shares of Series A Convertible Preferred Stock (the “Shares”) of the Company, par value $0.0001 per share, convertible into shares of common stock of the Company, par value $0.0001 per share (“Common Stock”) on the terms and conditions hereinafter set forth, and the Subscriber desires to acquire that number of Shares set forth on the signature page hereof.  The Shares and the Common Stock underlying the Shares are together the “Securities.”

NOW, THEREFORE, for and in consideration of the promises and the mutual covenants hereinafter set forth, the parties hereto do hereby agree as follows:

1.             Subscription Procedure

1.1           Subject to the terms and conditions hereinafter set forth, the Subscriber hereby subscribes for and agrees to purchase from the Company such number of Shares as is set forth upon the signature page hereof at a price of $1.60 per Share (the “Purchase Price”).  The Company agrees to sell such Shares to the Subscriber for the Purchase Price.

1.2           The subscription period will begin as of December 9, 2008 and will terminate (if the Closing Date has not earlier occurred) at 5:00 PM Eastern Standard Time on February 10, 2009, unless extended by the Company, World Orient and the Placement Agent (as defined below) for up to an additional 90 days (the “Termination Date”).  The Shares will be offered on a “best efforts” basis as more particularly set forth in a Confidential Private Placement Memorandum and any supplements thereto (the “Offering Memorandum”) which shall supersede in its entirety that Executive Summary dated December 9, 2008.  The final Offering Memorandum will be provided to Subscribers in the Offering no later than one (1) day prior to the Termination Date.   The consummation of the Offering is subject to the satisfaction of a number of conditions to be further described in the Offering Memorandum, one or more of which conditions may not occur.

1.3           Placement of Shares will be made by WestPark Capital, Inc. (the “Placement Agent”), which will receive certain compensation therefore as will be more fully described in the Offering Memorandum.

1.4           The Purchase Price will be placed in escrow pursuant to an escrow agreement (the “Escrow Agreement”) by and among the Placement Agent, the Company and David Kagel, Esq. as escrow agent, and shall be paid over to the Company at the closing of the purchase of the Shares in the Offering (the “Closing”) to occur on the Closing Date.

1.5           The certificates for the Shares bearing the name of the Subscriber will be delivered by the Company no later than thirty (30) days following the Closing Date.  The Subscriber hereby authorizes and directs the Company to deliver the securities to be issued to such Subscriber pursuant to this Subscription Agreement to the residential or business address indicated in the Investor Questionnaire, as attached.

1.6           The Purchase Price for the Shares purchased hereunder shall be paid by certified check, payable to Law Offices of David L. Kagel, a Professional Corporation, as escrow agent, or by wire transfer to Law Offices of David L. Kagel pursuant to the following instructions:

Law Offices of David L. Kagel, a Professional Corporation

Subscription Escrow Account #2

Wells Fargo Bank

1801 Avenue of the Stars

Los Angeles, CA 90067

Account # 9371471510

ABA # 121000248

1.7           The Company and/or World Orient may, in their sole discretion, reject any subscription, in whole or in part, or terminate or withdraw the Offering in its entirety at any time prior to a closing in relation thereto.  Neither the Company nor the Placement Agent shall be required to allocate among investors on a pro rata basis in the event of an over-subscription.

2.           Representations and Covenants of Subscriber

2.1           The Subscriber recognizes that the purchase of Securities involves a high degree of risk in that (i) the Company will need additional capital to operate its business but has no assurance of additional necessary capital; (ii) an investment in the Company is highly speculative and only investors who can afford the loss of their entire investment should consider investing in the Company and the Securities; (iii) an investor may not be able to liquidate his or her investment; (iv) transferability of the securities comprising the Securities is extremely limited; (v) an investor could sustain the loss of his or her entire investment; and (vi) the Company is and will be subject to numerous other risks and uncertainties, including without limitation, significant and material risks relating to the Company’s business and the business and operations of World Orient and its subsidiaries, and the industries, markets and geographic regions in which the Company will compete, as well as risks associated with the Offering, the Share Exchange and the other transactions contemplated herein, in the Offering Memorandum and in the Exchange Agreement, all as more fully set forth herein and in the Offering Memorandum.  For the avoidance of doubt, all references to the Company in this Section 2.1 include the Company’s business and operations after it acquires the business and operations of World Orient and its subsidiaries through the Share Exchange.

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2.2           The Subscriber represents that he or she is an “accredited investor” as such term is defined in Rule 501 of Regulation D promulgated under the Act, as indicated by his or her responses to the Investor Questionnaire, the form of which is attached hereto as Exhibit A, and that he or she is able to bear the economic risk of an investment in the Securities.  The Subscriber must complete the applicable Investor Questionnaire to enable the Company and World Orient to assess the Subscriber’s eligibility for the Offering.

2.3           The Subscriber acknowledges that he or she has prior investment experience, including without limitation, investment in non-listed and non-registered securities, or he or she has employed the services of an investment advisor, attorney or accountant to read all of the documents furnished or made available by the Company or World Orient both to him and to all other prospective investors in the Securities and to evaluate the merits and risks of such an investment on his or her behalf, and that he or she recognizes the highly speculative nature of this investment.

2.4           The Subscriber acknowledges receipt and careful review of the Offering Memorandum, this Subscription Agreement, and the attachments hereto and thereto (collectively, the “Offering Documents”) and hereby represents that he or she has been furnished or given access by the Company or World Orient during the course of this Offering with or to all information regarding the Company and World Orient and their respective financial conditions and results of operations which he or she had requested or desired to know; that all documents which could be reasonably provided have been made available for his or her inspection and review; that he or she has been afforded the opportunity to ask questions of and receive answers from duly authorized representatives of the Company and World Orient concerning the terms and conditions of the Offering, and any additional information which he or she had requested.  The Subscriber further represents and acknowledges that the Subscriber has not seen or received any advertisement or general solicitation with respect to the sale of any of the securities of the Company, including, without limitation, the Securities.

2.5           The Subscriber acknowledges that this Offering of Shares may involve tax consequences, and that the contents of the Offering Documents do not contain tax advice or information.  The Subscriber acknowledges that he or she must retain his or her own professional advisors to evaluate the tax and other consequences of an investment in the Securities.

2.6           The Subscriber acknowledges that this Offering of Shares has not been reviewed or approved by the United States Securities and Exchange Commission (“SEC”) because the Offering is intended to be a nonpublic offering pursuant to Section 4(2) of the Act.  The Subscriber represents that the Securities are being purchased for his or her own account, for investment and not for distribution or resale to others.  The Subscriber agrees that he or she will not sell or otherwise transfer any of the securities comprising the Securities unless they are registered under the Act or unless an exemption from such registration is available and, upon the Company’s request, the Company receives an opinion of counsel reasonably satisfactory to the Company confirming that an exemption from such registration is available for such sale or transfer.

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2.7           The Subscriber understands that the Securities have not been registered under the Act by reason of a claimed exemption under the provisions of the Act which depends, in part, upon his investment intention.  The Subscriber realizes that, in the view of the SEC, a purchase now with the intention to distribute would represent a purchase with an intention inconsistent with his or her representation to the Company, and the SEC might regard such a distribution as a deferred sale to which such exemption is not available.

2.8           The Subscriber understands that Rule 144 (the “Rule”) promulgated under the Act requires, among other conditions, a one year holding period beginning on the date the Company files current “Form 10 Information” (as such term is defined in Rule 144(i)(3)) with the SEC prior to the resale (in limited amounts) of securities acquired in a non-public offering, such as the Offering, without having to satisfy the registration requirements under the Act.  Except as specifically set forth in Section 4.1, the Subscriber understands that the Company makes no representation or warranty regarding its fulfillment in the future of any reporting requirements under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or its dissemination to the public of any current financial or other information concerning the Company, as is required by Rule 144 as one of the conditions of its availability.  The Subscriber consents that the Company may, if it desires, permit the transfer of the Securities out of his or her name only when his or her request for transfer is accompanied by an opinion of counsel reasonably satisfactory to the Company that neither the sale nor the proposed transfer results in a violation of the Act, any applicable state “blue sky” laws or any applicable securities laws of any other country, province or jurisdiction (collectively, “Securities Laws”).  The Subscriber agrees to hold the Company, World Orient and their respective directors, officers and controlling persons and their respective heirs, representatives, successors and assigns harmless and to indemnify them against all liabilities, costs and expenses incurred by them as a result of any misrepresentation made by him contained herein or in the Investor Questionnaire or any sale or distribution by the undersigned Subscriber in violation of any Securities Laws.

2.9           The Subscriber consents to the placement of one or more legends on any certificate or other document evidencing his or her Shares and the Common Stock underlying the Shares stating that they have not been registered under the Act and are subject to the terms of this Subscription Agreement, and setting forth or referring to the restrictions on the transferability and sale thereof.

2.10           The Subscriber understands that the Company and World Orient will review this Subscription Agreement and the Investor Questionnaire and, if the Subscriber is a natural person, the Company and World Orient are hereby given authority by the undersigned to call his or her bank or place of employment. The Subscriber further authorizes the Company and World Orient to review the financial standing of the Subscriber; and the Subscriber agrees that the Company and World Orient reserve the unrestricted right to reject or limit any subscription and to close the offer at any time.

2.11           The Subscriber hereby represents that the address of Subscriber furnished by him at the end of this Subscription Agreement and in the Investor Questionnaire is the undersigned’s principal residence if he or she is an individual or its principal business address if it is a corporation or other entity.

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2.12           The Subscriber acknowledges that if the Subscriber is a Registered Representative of a Financial Industry Regulatory Authority (“FINRA”) member firm, he or she must give such firm the notice required by the FINRA Conduct Rules, or any applicable successor rules of the FINRA, receipt of which must be acknowledged by such firm on the signature page hereof.  The Subscriber shall also notify the Company if the Subscriber or any affiliate of Subscriber is a registered broker-dealer with the SEC, in which case the Subscriber represents that the Subscriber is purchasing the Securities in the ordinary course of business and, at the time of purchase of the Securities, has no agreements or understandings, directly or indirectly, with any person to distribute the Securities or any portion thereof.

2.13           The Subscriber hereby represents that, except as set forth in the Offering Documents, no representations or warranties have been made to the Subscriber by either the Company or World Orient or their agents, employees or affiliates and in entering into this transaction, the Subscriber is not relying on any information, other than that contained in the Offering Documents and the results of independent investigation by the Subscriber.

2.14           The Subscriber agrees that he or she will purchase securities in the Offering only if his or her intent at such time is to make such purchase for investment purposes and not with a view toward resale.

2.15           If the undersigned Subscriber is a partnership, corporation, trust or other entity, such partnership, corporation, trust or other entity further represents and warrants that:  (i) it was not formed for the purpose of investing in the Company; (ii) it is authorized and otherwise duly qualified to purchase and hold the Securities; and (iii) that this Subscription Agreement has been duly and validly authorized, executed and delivered and constitutes the legal, binding and enforceable obligation of the undersigned.

2.16           If the Subscriber is not a United States person, such Subscriber hereby represents that it has satisfied itself as to the full observance of the laws of its jurisdiction in connection with any invitation to subscribe for the Shares or any use of this Subscription Agreement, including (i) the legal requirements within its jurisdiction for the purchase of the Shares, (ii) any foreign exchange restrictions applicable to such purchase, (iii) any governmental or other consents that may need to be obtained, and (iv) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale or transfer of the Securities.  Such Subscriber’s subscription and payment for, and his or her continued beneficial ownership of the Securities, will not violate any applicable securities or other laws of the Subscriber’s jurisdiction.

2.17           The undersigned hereby covenants and agrees that neither it nor any of its affiliates has or will have an open position (e.g., short sale) in the Common Stock prior to the Registration Statement (as defined below) being declared effective by the SEC with the intent of covering such open position with Common Stock being registered in the Registration Statement.  The undersigned hereby acknowledges and understands that the SEC has taken the position that such an open position would constitute a violation of Section 5 of the Act.

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2.18           The Subscriber acknowledges that (i) the Offering Memorandum contains material, non-public information concerning the Company within the meaning of Regulation FD promulgated by the SEC, and (ii) the Subscriber is obtaining such material, non-public information solely for the purpose of considering whether to purchase the Shares pursuant to a private placement that is exempt from registration under the Act.  In accordance with Regulation FD and other applicable provisions of the Securities Laws, the Subscriber agrees to keep such information confidential and not to disclose it to any other person or entity except the Subscriber’s legal counsel, other advisors and other representatives who have agreed (i) to keep such information confidential, (ii) to use such information only for the purpose set forth above, and (iii) to comply with applicable securities laws with respect to such information.  In addition, the Subscriber further acknowledges that the Subscriber and such legal counsel, other advisors and other representatives are prohibited from trading in the Company’s securities while in possession of material, non-public information and agrees to refrain from purchasing or selling securities of the Company until such material, non-public information has been publicly disseminated by the Company.  The Subscriber agrees to indemnify and hold harmless the Company, World Orient and their respective officers, directors, employees and affiliates and each other person, if any, who controls any of the foregoing, against any loss, liability, claim, damage and expense whatsoever (including, but not limited to, any and all expenses whatsoever reasonably incurred in investigating, preparing or defending against any litigation commenced or threatened or any claim whatsoever) arising out of or based upon any false representation or warranty by the Subscriber, or the Subscriber’s breach of, or failure to comply with, any covenant or agreement made by the Subscriber herein or in any other document furnished by the Subscriber to the Company, World Orient or their respective officers, directors, employees or affiliates or each other person, if any, who controls any of the foregoing in connection with this transaction.

2.19           The Subscriber understands and acknowledges that (i) the Securities are being offered and sold to Subscriber without registration under the Act in a private placement that is exempt from the registration provisions of the Act under Section 4(2) of the Act and (ii) the availability of such exemption depends in part on, and that the Company will rely upon the accuracy and truthfulness of, the foregoing representations, and such Subscriber hereby consents to such reliance.

3.           Representations by the Company and World Orient

Except as set forth in the reports filed by the Company pursuant to the Exchange Act (the “SEC Reports”), each of the Company and, as applicable, World Orient severally represent and warrant to the Subscriber that:

3.1           Organization and Authority.  The Company and World Orient, and each of their respective subsidiaries, (i) is a corporation and company, respectively, validly existing and in good standing under the laws of the jurisdiction of its incorporation and formation, respectively, (ii) has all requisite corporate power and company power, respectively, and authority to own, lease and operate its properties and to carry on its business as presently conducted, and (iii) has all requisite corporate power and company power, respectively, and authority to execute, deliver and perform their obligations under this Subscription Agreement and the Offering Documents being executed and delivered by it in connection herewith, and to consummate the transactions contemplated hereby and thereby.

3.2           Qualifications.  The Company and World Orient, and each of their respective subsidiaries, is duly qualified to do business as a foreign corporation and foreign company, respectively, and is in good standing in all jurisdictions where such qualification is necessary and where failure so to qualify could have a material adverse effect on the business, properties, operations, condition (financial or other), results of operations or prospects of the Company and its subsidiaries (after the effective time of the Share Exchange), taken as a whole.

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3.3           Capitalization of the Company.  Immediately after the effective time of the Share Exchange (but before the closing of this Offering), the authorized capital stock of the Company will consist of 100,000,000 shares of Common Stock, $0.0001 par value per share, and 5,000,000 shares of Series A Convertible Preferred Stock, $0.0001 par value per share, and 5,000,000 shares of “blank check” Preferred Stock, par value $0.0001 per share.  Of the authorized capital stock of the Company, immediately after the effective time of the Share Exchange (but before the closing of this Offering) there will be outstanding  9,081,000 shares of Common Stock and warrants to purchase 7,096,390 shares of Common Stock at an exercise price of $0.0001, and no options to purchase shares of Common Stock.  Except as disclosed in the SEC Reports or the Offering Documents, there are no additional outstanding options, warrants, script 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 from the Company, any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company or any subsidiary is or may become bound to issue additional shares of Common Stock, or securities or rights convertible or exchangeable into shares of Common Stock. Except as described in the Offering Documents, the issuance and sale of the Shares will not obligate the Company to issue shares of Common Stock or other securities to any person (other than the Subscribers) 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.  The shares of the Company’s capital stock outstanding immediately after the effective time of the Share Exchange (but before the closing of the Offering) are or will be duly authorized and validly issued and are or will be fully paid and nonassessable.  None of the outstanding shares of Common Stock or options, warrants, or rights or other securities entitling the holders to acquire Common Stock has been issued in violation of the preemptive rights of any security holder of the Company.  No holder of any of the Company’s securities has any rights, “demand,” “piggy-back” or otherwise, to have such securities registered by reason of the intention to file, filing or effectiveness of the Registration Statement (as defined below), except as contemplated by the Exchange Agreement.  The Shares to be issued to the Subscriber have been duly authorized, and when issued and paid for in accordance with this Subscription Agreement, the Common Stock will be duly and validly issued, fully paid and non-assessable will be duly and validly issued, fully paid and non-assessable.

3.4           Authorization.  The Offering Documents have been duly and validly authorized by the Company and World Orient.  This Subscription Agreement, assuming due execution and delivery by the Subscriber, when the Subscription Agreement is executed and delivered by the Company, will be, valid and binding obligations of the Company, enforceable in accordance with their respective terms, except as the enforceability hereof and thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to or affecting creditors’ rights generally and general principles of equity, regardless of whether enforcement is considered in a proceeding in equity or at law.

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3.5           Non-Contravention.  The execution and delivery of the Offering Documents by the Company and World Orient, the issuance of the Shares as contemplated by the Offering Documents and the completion by the Company and World Orient of the other transactions contemplated by the Offering Documents do not and will not, with or without the giving of notice or the lapse of time, or both, (i) result in any violation of any provision of the articles of incorporation or by-laws or similar instruments of the Company or World Orient or their respective subsidiaries, (ii) conflict with or result in a breach by the Company or World Orient or their respective subsidiaries of any of the terms or provisions of, or constitute a default under, or result in the modification of, or result in the creation or imposition of any lien, security interest, charge or encumbrance upon any of the properties or assets of the Company or World Orient or their respective subsidiaries, pursuant to any agreements, instruments or documents filed as exhibits to the SEC Reports or any indenture, mortgage, deed of trust or other agreement or instrument to which World Orient or any of its subsidiaries is a party or by which World Orient or any of its subsidiaries or any of its properties or assets are bound or affected, in any such case which would have a material adverse effect on the business, properties, operations, condition (financial or other), results of operations or prospects of the Company and World Orient and their respective subsidiaries, taken as a whole, or the validity or enforceability of, or the ability of the Company or World Orient to perform their obligations under, the Offering Documents, (iii) violate or contravene any applicable law, rule or regulation or any applicable decree, judgment or order of any court, United States federal or state regulatory body, administrative agency or other governmental body having jurisdiction over World Orient or any of its subsidiaries or any of its respective properties or assets that would have a material adverse effect on the business, properties, operations, condition (financial or other), results of operations or prospects of the Company and its subsidiaries (after the effective time of the Share Exchange), taken as a whole, or the validity or enforceability of, or the ability of the Company or World Orient to perform its obligations under, the Offering Documents, or (iv) have any material adverse effect on any permit, certification, registration, approval, consent, license or franchise necessary for the Company or its subsidiaries (after the effective time of the Share Exchange) to own or lease and operate any of its properties and to conduct any of its business or the ability of the Company or its subsidiaries to make use thereof.

3.6           Information Provided.  The Company hereby represents and warrants to the Subscriber that the information set forth in the Offering Memorandum, the SEC Reports and any other document provided by the Company (or the Company’s authorized representatives) to the Subscriber in connection with the transactions contemplated by this Subscription Agreement, does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading, it being understood that for purposes of this Section 3.6, any statement contained in such information shall be deemed to be modified or superseded for purposes of this Section 3.6 to the extent that a statement in any document included in such information which was prepared and furnished to the Subscriber on a later date or filed with the SEC on a later date modifies or replaces such statement, whether or not such later prepared and furnished or filed statement so states.  World Orient hereby represents and warrants to the Subscriber that the information set forth in the Offering Memorandum and any other document provided by World Orient (or World Orient’s authorized representatives) to the Subscriber in connection with the transactions contemplated by this Subscription Agreement, does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading.

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3.7           Absence of Certain Proceedings.  Except as disclosed in the SEC Reports, neither the Company nor World Orient is aware of any action, suit, proceeding, inquiry or investigation before or by any court, public board or body, or governmental agency pending or threatened against or affecting the Company or World Orient or any of their respective subsidiaries, in any such case wherein an unfavorable decision, ruling or finding would have a material adverse effect on the business, properties, operations, condition (financial or other), results of operations or prospects of the Company or World Orient, or the transactions contemplated by the Offering Documents or which could adversely affect the validity or enforceability of, or the authority or ability of the Company or World Orient to perform its obligations under, the Offering Documents; and to the Company’s and World Orient’s knowledge there is not pending or contemplated any, and there has been no, investigation by the SEC involving the Company or World Orient or any of their current or former directors or officers.

3.8           Compliance with Law.  Neither the Company nor World Orient nor any of their respective subsidiaries is in violation of or has any liability under any statute, law, rule, regulation, ordinance, decision or order of any governmental agency or body or any court, domestic or foreign, except where such violation or liability would not individually or in the aggregate have a material adverse effect on the business, properties, operations, condition (financial or other), results of operations or prospects of the Company and its subsidiaries (after the effective time of the Share Exchange), taken as a whole; and to the knowledge of the Company and World Orient there is no pending investigation that would reasonably be expected to lead to such a claim.

3.9           Tax Matters.  The Company and World Orient and each of their respective subsidiaries has filed all federal, state and local income and franchise tax returns required to be filed and has paid all taxes shown by such returns to be due, and no tax deficiency has been determined adversely to the Company or World Orient or any of their respective subsidiaries which has had (nor does the Company or World Orient or any of their respective subsidiaries have any knowledge of any tax deficiency which, if determined adversely to the Company or World Orient or any of their respective subsidiaries, might have) a material adverse effect on the business, properties, operations, condition (financial or other), results of operations, or prospects of the Company or any of its subsidiaries (after the effective time of the Share Exchange), taken as a whole.

4.           Registration Rights

4.1           Registration Requirement.  Subject to the terms and limitations hereof, the Company shall file a registration statement on Form S-1 or other appropriate registration document under the Act (the “Registration Statement”) for resale of the Common Stock underlying the Shares, all shares held by the shareholders of the Company immediately prior to the Closing Date (the “Registrable Securities”) and shall use its reasonable best efforts to maintain the Registration Statement effective for a period of twenty-four (24) months at the Company’s expense (the “Effectiveness Period”).  The Company shall file such Registration Statement no later than sixty (60) days after the Closing Date (the “Registration Filing Date”), and shall use reasonable best efforts to cause such Registration Statement to become effective within one hundred and fifty (150) days after the Closing Date, or one hundred eighty (180) days after the Closing Date if the Registration Statement is subject to a full review by the SEC.

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4.2           Limitation to Registration Requirement.  Notwithstanding the foregoing, the Company shall not be obligated to effect any registration of the Registrable Securities or take any other action pursuant to this Section 4: (i) in any particular jurisdiction in which the Company would be required to execute a general consent to service of process in effecting such registration, qualification or compliance unless the Company is already subject to service in such jurisdiction and except as may be required by the Act, or (ii) during any period in which the Company suspends the rights of a subscriber after giving the Subscriber written notification of a Potential Material Event (defined below) pursuant to Section 4.6 hereof.

4.3           Expenses of Registration.  Except as otherwise expressly set forth, the Company shall bear all expenses incurred by the Company in compliance with the registration obligation of the Company, including, without limitation, all registration and filing fees, printing expenses, fees and disbursements of counsel for the Company incurred in connection with any registration, qualification or compliance pursuant to this Subscription Agreement and all underwriting discounts, selling commissions and expense allowances applicable to the sale of any securities by the Company for its own account in any registration.  All underwriting discounts, selling commissions and expense allowances applicable to the sale by Subscriber of Registrable Securities and all fees and disbursements of counsel for the Subscriber shall be borne by the Subscriber.

4.4           Indemnification.

(a)           To the extent permitted by law the Company will indemnify each Subscriber, each of its officers, directors, agents, employees and partners, and each person controlling such Subscriber, with respect to each registration, qualification or compliance effected pursuant to this Subscription Agreement, and each underwriter, if any, and each person who controls any underwriter, and their respective counsel against all claims, losses, damages and liabilities (or actions, proceedings or settlements in respect thereof) arising out of or based on (i) any untrue statement (or alleged untrue statement) of a material fact contained in any prospectus, offering circular or other document prepared by the Company (including any related registration statement, notification or the like) incident to any such registration, qualification or compliance, or (ii) any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or any violation by the Company of the Act or any rule or regulation thereunder applicable to the Company and relating to action or inaction required of the Company in connection with any such registration, qualification or compliance, and subject to the provisions of Section 4.4(c) below, will reimburse each such Subscriber, each of its officers, directors, agents, employees and partners, and each person controlling such Subscriber, each such underwriter and each person who controls any such underwriter, for any legal and any other expenses as they are reasonably incurred in connection with investigating and defending any such claim, loss, damage, liability or action, provided that the Company will not be liable in any such case to the extent that any such claim, loss, damage, liability or expense arises out of or is based on any untrue statement (or alleged untrue statement) or omission (or alleged omissions) based upon written information furnished to the Company by (or on behalf of) such Subscriber or underwriter, or if the person asserting any such loss, claim, damage or liability (or action or proceeding in respect thereof) did not receive a copy of an amended preliminary prospectus or the final prospectus (or the final prospectus as amended and supplemented) at or before the written confirmation of the sale of such Registrable Securities to such person because of the failure of the Subscriber or underwriter to so provide such amended preliminary or final prospectus (or the final prospectus as amended and supplemented); provided, however, that the indemnity agreement contained in this subsection shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable in any such case for any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon a violation which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by the Subscriber, any such partner, officer, director, employee, agent or controlling person of such Subscriber, or any such underwriter or any person who controls any such underwriter; provided, however, that the obligations of the Company hereunder shall be limited to an amount equal to the portion of net proceeds represented by the Registrable Securities pursuant to this Subscription Agreement.

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(b)           To the extent permitted by law, each Subscriber whose Registrable Securities are included in any registration, qualification or compliance effected pursuant to this Subscription Agreement will indemnify the Company, and its directors, officers, agents, employees and each underwriter, if any, of the Company’s securities covered by such a registration statement, each person who controls the Company or such underwriter within the meaning of the Act and the rules and regulations thereunder, each other such Subscriber and each of their officers, directors, partners, agents and  employees, and each person controlling such Subscriber, and their respective counsel against all claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any such registration statement, prospectus, offering circular or other document, or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the Company and such Subscribers, directors, officers, partners, persons, underwriters or control persons for any legal or any other expenses as they are reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability or action, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such registration statement, prospectus, offering circular or other document in reliance upon and in conformity with written information furnished to the Company by such Subscriber; provided, however, that the obligations of any Subscriber hereunder shall be limited to an amount equal to the net proceeds to such Subscriber from Registrable Securities sold under such registration statement, prospectus, offering circular or other document as contemplated herein; provided, further, that the indemnity agreement contained in this subsection shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Subscriber, which consent shall not be unreasonably withheld or delayed.

(c)               Each party entitled to indemnification under this Section (the “Indemnified Party”) shall give notice to the party required to provide indemnification (the “Indemnifying Party”) promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom, provided that counsel for the Indemnifying Party, who shall conduct the defense of such claim or any litigation resulting therefrom, shall be approved by the Indemnified Party (whose approval shall not unreasonably be withheld), and the Indemnified Party may participate in such defense at such party’s expense; and provided further that if any Indemnified Party reasonably concludes that there may be one or more legal defenses available to it that are not available to the Indemnifying Party, or that such claim or litigation involves or could have an effect on matters beyond the scope of this Subscription Agreement, then the Indemnified Party may retain its own counsel at the expense of the Indemnifying Party; and provided further that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Subscription Agreement unless and only to the extent that such failure to give notice results in material prejudice to the Indemnifying Party.  No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement 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.  Each Indemnified Party shall furnish such information regarding itself or the claim in question as an Indemnifying Party may reasonably request in writing and as shall be reasonably required in connection with defense of such claim and litigation resulting therefrom.

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(d)               If the indemnification provided for in this Section is held by a court of competent jurisdiction to be unavailable to an Indemnified Party with respect to any loss, liability, claim, damage or expense referred to herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified Party hereunder, shall contribute to the amount paid or payable by such Indemnified Party as a result of such loss, liability, claim, damage or expense in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand and of the Indemnified Party on the other in connection with the statements or omissions which resulted in such loss, liability, claim, damage or expense as well as any other relevant equitable considerations.  The relative fault of the Indemnifying Party and of the Indemnified Party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the Indemnifying Party or by the Indemnified Party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

4.5           Transfer or Assignment of Registration Rights. The Registrable Securities, and any related benefits to the Subscriber hereunder may be transferred or assigned by the Subscriber to a permitted transferee or assignee, provided that the Company is given written notice of such transfer or assignment, stating the name and address of said transferee or assignee and identifying the Registrable Securities with respect to which such registration rights are being transferred or assigned; provided further that the transferee or assignee of such Registrable Securities shall be deemed to have assumed the obligations of the Subscriber under this Subscription Agreement by the acceptance of such assignment and shall, upon request from the Company, evidence such assumption by delivery to the Company of a written agreement assuming such obligations of the Subscriber.

4.6           Registration Procedures.  In the case of the registration effected by the Company pursuant to this Subscription Agreement, the Company will keep the Subscriber advised in writing as to the initiation of each registration and as to the completion thereof.  The Company will:

(a)           Prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Act with respect to the disposition of securities covered by such registration statement;

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(b)           Respond as promptly as reasonably practicable to any comments received from the SEC with respect to a registration statement or any amendment thereto.

(c)           Notify the Subscriber as promptly as reasonably practicable and (if requested by any such person) confirm such notice in writing no later than one (1) trading day following the day (A) when a prospectus or any prospectus supplement or post-effective amendment to a registration statement is proposed to be filed and (B) with respect to a registration statement or any post-effective amendment, when the same has become effective;

(d)           Furnish such number of prospectuses and other documents incident thereto, including supplements and amendments, as the Subscriber may reasonably request;

(e)           Furnish to the Subscriber, upon request, a copy of all documents filed with and all correspondence from or to the SEC in connection with any such registration statement other than non-substantive cover letters and the like;

(f)           Use its reasonable best efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order suspending the effectiveness of a registration statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, at the earliest practicable moment; and

(g)           Use its reasonable best efforts to comply with all applicable rules and regulations of the SEC.

Notwithstanding the foregoing, if at any time or from time to time after the date hereof, the Company notifies the Subscriber in writing of the existence of an event or circumstance that is not disclosed in the Registration Statement and that may have a material effect on the Company or its business (a “Potential Material Event”), the Subscriber shall not offer or sell any Registrable Securities, or engage in any other transaction involving or relating to the Registrable Securities, from the time of the giving of notice with respect to a Potential Material Event until the Company notifies the Subscriber that such Potential Material Event either has been added to the Registration Statement by amendment or supplement or no longer constitutes a Potential Material Event; provided, that the Company may not so suspend the right of Subscriber for more than one hundred and twenty (120) days in the aggregate.

4.7           Statement of Beneficial Ownership.  The Company may require the Subscriber to furnish to the Company a certified statement as to the number of shares of Common Stock beneficially owned by such Subscriber and the controlling person thereof and any other such information regarding the Subscriber, the Registrable Securities held by the Subscriber and the intended method of disposition of such securities as shall be reasonably required with respect to the registration of the Subscriber’s Registrable Securities.  The Subscriber hereby understands and agrees that the Company may, in its sole discretion, exclude the Subscriber’s shares of Common Stock from the Registration Statement in the event that the Subscriber fails to provide such information requested by the Company within the time period reasonably specified by the Company or is required to do so by law or the SEC.

4.8           Compliance.  Subscriber covenants and agrees that if the Shares are sold under a registration statement, that the Shares will only be disposed of pursuant to an effective statement  under, and in compliance with the requirements of, the Act, including in accordance with the plan of distribution set forth in the registration statement and in compliance with the prospectus delivery requirements of the Act as applicable to such Subscriber in connection with sales of Registrable Securities pursuant to the registration statement required hereunder.  Subscriber understands and acknowledges that the Company and the Company’s counsel may rely on the statements and covenants made in this Section for purposes of providing a legal opinion to the transfer agent for removal of a restrictive legend under the Act.

13

4.9           Piggy-Back Registrations.  If at any time during the Effectiveness Period there is not an effective registration statement covering all of the Registrable Securities and the Company shall determine to prepare and file with the SEC a registration statement relating to an offering for its own account or the account of others under the Act of any of its Common Stock, other than an offering of securities issued pursuant to a Strategic Issuance (as defined below) and other than a Form S-4 or Form S-8 registration statement (each as promulgated under the Act or their then equivalents relating to equity securities to be issued solely in connection with any business combination transaction, acquisition of any entity or business or equity securities issuable in connection with stock option or other employee benefit plans), then the Company shall send to the  Subscriber (together with any other holders of its Common Stock possessing “piggyback registration rights” comparable to those granted to the Subscriber hereunder (“Rightsholders”)) written notice of such determination and, if within fifteen (15) days after receipt of such notice, the Subscriber shall so request in writing, the Company shall include in such registration statement all or any part of such Registrable Securities such Subscriber requests to be registered; provided that the Company shall not be required to register any Registrable Securities pursuant to this Section that are eligible for resale pursuant to Rule 144 promulgated under the Act; and provided further that the Company may, without the consent of the Subscriber, withdraw such registration statement before its becoming effective if the Company or other stockholders have elected to abandon the proposal to register the securities proposed to be registered thereunder.  If the registration statement is being filed for an underwritten public offering, the Subscriber must timely execute and deliver the usual and customary agreement among the Company, such Subscriber and the underwriters relating to the registration including a lock-up agreement if requested by the underwriters with respect to any shares of Common Stock not included in the registration, on terms no less favorable than those agreed to by the Company, its directors and its officers.  If the registration statement is being filed for an underwritten offer and sale by the Company of securities for its own account and the managing underwriters advise the Company in writing that in their opinion the offering contemplated by the registration statement cannot be successfully completed if the Company were to also register the Registrable Shares of the Subscriber requested to be included in such registration statement, then the Company will include in the registration: (i) first, any securities the Company proposes to sell, (ii) second, any securities of any person whose securities are being registered as a result of the exercise of a demand registration right, and (iii) third, that portion of the aggregate number of shares being requested for inclusion in the registration statement by (X) the Subscriber and (Y) all other Rightsholders, which in the opinion of such managing underwriters can successfully be sold, such number of shares to be taken pro rata from the Rightsholders on the basis of the total number of shares being requested for inclusion in the registration statement by each Rightsholder.  “Strategic Issuance” shall mean an issuance of securities: (i) in connection with a “corporate partnering” transaction or a “strategic alliance” (as determined by the Board of Directors of the Company in good faith); (ii) in connection with any financing transaction in respect of which the Company is a borrower; or (iii) to a vendor, lessor, lender, or customer of the Company, or a research, manufacturing or other commercial collaborator of the Company, in a transaction approved by the Board of Directors, provided in any case, that such issuance is not being made primarily for the purpose of avoiding compliance with this Subscription Agreement.

14

4.10           “Lock-Up” Agreement.  The Subscriber agrees that, during the period from the date hereof until that date that is fourteen (14) months following the date on which the Company's Common Stock begins to be listed or quoted on either the New York Stock Exchange, NYSE Alternext (formerly the American Stock Exchange), NASDAQ Global Market, NASDAQ Capital Market or the OTC Bulletin Board (the "Listing Date") that, it, he or she shall not, directly or indirectly sell, assign, exchange, distribute, offer to sell, contract to sell (including, without limitation, any short sale), hypothecate, pledge, grant any option to purchase or otherwise transfer or dispose of any Shares of the Company held by it, him or her and purchased further to this Subscription Agreement, at any time during such period, except that one-twelfth (1/12) of the Shares acquired hereunder shall be automatically released from this lock-up provision on the date that is ninety (90) days after the Listing Date (the “Initial Release Date”) and then the Shares will be released every thirty (30) days after the Initial Release Date on a pro rata basis over the eleven (11) months following the Initial Release Date.  WestPark Capital, Inc., in its discretion, may release some or all the Shares earlier than the schedule set forth in this Section. In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to and place restrictive legends on the certificates evidencing the Shares of the Company, and the Subscriber agrees to further execute a lock-up agreement which encompasses the terms of this Section 4.10, in substantially the form attached hereto as Exhibit B.

5.           Miscellaneous

5.1           Any notice or other communication given hereunder shall be deemed sufficient if in writing and sent by registered or certified mail, return receipt requested, addressed to the Company, at Zhengzhou Shenyang Technology Company Limited, Building 28, Huzhu Road, Zhongyuan District, Zhengzhou, People’s Republic of China, Attention: Zhong Bo with a copy to (which shall not constitute notice) K&L Gates LLP, 10100 Santa Monica Blvd., Seventh Floor, Los Angeles, California 90067, Attention: Thomas J. Poletti, Esq., and to the Subscriber at his address indicated on the signature page of this Subscription Agreement.  Notices shall be deemed to have been given three (3) business days after the date of mailing, except notices of change of address, which shall be deemed to have been given when received.

5.2           This Subscription Agreement may be amended through a written instrument signed by the Subscriber, World Orient and the Company; provided, however, that the terms of Section 4 of this Subscription Agreement may be amended without the consent or approval of the Subscriber so long as such amendment applies in the same fashion to the subscription agreements of all of the other subscribers for Shares in the Offering and at least holders of a majority of the Shares sold in the Offering have given their approval of such amendment, which approval shall be binding on all holders of Shares.

5.3           This Subscription Agreement shall be binding upon and inure to the benefit of the parties hereto and to their respective heirs, legal representatives, successors and assigns.  This Subscription Agreement sets forth the entire agreement and understanding between the parties as to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings of any and every nature among them.

15

5.4           Notwithstanding the place where this Subscription Agreement may be executed by any of the parties hereto, the parties expressly agree that all the terms and provisions hereof shall be construed in accordance with and governed by the laws of the State of Delaware.

5.5           This Subscription Agreement may be executed in counterparts.  It shall not be binding upon the Company and World Orient unless and until it is accepted by the Company and World Orient.  Upon the execution and delivery of this Subscription Agreement by the Subscriber, this Subscription Agreement shall become a binding obligation of the Subscriber with respect to the purchase of Shares as herein provided; subject, however, to the right hereby reserved to the Company to enter into the same agreements with other subscribers and to add and/or to delete other persons as subscribers.  This Subscription Agreement may be executed and delivered by facsimile or by scanned email.

5.6           The holding of any provision of this Subscription Agreement to be invalid or unenforceable by a court of competent jurisdiction shall not affect any other provision of this Subscription Agreement, which shall remain in full force and effect.

5.7           It is agreed that a waiver by either party of a breach of any provision of this Subscription Agreement shall not operate, or be construed, as a waiver of any subsequent breach by that same party.

5.8           The parties agree to execute and deliver all such further documents, agreements and instruments and take such other and further action as may be necessary or appropriate to carry out the purposes and intent of this Subscription Agreement.

5.9           The Company agrees not to disclose the names, addresses or any other information about the Subscribers, except as required by law, provided that the Company may provide information relating to the Subscriber as required in any registration statement under the Act that may be filed by the Company pursuant to the requirements of this Subscription Agreement.

5.10           The obligation of the Subscriber hereunder is several and not joint with the obligations of any other subscribers for the purchase of Shares in the Offering (the “Other Subscribers”), and the Subscriber shall not be responsible in any way for the performance of the obligations of any Other Subscribers.  Nothing contained herein or in any other agreement or document delivered at the Closing, and no action taken by the Subscriber pursuant hereto, shall be deemed to constitute the Subscriber and the Other Subscribers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Subscriber and the Other Subscribers are in any way acting in concert with respect to such obligations or the transactions contemplated by this Subscription Agreement.  The Subscriber shall be entitled to protect and enforce the Subscriber’s rights, including without limitation the rights arising out of this Subscription Agreement, and it shall not be necessary for any Other Subscriber to be joined as an additional party in any proceeding for such purpose.  The language used in this Subscription Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.  The Subscriber is not acting as part of a “group” (as that term is used in Section 13(d) of the Exchange Act) in negotiating and entering into this Subscription Agreement or purchasing the Shares or acquiring, disposing of or voting any of the underlying shares of Common Stock.  The Company hereby confirms that it understands and agrees that the Subscriber is not acting as part of any such group.

16

[SIGNATURE PAGE FOLLOWS]

17

IN WITNESS WHEREOF, the parties have executed this Subscription Agreement as of the day and year first written above.

Full Legal  Name of Subscriber (Please print)	Full Legal  Name of Co-Subscriber (if applicable)
Signature of (or on behalf of) Subscriber	Signature of or on behalf of Co-Subscriber (if applicable)
Name:
Title:
Address of Subscriber	Address of Co-Subscriber (if applicable)
Social Security or Taxpayer	Social Security or Taxpayer Identification
Identification Number of Subscriber	Number of Co-Subscriber (if applicable)
Number of Shares Subscribed For

Subscription Agreed to and Accepted

SRKP 18, INC.	WORLD ORIENT UNIVERSAL LIMITED
By:	By:
Name:	Name:
Title:	Title:

18

Exhibit A-1

Corporate Investor Questionnaire

Name:

IMPORTANT:

Please Complete

CORPORATE INVESTOR QUESTIONNAIRE

SRKP 18, INC.

WORLD ORIENT UNIVERSAL LIMITED

SRKP 18, Inc.

1900 Avenue of the Stars, Suite 310

Los Angeles, CA 90067

Attn:  Richard Rappaport

World Orient Universal Limited

c/o Zhengzhou Shenyang Technology Company Limited

Building 28, Huzhu Road

Zhongyuan District, Zhengzhou

People’s Republic of China

Attn: Zhong Bo

The information contained in this Corporate Investor Questionnaire is being furnished in order to determine whether the undersigned Corporation’s subscription to purchase shares of Series A Convertible Preferred Stock (the “Shares”) of SRKP 18, Inc. (the “Company”) may proceed.

This Questionnaire should be completed, signed, dated and a copy should be sent to WestPark Capital, Inc. (the “Placement Agent”) via facsimile at (323) 443-3531 or via electronic format (e.g., PDF) to dcabo@wpcapital.com and the original delivered to WestPark Capital, Inc. at 1900 Avenue of the Stars, Suite 310, Los Angeles, CA 90067, Attention: Diane Cabo.  Please keep a copy for your files.

A-1 (1)

ALL INFORMATION CONTAINED IN THIS QUESTIONNAIRE WILL BE TREATED CONFIDENTIALLY.  The undersigned Corporation understands, however, that the Company may present this Questionnaire to such parties as it deems appropriate if called upon to establish that the proposed offer and sale of the Shares in the Company is exempt from registration under the Securities Act of 1933, as amended, or meets the requirements of applicable state securities or “blue sky” laws.  Further, the undersigned Corporation understands that the offering required to be reported to the Securities and Exchange Commission and to various state securities or “blue sky” regulators.

I. PLEASE CHECK ANY OF STATEMENTS 1-3 BELOW THAT APPLY TO THE CORPORATION.

¨ 1. Each of the shareholders of the undersigned Corporation is able to certify that such shareholder meets at least one of the following two conditions:

(a) The shareholder is a natural person whose individual net worth* or joint net worth with his or her spouse exceeds $1,000,000; or

(b) The shareholder is a natural person who had an individual income* in excess of $200,000 in each of the previous two years and who reasonably expects an individual income in excess of $200,000 this year.

¨ 2. Each of the shareholders of the undersigned Corporation is able to certify that such shareholder is a natural person who, together with his or her spouse, has had a joint income in excess of $300,000 in each of the previous two years and who reasonably expects a joint income in excess of $300,000 this year.

¨ 3. The undersigned Corporation: (a) was not formed for the specific purpose of acquiring the Shares; and (b) has total assets in excess of $5,000,000.

* For purposes of this Questionnaire, the term “net worth” means the excess of total assets over total liabilities. In determining income, an investor should add to his or her adjusted gross income any amounts attributable to tax-exempt income received, losses claimed as a limited partner in any limited partnership, deductions claimed for depletion, contributions to IRA or Keogh retirement plans, alimony payments and any amount by which income from long-term capital gains has been reduced in arriving at adjusted gross income.

A-1 (2)

IF YOU CHECKED STATEMENT 1 OR STATEMENT 2 IN SECTION I, ABOVE, AND DID NOT CHECK STATEMENT 3, YOU MUST PROVIDE A LETTER SIGNED BY AN OFFICER OF THE UNDERSIGNED CORPORATION LISTING THE NAME OF EACH SHAREHOLDER AND THE REASON (UNDER STATEMENT 1 OR STATEMENT 2) WHY SUCH SHAREHOLDER QUALIFIES AS AN ACCREDITED INVESTOR (ON THE BASIS OF NET WORTH, INDIVIDUAL INCOME OR JOINT INCOME), OR EACH SHAREHOLDER MUST PROVIDE A COMPLETED INDIVIDUAL INVESTOR QUESTIONNAIRE (PAGES A-1 (2) TO A-1 (6)).

II.           OTHER CERTIFICATIONS

By signing the Signature Page, the undersigned certifies the following:

(a) that the Corporation’s purchase of  Shares will be solely for the Corporation’s own account and not for the account of any other person or entity;

(b) that the Corporation’s name, address of principal office, place of incorporation and taxpayer identification number as set forth in this Questionnaire are true, correct and complete; and

(c)  that one of the following is true and correct (check one):

o (i) the Corporation is a corporation organized in or under the laws of the United States or any political subdivision thereof.

o (ii) the Corporation is a corporation which is neither created nor organized in or under the United States or any political subdivision thereof, but which has made an election under either Section 897(1) or 897(k) of the United States Internal Revenue Code of 1986, as amended, to be treated as a domestic corporation for certain purposes of United States federal income taxation (A COPY OF THE INTERNAL REVENUE SERVICE ACKNOWLEDGMENT OF THE UNDERSIGNED’S ELECTION MUST BE ATTACHED TO THIS QUESTIONNAIRE IF THIS PROVISION IS APPLICABLE).

o (iii) neither (1) nor (ii) above is true.

A-1 (3)

III. GENERAL INFORMATION

(a)            PROSPECTIVE PURCHASER (THE CORPORATION)

Name:______________________________________________________________________________________________

Principal Place of Business:_______________________________________________________________________

         (Number and Street)

(City)                                                                                          (State)                                     (Zip Code)

Address for Correspondence (if different):____________________________________________________________

                 (Number and Street)

(City)                                                                                          (State)   (Zip Code)

Telephone Number:_____________________________________________________________________________

(Area Code)                                  (Number)

Facsimile Number: ______________________________________________________________________________

(Area Code)                                  (Number)

State of Incorporation:___________________________________________________________________________

Date of Formation:______________________________________________________________________________

Taxpayer Identification Number:____________________________________________________________________

FINRA Affiliation or Association of the Corporation, if any:_______________________________________________

                                           If none, check here ¨

Number of Shareholders:_______________________________________________________________

(b) INDIVIDUAL WHO IS EXECUTING THIS QUESTIONNAIRE ON BEHALF OF THE CORPORATION

Name:_______________________________________________________________________________________________

Position or Title:_______________________________________________________________________________________

A-1 (4)

IV. BENEFICIAL, OWNERSHIP

List the name, address, title, phone number and email address of the natural person or persons who will possess voting and investment power over the Shares subscribed for herein:

Name of Natural Person(s):________________________________________________________

Address:______________________________________________________________________

_____________________________________________________________________________

Title (if any):___________________________________________________________________

Phone:________________________________________________________________________

Email address(if any):____________________________________________________________

V. SIGNATURE

The Signature Page to this Questionnaire is contained on page A-1 (6), entitled Corporation Signature Page.

A-1 (5)

Corporation Signature Page

SRKP 18, INC.

WORLD ORIENT UNIVERSAL LIMITED

1.           The undersigned Corporation represents that (a) the information contained in this Questionnaire is complete and accurate and (b) the Corporation will immediately notify (i) WestPark Capital, Inc., 1900 Avenue of the Stars, Suite 310, Los Angeles, CA 90067, Attention: Diane Cabo, phone number (310) 203-2928, facsimile (323) 443-3531 and (ii) Scott Galer, Esq., counsel to WestPark Capital, Inc., at Stubbs, Alderton & Markiles, LLP, 15260 Ventura Boulevard, 20th Floor, Sherman Oaks, California  91403, phone number (818) 444-4500, facsimile (818) 444-4520 if any material change in any of the information occurs prior to the acceptance of the undersigned Corporation’s subscription and will promptly send the foregoing written confirmation of such change.

2.           The undersigned Corporation hereby represents and warrants that the person signing this Questionnaire on behalf of the Corporation has been duly authorized by all requisite action on the part of the Corporation to acquire the Shares and sign this Questionnaire and this Subscription Agreement on behalf of the Corporation and, further, that the undersigned Corporation has all requisite authority to purchase the Shares and enter into the Subscription Agreement.

Date	Name of Corporation (Please Type or Print)
	By:
	Signature
	Name:
	(Please Type or Print)
	Title:
	(Please Type or Print)

THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS SUCH SECURITIES ARE INCLUDED IN AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN OPINION OF COUNSEL HAS BEEN DELIVERED TO THE EFFECT THAT REGISTRATION OF SUCH SECURITIES IS NOT REQUIRED.

A-1 (6)

Exhibit A-2

Individual Investor Questionnaire

Name:__________________________________

IMPORTANT:

Please Complete

INDIVIDUAL INVESTOR QUESTIONNAIRE

SRKP 18, INC.

WORLD ORIENT UNIVERSAL LIMITED

SRKP 18, Inc.

1900 Avenue of the Stars, Suite 310

Los Angeles, CA 90067

Attn:  Richard Rappaport

World Orient Universal Limited

c/o Zhengzhou Shenyang Technology Company Limited

Building 28, Huzhu Road

Zhongyuan District, Zhengzhou

People’s Republic of China

Attn: Zhong Bo

The information contained in this Individual Investor Questionnaire is being furnished in order to determine whether the undersigned’s subscription to purchase shares of Series A Convertible Preferred Stock (the “Shares”) of SRKP 18, Inc. (the “Company”) may proceed.

This Questionnaire should be completed, signed, dated and a copy should be sent to WestPark Capital, Inc. (the “Placement Agent”) via facsimile at (323) 443-3531 or electronic format (e.g., PDF) to dcabo@wpcapital.com and the original delivered to WestPark Capital, Inc. at 1900 Avenue of the Stars, Suite 310, Los Angeles, CA 90067, Attention: Diane Cabo.  Please keep a copy for your files.

A-2 (1)

ALL INFORMATION CONTAINED IN THIS QUESTIONNAIRE WILL BE TREATED CONFIDENTIALLY.  The undersigned Corporation understands, however, that the Company may present this Questionnaire to such parties as it deems appropriate if called upon to establish that the proposed offer and sale of the Shares in the Company is exempt from registration under the Securities Act of 1933, as amended, or meets the requirements of applicable state securities or “blue sky” laws.  Further, the undersigned Corporation understands that the offering required to be reported to the Securities and Exchange Commission and to various state securities or “blue sky” regulators.

IF YOU ARE PURCHASING SHARES WITH YOUR SPOUSE, YOU MUST BOTH SIGN THE SIGNATURE PAGE (PAGE A-2 (5)).

IF YOU ARE PURCHASING SHARES WITH ANOTHER PERSON NOT YOUR SPOUSE, YOU MUST EACH FILL OUT A SEPARATE QUESTIONNAIRE. Please make a photocopy of pages A-2 (1) to A-2 (5) and return both completed Questionnaires to WestPark Capital, Inc. in the same envelope.

I.  PLEASE INDICATE DESIRED TYPE OF OWNERSHIP OF SHARES:

¨           Individual

¨           Joint Tenants (rights of survivorship)

¨           Tenants in Common (no rights of survivorship)

II. PLEASE CHECK ANY OF STATEMENTS 1-4 BELOW THAT APPLY TO YOU.

¨ 1.           I have an individual net worth* or joint net worth with my spouse in excess of $1,000,000.

¨ 2.          I have had an individual income* in excess of $200,000 in each of the previous two years and I reasonably expect an individual income in excess of $200,000 this year. NOTE: IF YOU ARE BUYING JOINTLY WITH YOUR SPOUSE, YOU MUST EACH HAVE AN INDIVIDUAL INCOME IN EXCESS OF $200,000 IN EACH OF THESE YEARS IN ORDER TO CHECK THIS BOX.

¨ 3.           My spouse and I have had a joint income* in excess of $300,000 in each of the previous two years and I reasonably expect a joint income in excess of $300,000 this year.

¨ 4.          I am a director and/or an executive officer of Company as such terms are defined in Regulation D promulgated under the Securities Act of1933, as amended.

A-2 (2)

* For purposes of this Questionnaire, the term “net worth” means the excess of total assets over total liabilities. In determining income, an investor should add to his or her adjusted gross income any amounts attributable to tax-exempt income received, losses claimed as a limited partner in any limited partnership, deductions claimed for depletion, contributions to IRA or Keogh retirement plans, alimony payments and any amount by which income from long-term capital gains has been reduced in arriving at adjusted gross income.

A-2 (3)

III. OTHER CERTIFICATIONS

By signing the Signature Page, I certify the following (or, if I am purchasing Shares with my spouse as co-owner, each of us certifies the following):

(a)  that I am at least 21 years of age;

(b) that my purchase of  Shares will be solely for my own account and not for the account of any other person (other than my spouse, if co-owner);

(c) that the name, home address and social security number or taxpayer identification number as set forth in this Questionnaire are true, correct and complete; and

(d) that one of the following is true and correct (check one):

Spouse, if Co-owner

¨ ¨ (i)           I am a United States citizen or resident of the United States for United States federal income tax purposes.

¨ ¨ (ii)          I am neither a United States citizen nor a resident of the United States for United States federal income tax purposes.

IV. GENERAL INFORMATION

(a)           PERSONAL INFORMATION

Name:_________________________________________________________________________________________

Social Security or Taxpayer Identification Number:_______________________________________________________

Residence Address:_______________________________________________________________________________

(Number and Street)

(City)                                                                                                      (State)     (Zip Code)

Residence Telephone Number:______________________________________________________________________

 (Area Code)                                    (Number)

Residence Facsimile Number:_______________________________________________________________________

(Area Code)                                  (Number)

Name of Business:_______________________________________________________________________________

BusinessAddress:_______________________________________________________________________________

(Number and Street)

(City)                                                                                                      (State)     (Zip Code)

A-2 (4)

BusinessTelephone Number:_______________________________________________________________________

                                                                                        (Area Code)                                                     (Number)

Business Facsimile Number:________________________________________________________________________

                                                                                        (Area Code)                                                     (Number)

I prefer to have correspondence sent to:   ¨ Residence   ¨ Business

FINRA Affiliation or Association, if any:_____________________________________________________________

If none, check here ¨

Spouse, if Potential Co-owner

Name:__________________________________________________________________________________________

Social Security or Taxpayer Identification Number:_____________________________________________________

Residence Address:________________________________________________________________________________

(Number and Street)

(City)                                                                                                      (State)     (Zip Code)

Residence Telephone Number:______________________________________________________________________

Name of Business:
Business Address:
	(Number and Street)

(City)                                                                                     (State)

I prefer to have correspondence sent to:   ¨ Residence    ¨ Business

FINRA Affiliation or Association, if any:___________________________________________________________

If none, check here   ¨

V.           SIGNATURE

The Signature Page to this Questionnaire is contained on page A-2 (5), entitled Individual Signature Page.

A-2 (5)

INDIVIDUAL SIGNATURE PAGE

SRKP 18, INC.

WORLD ORIENT UNIVERSAL LIMITED

1.           The undersigned represents that (a) the information contained in this Questionnaire is complete and accurate, and (b) he/she will immediately notify (i) WestPark Capital, Inc., 1900 Avenue of the Stars, Suite 310, Los Angeles, CA 90067, Attention: Diane Cabo, phone number (310) 203-2928, facsimile (323) 443-3531 and (ii) Scott Galer, Esq., counsel to WestPark Capital, Inc., at Stubbs, Alderton & Markiles, LLP, 15260 Ventura Boulevard, 20th Floor, Sherman Oaks, California  91403, phone number (818) 444-4500, facsimile (818) 444-4520 if any material change in any of the information occurs prior to the acceptance of the undersigned’s subscription and will promptly send the foregoing written confirmation of such change.

Date:	Name (Please Type or Print)
	Signature
	Name of Spouse if Co-owner
	(Please Type or Print)
	Signature of Spouse if Co-owner

IF YOU ARE PURCHASING SHARES WITH YOUR SPOUSE, YOU MUST BOTH SIGN THIS SIGNATURE PAGE (PAGE A-2 (5)). IF YOU ARE PURCHASING SHARES WITH ANOTHER PERSON NOT YOUR SPOUSE, YOU MUST EACH FILL OUT A SEPARATE QUESTIONNAIRE. Please make a photocopy of pages A-2 (1) to A-2 (5) and return both completed Questionnaires to WestPark Capital, Inc. in the same envelope.

THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS SUCH SECURITIES ARE INCLUDED IN AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN OPINION OF COUNSEL HAS BEEN DELIVERED TO THE EFFECT THAT REGISTRATION OF SUCH SECURITIES IS NOT REQUIRED.

A-2 (6)

Exhibit A-3

Limited Partnership Investor Questionnaire

Name:

IMPORTANT:

Please Complete:

LIMITED PARTNERSHIP INVESTOR QUESTIONNAIRE

SRKP 18, INC.

WORLD ORIENT UNIVERSAL LIMITED

SRKP 18, Inc.

1900 Avenue of the Stars, Suite 310

Los Angeles, CA 90067

Attn:  Richard Rappaport

World Orient Universal Limited

c/o Zhengzhou Shenyang Technology Company Limited

Building 28, Huzhu Road

Zhongyuan District, Zhengzhou

People’s Republic of China

Attn: Zhong Bo

The information contained in this Limited Partnership Investor Questionnaire is being furnished in order to determine whether the undersigned Limited Partnership’s subscription to purchase shares of Series A Convertible Preferred Stock (the “Shares”) of SRKP 18, Inc. (the “Company”) may proceed.

This Questionnaire should be completed, signed, dated and a copy should be sent to WestPark Capital, Inc. (the “Placement Agent”) via facsimile at (323) 443-3531 or electronic format (e.g., PDF) to dcabo@wpcapital.com and the original delivered to WestPark Capital, Inc. at 1900 Avenue of the Stars, Suite 310, Los Angeles, CA 90067, Attention: Diane Cabo.  Please keep a copy for your files.

A-3 (1)

ALL INFORMATION CONTAINED IN THIS QUESTIONNAIRE WILL BE TREATED CONFIDENTIALLY. The undersigned Limited Partnership understands, however, that the Company may present this Questionnaire to such parties as it deems appropriate if called upon to establish that the proposed offer and sale of the Shares in the Company is exempt from registration under the Securities Act of 1933, as amended, or meets the requirements of applicable state securities or “blue sky” laws.  Further, the undersigned Limited Partnership understands that the offering required to be reported to the Securities and Exchange Commission and to various state securities or “blue sky” regulators.

I.            PLEASE CHECK THE STATEMENT BELOW, IF IT APPLIES TO THE LP.

¨ The undersigned Limited Partnership: (a) was not formed for the specific purpose of acquiring the Shares, and (b) has total assets in excess of $5,000.000.

II.          OTHER CERTIFICATIONS

By signing the Signature Page, the undersigned certifies that the Limited Partnership’s name, address of principal office, place of organization and taxpayer identification number as set forth in this Questionnaire are true, correct and complete; and

III. GENERAL INFORMATION

(a)            PROSPECTIVE PURCHASER (THE LIMITED PARTNERSHIP)

Name:_________________________________________________________________________________

Principal Place of Business: ________________________________________________________________

 (Number and Street)

_________________________________________________________________________________

(City)                                                                            (State)                                (Zip Code)

Address for Correspondence (if different): ____________________________________________

(Number and Street)

_________________________________________________________________________________

(City)                                                                            (State)(Zip Code)

Telephone Number: ___________________________________________________________________

(Area Code)                                  (Number)

Facsimile Number: ___________________________________________________________________

(Area Code)                                  (Number)

A-3 (2)

State of Formation: _________________________________________________________________________________

Date of Formation: _________________________________________________________________________________

Taxpayer Identification Number: ______________________________________________

FINRA Affiliation or Association of the Corporation, if any: ___________________________

If none, check here          ¨

(c)  INDIVIDUAL WHO IS EXECUTING THIS QUESTIONNAIRE ON BEHALF OF THE LIMITED PARTNERSHIP

Name: _________________________________________________________________________________

Position or Title: _________________________________________________________________________________

IV. SIGNATURE

The Signature Page to this Questionnaire is contained on page A-3 (4), entitled Limited Partnership Signature Page.

A-3 (3)

Limited Partnership Signature Page

SRKP 18, INC.

WORLD ORIENT UNIVERSAL LIMITED

1.The undersigned Limited Partnership represents that (a) the information contained in this Questionnaire is complete and accurate, and (b) the Limited Partnership will immediately notify (i) WestPark Capital, Inc., 1900 Avenue of the Stars, Suite 310, Los Angeles, CA 90067, Attention: Diane Cabo, phone number (310) 203-2928, facsimile (323) 443-3531 and (ii) Scott Galer, Esq., counsel to WestPark Capital, Inc., at Stubbs, Alderton & Markiles, LLP, 15260 Ventura Boulevard, 20th Floor, Sherman Oaks, California  91403, phone number (818) 444-4500, facsimile (818) 444-4520 if any material change in any of the information occurs prior to the acceptance of the undersigned’s subscription and will promptly send the foregoing written confirmation of such change.

2.The undersigned Limited Partnership hereby represents and warrants that the person or entity signing this Questionnaire on behalf of the Limited Partnership has been duly authorized by all requisite action on the part of the Limited Partnership to sign this Questionnaire and this Subscription Agreement on behalf of the Limited Partnership and, further, that the undersigned Limited Partnership has all requisite authority to purchase the Shares and enter into the Subscription Agreement.

Date	Name of Limited Partnership
	(Please Type or Print)
	By:
	Signature

Name:

(Please Type or Print)

Title:

(Please Type or Print)

THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS SUCH SECURITIES ARE INCLUDED IN AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN OPINION OF COUNSEL HAS BEEN DELIVERED TO THE EFFECT THAT REGISTRATION OF SUCH SECURITIES IS NOT REQUIRED.

A-3 (4)

Exhibit B

LOCK-UP AGREEMENT

ZST Digital Networks, Inc.

World Orient Universal Limited

c/o Zhengzhou Shenyang Technology Company Limited

Building 28, Huzhu Road

Zhongyuan District, Zhengzhou

People’s Republic of China

Attn: Zhong Bo

WestPark Capital, Inc.

1900 Avenue of the Stars, Suite 310

Los Angeles, CA 90067

The undersigned, being a security holder of ZST Digital Networks, Inc. (formerly known as SRKP 18, Inc. and referred to herein as the “Company”) and receiving his/her/its shares of the Company’s common stock (the “Company Common Stock”) upon the conversion of his/her/its shares of Series A Convertible Preferred Stock as an investor in the Company’s private offering that closed on __________, 2008 (the “Private Offering”), hereby delivers this Lock-up Agreement to the Company.

The undersigned recognizes that it is in the best financial interests of the Company and of the undersigned, as a stockholder of the Company, that the Company Common Stock received by the undersigned pursuant to the Private Offering be subject to certain restrictions and hereby agrees as follows:

Other than as set forth below, the undersigned shall not: (a) sell, assign, exchange, transfer, pledge, distribute or otherwise dispose of (i) any shares of the Company Common Stock received by the undersigned in the Private Offering, or (ii) any interest (including, without limitation, an option to buy or sell) in any such shares of the Company Common Stock, in whole or in part, and no such attempted transfer shall be treated as effective for any purpose; or (b) engage in any transaction in respect to any shares of the Company Common Stock received by the undersigned in the Private Offering or any interest therein, the intent or effect of which is the effective economic disposition of such shares (including, but not limited to, engaging in put, call, short-sale, straddle or similar market transactions) (the foregoing restrictions are referred to herein as “Lock-Up Restrictions”).

One-twelfth of the undersigned’s shares of the Company’s Common Stock acquired in the Private Offering shall be released from the Lock-Up Restrictions on the date that is ninety (90) days subsequent to the date on which the Company’s Common Stock begins to be listed or quoted on either the New York Stock Exchange, NYSE Alternext (formerly the American Stock Exchange), NASDAQ Global Market, NASDAQ Capital Market or the OTC Bulletin Board (the “Initial Release Date”), and the undersigned’s shares will automatically be released from the Lock-Up Restrictions on a monthly basis after the Initial Release Date on a pro rata basis over the eleven months following the Initial Release Date, until all of the shares are released from the Lock-Up Restrictions.  WestPark Capital, Inc., in its discretion, may release from the Lock-up Restrictions some or all the undersigned’s shares of the Company’s Common Stock earlier than the schedule set forth in this Lock-up Agreement.

A-3 (5)

The certificates evidencing the Company Common Stock received by the undersigned in the Private Offering bear a legend as set forth below and such legend shall remain during the term of this Lock-Up Agreement as set forth above:

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO TRANSFER RESTRICTIONS SET FORTH IN THAT CERTAIN LOCK-UP AGREEMENT BY AND BETWEEN ZST DIGITAL NETWORKS, INC., A DELAWARE CORPORATION, AND THE HOLDER HEREOF (THE “LOCK-UP AGREEMENT”), AND MAY NOT BE SOLD, ASSIGNED, EXCHANGED, TRANSFERRED, ENCUMBERED, PLEDGED, DISTRIBUTED OR OTHERWISE DISPOSED OF PRIOR TO THAT CERTAIN TIME PERIOD DETAILED IN THE LOCK-UP AGREEMENT. THE ISSUER AGREES TO REMOVE THIS RESTRICTIVE LEGEND (AND ANY STOP ORDER PLACED WITH THE TRANSFER AGENT) UPON THE EXPIRATION OF THE TIME PERIOD SPECIFIED IN THE LOCK-UP AGREEMENT. A COPY OF THE LOCK-UP AGREEMENT IS AVAILABLE FOR REVIEW AT THE PRINCIPAL EXECUTIVE OFFICE OF THE ISSUER.

[SIGNATURE ON NEXT PAGE]

A-3 (6)

IN WITNESS WHEREOF, the undersigned has executed this Lock-Up Agreement as of the date first written above.

Printed Name of Holder

Signature

By:

Title (if applicable):

A-3 (7)

EX-10.2

EXHIBIT 10.2

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (“Agreement”) made as of this 9th day of January, 2009, by and among SRKP 18, Inc., a Delaware corporation (the “Company”); World Orient Universal Limited, a British Virgin Islands corporation and upon the Closing Date (as defined below) a 100%-owned subsidiary of the Company ("World Orient"); and the undersigned (each a “Holder” and together the “Holders”).

WHEREAS, the Company, World Orient, and all of the shareholders of World Orient are parties to a certain Share Exchange Agreement dated as of December 11, 2008 (the “Exchange Agreement”), pursuant to which World Orient will become a 100%-owned subsidiary of the Company and 100% of the outstanding securities of World Orient will be exchanged for securities in the Company (the “Share Exchange”);

WHEREAS, immediately after the effective time of the Share Exchange (the “Closing Date”), the Company will assume the business and operations of Zhengzhou Shenyang Technology Company Limited, a company organized under the laws of the People’s Republic of China and a wholly-owned subsidiary of World Orient (“ZST”);

WHEREAS, the Company agreed to file, within sixty (60) days after the termination of the Offering (as defined below) with the U.S. Securities and Exchange Commission (the “Commission” or “SEC”) a registration statement (the “Initial Registration Statement”) covering the resale of shares issued in connection with the Company’s private offering (the “Offering”) that closed concurrently with the Share Exchange and covering the resale of shares of Common Stock held by those persons that are stockholders of the Company immediately prior to the Closing Date, except for the WestPark Affiliates (as defined below); and

WHEREAS, as set forth in Section 9.1 of the Exchange Agreement, and as a condition to the closing of the Share Exchange, the Company agreed to enter into a registration rights agreement requiring the Company to file with the Commission, within the time periods as set forth herein, a registration statement covering the resale of shares of Common Stock of the Company, as set forth on Schedule I hereof (the “Shares”), held by those persons (and/or their designees) that are stockholders of the Company immediately prior to the Closing Date who are affiliates of WestPark Capital, Inc. (“WestPark Affiliates” or “Holders”).

NOW, THEREFORE, for and in consideration of the promises and the mutual covenants hereinafter set forth, the parties hereto do hereby agree as follows:

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1.           Registration Rights

1.1           Registration Requirement.  Subject to the terms and limitations hereof, the parties hereto agree and acknowledge that the Company shall prepare and file a registration statement (the “Registration Statement”) on Form S-1 or other appropriate registration document under the Securities Act of 1933, as amended (the “Act”) for resale of the Shares (the “Registrable Securities”) and shall use its reasonable best efforts to maintain the Registration Statement effective for a period of twelve (12) months at the Company’s expense (the “Effectiveness Period”).  The Company shall file such Registration Statement no later than the tenth (10th) day after the end of the six (6) month period that immediately follows the filing date of the Initial Registration Statement (the “Required Filing Date”), provided that if such day is not a Business Day, then the Required Filing Date shall be the next business day thereafter.  The Company shall use reasonable best efforts to cause such Registration Statement to become effective within one hundred fifty (150) days after the Required Filing Date or the actual filing date, whichever is earlier, or one hundred eighty (180) days after the Required Filing Date or the actual filing date, whichever is earlier, if the Registration Statement is subject to a full review by the SEC (the “Required Effectiveness Date”).  If the Company fails to file the Registration Statement by the Required Filing Date or if the Registration Statement does not become effective on or before the Required Effectiveness Date due to the failure of the Company to fulfill its obligations hereunder, the Company shall be required to issue, as liquidated damages, to each of the Holders shares (the “Penalty Shares”) equal to one percent (1%) of their respective Shares on a monthly basis until the Registration Statement is filed with or declared effective by the Commission, as applicable.

1.2           Limitation to Registration Requirement.  Notwithstanding the foregoing, no Penalty Shares shall be due to the Holders if the Company is using its best efforts to cause the Registration Statement to be filed and declared effective in a timely manner.  In addition, the Company shall not be obligated to effect any registration of the Registrable Securities or take any other action pursuant to this Section 1: (i) in any particular jurisdiction in which the Company would be required to execute a general consent to service of process in effecting such registration, qualification or compliance unless the Company is already subject to service in such jurisdiction and except as may be required by the Act; or (ii) during any period in which the Company suspends the rights of a Holder after giving the Holder written notification of a Potential Material Event (defined below) pursuant to Section 1.6 hereof.

1.3           Expenses of Registration.  Except as otherwise expressly set forth, the Company shall bear all expenses incurred by the Company in compliance with the registration obligation of the Company, including, without limitation, all registration and filing fees, printing expenses, fees and disbursements of counsel for the Company incurred in connection with any registration, qualification or compliance pursuant to this Agreement and all underwriting discounts, selling commissions and expense allowances applicable to the sale of any securities by the Company for its own account in any registration.  All underwriting discounts, selling commissions and expense allowances applicable to the sale by a Holder of Registrable Securities and all fees and disbursements of counsel for a Holder shall be borne by the Holder.

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1.4           Indemnification.

(a)           To the extent permitted by law the Company will indemnify each Holder, each of its officers, directors, agents, employees and partners, and each person controlling such Holder, with respect to each registration, qualification or compliance effected pursuant to this Agreement, and each underwriter, if any, and each person who controls any underwriter, and their respective counsel against all claims, losses, damages and liabilities (or actions, proceedings or settlements in respect thereof) arising out of or based on (i) any untrue statement (or alleged untrue statement) of a material fact contained in any prospectus, offering circular or other document prepared by the Company (including any related registration statement, notification or the like) incident to any such registration, qualification or compliance, or (ii) any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or any violation by the Company of the Act or any rule or regulation thereunder applicable to the Company and relating to action or inaction required of the Company in connection with any such registration, qualification or compliance, and subject to the provisions of Section 1.4(c) below, will reimburse each such Holder, each of its officers, directors, agents, employees and partners, and each person controlling such Holder, each such underwriter and each person who controls any such underwriter, for any legal and any other expenses as they are reasonably incurred in connection with investigating and defending any such claim, loss, damage, liability or action, provided that the Company will not be liable in any such case to the extent that any such claim, loss, damage, liability or expense arises out of or is based on any untrue statement (or alleged untrue statement) or omission (or alleged omissions) based upon written information furnished to the Company by (or on behalf of) such Holder or underwriter, or if the person asserting any such loss, claim, damage or liability (or action or proceeding in respect thereof) did not receive a copy of an amended preliminary prospectus or the final prospectus (or the final prospectus as amended and supplemented) at or before the written confirmation of the sale of such Registrable Securities to such person because of the failure of the Holder or underwriter to so provide such amended preliminary or final prospectus (or the final prospectus as amended and supplemented); provided, however, that the indemnity agreement contained in this subsection shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable in any such case for any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon a violation which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by the Holder, any such partner, officer, director, employee, agent or controlling person of such Holder, or any such underwriter or any person who controls any such underwriter; provided, however, that the obligations of the Company hereunder shall be limited to an amount equal to the portion of net proceeds represented by the Registrable Securities pursuant to this Agreement.

(b)           To the extent permitted by law, each Holder whose Registrable Securities are included in any registration, qualification or compliance effected pursuant to this Agreement will indemnify the Company, and its directors, officers, agents, employees and each underwriter, if any, of the Company’s securities covered by such a registration statement, each person who controls the Company or such underwriter within the meaning of the Act and the rules and regulations thereunder, each other such Holder and each of their officers, directors, partners, agents and  employees, and each person controlling such Holder, and their respective counsel against all claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any such registration statement, prospectus, offering circular or other document, or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the Company and such Holders, directors, officers, partners, persons, underwriters or control persons for any legal or any other expenses as they are reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability or action, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such registration statement, prospectus, offering circular or other document in reliance upon and in conformity with written information furnished to the Company by such Holder; provided, however, that the obligations of any Holder hereunder shall be limited to an amount equal to the net proceeds to such Holder from Registrable Securities sold under such registration statement, prospectus, offering circular or other document as contemplated herein; provided, further, that the indemnity agreement contained in this subsection shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld or delayed.

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(c)           Each party entitled to indemnification under this Section (the “Indemnified Party”) shall give notice to the party required to provide indemnification (the “Indemnifying Party”) promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom, provided that counsel for the Indemnifying Party, who shall conduct the defense of such claim or any litigation resulting therefrom, shall be approved by the Indemnified Party (whose approval shall not unreasonably be withheld or delayed), and the Indemnified Party may participate in such defense at such party’s expense; and provided further that if any Indemnified Party reasonably concludes that there may be one or more legal defenses available to it that are not available to the Indemnifying Party, or that such claim or litigation involves or could have an effect on matters beyond the scope of this Agreement, then the Indemnified Party may retain its own counsel at the expense of the Indemnifying Party; and provided further that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Agreement unless and only to the extent that such failure to give notice results in material prejudice to the Indemnifying Party.  No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement 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.  Each Indemnified Party shall furnish such information regarding itself or the claim in question as an Indemnifying Party may reasonably request in writing and as shall be reasonably required in connection with defense of such claim and litigation resulting therefrom.

(d)           If the indemnification provided for in this Section is held by a court of competent jurisdiction to be unavailable to an Indemnified Party with respect to any loss, liability, claim, damage or expense referred to herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified Party hereunder, shall contribute to the amount paid or payable by such Indemnified Party as a result of such loss, liability, claim, damage or expense in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand and of the Indemnified Party on the other in connection with the statements or omissions which resulted in such loss, liability, claim, damage or expense as well as any other relevant equitable considerations.  The relative fault of the Indemnifying Party and of the Indemnified Party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the Indemnifying Party or by the Indemnified Party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

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1.5           Transfer or Assignment of Registration Rights. The Registrable Securities, and any related benefits to the Holder hereunder may be transferred or assigned by the Holder to a permitted transferee or assignee, provided that the Company is given written notice of such transfer or assignment, stating the name and address of said transferee or assignee and identifying the Registrable Securities with respect to which such registration rights are being transferred or assigned; provided further that the transferee or assignee of such Registrable Securities shall be deemed to have assumed the obligations of the Holder under this Agreement by the acceptance of such assignment and shall, upon request from the Company, evidence such assumption by delivery to the Company of a written agreement assuming such obligations of the Holder.

1.6           Registration Procedures.  In the case of the registration effected by the Company pursuant to this Agreement, the Company will keep the Holder advised in writing as to the initiation of each registration and as to the completion thereof.  The Company will:

(a)           Prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Act with respect to the disposition of securities covered by such registration statement;

(b)           Respond as promptly as reasonably practicable to any comments received from the SEC with respect to a registration statement or any amendment thereto;

(c)           Notify the Holders as promptly as reasonably practicable and (if requested by any such persons) confirm such notice in writing no later than one trading day following the day (i) when a prospectus or any prospectus supplement or post-effective amendment to a registration statement is proposed to be filed and (ii) with respect to a registration statement or any post-effective amendment, when the same has become effective;

(d)           Furnish such number of prospectuses and other documents incident thereto, including supplements and amendments, as the Holders may reasonably request;

(e)           Furnish to the Holders, upon request, a copy of all documents filed with and all correspondence from or to the SEC in connection with any such registration statement other than non-substantive cover letters and the like;

(f)           Use its reasonable best efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order suspending the effectiveness of a registration statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, at the earliest practicable moment; and

(g)           Use its reasonable best efforts to comply with all applicable rules and regulations of the SEC.

Notwithstanding the foregoing, if at any time or from time to time after the date hereof, the Company notifies the Holders in writing of the existence of an event or circumstance that is not disclosed in the Registration Statement and that may have a material effect on the Company or its business (a “Potential Material Event”), the Holders shall not offer or sell any Registrable Securities, or engage in any other transaction involving or relating to the Registrable Securities, from the time of the giving of notice with respect to a Potential Material Event until the Company notifies the Holders that such Potential Material Event either has been added to the Registration Statement by amendment or supplement or no longer constitutes a Potential Material Event; provided, that the Company may not so suspend the right of Holders for more than one hundred twenty (120) days in the aggregate.

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1.7           Statement of Beneficial Ownership.  The Company may require each Holder to furnish to the Company a certified statement as to the number of shares of Common Stock beneficially owned, including derivative instruments underlying Common Stock,  by such Holder and the controlling person thereof and any other such information regarding the Holder, the Registrable Securities held by the Holder and the intended method of disposition of such securities as shall be reasonably required with respect to the registration of the Holder’s Registrable Securities.  Each Holder hereby understands and agrees that the Company may, in its sole discretion, exclude the Holder’s shares of Common Stock from the Registration Statement in the event that the Holder fails to provide such information requested by the Company within the time period reasonably specified by the Company or is required to do so by law or the SEC.

1.8           Compliance.  Each Holder covenants and agrees that he, she or it will comply with the prospectus delivery requirements of the Act as applicable to such Holder in connection with sales of Registrable Securities pursuant to the registration statement required hereunder.

1.9           Piggy-Back Registrations.  If at any time during the Effectiveness Period there is not an effective registration statement covering all of the Registrable Securities and the Company shall determine to prepare and file with the SEC a registration statement relating to an offering for its own account or the account of others under the Act of any of its Common Stock, other than an offering of securities issued pursuant to a Strategic Issuance (as defined below) and other than a Form S-4 or Form S-8 registration statement (each as promulgated under the Act or their then equivalents relating to equity securities to be issued solely in connection with any business combination transaction, acquisition of any entity or business or equity securities issuable in connection with stock option or other employee benefit plans), then the Company shall send to the  Holders (together with any other holders of its Common Stock possessing “piggyback registration rights” comparable to those granted to the Holders hereunder (“Rightsholders”)) written notice of such determination and, if within fifteen (15) days after receipt of such notice, a Holder shall so request in writing, the Company shall include in such registration statement all or any part of such Registrable Securities such Holder requests to be registered; provided that the Company shall not be required to register any Registrable Securities pursuant to this Section that are eligible for resale pursuant to Rule 144 promulgated under the Act; and provided further that the Company may, without the consent of the Holder, withdraw such registration statement before its becoming effective if the Company or other stockholders have elected to abandon the proposal to register the securities proposed to be registered thereunder.  If the registration statement is being filed for an underwritten public offering, a Holder must timely execute and deliver the usual and customary agreement among the Company, such Holder and the underwriters relating to the registration.  If the registration statement is being filed for an underwritten offer and sale by the Company of securities for its own account and the managing underwriters advise the Company in writing that in their opinion the offering contemplated by the registration statement cannot be successfully completed if the Company were to also register the Registrable Shares of the Holders requested to be included in such registration statement, then the Company will include in the registration: (i) first, any securities the Company proposes to sell, (ii) second, any securities of any person whose securities are being registered as a result of the exercise of a demand registration right, and (iii) third, that portion of the aggregate number of shares being requested for inclusion in the registration statement by (X) the Holders and (Y) all other Rightsholders, which in the opinion of such managing underwriters can successfully be sold, such number of shares to be taken pro rata from the Rightsholders on the basis of the total number of shares being requested for inclusion in the registration statement by each Rightsholder.  “Strategic Issuance” shall mean an issuance of securities: (i) in connection with a “corporate partnering” transaction or a “strategic alliance” (as determined by the Board of Directors of the Company in good faith); (ii) in connection with any financing transaction in respect of which the Company is a borrower; or (iii) to a vendor, lessor, lender, or customer of the Company, or a research, manufacturing or other commercial collaborator of the Company, in a transaction approved by the Board of Directors, provided in any case, that such issuance is not being made primarily for the purpose of avoiding compliance with this Agreement.

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2.           Miscellaneous

2.1           Any notice or other communication given hereunder shall be deemed sufficient if in writing and sent by registered or certified mail, return receipt requested, addressed to the Company, at Zhengzhou Shenyang Technology Company Limited, Building 28, Huzhu Road, Zhongyuan District, Zhengzhou, People’s Republic of China, Attention:  Zhong Bo, with a copy to (which shall not constitute notice) K&L Gates LLP, 10100 Santa Monica Blvd., Seventh Floor, Los Angeles, California 90067, Attention: Thomas J. Poletti, Esq., and to the Holders at their respective addresses indicated on the signature page of this Agreement.  Notices shall be deemed to have been given three (3) business days after the date of mailing, except notices of change of address, which shall be deemed to have been given when received.

2.2           This Agreement may only be amended through a written instrument signed by the Holders, World Orient and the Company.

2.3           This Agreement shall be binding upon and inure to the benefit of the parties hereto and to their respective heirs, legal representatives, successors and assigns.  This Agreement sets forth the entire agreement and understanding between the parties as to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings of any and every nature among them.

2.4           Notwithstanding the place where this Agreement may be executed by any of the parties hereto, the parties expressly agree that all the terms and provisions hereof shall be construed in accordance with and governed by the laws of the State of Delaware.

2.5           This Agreement may be executed in counterparts. Upon the execution and delivery of this Agreement, this Agreement shall become a binding obligation of the parties hereto.  This Agreement may be executed and delivered by facsimile.

2.6           The holding of any provision of this Agreement to be invalid or unenforceable by a court of competent jurisdiction shall not affect any other provision of this Agreement, which shall remain in full force and effect.

2.7           It is agreed that a waiver by either party of a breach of any provision of this Agreement shall not operate, or be construed, as a waiver of any subsequent breach by that same party.

2.8           The parties agree to execute and deliver all such further documents, agreements and instruments and take such other and further action as may be necessary or appropriate to carry out the purposes and intent of this Agreement.

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2.9           The Company agrees not to disclose the names, addresses or any other information about the Holders, except as required by law, provided that the Company may provide information relating to the Holders as required in any registration statement under the Act that may be filed by the Company pursuant to the requirements of this Agreement.

2.10           The obligation of each Holder hereunder is several and not joint with the obligations of any other Holders (the “Other Holders”), and each Holder shall not be responsible in any way for the performance of the obligations of any Other Holders.  Nothing contained herein or in any other agreement or document delivered at the Closing, and no action taken by a Holder pursuant hereto, shall be deemed to constitute the Holder and the Other Holders as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Holder and the Other Holders are in any way acting in concert with respect to such obligations or the transactions contemplated by this Agreement.  Each Holder shall be entitled to protect and enforce the Holder’s rights, including without limitation the rights arising out of this Agreement, and it shall not be necessary for any Other Holder to be joined as an additional party in any proceeding for such purpose.  The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.  No Holder is acting as part of a “group” (as that term is used in Section 13(d) of the 1934 Act) in negotiating and entering into this Agreement or purchasing the Shares or acquiring, disposing of or voting any of the underlying shares of Common Stock.  The Company hereby confirms that it understands and agrees that the Holders are not acting as part of any such group.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written above.

/s/ Richard Rappaport
Richard Rappaport
/s/ Anthony C. Pintsopoulos
Anthony C. Pintsopoulos
/s/ Kevin DePrimio
Kevin DePrimio
/s/ Jason Stern
Jason Stern
Amanda Rappaport Trust
By:	/s/ Richard Rappaport
Name: Richard Rappaport
Title:  Trustee
Kailey Rappaport Trust
By:	/s/ Richard Rappaport
Name: Richard Rappaport
Title: Trustee
WestPark Financial Services, LLC
By:	/s/ Richard Rappaport
Name: Richard Rapppaport
Title: Chief Executive Officer

SRKP 18, INC.		WORLD ORIENT UNIVERSAL LIMITED
By:	/s/ Richard Rappaport	By:	/s/ Zhong Bo
Name:Richard Rappoart		Name: Zhong Bo
Title: President		Title: President

9

SCHEDULE I

HOLDERS AND REGISTRABLE SECURITIES

	HOLDER	NO. OF SHARES OUTSTANDING BEING REGISTERED		NO. OF SHARES BEING REGISTERED THAT ARE ISSUABLE UPON EXERCISE OF OUTSTANDING WARRANTS
1.	Richard Rappaport		470,399		67,200
2.	Anthony C. Pintsopoulos		294,000		42,000
3.	Kevin DePrimio		102,900		14,700
4.	Jason Stern		58,800		8,400
5.	Amanda Rappaport Trust		132,300		18,900
6.	Kailey Rappaport Trust		132,300		18,900
7.	WestPark Financial Services, LLC		1,149,246		164,177
	TOTAL		2,339,945		334,277

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EX-10.3

EXHIBIT 10.3

SHARE AND WARRANT CANCELLATION AGREEMENT

THIS SHARE AND WARRANT CANCELLATION AGREEMENT (this “Agreement”) is made and entered into as of this 9th day of January 2009 by and between SRKP 18, Inc., a Delaware corporation (“SRKP 18”) and the stockholders of SRKP 18, as set forth on Schedule I attached hereto (such stockholders collectively referred to herein as the “Stockholders”).  Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to them in the Exchange Agreement (as hereinafter defined).

RECITALS

WHEREAS, SRKP 18, World Orient Universal Limited, a company organized under the laws of the British Virgin Islands (“World Orient”), and the shareholders of World Orient (the “World Orient Shareholders”) entered into a Share Exchange Agreement, dated as of December 11, 2008 (the “Exchange Agreement”), a copy of which is attached hereto as Exhibit A, whereupon SRKP 18 agreed to issue an aggregate of 1,985,000 shares of its common stock to the World Orient Shareholders in exchange for all of the issued and outstanding shares of World Orient (the “Share Exchange”);

WHEREAS, after the Share Exchange, SRKP 18 agreed to offer Zhong Bo, Wu Dexiu, Huang Jiankang, Sun Hui and Li Yuting (the “ZST Management”) a thirty (30) day right to purchase up to an aggregate of 12,530,000 shares of our common stock at a per share purchase price of $0.2806 (the “Purchase Right”);

WHEREAS, SRKP 18 agreed to enter into an agreement with the Stockholders to cancel 0.3317 shares of common stock and warrants to purchase 0.5328 shares of common stock held by each of them for one (1) share of common stock purchased by the ZST Management pursuant to the Purchase Right;

WHEREAS, assuming the exercise in full of the Purchase Right, the Stockholders shall cancel (i) an aggregate of 4,156,390 shares of SRKP 18 common stock held by such Stockholders (the “Shares”), as such Shares are more particularly set forth on Schedule I attached hereto, and (ii) an aggregate of 6,676,390 warrants to purchase shares of SRKP 18 common stock held by such Stockholders (the “Warrants”), as such Warrants are more particularly set forth on Schedule II attached hereto; and

WHEREAS, the Stockholders acknowledge that they would benefit from the completion of the transactions contemplated by the Exchange Agreement.

NOW, THEREFORE, for and in consideration of the execution and delivery of the Exchange Agreement, and the payment of good and valuable consideration pursuant to the Exchange Agreement, the receipt and sufficiency of which is hereby acknowledged, SRKP 18 and the Stockholders, each intending to be legally bound by this Agreement, hereby agree as follows:

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AGREEMENT

1.  DUTIES

1.1  Rights and Obligations of the Parties.  The parties shall be entitled to such rights and shall perform such duties as set forth herein.  In the event that the terms of this Agreement conflict in any way with the provisions of the Exchange Agreement, the Exchange Agreement shall control.

1.2  Cancellation of Shares and Warrants.  Upon the exercise of the Purchase Right, for each one (1) share of common stock purchased by the ZST Management, 0.3317 of the Shares and 0.5328 of the Warrants shall be deemed automatically cancelled on a pro rata basis with respect to the Shares and Warrants held by each Stockholder.  The Stockholders agree to execute any and all documents, including, but not limited to, stock powers for the stock certificates representing the Shares, as SRKP 18 reasonably determines necessary to effect the cancellation of the Shares and the Warrants pursuant to the terms of this Agreement.

2.  DIVIDENDS; VOTING RIGHTS; STOCK SPLITS

2.1  Cash Dividends; Voting Rights.  Prior to the exercise of the Purchase Right, the Stockholders shall have rights to cash or stock dividends with respect to the Shares and the Warrants, if any, and have rights to vote their respective Shares, if any such matter requiring stockholder approval shall arise.

2.2  Stock Splits; Stock Dividends.  In the event of any stock split or other similar transaction with respect to SRKP 18 common stock that becomes effective prior to the exercise of the Purchase Right, the additional shares or warrants issued with respect to the Shares or the Warrants shall be similarly cancelled.

3.  MISCELLANEOUS

3.1  Transferability.  None of the rights and obligations of the Stockholders hereunder shall be transferable.

3.2  Notices.  Any notices or other communications required or permitted under this Agreement shall be in writing and shall be sufficiently given if sent by (i) registered or certified mail, postage prepaid, addressed as follows, (ii) facsimile to the facsimile numbers identified below or (iii) overnight courier (such as UPS or FedEx), addressed as follows:

If to SRKP 18:

SRKP 18, Inc.

4737 North Ocean Drive, Suite 207

Lauderdale by the Sea, FL 33308

Attention: Richard Rappaport

Telecopy No.:  (310) 843-9304

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If to the Stockholders:

to the address set forth next to the name of each of the Stockholders in Schedule I.

or such other person or address as shall be furnished in writing by any of the parties and any such notice or communication shall be deemed to have been given as of the date so mailed.

3.3  Construction.  The validity, enforcement and construction of this Agreement shall be governed by the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof.

3.4  Binding Effect.  This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, legatees, assigns and transferees, as the case may be.

3.5  Severability.  If any provision or section of this Agreement is determined to be void or otherwise unenforceable, it shall not affect the validity or enforceability of any other provisions of this Agreement which shall remain enforceable in accordance with their terms.

3.6  Interpretation.  The headings and subheadings contained in this Agreement are for reference only and for the benefit of the parties and shall not be considered in the interpretation or construction of this Agreement.  This Agreement shall be construed and interpreted without regard to any rule or presumption requiring that it be construed or interpreted against the party causing it to be drafted.

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

3.8  Amendments.  This Agreement may be amended from time to time but only by written agreement signed by all of the parties hereto.

3.9 Entire Agreement.This Agreement constitutes the entire understanding and agreement of the parties relating to the subject matter hereof and supersedes any and all prior understandings, agreements, negotiations and discussions, both written and oral, between the parties hereto with respect to the subject matter hereof.

[Signatures appear on following page]

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IN WITNESS WHEREOF, the parties have executed this Share and Warrant Cancellation Agreement as of the day and year first above written.

SRKP 18, INC.		STOCKHOLDERS
By:	/s/ Richard Rappaport	/s/ Debbie Schwartzberg
Name:  Richard Rappaport		Debbie Schwartzberg
Title:    President
		/s/ Janine Frisco
		Janine Frisco
		/s/ Richard Rappaport
		WestPark Financial Services, LLC By: Richard Rappaport Its: President
		/s/ Richard Rappaport
		Richard Rappaport
		/s/ Anthony Pintsopoulos
		Anthony Pintsopoulos
		/s/ Richard Rappaport
		Amanda Rappaport Trust By: Richard Rappaport Its: Trustee
		/s/ Richard Rappaport
		Kailey Rappaport Trust By: Richard Rappaport Its: Trustee
		/s/ Kevin DePrimio
		Kevin DePrimio
		/s/ Jason Stern
		Jason Stern

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/s/ Debbie Schwartzberg

The Julie Schwartzberg Trust dated 2/9/2000

By: Debbie Schwartzberg

Its: Trustee

/s/ Debbie Schwartzberg

The David N. Sterling Trust dated 2/3/2000

By: Debbie Schwartzberg

Its: Trustee

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Schedule I

Stockholders of SRKP 18, Inc.

	Stockholder	Shares to be cancelled per the terms of this Agreement		Pre-Purchase Right Shares		Post-Purchase Right Shares (assuming full exercise of the Purchase Right)
1.	Debbie Schwartzberg 785 5th Avenue , Apt 10C New York, NY 10022		585,705		1,000,000		414,295
2.	The Julie Schwartzberg Trust 785 5th Avenue , Apt 10C New York, NY 10022		58,570		100,000		41,430
3.	The David N. Sterling Trust 785 5th Avenue , Apt 10C New York, NY 10022		58,570		100,000		41,430
4.	Janine Frisco 200 Oceangate, Suite 1500 Long Beach, CA 90802-4302		145,474		248,374		102,900
5.	WestPark Financial Services, LLC 1900 Avenue of the Stars, Suite 310 Los Angeles, CA 90067		1,624,733		2,773,979		1,149,246
6.	Richard Rappaport 1900 Avenue of the Stars, Suite 310 Los Angeles, CA 90067		665,021		1,135,420		470,399
7.	Anthony Pintsopoulos 1900 Avenue of the Stars, Suite 310 Los Angeles, CA 90067		415,639		709,639		294,000
8.	Amanda Rappaport Trust 1900 Avenue of the Stars, Suite 310 Los Angeles, CA 90067		187,038		319,338		132,300
9.	Kailey Rappaport Trust 1900 Avenue of the Stars, Suite 310 Los Angeles, CA 90067		187,038		319,338		132,300
10.	Kevin DePrimio 1900 Avenue of the Stars, Suite 310 Los Angeles, CA 90067		145,474		248,374		102,900
11.	Jason Stern 1900 Avenue of the Stars, Suite 310 Los Angeles, CA 90067		83,128		141,928		58,800
			4,156,390		7,096,390		2,940,000

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Schedule II

Warrantholders of SRKP 18, Inc.

	Warrantholder	Warrants to be cancelled per the terms of this Agreement		Pre-Purchase Right Warrants		Post-Purchase Right Warrants (assuming full exercise of the Purchase Right)
1.	Debbie Schwartzberg 785 5th Avenue , Apt 10C New York, NY 10022		940,815		1,000,000		59,185
2.	The Julie Schwartzberg Trust 785 5th Avenue , Apt 10C New York, NY 10022		94,081		100,000		5,919
3.	The David N. Sterling Trust 785 5th Avenue , Apt 10C New York, NY 10022		94,081		100,000		5,919
4.	Janine Frisco 200 Oceangate, Suite 1500 Long Beach, CA 90802-4302		233,674		248,374		14,700
5.	WestPark Financial Services, LLC 1900 Avenue of the Stars, Suite 310 Los Angeles, CA 90067		2,609,802		2,773,979		164,177
6.	Richard Rappaport 1900 Avenue of the Stars, Suite 310 Los Angeles, CA 90067		1,068,220		1,135,420		67,200
7.	Anthony Pintsopoulos 1900 Avenue of the Stars, Suite 310 Los Angeles, CA 90067		667,639		709,639		42,000
8.	Amanda Rappaport Trust 1900 Avenue of the Stars, Suite 310 Los Angeles, CA 90067		300,438		319,338		18,900
9.	Kailey Rappaport Trust 1900 Avenue of the Stars, Suite 310 Los Angeles, CA 90067		300,438		319,338		18,900
10.	Kevin DePrimio 1900 Avenue of the Stars, Suite 310 Los Angeles, CA 90067		233,674		248,374		14,700
11.	Jason Stern 1900 Avenue of the Stars, Suite 310 Los Angeles, CA 90067		133,528		141,928		8,400
			6,676,390		7,096,390		420,000

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Exhibit A

Share Exchange Agreement

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EX-10.4

EXHIBIT  10.4

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  IT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.

PROMISSORY NOTE

No. N-__	Date of Issuance
US $170,000	January 9, 2009

FOR VALUE RECEIVED, SRKP 18, Inc., a Delaware corporation (the “Company”), hereby promises to pay WestPark Capital, Inc. (the “Lender”), the principal sum of One Hundred Seventy Thousand United States Dollars (US$ 170,000) with no interest (this “Note”).  This Note is issued in connection with that certain Share Exchange Agreement dated December 11, 2008, as amended on January 9, 2009, by and among the Company, World Orient Universal Limited, a company organized in the British Virgin Islands (“World Orient”), and all of the shareholders of World Orient (the “Exchange Agreement”).  The principal shall be due and payable by the Company on or before the earlier of (a) thirty (30) days from the date of issuance of this Note or (b) upon the receipt by the Company of at least $4 million in the Equity Financing (the “Maturity Date”).  Capitalized terms used but not defined herein shall have the meanings given to them in the Exchange Agreement.

1.           Payment.  All payments shall be made in lawful money of the United States of America at the principal office of the Company, or at such other place as the holder hereof may from time to time designate in writing to the Company.  Payment shall be credited first to Costs (as defined below), if any, and any remainder applied to principal.  The Company hereby waives demand, notice, presentment, protest and notice of dishonor.

2.           Usury.  It is the intention of the parties hereto to strictly comply with all applicable usury laws.  Accordingly, notwithstanding any provisions to the contrary in this Note, or in any of the documents securing payment hereof or otherwise relating hereto, in no event shall this Note or such documents be construed to contract for, charge, or permit a receipt of interest in excess of the maximum amount permitted by applicable law.  If any such excess interest is contracted for, charged, or received under this Note or under the terms of any of the documents securing payment hereof or otherwise relating hereto, or in the event the maturity of the indebtedness evidenced by this Note is accelerated in whole or in part, or in the event that all or part of the principal or interest of this Note shall be prepaid, so that under any of such circumstances the amount of interest contracted for, charged, or received under this Note or under any of the instruments securing payment hereof shall exceed the maximum rate of interest permitted by law, then, in such event (i) neither the Company nor its successors or assigns, or any other party liable for the payment hereof shall be obligated to pay the amount of such interest to the extent that it is in the excess of the maximum permitted by law; and (ii) any such excess shall be deemed a mistake and canceled automatically, and, if theretofore paid, shall, at the option of the holder of this Note, be refunded to the Company or applied as a credit against the then unpaid principal amount hereof, and (iii) the effective rate of interest shall be automatically reduced to the maximum contract rate allowed under such laws as now or hereafter construed by the court of appropriate jurisdiction, and, to the extent permitted by law, determination of the rate of interest shall be made by amortizing, prorating, allocating, and spreading in equal parts during the period of the fully stated term of the loan evidenced hereby all interest at any time contracted for, charged, or received from the Company in connection with the loan evidenced by this Note.

3.           Waiver and Amendment.  Any provision of this Note may be amended, waived or modified upon the written consent of the Company and the Lender.

4.           Notices.  Any notice, request or other communication required or permitted hereunder shall be in writing and shall be deemed to have been duly given if personally delivered or mailed by registered or certified mail, postage prepaid, or by recognized overnight courier or personal delivery at the respective addresses of the parties as set forth below. Any party hereto may by notice so given change its address for future notice hereunder. Notice shall conclusively be deemed to have been given when received.

If to the Company:

SRKP 18, Inc.

c/o Zhengzhou Shenyang Technology Limited

Building 28, Huzhu Road

Zhongyuan District, Zhengzhou

People’s Republic of China

Attention:  Zhong Bo

Fax: [(__) __________]

If to the Lender:

WestPark Capital, Inc.

1900 Avenue of the Stars, Suite 310

Los Angeles, CA 90067

Attn: Richard Rappaport

Fax: (310) 843-9304

5.           Successors and Assigns.  This Note applies to, inures to the benefit of, and binds the successors and assigns of the parties hereto; provided, however, that the Company may not assign its obligations under this Note without the written consent of the Lender.  The Lender and any subsequent holder of this Note receives this Note subject to the foregoing terms and conditions, and agrees to comply with the foregoing terms and conditions for the benefit of the Company and any other Lenders.

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6.           Officers and Directors Not Liable.  In no event shall any officer or director of the Company be liable for any amounts due and payable pursuant to this Note.

7.           Expenses.  The Company hereby agrees, subject only to any limitation imposed by applicable law, to pay all expenses, including reasonable attorneys’ fees and legal expenses, incurred by the holder of this Note (“Costs”) in endeavoring to collect any amounts payable hereunder which are not paid when due, whether by declaration or otherwise.  The Company agrees that any delay on the part of the holder in exercising any rights hereunder will not operate as a waiver of such rights.  The holder of this Note shall not by any act, delay, omission or otherwise be deemed to have waived any of its rights or remedies, and no waiver of any kind shall be valid unless in writing and signed by the party or parties waiving such rights or remedies.

8.           Governing Law.  This Note and all actions arising out of or in connection with this Note shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to the conflicts of law provisions of the State of Delaware, or of any other state.

9.           Approval.  The Company hereby represents that its board of directors, in the exercise of its fiduciary duty, has approved the Company’s execution of this Note based upon a reasonable belief that the principal provided hereunder is appropriate for the Company after reasonable inquiry concerning the Company’s financing objectives and financial situation.  In addition, the Company hereby represents that it intends to use the principal of this Note primarily for the operations of its business, and not for any personal, family or household purpose.

10.           Waiver.  THE COMPANY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES THE RIGHT IT MAY HAVE TO A TRIAL BY JURY OF, UNDER OR IN CONNECTION WITH THIS NOTE, OR ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY RELATING HERETO OR THERETO.  THIS PROVISION IS A MATERIAL INDUCEMENT FOR LENDER ACCEPTING THIS NOTE.

SRKP 18, Inc.
By:	/s/ Richard Rappaport
Name: Richard Rappaport
Title: President

3

EX-10.5

EXHIBIT 10.5

ZHENGZHOU SHENYANG SCIENCE & TECHNOLOGY CO., LTD.

Employment Contract

Labor Contract of Company Employees

Party A

Corporation Representative

Company Address

Party B

Identity Card:

Home Address:

Telephone:                                                      Postal Code:

Party B confirms: Party A has accurately informed Party B, and Party B confirms content of work, condition of work, address of work, occupational hazards, labor rewards and the other what Party B has a right to know, Party B has known and read the rules and regulations and labor disciplines of Party A carefully.

Party B promises: Party B provides the studies, certificates, documents and so on are real in work for Party A, if the false information is provided, Party B is willing to assume responsibilities up to Labor Contract is terminated.

According to Labor Law of the People's Republic of China, Labor Contract Law of the People's Republic of China and the relevant laws and regulations, on the basis of equality and voluntariness and reaching unanimity through consultation, regarding related matters on Party A employs Party B to conclude this contract, in order to comply with it commonly.

2

Chapter 1 Contract Period

Article 1 This contract iscontract. (Please select fixed term, non-fixed term)

(1) Fixed term:

The effective period since_____(date)_____(month)____(year) till _____(date)_____(month)____(year).

The probationary period since____(date)_____(month)____(year) to _____(date)_____(month)____(year).

If both parties reach an agreement on the renewal of the contract before one month of the expiry of the contract, the contract can be renewed, without limiting the number of renewals.

(2) Non-fixed term

The effective period since_____(date)_____(month)____(year)

The probationary period since_____(date)_____(month)____(year) to _____(date)_____(month)____(year).

(3) During the probationary period, either party has the right to terminate this labor contract, but it must be notified each other for seven days in advance. If the probationary period is expired, and two parties without objections, Party B becomes the official staff of Party A, and the probationary period should be included in the life of the contract.

Chapter 2 The content and address of work

Article 2 Party B agrees to, according to the requirement of Party A, work in the _______department, engage in__________( type of work). Party B's work and labor ration standards is decided by the Party A, Party A has a right to adjust Party B’s work and labor ration reasonably, according to the requirements.

Article 3 Party B should get the work standards of the Party A’s regulations.

Article 4 Party B’s workplace is

Article 5 Party B agrees: Party A can adjust Party B’s work contents, position and workplace, which based on the performance and ability of Party B, or the company's operating requirements.

3

Chapter 3 The working time, break time and vacation

Article 6 Party B’s working hours are eight hours per day, and five and a half days per week, working hours shall be executed according to regulations of the company.

Article 7 Party B has the right to enjoy statutory holidays and vacations treatment, which are regulated by Party A. Except special working hours that is executed in accordance with the laws.

Article 8 Party B agrees: Party A may, according to the working requirements, adjust the working hours, including change the beginning and end of the working time of the day, by giving reasonable resting time for employees, require employees to work on statutory holidays and rest days. No special reason, Party B should support and submit to Party A’s arrangement actively, but Party A should control overtime work strictly.

Article 9 Party A is not allowed to violate labor law to extend the working hours of workers. In case get the special requirements need to arrange overtime work, Party A should, according to relevant regulations, pay the compensation to Party B, except the non-payment of law and relevant regulations.

Chapter 4   Labor Rewards

Article 10 Labor rewards (namely salary) for Party B during normal working period consist of basic wages, post wages, allowances and wages for keeping secret. The concrete amount shall be referred to base amount determined on employment table.

Article 11 Party A implements graded wages system in accordance with relevant regulations and enterprise business conditions, determines corresponding salary standard depending on assumed post of Party B and other conditions, and pays the salary through bank payment or cashes payment in the next month.

Article 12 Party A may increase wages in accordance with profits and Party B’s behavior and working performance, if Party B can’t reach required indexes specified by Party A, wages of Party B may not increase.

4

Article 13 Party A may set up year-end bonus in accordance with enterprise profits, and issue bonus depending on employee’s working performance and term of service.

Article 14 Party A may provide allowances and subsidies for Party B in accordance with state regulations and enterprise conditions.

Article 15 Except for subsidies prescribed by the law, rules and regulations, Party A has no obligation to provide other allowances and subsidies to Party B.

Article 16 The wages paid by Party A include deserved rewards for keeping secret (exact ratio is 15% of wages payment).

Article 17 On the premise of Party B provides normal work, Party A shall pay wages monthly not less than local minimum wage level.

Article 18 Party B agrees Party A to adjust the salary in case following conditions happen:

 (1) The post of duty of Party B is adjusted in accordance with his performance and ability; and

 (2) Labor reward of Party B is adjusted in accordance with bylaws of Party A;

 (3) The post of duty of Party B is adjusted in accordance with bylaws of Party A;

 (4) Party B becomes a shareholder or enjoys the proper equity participation of Party A;

 (5) On condition that Party A’s business condition has vital changes and occurs other impersonal accidents.

Chapter 5 Social Insurance

Article 19 Both parties shall pay the social insurance premiums in accordance with state prescription.

5

Chapter 6 Labor Protection, Labor Condition & Occupational Hazard Protection

Article 20 Party A shall provide necessary labor conditions and tools for Party A, as well as safe and sanitary working environment that meets state requirements, otherwise Party B has a right to refuse to work or terminate the contract.

Article 21 Party A shall provide labor protection and health care articles for Party B in accordance with working requirements and state prescriptions, give corresponding protection to women staff and workers during menstruation, pregnancy, child birth and baby nursing period. The specific methods shall be executed in accordance with relevant state prescriptions and local standards.

Article 22 During the service period of Party B, Party A must offer such an opportunity for Party B as professional ethics education, operational technical safety production, education of kinds of rules and regulations as well as social legal system education from time to time, and Party B shall actively accept such educations.

Article 23 For the post of duty existing occupational hazard, Party A shall provide occupational hazard protection in accordance with relevant laws of China.

Chapter 7 Labor Discipline

Article 24 Party B has gotten acquainted with and read bylaws and labor disciplines of Party A carefully. Party B commits himself to abide by all bylaws as well as labor disciplines established by Party A strictly.

Article 25 Party A has the right to establish and revise bylaws and labor disciplines in accordance with legal prescriptions.

Article 26 Once Party B breaks the criminal law, be subjected to legal sanctions, or breaches current bylaws of the company, Party A has the right to take disciplinary action against even dismiss him in accordance with relevant prescriptions; any losses caused by breaching rules, such as bad effect on business fame, assets losses, etc, Party A may take one-time punishment measures as the case may be.

6

Article 27 If Party B engages in embezzlement and takes bribes, neglects duty grossly,engages in malpractice for selfish ends or has other immoralities, which will cause or going to damage personal and property interests greatly, in other cases Party B violates the criminal law or be subjected to legal sanctions, Party A has the right to dismiss Party B’s duty immediately without paying any “contract compensation” and “contract performance bond”. Party B shall bear total compensation responsibility for any losses hereof caused by any embezzlement and bribe, personal security and property benefits damage.

Article 28 Party B shall keep commercial items confidential during engagement and after dismissing in accordance with the Agreement on Secret Information signed by both parties.

Chapter 8 Right and Obligation of Both Parties

Article 29 Party A can properly adjust Party B’s post of duty in accordance with his or her practical working ability and demands of the company.

Article 30 Party A has the right to supervise Party B in accordance with corporate bylaws.

Article 31 Any technological achievements tied to job and relevant intellectual property rights accomplished by Party B during engagement period shall be possessed by Party A, and Party B has the right to obtain certificate of honor and material award.

Article 32 Party A shall provide corresponding professional skill training for Party B, and Party B has a right to enjoy basic working right and relevant personnel treatment prescribed by Party A.

Article 33 Party B enjoys the right to participate relevant business training and make a suggestion on working improvement.

Article 34 Party B has an obligation to protect Party A’s interests, fame and common property, abide by bylaws and labor disciplines prescribed by Party A, and keep Party A’s commercial items confidential.

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Chapter 9 Cancellation and Termination of Contract

Article 35 Both parties may terminate their employment contract if they so agree after consultations.

Article 36Party A may terminate an employment contract by giving Party B himself 30 days’ prior written notice, if:

 (1) After the set period of medical care for an illness or non-work-related injury, Party B can engage neither in his original work nor in other work arranged for him by Party A;

 (2) A major change in the objective circumstances relied upon at the time of conclusion of the employment contract renders it impossible and, after consultations, both parties are unable to reach agreement on amending the employment contract;

 (3) Party B is incompetent and remains incompetent after training or adjustment of his position;

 (4) Any conditions meeting employment contract termination prescribed in Party A’s bylaws occur.

Article 37If any one of the following circumstances occurs, Party A may reduce the workforce in accordance with specified procedures of employment contract:

 (1) Restructuring pursuant to the Enterprise Bankruptcy Law;

 (2) Serious difficulties in production and/or business operations;

 (3) The enterprise switches production, introduces a major technological innovation or revises its business method, and, after amendment of employment contracts, still needs to reduce its workforce;

 (4) Other major changes in the objective economic circumstances relied upon at the time of conclusion of the employment contracts, rendering them impossible.

Article 38 Party A may dismiss the employment contract anytime if Party B:

 (1) Is proved during the probation period not to satisfy the conditions for employment;

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 (2) Materially breaches Party A’s rules and regulations;

 (3)Commits serious dereliction of duty or practices graft, causing substantial damage to Party A;

 (4) Has additionally established an employment relationship with other employing units which materially affects the completion of his tasks with the first-mentioned unit, or he refuses to rectify the matter after the same is brought to his attention by Party A;

 (5) Party B uses such means as deception or coercion, or takes advantage of Party A’s difficulties, to cause Party A to conclude an employment contract, or to make an amendment thereto, that is contrary to that Party A’s true intent; thus causes invalid or partially invalid employment contract;

 (6) Has his criminal liability, rehabilitation through labor and be prosecuted for the criminal responsibility pursued in accordance with the law.

Article 39 Party B may terminate his employment contract if Party A:

 (1) Fails to provide the labor protection or working conditions specified in the employment contract or state policies and regulations;

 (2) Fails to pay labor compensation in full and on time;

 (3) Has rules and regulations that violate laws or regulations, thereby harming Party B’s rights and interests;

 (4) Party A uses such means as deception or coercion, or takes advantage of Party B’s difficulties, to cause Party B to conclude an employment contract, or to make an amendment thereto, that is contrary to that Party B’s true intent; thus causes invalid or partially invalid employment contract;

 (5) If Party A uses violence, threats or unlawful restriction of personal freedom to compel Party B to work, or if Party B is instructed in violation of rules and regulations or peremptorily ordered by Party A to perform dangerous operations which threaten his personal safety, Party B may terminate his employment contract forthwith without giving prior notice to Party A.

9

Article 40 Party A may not terminate an employment contract if Party B:

 (1) Has been confirmed as having lost or partially lost his capacity to work due to an occupational disease contracted or a work-related injury sustained with the Party B;

 (2) Has contracted an illness or sustained a non-work-related injury, and the set period of medical care therefore has not expired;

 (3) Is a female employee in her pregnancy, child birth and baby nursing period;

 (4) Other circumstances specified in laws or administrative statutes regulations.

Article 41 Generally any of the parties may terminate his employment contract by giving one month prior notice to the other one, otherwise he will pay 2 times’ salaries as compensation money. Employment contract termination procedures will be handled in accordance with legal and relevant enterprise prescriptions.

Article 42 During the contract period, if Party B feels an objection to work by having proper reasons, he can quit the job by informing Party A one month advance in written form, which will be valid after Party A’s approval. If Party B gets expired training, but the work doesn’t reach to specified term, Party B shall pay training fee for Party A. If Party B quits the job without approval of Party A, Party A has the right to request Party B to execute employment contract under the help of governmental labor department, and then compensate economic losses hereof to Party A.

Article 43 During the contract period, by assuming such senior posts in economy, management and finance, if Party B quits the job without any proper reason and Party A’s approval, Party A has the right to request Party B to compensate the indirect or direct economic losses hereof, at least the rest total salaries specified in the contract for contract breaching responsibilities.

Article 44 The employment contract shall terminate if:

 (1) Its term expires;

 (2) Party B has commenced drawing his basic old age insurance pension in accordance with the law;

10

 (3) Party B dies, or is declared dead or missing by a People’s Court;

 (4) Party A is declared bankrupt;

 (5) Party A has its business license revoked, is ordered to close or is closed down, or Party A decides on early liquidation;

 (6) Other circumstances specified in laws or administrative statutes regulations.

Chapter 10 Responsibility for Breach of Contract

Article 45 Both parties must strictly perform the employment contract, unless some relevant contents can’t be performed after both parties’ negotiation, any of the parties violates the contract shall compensate economic losses hereof depending on degree and responsibilities, compensation amounts shall be determined in accordance with regulations and practical conditions.

Chapter 11 Others

Article 46 This contract is discussed by workers' congress, approved by the Board of Directors, and the final power of interpretation is possessed by the Human Resource Department (or the Office) of Zhengzhou Shenyang Technologies Co., Ltd.;

Article 47 Once the contract is signed, both parties must abide by the contract strictly. Both parties may not change contract contents at his own choice. All disputes caused by this contract shall be settled down through negotiation, if failed, they may submit to local labor dispute arbitration committee;

Article 48 The matters that are not covered by this agreement or not complied with the law of state or local government should be executed in accordance with the law;

Article 49 This contract is executed in duplicates, Party A and Party B each has one and shall be supervised by superior department in charge of Party A and state labor management department.

This contract will take effect immediately as from the signing day!

Party A (Signature)	Party B (Signature)
	Date:

11

EX-10.6

Patent License Agreement

EXHIIBT 10.6

Patent License Agreement

This Patent License Agreement (the "Agreement") is made and entered into as of January 9, 2009 (the “Effective Date”) in Zhengzhou, the People’s Republic of China (the “PRC” or “China”):

Between

Licensor: Zhong Bo

ID. No.: 412801195008100614

Address: No.5, Unit 6, Building 28, Huzhu Road, Zhongyuan District, Zhengzhou.

And

Licensee: Zhengzhou Shenyang Technology Co, Ltd.

Business License No.: 410100100008310

Address: Building 28, Huzhu Road, Zhongyuan District, Zhengzhou.

Licensor and Licensee shall be referred to individually as a “Party” and collectively as the “Parties.”

WHEREAS:

1.       Licensor is the owner of a utility model patent entitled “Double-Sided Printed Circuit Board for Cable TV Outdoor Optical Receiver (有线电视室外光接收机双面印刷电路板)” (the “Patent”, which was granted as of January 30, 2002 with the Patent Number of ZL 01 207855.7, and the Patent Certificate of which is attached as Exhibit A ).

2. Licensor agrees to license Licensee to use the Patent in accordance with terms and conditions of this Agreement and Licensee agrees to accept such license in accordance with terms and conditions of this Agreement.

NOW, the Parties hereby agree as follows:

1. Definition

1.1 Patent shall mean a utility model patent entitled “Double-Sided Printed Circuit Board for Cable-TV Outdoor Optical Receiver (有线电视室外光接收机双面印刷电路板)” published by the SIPO as of January 30, 2002 with the Patent Number of ZL 01 207855.7, which Licensor licenses Licensee to implement.

1

Patent License Agreement

1.2 Know-how shall mean the technology that has not been in the public domain but is helpful for the implementation of the Patented technology for industrial production .

1.3 Technology Data shall mean all documents relating to the Patent, all Know-how relating to the implementation of the Patent, and design drawings, process drawings, process formula, technological process and other technology data.

1.4 Improved Technology shall mean any improvement to the technology licensed by Licensor to Licensee.

1.5 Exclusive License shall mean Licensor to exclusively licenses to Licensee rights to implement the Patent technology in the agreed term, territory and technology field in accordance with terms and conditions set forth in this Agreement. Without the written consent of Licensee, Licensor shall not retain any right to use such Patent technology and enter into any license agreement with any third party regarding the Patent.  Licensee has the right to sub-license any third party to implement the Patent without the consent of Licensor.

2. Mode and Scope of Patent License

2.1 Licensor to exclusively licenses to Licensee rights to implement the Patent within the territory of the PRC during the license term set forth in Section 3.1.  Without written consent of Licensee, Licensor shall not sub-license any third party to make, use or sell any patented articles.

2.2 Licensor has the right to, at its sole discretion, use the Patent technology and manufacture, use, offer for sale, sell and export the Patent products, or license other parties to use the Patent technology and manufacture, use, offer for sale, sell and export the Patent products.

2.3 Licensor agrees that Licensee has the right to sub-license the third party to use the Patent technology; however, the scope of sublicense shall not exceed the scope licensed by Licensor to Licensee as set forth in Sections 2.1 and 2.2.

3. Term of Patent License

3.1 The term of license granted by Licensor to Licensee herein shall be from the effective date of this Agreement to the expiration or termination date of the Patent.

2

Patent License Agreement

4. Delivery of Patent Documents and Technology Data

4.1 Licensor shall deliver all Patent documents (the “Patent Documents”, including but not limited to the Patent documents, Technology Data, Know-how, technology standards and other technology, except for the documents which have been delivered before the execution of this Agreement,), to Licensee within three (3) days after the effective date of this Agreement.

5. License Fees and Registration

5.1 Licensor grants to Licensee a royalty-free Exclusive License to use the Patent technology in accordance with the scope of license during the term of license.

5.2 The Parties agree to cooperate with each other to handle the registration and filing procedures in accordance with the law.  Licensee shall bear the costs and fees for such registration.

6. Improved Technology

6.1 Licensor agrees that Licensee has the sole and exclusive right in and to the Improved Technology and Licensee has the right to apply for patent, copyright or other intellectual property rights regarding the Improved Technology, and to request Licensor to provide necessary assistance for such application.

7. Representations, Warranties and Covenants

7.1 Licensor represents and warrants to Licensee as follows：

7.1.1 Licensor warrants and represents that it has all necessary right, power and capability to enter into and perform the obligations and liabilities under this Agreement.  This Agreement is binding on Licensor legally and validly upon the execution hereof.

7.1.2 Licensor has legal and entire proprietary and control of the Patent, and has the right and authority to enter into this Agreement and license the Patent.

7.2 Licensee represents, warrants and covenants to Licensor as follow：

7.2.1 Licensee is a limited liability company duly organized and existing under the laws of the PRC, and has all necessary right, power and capacity to enter into and perform the obligations and liabilities under this Agreement.  This Agreement is legally and validly binding on and enforceable to Licensee upon the execution hereof.

3

Patent License Agreement

7.2.2 Licensee shall enter into and perform this Agreement within its power and business scope, and has adopted necessary corporate authorization, obtained all the consents and approvals of the third party and governmental authorities, and not violated all binding or applicable laws and limitations to the company.

8. Infringement

8.1 Where either Party discovers that the Patent is infringed by a third party, such Party shall inform the other Party immediately. Licensor shall negotiate with the infringing party, or be responsible for addressing a petition to the patent administrative authorities, or bringing a suit to the court, and Licensee shall provide assistance.

9. Dispute Resolution

9.1 In the event of any dispute with respect to the construction and performance of this Agreement, the Parties shall first resolve the dispute through good faith amicable negotiations.  In the event the Parties fail to reach an agreement on the dispute within thirty (30) days after either Party's request the resolution of the dispute through negotiations, such Party may submit the relevant disputes to Zhengzhou Arbitration Commission for resolution, in accordance with its then effective arbitration rules.  The arbitration shall be conducted in Zhengzhou, and the language used during arbitration shall be Chinese.  The arbitration award shall be final and binding on both Parties.

10. Governing law

10.1 The effectiveness, construction, and enforcement of this Agreement hereunder shall be governed by the laws of PRC.

11. Amendments and Supplements

11.1 Any amendments and supplements to this Agreement shall be in writing.  The amendment agreements and supplementary agreements to this Agreement duly signed by the Parties shall be an integral part of this Agreement and shall have the equal legal validity with this Agreement.

12. Severability

Patent License Agreement

12.1 In the event that any provision of this Agreement is found to be invalid and unenforceable in any aspect in accordance with any laws or regulations, such provision is invalid and unenforceable to the extent of relevant jurisdiction under relevant laws and regulations, and the validity and enforceability of the remaining provisions of this Agreement shall not be affected or compromised in any aspect.

4

Patent License Agreement

13. Effectiveness and Termination

13.1 This Agreement is executed on the date first above written and shall take effect as of such date.  This Agreement shall expire upon expiration or termination of the Patent  .

14. Miscellaneous

14.1 This Agreement is written in Chinese in four copies, each Party having one copy while other two copies for filing.

IN WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Patent License Agreement as of the date first above written.

Licensor: Zhong Bo

By: /s/ Zhong Bo

Licensee: Zhengzhou Shengyang Technology Co., Ltd. (seal)

Legal representative or authorized representative:

Name:/s/ Zhong Bo

5

Patent License Agreement

Exhibit A Patent Certificate

 [Please attach]

6

EX-10.7

EXHIBIT 10.7

House Lease Agreement

Party A (Lessor): Zhengzhou Green City Advertisement Co., Ltd.

Party who establishes the contract:

Party B (Lessee): Zhengzhou Shenyang Science & Technology Co., Ltd.

Based on full consultation and negotiation, both parties agree to reach such an agreement about house lease affairs and strictly abide by the terms.

I. Party A is willing to lease out the house located in No. 170, Gongren Road, Zhongyuan District (with floor area of 200m2) to Party B. Party B has adequate acknowledgement to the house and is willing to lease this house.

II. The annual rents of above house agreed by both parties are total RMB 50,000 (Fifty Thousand) Yuan, and the term is from September 16, 2007 to September 15, 2010. The rents shall be paid semiyearly, and delivered to Party A 15 days before expiration.

III. The land use right of above-mention house shall be used by Party B at the same time of lease agreement is affective.

IV. Party A shall define clear proprietorship of the house. If there is any dispute or credit problem relevant to Party A, he shall be responsible for the dispute and bear lawsuit responsibility collateral, thus compensate any economic losses caused thereof. Party B shall assure the above-mention house is for office purpose only.

V. During leasing term, Party A shall promise to bear following responsibilities:

1. Above-mentioned house shall accord with leasing house requirements;

2. If the house needs to be sold or pledged, Party A shall inform Party B three (3) months in advance.

VI. During leasing term, Party B shall promise to bear following responsibilities:

1. If the house is intended to be modified or rebuilt, it shall be approved by Party A in written form, while the expenses shall be paid by Party B;

2. If it needs the sublease to the third party or exchange with the third person, it shall be invalid unless agreed by Party A;

3. Party B shall bear compensation or repair for the damaged house or equipment due to improper use or other man-made reasons;

4. Party B shall assist Party A to take regular building inspection;

5. Party B shall return the house to Party A once the agreement expires. If the lease keeping is required, Party B shall negotiate with Party A three (3) months in advance to sign further agreement.

VII. Responsibility for breach of contract: should any party fail to fulfill obligations specified in the agreement or violate against relevant state or local house lease regulations, the other party has the right to release this agreement in advance, any losses hereof shall be born by the party bears responsibility. Should Party B overdue the delivery of rents, Party B shall pay 10% penalties on the basis of monthly rents for each overdue day.

VIII. No party bears any responsibility for house removing and equipment damage caused by force majeure.

IX. If there is any dispute during contract performance, both parties shall take negotiation to settle them down. If negotiation is failed, both parties can lodge an appeal to people's court that has the jurisdiction over these matters.

X. Both parties shall bear respective liabilities of paying taxes during the leasing term according to relevant regulations.

XI. Anything not covered in this contract will be discussed separately by both parties. The supplementary agreement shall have the equal effect with this agreement after signing by both parties.

XII. There are two duplicates for this agreement, Party A and Party B shall each take one copy.

XIII. Other affairs agreed by both parties:

1. Party B shall take charge for such affairs as unit personnel management, family planning and three-responsibility (being responsible for general sanitation, green covering and keeping good social order in a designated area outside the unit building) during leasing term;

2. Party B shall pay the practical water and electricity cost to Party A during leasing term.

Party A (Signature):	Party B (Signature):
Legal representative:	Legal representative:
Address:	Address:
Contact phone: 67946262	Contact phone: 67716850
Post code:	Post code:
Authorized proxy: Liu Haike	Authorized proxy: Wang Weiping

Zhengzhou Green City Advertisement Co., Ltd. (Seal)

Zhengzhou Shenyang Science & Technology Co., Ltd. (Seal)

Date: Aug. 29, 2007

EX-10.8

EXHIBIT 10.8

Zhengzhou Shenyang Science & Technology Co., Ltd.

Block 28, Huzhu Road, Zhongyuan District, Zhengzhou City, Henan Province, China

July 11, 2008

No. 1 Complementary Agreement

Dear Sir/Ms:

According to No.20080104001260001112 Accounts Receivable Financing Agreement on Jan. 4, 2008 and the subsequent complementary agreement (hereinafter referred to as “Line Letter”) signed between Raiffeisen Zentralbank Oesterreich AG Beijing Branch (hereinafter referred to as “the Lender”) and Zhengzhou Shenyang Science & Technology Co., Ltd. (hereinafter referred to as “the Borrower”), the Lender agrees to provide the Borrower with accounts receivable line (hereinafter referred to as “Line”) with non-commitment and right of recourse with total amount of not exceeding RMB 50,000,000.00Yuan (RMB50MILLION YUAN).

The terms defined in Line Letter have the same meanings in this complementary agreement.

Now the Parties mutually agree to modify this Line Letter as following:

The total amount of accounts receivable financing line with non-commitment and right of recourse not exceeding RMB 63,000,000.00Yuan (RMB SIXTY-THREE MILLION YUAN)

1. Clause 3 (Line Category and Amount) should be modified as following:

⑴ Total Amount of Line: not exceeding RMB 63,000,000.00Yuan (RMB SIXTY-THREE MILLION YUAN).

⑵ Can be used for:

   Accounts Receivable Financing: short-term loan with currency of RMB, term not exceeding the loan term, and amount not exceeding 85% of accounts receivable (hereinafter referred to as “Loan”).

2. Clause 4 (Commission, cost (exclude advanced pay)), interest rate and Penalty Interest should be modified as following:

Interest rate: interest rate of the same level in corresponding period published by the People’s Bank of China ×130%;

Management Fee of Accounts Receivable: 0.125%of amount of accounts receivable, but each loan should not be less than RMB 2,500.00 Yuan (RMB TWO THOUSAND AND FIVE HUNDRED YUAN), the Borrower should pay for then Lender on withdrawal date of each loan.

Upfront Fees: the interest rate is 0.25% of total amount of the line, that is, RMB 157,500.00 (RMB ONE HUNDRED AND FIFTY SEVEN THOUSAND FIVE HUNDRED), the Borrower should pay for the lender within Fifteen (15) days after signing this Complementary Agreement.

Penalty Interest: if the borrower fails to pay for any pricinpal, interest rate and/or other fund receivable under this line, the Lender owns the right to collect the penalty interest from corresponding due date to the lender receiving all the fund as per the ratio of one HUNDRED AND FIFTY PERCENTAGE (150%).

If the borrower fails to use any or all the funds under this loan according to the purpose prescribed in this letter, the Lender owns the right to collect the penalty interest from the date this funds is appropriated to the date the Borrower stops appropriating this funds as per the ratio of TWO HUNDRED PERCENTAGE (200%).

If the Borrow fails to pay any accounts payable and appropriates the same accounts, the Lender owns the right to collect the higher interest rate generated from this capital.

All other banking rates shall be based on standard rate scale of the Lender. Registration fee on pledge and expenditures of accounts receivable (include but not limited to initial registration, alteration registration, extension registration and withdrawal registration) shall take charging standards of Credit Reference Center, the People’s Bank of China as reference.

    The loan interest shall be calculated according to actual days, 360 days for a year, and the interest shall take RMB settlement. The Borrower should pay for the Lender the interest payable of this fund from the drawing date (the definition see Clause 3) to the due date (the definition see Clause 3).

All the interest, handling charge, insurance premium, Registration fee on pledge and expenditures of accounts receivable, banking fee generated from the line and other expenses relative to the Line shall be undertaken by borrower.

The lender shall keep the right to reasonably regulate the above handing charge, costs and rate from time to time, and the right to debited the Lender’s account to deduct all the expenses including interest, handing charge, insurance premium, Registration fee on pledge and expenditures of accounts receivable, banking fee and other relative fees.

3. Clause 6 (Loan Term) should be modified as following:

The final due date (hereinafter referred to as “final due date”) of the Line shall be Sep. 30, 2009. The drawing date (“Drawing Date” for short) of each loan under the Line shall be any business day Beijing City Commercial Bank (hereinafter referred to as “Working Day of the Bank”) provides corporate business before the final due date.

The loan term of each loan (hereinafter referred to as “loan term”) in this letter shall begin from the drawing date of each loan to the due date (if not working day of the bank, postpone to the next working day, hereinafter referred to as “due date”) of corresponding accounts receivable of the loan, but the term should not be later than the final due date. The loan term should not exceed Ninety-days (90).

Notwithstanding, the lender may decide by themselves to inform the Borrower to terminate the loan in written form. The Lender shall notice the Borrower in written form 10 days before termination of the loan. If the loan is terminated, all the principals, interest, and other fees should be mature immediately, and the Borrower should immediately pay for the Lender in full amount.

4. Clause 18 ( tariffs and cost ) should be modified as following:

Borrower shall pay lender the stamp tax equivalent to 0.005％ of added partial loan (RMB 650.00) within fourteen (14 ) days after signing this Complementary Agreement.

All the payments to lender by Borrower shall be no offset, no counterclaim, no any deductions or withholding, and shall not contain any tariff and cost, withholding tax or tax in other forms.

5. Clause 21 ( in use ) shall be modified as following:

Only Borrower can use the Line. The use of Line must be in line with rules of this letter. In any time the outstanding balance of loan by borrower shall not exceed RMB 63,000,000.00 Yuan (in words: RMB SIXTY-THREE MILLION YUAN)

Other terms and conditions in Line letter keep unchanged. In the case of any discrepancy between this Complementary Agreement and Line letter, this Complementary Agreement prevails. This Complementary Agreement takes in effect on the date, noted at the head of this agreement, when two parties sign.

Raiffeisen Zentralbank Oesterreich AG Beijing Branch

Authorised representative (sealed)

Zhengzhou Shenyang Science & Technology Co., Ltd (official seal)

    Zhong Bo

Legal Representative or Authorised Representative (signature)

To the confirmation of the following parties:

Lender has notified all following parties to pay attention that all the clauses about rights and obligations have been explained in details according to all parties’ demands and all parties consent and understand all the contents in this agreement.

Personal voucher:

Zhong Bo

(Signature)

Top-secret

Zhengzhou Shenyang Science & Technology Co., Ltd.

Block 28, Huzhu Road, Zhongyuan District, Zhengzhou City, Henan Province, China

Jan. 4, 2008

Dear Sir/Ms:

The total amount of accounts receivable financing line with non-commitment and right of recourse not exceeding RMB 50,000,000.00Yuan (RMB FIFTY MILLION YUAN)

Raiffeisen Zentralbank Oesterreich AG Beijing Branch (hereinafter referred to as “the Lender”), with great pleasure, informs borrower (definition see Clause 1) that we agree to provide the following line of credit (hereinafter referred to as Line ) for borrower , as per the following terms and conditions in this line of credit( hereinafter referred to this letter ).

1. Borrower:

Name: Zhengzhou Shenyang Science & Technology Co., Ltd.

Registered Country: People’s Republic of China (excluding Hong Kong SAR, Macau SAR and Taiwan region, hereinafter referred to China)

Register No. of Company: 410100100008310

Address: Block 28, Huzhu Road, Zhongyuan District, Zhengzhou City, Henan Province, China

2. Accounts Receivable:

The accounts receivable in this letter (hereinafter referred to accounts receivable ) refers to the less than Ninety (90) days-payment creditor's right that requires buyer to pay but not pay to borrower (including present and future ) in the related purchase & sale contract ( hereinafter referred to purchase & sale contract ) produced as borrower sells commodities to one or many companies ( hereinafter referred to seller ) which are recognized and accepted by lender )

3. The category of Line and amount

⑴ Total Amount of Line: not exceeding RMB 50,000,000.00Yuan (RMB FIFTY MILLION YUAN).

⑵ Can be used for:

   Accounts Receivable Financing: short-term loan with currency of RMB, term not exceeding the loan term, and amount not exceeding 85% of accounts receivable (hereinafter referred to as “Loan”).

4. Commission, cost (exclude advanced pay), interest rate and Penalty Interest:

Interest rate: interest rate of the same level in corresponding period published by the People’s Bank of China ×115%;

Management Fee of Accounts Receivable: 0.125%of amount of accounts receivable, but each loan should not be less than RMB 2,500.00 Yuan (RMB TWO THOUSAND AND FIVE HUNDRED YUAN), the Borrower should pay for then Lender on withdrawal date of each loan.

Upfront Fees: the interest rate is 0.25% of total amount of the line, that is, RMB 125,000.00 (RMB ONE HUNDRED AND TWENTY FIVE MILLION YUAN), the Borrower should pay for the lender within Fifteen (15) days after signing this Complementary Agreement.

Penalty Interest: if the borrower fails to pay for any pricinpal, interest rate and/or other fund receivable under this line, the Lender owns the right to collect the penalty interest from corresponding due date to the lender receiving all the fund as per the ratio of one HUNDRED AND FIFTY PERCENTAGE (150%).

If the borrower fails to use any or all the funds under this loan according to the purpose prescribed in this letter, the Lender owns the right to collect the penalty interest from the date this funds is appropriated to the date the Borrower stops appropriating this funds as per the ratio of TWO HUNDRED PERCENTAGE (200%).

If the Borrow fails to pay any accounts payable and appropriates the same accounts, the Lender owns the right to collect the higher interest rate generated from this capital.

All other banking rates shall be based on standard rate scale of the Lender. Registration fee on pledge and expenditures of accounts receivable (include but not limited to initial registration, alteration registration, extension registration and withdrawal registration) shall take charging standards of Credit Reference Center, the People’s Bank of China as reference.

The loan interest shall be calculated according to actual days, 360 days for a year, and the interest shall take RMB settlement. The Borrower should pay for the Lender the interest payable of this fund from the drawing date (the definition see Clause 6) to the due date (the definition see Clause 6).

All the interest, handling charge, insurance premium, Registration fee on pledge and expenditures of accounts receivable, banking fee generated from the line and other expenses relative to the Line shall be undertaken by borrower.

The lender shall keep the right to reasonably regulate the above handing charge, costs and rate from time to time, and the right to debited the Lender’s account to deduct all the expenses including interest, handing charge, insurance premium, Registration fee on pledge and expenditures of accounts receivable, banking fee and other relative fees.

5. The purpose of loan:

The loan is to meet the demand of usual capital flow for borrower

6. The loan term

The final due date (hereinafter referred to as “final due date”) of the Line shall be Sep. 30, 2008. The drawing date (“Drawing Date” for short) of each loan under the Line shall be any business day Beijing City Commercial Bank (hereinafter referred to as “Working Day of the Bank”) provides corporate business before the final due date.

The loan term of each loan (hereinafter referred to as “loan term”) in this letter shall begin from the drawing date of each loan to the due date (if not working day of the bank, postpone to the next working day, hereinafter referred to as “due date”) of corresponding accounts receivable of the loan, but the term should not be later than the final due date. The loan term should not exceed Ninety (90)days.

Notwithstanding, the lender still keeps the decision-making power to cancel the line .. If canceling the line, lender does not need to notify later or provide any reason nor does he need to shoulder any responsibility. The principal sum, interest rate and other debts related to line in this letter shall be due right now and paid to lender in full amount by borrower.

7. Payment:

Each loan shall be paid in related due date with no later than the final due date. Among the two dates adopt the earlier one. With the written approval by lender, borrower can pay before due date, but lender should receive the payment in advance notice officially signed by borrower in at least Three (3) bank working days before he prepares to pay in advance ( hereinafter referred to advanced payment date ). Borrower shall compensate any capital allocation funds and margin income losses to lender brought by payment in advance. The cost and losses are to the lender’s final confirmation and have legal binding force to borrower.

8. Usage of funds

Lender reserves the right to decide the order and capital ratio of principal sum, interest rate, cost or other debts in any Line to be paid by all or partial funds from borrower.

9. Guarantee

In order to ensure borrower to fulfill obligations in this letter completely, borrower shall sign with lender or provide security document for lender on the date of signing this letter or before or after

(a) The original certificate, whose content and form has been accepted by lender, agreed to underwrite and issue by Anlian Insurance Co. Guangzhou Branch (hereinafter referred to Anlian Guangzhou), in favor of trade credit insurance certificate (hereinafter referred to credit insurance certificate ), whose insurance term confirmation and insurance fees have been paid in full amount.

(b) about transferring all the rights and interests of borrower in credit insurance certificate to Insurance Rights and Interests Transferring Circular of lender.

(c) The Account Receivable Hypothecation Agreement that puts accounts receivable in first priority to lender

(d) Account Hypothecation and oversight and management Agreement , the RMB settlement accounts opened at lender’s by borrower regulates that the account receivable shall be flown in oversight and management account directly

(e) payment notice that notifies buyer to pay account receivable to oversight and management account

(f) irrevocable and unconditional joint liability in favor of lender issued by Zhongbo ( hereinafter referred to personal voucher ) , the ID certificate ( include without limitation to ID card copy of personal voucher and Marriage Card or residence registration copies of personal voucher )recognized by lender in content and form and signed by personal voucher, personal net balance sheet and related certificate of asset ownership

(g) Remittance certificate that borrower authorizes lender to represent borrower to fill or sign , insurance claim document and / or other related documents as well as Power of Attorney that sometimes represents lender and is in the name of borrower to sue for

( the above collectively referred to security documents, all are the copies of this letter and undividable parts of this letter.)

All the guarantee in the security documents are independent. The invalidation or withdrawal of this letter for any reason shall have no effect on the validity of the security documents. The security documents remains valid.

The guarantee clauses in this letter and all security documents consist of a complete and undividable document concerning lender and / or personal voucher vouch responsibility. In case of any discrepancy terms and conditions in all security documents prevail.

10. Application for Line:

(a) The use of any Line by lender, all or part, shall put forward a drawing application (hereinafter referred to drawing application) whose content and format are consistent with Appendix 1 (drawing application) to lender by borrower in three (3) bank working days before drawing date. This letter is not lender’s promise to provide loan for borrower, unless lender specifically shows that he accepts borrower’s drawing application or provides loan for borrower.

(b) Before borrower delivers each drawing application, all the preconditions in clause 11 of this letter (preconditions) and other conditions required by lender from time to time have been satisfied and borrower does not breach any rules in this letter. The drawing application is irrevocable, and once delivered, it has binding force to borrower.

(c) Precondition of receiving withdraw application by Lender is that Lender has wholly independent right to require the pay loan, modify, cancel and/or rebuild any line and/or relevant fee and expense with line.

(d) Lender will not accept any application of Borrower without satisfying each clause (a), (b) and (c).

11. Precondition.

The amount provided by Lender is un-promises with recourse. Under the clause of this letter, each sum of withdrawing the loan of lender shall comply with regulation of tenth clause (line application) and shall meet the following precondition.

(a) lender must receive:

Copies of the following documents accepted by lender, signed by legal representative of Borrower and authorized representative, or obtained from registration location of Administration for Industry and Commerce of Borrower and attested truth:

(1) Current and valid Business License tested by recent annual check of Borrower (Original and duplicate);

(2) Current and valid Articles of Association and relevant amend and change of Borrower;

(3) Relevant document about administration for industry and commerce registration which indicates that when signing this letter, organization situation of shareholder meeting and board of directors of Borrower;

(4) Current and valid Organization Code Certificate of Borrower (Original and duplicate);

(5) Capital Verification Report about the registered capital and financial report in recent three years of Borrower issued by a qualified public accounting firm.

(6) Current and valid Tax Registration Certificate of Borrower (State and local)

(7) Basic Permit for Opening Bank Account of Borrower;

(8) List of members in board of directors of Borrower, identification certificate, the speciment signature, identification certificate of authorized person and the speciment of the signature.

-Present letter formally signed by Borrower;

- Resolutions of Shareholders Meeting and meeting record which is accepted by Lender in form and content, certified as the truth according to requirement of Lender, board of directors or the shareholders meeting agreed or approved line, all warranty required in Clause 9 (warranty) and other documents required by this letter;

-Attorney Opinion Letter issued by Law Firm approved by Lender (if required);

-Approval or registration recognized by Lender, of all Chinese Government Agencies relevant with Line, including Administration of Exchange Control;

(b) all warranty, legal document involved in Clause 9 (warranty) have been formally signed and complete the valid registration (if required), including, without limitation to the copies of confirm certification of obtaining the Registration of Pledge Receivables;

(c) Lender has paid the stamp tax, account receivable management expenses, initial expenses, expenses and payout of account receivable pledge registration paid in advance by Lender.

(d) Current and valid loan card No. and password obtained from People’s Bank of China to Lender provided by Borrower;

(e) RMB Settlement Accounts which opened in the Lender by Borrower.

(f) RMB Accounts Remittance Receipt pre-stored in Lender and formally singed by Borrower.

(g) Credit insurance and all insurance claim documents under the relevant regulations of Allianz Guangzhou pre-stored in Lender and formally singed by Borrower.

(h) Available all the Bank Accounts List (include, but not limited to Account with Bank and the account No.) till the first withdraw date sealed in advance by Borrower, available Bank credit line, relevant balance of loans and company guarantee and balance for any Third Party provided by Borrower.

(i) In advance 3 working days of withdrawing date, Lender shall receive the following:

-withdrawing application formally signed by Borrower (about form, refer to Appendix 1)

- loan due bill formally signed by Borrower (about form, refer to Appendix 2)

-Maximum loan amount shall not exceed 85% of Account Receivable. Each loan amount shall not less than RMB 1,000,000.00 (Word: RMB ONE MILLION YUAN ONLY);

-Confirmation letter formally signed by bargainee, about receive the goods related with account receivable and agreement that pay the full amount of account receivable before due date to supervision account according to the Borrower instruction of notice of payment;

-Copy of sale contract signed by Borrower and Bargainee approved by Lender in forma and content, attested to be truth as per Lender requirement;

-copies of account receivable commercial invoice approved by Lender in form and content, attested to be truth as per Lender requirement;

-other documents relevant with account receivable as per the requirement, include but not limited to copies of relevant bill of lading and other transport document attested to be truth as per Borrower requirement;

-credit insurance original or copies of credit insurance attested to be truth as per Borrower requirement;

-Insurance period confirmation original of credit insurance or the copies attested to be truth as per Borrower requirement;

-certificate about full payment of insurance premium for credit insurance confirmed by Allianz Guangzhou;

-latest bargainee list accepted by Allianz Guangzhou and checked bargainee relevant credit insurance accept line. Total of unpaid account receivable of Bargainee (include the corresponding account receivable about this application Loan) shall not exceed the credit insurance line approved by Allianz Guangzhou for bargainee.

12 Other condition:

12.1 Statement and guarantee of account receivable

(1) Sale contract and account receivable is legal and valid. There is no fault, current, foresight potential dispute and valid or cancellation in law. Both Party of contract (especially Borrower) has already abided and overall implemented or made sure that will overall implement all obligations under Purchase and Sale Contract clause. There is no unsolved dispute between borrower and bargainee. In execution of contract, there is never overdue arrearage for any reason and characters of bargainee to Borrower.

(2) Borrower has overall fulfill the all obligation under clause of Purchase and Sale Contract, include but not limited to deliver the goods related with account receivable to arrearage as per requirement of purchase and sale contract. Furthermore, Borrower makes sure that there is neither any reason about refused by arrearage on due date or possibly refused to pay full amount of account receivable, nor any reason about Borrower or agent of Borrower not abide the regulations in purchase and sale contract signed by Borrower and Arrearage which lead to account receivable will or possibly deducted breach of contract damages and/or loss.

(3) Arrearage makes sure that receive the relevant goods related with account receivable delivered by Borrower. For the obligation under the purchase and sale contract and account receivable, there is no contradict, claim, cancel out or allegation with other characters.

(4) There is neither pledge in any forms such as security interest and/or right burden nor any power executed by any Third Party. Before clearing off full amount the arrearage under this letter by Borrower, transferring account receivable to any other Third Party is not allowed.

(5) Borrower is the only creditor of account receivable. The credit right of account receivable is clear. There is no any fault, dispute, any deduction, counter claim, attachment, or forcible execution which blocks the realization of any reason of credit right and prohibits or limit under account receivable and purchase and sale contract.

(6) There is no bank's order, money order, cheque, bond, or other fiancé bill signed by Borrower, Arrearage, or any other Third Party for all or any part of the account receivable.

(7) As per the clause of credit insurance, credit insurance is implementing to insurer instead of void or voidable. There is no claim for compensation, unpaid claim, or claim reference of lodge claim acknowledged by Borrower. ]

(8) Account receivable and relevant goods, documents, bill (include but not limited to commercial invoice, transport document and so on) conform to the law, regulation, rule. It is legal, valid, true, accurate and complete.

(9) Amount of account receivable shall subject to amount listed in legal and valid commercial invoice.

(10) 4 weeks after goods involved in account receivable dispatch out, commercial invoice shall be issued. In this invoice shall indicate the amount of the goods paid by Arrearage under purchase and sale contract.

12.2 Statement and guarantee of Borrower

(1) Borrower is business entity set up according to the China Law. Signed, submitted, and implement this letter is the real opinion and have necessary agreement, approval, authorize. There is no fault in law. It is not disobey the articles of association of the Borrower Company or the laws, regulations, rules. Borrower shall obey the requirement of any government department and relevant requirement or the any clause in any other contract which has the binding force on Borrower property;

(2) The authorized representative on behalf of Borrower and the seal of Borrower and relevant seals on this letter and any documents relevant to account receivable obtain the agreement, approve, authorize of board of directors and shareholder meetings. It is true and valid. There is no fault in law.

(3) This letter, in which the Borrower is one Party, owns the legal, valid, law bond force. Borrower can implement according to the regulation in this letter.

(4) herein Borrower authorizes Lender in irrepealable and unconditional form in using Loan Card No. and password provided by Borrower to refer the Borrower information in Registry Reference System of Bank Credit;

(5) Lender is entitled to supervise the each usage situation of sum and require the borrower providing the relevant contract and other documents approved by Lender in consent and form. If there is any dispute about the usage and use of the loan, Lender is entitled to refuse withdrawing of loan by Borrower.

(6) Borrower makes sure that the usage of loan complies with the relevant regulations and Clause 5 in this letter. Borrower can not engage in adventures, such as stock and real estate with the loan.

(7) All the relevant documents with this letter, information or any other information provided by Borrower to Lender are true, complete, accurate, and valid in essential aspect. In Borrower’s view, there is no any important fact or situation which wasn’t disclosed to Lender. If such facts and situation are disclosed, there must be the serious adverse effect for Lender providing the line/loan to Borrower (include but not limited to any adverse reasons which influences Bargainee fulfill the obligation of paying the account receivable under this purchase and sale contract); further more, Lender providing loan as per this letter is not deem to recognize the accuracy and truth of statement, guarantee and promises of Borrower under this letter.

(8) Except the breach of contract before or on the signing date of this letter which was disclosed to Lender (indicate the any things or information, hereinafter refer to breach a contract, regulated in Clause 13 of this letter), there is no any breach a contract or potential breach a contract existing or continuing.

(9) According to the valid laws on signing date of this letter, except the advocate of enjoying priority of claim, the advocate of Lender to Borrower has the same claim sequence with the Borrower creditor who owns guarantee;

(10) Present, there is no unfinished or possibly happened any serious adverse effect lawsuit, arbitrate, administrative procedure and the reason aiming at Borrower/Bargainee, to business of Borrower/Bargainee, operation and asset or under relevant documents of implement this letter and account receivable (include purchase contract).

(11) All the payment relevant to line shall do through Lender. Lender it entitled to credit any account opened in Lender by Borrower, to pay any other liability caused by Borrower account or related with line.

(12) Under clause of this letter, loan shall be paid in same currency with loan currency. If there is no other regulations in this letter, Borrower shall prepare the payableprincipal, interests, other payment in relevant account opened in Lender before 11:00 am of due date. Authorized Lender will deduct account receivable from this account on the due date.

(13) Law, regulations, rule, procedure and requirement and instructions of any government departments and other Parties abided as schedule, current, valid in future, or if not abide, may cause the loss of right to Borrower (as insurant) and Lender (as beneficiary) under this letter and credit insurance, include but no limited to that Borrower shall fulfill all clauses and any other relevant regulations under this credit insurance (include reference regulations and clauses of Allianz Guangzhou accept insurance agreement);

(14) Without the agreement of Lender in advance in written form, Borrower shall not change, alter, and modify any clause and condition of purchase and sale contract and account receivable with Bargainee.

(15) Borrower shall not adopt any action which is harmful or possibly harmful for the good value of account receivable/ influences the effectiveness of this letter.

(16) According to the requirement of Lender, provide any document and information relevant to purchase and sale contract, account receivable and goods involved in;

(17) Without the agreement of Lender in advance in written form, Borrower shall not agree Allianz Guangzhou to do any change and modification for the credit insurance and relevant documents, include but not limited to relevant general clause. Any occurrence of uncontrollable situation of Borrower, Borrower makes sure any change, modification in relevant documents with credit insurance acknowledged by Borrower will notify Lender immediately (no later than 24 hours of acknowledgement), include but not limited to relevant general clause.

(18) Borrower promise that provide the necessary information to Lender to insist the obligation implemented by Borrower and Lender under credit insurance and relevant document;

(19) Borrower promises that provide Allianz Guangzhou, credit insurance or all documents required under local short-term credit insurance to claim the insurance.

(20) If there is claim insurance, Borrower shall notify Allianz Guangzhou to pay the credit insurance directly to supervise account and make sure the Lender is entitled to decide the usage of credit insurance claim payment, such as pay the payable but not pay to the Lender, arrearage from Lender, or possible to arrearage from Lender (include but not limited to the payment under this letter);

(21) Without the agreement of Lender, borrower shall not establish or permit any pledging, hypothecation, keep, charge, transfer, deed of security, security interest, other agreement and arrangement as the property of Borrower for any property (current or future);

(22) Borrower shall implement all the obligation under the line; at any time, enjoy the same guarantee and support for current and future obligation (include support of Third Party), except for the obligation of priority endowed by law;

(23) During the line period of continued existence, shareholders structure of Borrower shall not directly or indirectly change.

(24) Borrower promises that transfer account receivable directly to supervised account, until paying off all arrearage of Borrower (include but not limited to payment under this letter) and Borrower shall not agree and instruct Bargainee to transfer the payment to any other account. If Borrower receives the payment of any other accounts under the account receivable, shall transfer the payment into supervision account on the date of receiving. Where the transfer is overdue, Borrower shall pay the breach of contract damages in 2/10000 to Lender. Borrower irrepealablely authorize Lender to directly deduct the breach of contract damage and account receivable from any account opened in Lender.

(25) Lender shall provide medium term finance report of Borrower to Lender in 60 days after half financial year ending. Provide audited annual financial report of Borrower to Lender in 120 days after financial year ending.

（26）The Borrower are required to provide the Lender with relative data concerning accounts receivable and the Lender's business, property, operation and finance on reasonable requirements of the Lender.

(27) The Lender should notice the major adverse changes occurred to the operation or the financial status to the Lender immediately.

(28) Under the clauses of the agreements with the Lender or other Loaners, if any breaches or potential breaches occurred, the Borrower should immediately (not later than 24 hours after the accidents) inform the Lender.

The above-mentioned representation and warranty shall be regarded as the Borrower putting forward on the date he draws funds or applying to extend the loan term according to the situations existing then.

13. Branches:

13.1 Any one or many of the incidents or cases listed in the following shall form breaches (hereinafter referred to as "breaches"):

(1) The Borrower and/or the Bargainee fails to pay any due accounts in full in this letter or fails to pay for any other financial institutes, person, office, companies or enterprises or fails to perform the payment obligation and responsibilities; or

(2) Any representation, statements or warranty made by the Borrower, or any documents, data or information provided by the Borrower to the Lender are certified incorrect or not accurate materially; or

(3) The Borrower infringes any commitment in this letter and security documents (include but not limited to the completion of preconditions listed in Clause 11 of this letter (preconditions) and other preconditions prescribed in Clause 12 of this letter (other conditions); or

(4) The Borrower has some breaches against other regulations in this letter; or

(5) Any breaches occurred to Security Documents clause; or

(6) Any breaches occurred to Purchase and Sales Contract (especially the Bargainee refuses to pay account receivable); or

(7) The Borrower and/or the Bargainee are dissolved, liquidate, bankrupted, reformed, lost debt paying ability or similar situations (include but not limited to suspended operation required by the Government agencies or the Business License is revoked); or

（8）Borrower and/or bargainee is claimed to adopt the attachment, coercive execution, supervision or public auction measure which materially effects the borrower to repay the liability of this line letter and/or affects the bargainee not able to redeem his obligation of defraying the sum of the receivable debt; or

(9) Any cheques or bills signed by borrower and/or bargainee is protested; or

(10) If the occurrence of any events or the appearance of any matters makes the lender has reason to believe the borrower will not or is unable to fulfill any obligations under this

Letter or the bargainee will not or is unable to redeem his obligation of defraying the sum of the receivable debt, or the alteration of the associated law makes borrowers’ obligations of this letter become illegal or the bargainee’s responsibilities under this purchase contract become illegal; or

(11) According to the lender’s judgement, the operating and financial situation of the borrower and/or bargainee is having or going to have great unfavorable change; or

(12) If the borrower breach any obligations of this letter (include but not limit to the statement and guarantee ), and does not compensate the breach, and makes the lender satisfied or accords with the prescription of this letter within the reasonable time, but no later than the 15 days after receiving the lender’s written inform of correcting the breach; or

(13) Any incidences or events with issuing of notice, the process of the time, or the decisions may transfer to breaches (the ”potential breach of the contract” for short in this letter)

(14) However, if lender arranges, keeps Line/ loan or provided capital for loan in any law is or becomes illegal, then:

  (i) lender shall, as per the requirement of lender, pay in advance on pointed date the part of loan, accumulative interest rate and other capital deserving to pay influenced by the changes , as well as

(ii) If lender has not withdrawn any loan when borrower receives lender's notice, the right of lender withdrawing loan that has been notified by lender, influenced by this change, unpaid or any part shall be terminated right now, or

(15) If after signing of the letter, Lender shall decide on himself:

(i) during the normal business between banks in China, can not find the corresponding time to raise the funds for any loan and any interest, or

(ii) Because of the reason of Lender, Lender will obtain cost of corresponding deposit which will above interest rate regulated in Clause 4;

Lender is entitled to end the letter. But Lender shall notify the Lender about above situation. At the same time Article 13.1 Clause (15) will take into effect.

13.2 Once any of above events or situations occurs, the borrower should immediately (at the latest no later than 24 hours after the occurrence of the event or situation) notice the lender and without further notice or requirement, the lender has the right to adopt one or more measures of the following:

(1) Declare all withdrawn loans and accrued interest as well as all other funds (include but not limited to penalty interest, liquidated damages and expenses etc) generated or unpaid under this letter to be payable at maturity immediately;

(2) Declare the cancelling of all lines or amending of any items of documents related to line;

(3) Require the execution of all or part of security documents;

(4) Immediately execute all other rights and remedies enjoyed by the lender under this letter and security documents; various expenses (include but not limited to collection expenses, arbitration fees, travel expenses, attorney fees, expenses of realizing security interest, surveying and evidence taking fees, costs of preservation, announcement fee, execution fee, auctioneer's fee, transfer fee and other fees etc) incurred to the lender due to realization of creditor's rights all should be undertaken by the borrower;

(5) Countervail directly from any account opened by the borrower in the lender and used to pay off any account payable of the borrower to the lender under this letter.

14. Protection:

The borrower should adopt actions regarded as proper by the lender and undertake all expenses to perfect, protect and realize the security provided to the lender under the line, through registering to relevant authorities or issuing notice to any person or any other methods.

15. Information disclosing:

The borrower should irrepealably agree that the borrower discloses the account of borrower and relevant data of bargainee and account receivable to its headquarter, branches and its offices, relevant record and register government agencies, securities, mortgagors, insurance company or other person or company undertaking the liabilities of the borrower under the account of the lender or providing security or mortgage to the lender for the borrower.

16. Termination of credit warranty and line:

Notwithstanding such regulation of this letter, under the precondition of not prejudicing to other interests of the lender, when the credit warranty terminates, without need for further notice or requirement, the responsibility of the lender providing line to the borrower will terminate automatically and meanwhile, principal and interest will also be at maturity immediately.

17. Recheck:

According to usual bank practices, the lender reserves the right to amend, reduce or cancel the line, amend any clauses and clauses under this letter and amend any other documents or warranties related to this letter, without notice to the borrower in advance.

18. Taxes and fees:

The borrower has paid stamp tax equivalent to 0.005% of the line sum to the lender, that is RMB 2,500.00 Yuan (words: RMB TWENTY FIVE HUNDRED YUAN). If the loss of the lender is due to the delay performance or nonperformance of tax obligations related to this letter and the line by the borrower, then the borrower should compensate for the lender.

All funds paid by the borrower to the lender should be without balance out or counterclaim, without any abatement or withhold, and should not include any taxes, withholding tax or taxes of other forms.

19. Expenses:

All costs (including cost paying the principal in advance), legal expenses, telecommunication fees, mailing fees and other overhead expenses as well as advanced pay incurred in the process of preparation and execution of this letter and line, the completion of the security documents required by the letter and the protection and compulsive execution of the lender’s rights all should be undertaken by the borrower and it also has to compensate for the lender in full.

20. General Trade Consensus:

The line is dominated by the General Trade Consensus (GTC01/MAY01) of the lender. At the time of signing this letter, the borrower should also sign the General Trade Consensus (GTC01/MAY01) of the lender. If the two have divergence, should conform to the clauses of this letter.

21. Use:

The line is only limited to the use of the borrower. The use of the line must as per the requirements of this letter. The unliquidated balance of the borrower’s loan at any time should not exceed RMB 50,000,000.00 (words: RMB FIFTY MILLION YUAN).

22. Applicable law:

The letter should be applied to Chinese law and be explained according to Chinese law. If one certain specific item related to this letter is not required by relevant laws, then should refer to international practices.

23. Arbitration:

Any dispute caused by this letter or related to this letter can be resolved by the two parties through friendly negotiation. If the agreement can not be reached within 30 days from the date of any party putting forward written negotiating requirement, any party has the right to submit the dispute to China International Economic and Trade Arbitration Commission and arbitrate according to current valid arbitration rules of the Committee. The arbitrament of the arbitration is final and binding on both parties. The arbitration site is in Peking and the arbitration language is Chinese. Losing party of the arbitration should undertake all expenses (include but not limited to arbitration expenses, attorney fees etc) actually paid by the winning party for the handling of the case.

24. Transfer:

The borrower should not transfer or assign its any rights or obligations under this letter without written consent of the lender in advance.

The lender can transfer or assign its all or part rights and/or obligations under this letter and can therefore inform Allianz Guangzhou, transferee or assignee with information related to the borrower and account receivable known by the lender. It has legal validity to the borrower once informing the borrower in written of such transfer or assign.

25. Notice and delivery:

Any notice, requirement, instruction or other documents under this letter or related to this letter should be made in written form and delivered to following addresses or no., or the party should notice any alternative address or no. of the other party at least 5 bank working days in advance:

To the borrower: Zhengzhou Shenyang Science & Technology Co., Ltd.

              Addressee: Zhong Bo

              Post: Board Chairman

              Address: No. 90, Gongren Road., Zhengzhou City, Henan Province, China

              Post Code: 450007

              Fax: 86-0371 6771 3121

              Tel: 86-0371 6797 9600

To the lender: Raiffeisen Zentralbank Oesterreich AG Beijing Branch

              Addressee: Monika Goluch

              Post: Account Manager of Marketing Department

              Address: Room 200, St. Regis Hotel, Beijing, No. 21, Jianguomen Wai Street,

                     Beijing, China

              Post Code: 100020

              Fax: 86-010 6532 5926

              Tel: 86-010 6532 3388 /extension 356

Any notice, requirement, instruction or other documents issued by any party to the other party under this letter or about this letter should be deemed to be delivery under following clauses:

(1) If it is delivered by a specific person or express delivery, then it is at the time of actually receiving; or

(2) If it is delivered by fax, then it is at the time of the second bank working day from the fax delivering to the fax no. provided by the borrower; or

(3) If it is delivered by letter, then it is at the time of the fifth bank working day from the letter being putting into the envelope signed with the correct address of the other party and sent off in the form of postage pre-paid.

Notwithstanding the above, withdrawal request, prepayment notice and reminder notice issued by the lender etc under this letter should be delivered to the other party in the form of delivered by specially-assigned person and deemed to be delivery only after the formal receipt of the other party.

All instructions and notices delivered to the lender by the borrower in the form of fax should be legal responsibilities of the borrower. The borrower should bear all responsibilities for any losses or damages probably caused by instructions delivered in the form of fax, including losses or damages caused by improper or multiple deliveries. The borrower herein promises to make compensation in full for losses or damages caused by above clauses to the lender.

26. General Clauses:

The borrower should sign and affix the official seal in this letter to affirm that it has accepted all clauses required by this letter, and return to the lender along with the decision of stockholders' conference or directorate within 14 days from the date signed in the first page of this letter.

Once signed, this letter will replace all former agreements, letters, correspondence, discussions and meetings (include Financing Agreement of Account Receivable of No. 200708310012660001) related to the line. And if there is disagreement, should subject to this letter.

The invalidation of one clause in this letter will not influence the effect of other clauses herein. Any invalid clauses will be replaced by valid clauses most approaching to invalid clauses legally and should fully consider economic benefit of each party.

The lender has submitted the borrower to pay special attention to all clauses related to its rights and obligations and understand them comprehensively and accurately. The understanding of the two parties about clauses of this letter is completely consistent.

Best Regards

Raiffeisen Zentralbank Oesterreich AG Beijing Branch

Monika Goluch (Signature)

Authorization Representative (Sealed): Raiffeisen Zentralbank Oesterreich AG Beijing Branch

Zhengzhou Shenyang Science & Technology Co., Ltd. (official seal): Zhengzhou Shenyang Science & Technology Co., Ltd.

Legal Representative or Authorized Representative (Signature): Zhong Bo

Affirmed by following parties:

The lender has submitted following parties to pay special attention to all clauses related to their rights and obligations and has made corresponding detailed explanation meeting the requirements of various parties. Each party has no dissent to all contents under this letter and their understanding about the contents is completely consistent.

Individual Warrantor:

Zhong Bo

Zhong Bo (Signature)

Appendix Ⅰ

Withdrawal Request

Addresser: Zhengzhou Shenyang Science & Technology Co., Ltd.

To:  Raiffeisen Zentralbank Oesterreich AG Beijing Branch

             Ms. Monika Goluch

             Fax: 86-010 6532 5926

Date:

Yours Sincerely：

1. As to the Line Letter of No. 200801040012660001 signed on Jan. 4, 2008 and any amendments, supplements or other modified agreements (hereinafter referred to as “Line Letter”) signed thereafter by our party (as the “borrower”) and Raiffeisen Zentralbank Oesterreich AG Beijing Branch (as the “lender”). Clauses defined in Line Letter have the same connotations in this Withdrawal Request.

2. Our party herein issues this Withdrawal Request to your bank as per Line Letter and hopes to withdraw the loan of the sum of ____ on date of    (hereinafter referred to as “Withdrawal Day”) for the purpose of . The maturity date of the loan is

__ and the term of the loan is __ days. Please remit the withdrawal loan to the account opened by our party in your bank and the account number is ___. According to relevant requirements of Line Letter, our party should pay corresponding interest of the loan on Withdrawal Day. If our party can not pay the interest in full before 11:00 AM on Withdrawal Day, then our party herein irrepealably authorizes your bank to directly deduct the interest payable of our party from any account opened by our party in your bank.

3. Repayment fund resource of above loan is following account receivable. The details of the account receivable are as follows:

Commercial Invoice No.:

Sum:

Maturity Date (Date of Payment):

Goods:

Delivery Date:

Name of Bargainee:

Transportation: from         to

Bank Account of Bargainee (for the convenience of your bank):

Attached documents related to this account receivable:

Copies of Invoice Copies of Bill of Lading Purchase Contract

4. When above loan comes to its maturity as per Line Letter, your bank has the right to directly deduct relevant funds from any account opened by our party in your bank.

5. Our party hereby affirms to your bank: there is no default event or potential default event under Line Letter till the day of the issuing of this Withdrawal Request. And our party further affirms: statements and guarantees in the Line Letter are still correct in all respects till the day of the issuing of this Withdrawal Request. All promising items required in the Line Letter have been conformed to execute and all applicable preconditions have been met.

6. Our party herein irrepealably affirms and ensures that our party has informed or is to inform the bargainee to directly remit above account receivable to supervision account.

7. Our party hereby declare: till the day of the issuing of this Withdrawal Request, our party has not violated the credit insurance produced by Allianz Insurance Company Guangzhou Branch with the beneficiary of your bank and the insurance number of 101-1-801-07-000009-000-00 and all clauses, regulations (include regulations and clauses obeyed by Allianz Insurance Company Guangzhou Branch when providing insurance limit), responsibilities and obligations listed in its relevant documents as well as its relevant regulations. And our party will not violate any clause, regulation, responsibility, obligation and its relevant regulations before-mentioned during term of the loan.

       Best Regards

                   Borrower: Zhengzhou Shenyang Science & Technology Co., Ltd. (Sealed)

                   Signature: _______

                            Legal Representative or Authorized Representative

AppendixⅡ

Due Bill of Loan

Due Bill No.:

         As per the Line Letter of No. 200801040012660001 signed on Jan. 4, 2008 and any amendment, alteration or complementation agreements signed thereafter by the two parties【Total Amount of the loan is RMB FIFTY MILLION YUAN ﹙in Fingers: RMB 50,000,000.00 Yuan﹚, has loaned RMB_______Yuan﹙in Fingers: ____﹚】. Here the borrower（Zhengzhou Shenyang Science & Technology Co., Ltd.）loans RMB____Yuan(in Fingers: RMB_____) (when words disagree with fingers, subject to words) from the lender (Raiffeisen Zentralbank Oesterreich AG Beijing Branch) for the purpose of_____. The term of the loan is from the date of _____ to the date of ______.

Monthly Interest Rate:_____‰

All matters concerned should be performed as per requirements of above Line Letter clauses, hereby drafted as evidence.

Borrower: (Official Seal)

Legal Representative (or Authorized Agent): _______

 (Autographed and Stamped)

Date:

EX-10.9

EXHIBIT 10.9

Conclusion Date: January 4, 2008

Receivable Pledge Agreement

Between

Zhengzhou Shenyang Technologies Co., Ltd., China, as Pledger

And

Austria Central Cooperation Bank Beijing Branch, as Pledgee

Contents

Article 1 Definition and Explanation

Article 2 Pledge

Article 3 Scope of Security

Article 4 Registration of Pledge

Article 5 Performance of Sales Contract

Article 6 Monitoring of Accounts

Article 7 Representations and Warranties

Article 8 Commitments of the Pledger

Article 9 Nature and Validity

Article 10 Realization of the Pledge

Article 11 Expenses and Compensation

Article 12 Notification

Article 13 Effectuation, Amendment, and Termination of the Contract

Article 14 Applicable Laws and Dispute Settlement

Article 15 Miscellaneous

Signing page

Annex 1 Contract Form of Pledge Registration of Receivables

The receivable pledge agreement, hereinafter referred to as “the Agreement”, is signed on the forth day of January 2008, by and between the both parties of

1. Zhengzhou Shenyang Technology, Inc., China, as Pledger, hereinafter referred to as “Pledger”, a limited company founded in accordance with the laws of the People’s Republic of China, whose registration address is 170, Gongren Road, Zhongyuan District, Zhengzhou, China

And

2. Austria Central Cooperation Bank Beijing Branch, as pledge, hereinafter referred to as “Pledgee”.

WHEREAS

Zhengzhou Shenyang Technologies Co., Ltd. as a borrower and the pledge as a lender has signed a “Letter of Quota” numbered 200801040012660001, hereinafter referred to as “Letter of Quota”, on January 4, 2008, under which the lender agreed to provide a quota of loan not exceeding RMB50,000,000 of loan principal, hereinafter referred to as “loan”.

AND WHEREAS

The Pledger agrees to sign the agreement with the pledge and to establish a security on the receivables, defined as bellow, with the pledge as beneficiary to warrantee that the Pledger shall fully pay the debt owe to the Pledgee under the Letter of Quota.

THEREFORE, it is agreed between both parties as follows:

Article 1 Definition and Explanation

1.1 Definition

The following terms defined in the Letter of Quota shall have the same meanings in the Agreement except where the context otherwise clearly defined:

“Sales contract” means product sales contract signed either before or after signing of the Agreement by and between the Pledger and one or more companies, hereinafter referred to as “the Buyer”, recognized and accepted by the pledge.

“Agreement of accounts” means “the agreement of account pledge and monitoring” signed on or before signing of the Agreement by and between the Pledger and Pledgee.

“Monitoring accounts” means the accounts used for receiving the receivables opened by the Pledger

“Registration authority” means the Credit Centre of the People’s Bank of China.

“Receivable(s)” means any existing and future rights and interests enjoyed by the Pledger under the sales contract over debtors, which includes but not is limited to (1) all creditor’s right of the Pledger under the sales contract, including any advance payment, installment payment, performance bond, and debtor’s right for any other sum of payments; and (2) all rights enjoyed by the Pledger under the sales contract to claim indemnification due to any breach of the contract.

“Debtor” means the debtor obliged to pay the receivables to the Pledger under the sales contract.

1.2 Explanation

(1) The definition and explanation defined in the Letter of Quota shall be basically applicable in the understanding and explanation of the Agreement.

(2) The heading of each article and clause is only used for the convenience of reading, and does not constitute any part of the article and clause and condition. It cannot be applied in the explanation of the Agreement.

(3) Any laws, rules and regulations, ordinance, or other like legal documents mentioned in the Agreement shall all be interpreted as including the content of timely amendments, expansion, reissuing or adjusting of such documents and any other laws, rules and regulations, ordinance, or other legal documents based on such documents.

(4) “Such as”, “include”, “for example” or examples followed any other prepositions are not to limit the plain or general meaning of the words before the prepositions.

(5) “Pledger” and “Pledgee” include their agents, successors, transferee, and any other person being authorized, in case not in conflicting with the context.

Article 2 Pledge

2.1 To secure that all secured debts are timely and fully paid or discharged and that the Pledger may timely and properly perform its obligations due on time, due in acceleration, or other situations under the financing documents, the Pledger agrees to pledge the receivables to the pledge.

2.2 In case the Pledger and pledge adjust the amount of the loans according to the stipulations of the Letter of Quota, secured debts under the Agreement shall be the amount of loans actual provided under the Letter of Quota.

Article 3 Scope of Security

3. 1 The scope of pledge under the Agreement includes:

(1) All existing and future loans and accumulated interest, including but not limited to legal interests, agreed interests, overdue interests, and interests of punishment, handling charge and other charges, breach of contract damages, damages, expenses for realization of debtor’s rights, including but not limited to litigation expenses, attorney fee, notary fee, and execution fee, and other receivables, no matter they become receivables on expired date or under other conditions, the Pledger should pay the pledge under the financing documents;

(2) Any other items of payment the Pledger should pay the pledge due to or under the financing documents;

(3) All fees and expenses incurred when the Pledger realizes its secured rights and interests under the Agreement, including but not limited to the litigation expenses, attorney fees, notary fees and execution expenses; and

(4) Breach of contract damages and any other payments the Pledger should pay the pledge under the Agreement.

3.2 The certification issued by the Pledgee regarding any secured debt or receivables under the Agreement shall be final and bind the Pledger, unless there are any obvious errors.

Article 4 Registration of Pledge

4.1 The Pledgee and Pledger shall sign a Contract of Pledge Registration of Receivables based on the form in Annex 1 “Contract Form of Pledge Registration of Receivables” or any other form required or agreed upon by the pledge.

4.2 The Pledgee and Pledger agree the pledge registration of receivables shall be handled by the Pledgee in the registration authority, where the fees and expenses incurred shall be borne by the Pledger.

4.3 In case the Pledgee reasonably believes it is necessary to amend the pledge registration already done, the Pledger shall take all reasonable steps to assist the Pledgee to handle the amendment of pledge registration of receivables, where the fees and expenses incurred shall be borne by the Pledger.

4.4 Whenever the Pledgee requires, the Pledger shall, at any time, take the actions, including signing of any documents, acquiring any approvals and fulfilling any registrations, filing or recording, reasonably required by the Pledgee at his own charges to:

(1) Improve or protect the securities established under or according to the Agreement; or

(2) Assist the Pledgee or any other assignee to realize the pledge or any part of it established under the Agreement, or assist the Pledgee to exert any of his rights, powers, or discretions according to the Agreement.

Article 5 Performance of Sales Contract

5.1 The Pledger is obliged to continue to perform all obligations under the sales contract. The Pledgee has no responsibility or legal obligations to the sales contract, and is not obliged to implement responsibility undertaken by the Pledger to sales contract. The Pledgee has no responsibility to take actions concerning accounts receivable. In condition not affecting rights of the Pledgee under this agreement, the Pledger is not accountable or legally liable to any other parties concerning accounts receivable.

5.2 In spite of above regulations, if the Pledger and /debtor does not carry out obligations under sales contract properly and has done harm to rights enjoyed by the Pledgee under this agreement, the Pledgee has the right (but no obligations) to implement it in the name of Pledger or lodge a suit against debtor, refer to arbitration or take other measures. The Pledger agrees and authorizes the Pledgee to take actions mentioned above and provide coordination necessary. Expenses incurred as a result of any actions taken by Pledgee under this regulation should be compensated by the Pledger wholly.

Article 6 Monitoring of Accounts

6.1 The Pledger shall open monitored account at the place of pledge and guide debtor to deposit all accounts receivable into the account.

6.2 Without prior written consent of Pledgee, the Pledger is not allowed to indicate debtor to deposit account receivable into any other account except monitored account. If the Pledger, on any account, receives account receivable from any other means, he should notify immediately Pledgee and transfer the above sum of money into the monitored account.

Article 7 Representations and Warranties

7.1 The Pledger makes the following representations and warranties to the Pledgee:

(1) The Pledger is a limited company established in accordance with laws of the People’s Republic of China, and with independent legal person status. It has effective business license and is able to bring a suit and respond to a charge.

(2) The Pledger has legal qualifications and necessary rights to sign this agreement, to exercise rights and carry out obligations under this agreement.

(3) The sales contract is signed by the Pledger and debtor legally and effectively, and is legally binding to both parties. Accounts receivable of the Pledger in sales contract can be transferred according to relevant laws and regulations and nature of the sales contract.

(4) At present the debtor has no right of offsetting or counterargument in terms of the Pledger, which may affect guaranteed rights of the Pledgee under this agreement

(5) The Pledger has the sole right to account receivable, except guarantee set in this agreement, the Pledger does not have other guarantee of any nature in terms of account receivable. The Pledger has undisputable right to account receivable, and can be taken as the object of pledge security.

(6) The Pledger has carefully read, wholly understand and accept content of this agreement and document of financing, the Pledger signs and implements this agreement of his own free will. What are expressed is true.

(7) Data and documents provided by the Pledger to the Pledgee about the Pledger and account receivable are genuine and accurate, complete and effective, and document in duplicate is in conformity with the original.

(8) All those which are necessary for the signing of this agreement and guarantee by the Pledger under the agreement including approval, license, consent, notary, registration, record by government and other local department have been acquired and completed, which are legal and effective.

(9) The Pledger signs this agreement, implement its obligation under the agreement, which is not against the regulations of the company, other documents or any other agreement, and does not violate laws and regulations fit for the Pledger.

(10) This agreement constitutes legal, effective and legally binding obligations for the Pledger, and guarantee under it is unconditional, not limited by preferential rights of any other persons.

(11) Under the sales contract, there is no violating incidents or potential violating incidents by the Pledger and debtor.

(12) At present, there is no ongoing or possible arbitration, law suit or administrative procedures which may involve the Pledger and constitute serious unfavorable influence on financial condition, value of accounts receivable or ability of the Pledger to perform its obligation according to this agreement.

(13) Debtor or his any asset and income has no right of immunity or privileged in legal procedures such as offsetting, judgment, implementation, detaining.

7.2 The Pledger makes the representations and warranty under Article 7.1 above to the Pledgee. The above representations and warranty are regarded as made repeatedly everyday during the pledge period. When a representation and warranty is made repeatedly, it should fit in with the circumstances of the time.

Article 8 Commitments of the Pledger

8.1 The Pledger makes the following commitments to the Pledgee:

(1) The Pledger shall obey all legal and administrative laws relevant with the agreement, and the sales contract, strictly carry out and obey duty and obligations under this agreement and the sales contract, and take all necessary measures to guarantee accounts receivable legal and effective, including but not limited to legal and effective guarantee right to account receivable by the Pledgee.

(2) If there is any significant law suits, arbitration or administrative procedures involved with the Pledger or debtor, no matter it has begun or not, the Pledger is required to inform the Pledgee the detail as soon as possible (in not more than 3 work days).

(3) If any incidents of violations happened under this agreement, or incidents which may affect ability of the Pledger to implement obligations under this agreement, or incidents which may affect ability of debtor to implement obligations under this agreement, the Pledger should promptly notify the Pledgee in written form in detail.

(4) The Pledger shall acquire and handle all formalities necessary to make the agreement lawful and effective including approval, notary, registration, and record, and maintain they are lawful and effective and complete other necessary matters.

(5) Without prior instruction or written consent of the Pledgee, the Pledger is not allowed to agree, propose to amend or change in any other form sales contract or make any other guarantee other than which under this agreement on account receivable.

(6) Without prior consent of the Pledger, the Pledgee may transfer all or part of rights under this agreement to a third party, the pledge should sign proper and necessary documents and take proper and necessary measures, and complete relevant legal procedures.

(7) If the Pledger receives account receivable in any other accounts other than the controlled account, he should ,after receiving  payment of accounts receivable, immediately transfer it to the monitored account according to requirement of agreement.

(8) The Pledger is not allowed to take any measures which may change or harm the right of the Pledgee in terms of account receivable under this agreement.

(9) The Pledger promises to the Pledgee to take all measures which are beneficial to the guarantee under this agreement, and sign all necessary documents including but not excluding contracts related with extension and amendment of contract signed with the Pledger on registration of pledge of account receivable and other data and documents reasonably required by the Pledgee at any time.

Article 9 Nature and Validity

9.1 Guarantee set in this agreement is a lasting one. The responsibility of guarantee of the Pledger terminates until all guaranteed debts are paid off. Validity of this agreement is not affected by liquidation, combination, separation, acquisition, bankruptcy or other changes in organizational structure or any other arrangement made to account receivable.

9.2 Guarantee set in this agreement is independent of any other guarantee acquired by the Pledgee for debt guarantee. Before exercising right under this agreement, the Pledger does not need to perform any other guarantee possessed by him, nor is it necessary to first to take other measures of remedy. Under the precondition of permission of applicable law, this agreement is independent of quota letter. Invalidity wholly or in part of any other guarantee contract prescribed under quota letter does not affect validity of this agreement or duty and obligation of the Pledger under this agreement. Moreover, this agreement shall not be invalid or cancelled because quota letter it has guaranteed is invalid or be cancelled.

Article 10 Realization of the Pledge

10.1 Mortgage under this agreement will be executable once any case occurs as follows:

(1) Any violations under credit line letters.

(2) The Pledger transfers, distributes receivables in other ways, sets any part of receivables or attempts to set any guaranteed interests without the Pledgee’s previously written permission.

(3) The Pledger or debtor suspends or stops its business and enters bankruptcy, liquidation, shut-down, or something like this, or its business is forced to stop or suspend by the management.

(4) Any happening like lawsuit, arbitration, or administrative procedures concerning the Pledger or receivables occur, which by the Pledgee’s reasonable judgments will have severely adverse effects on the financial positions of the Pledgee, the value of receivables, and the pledger’s ability of coming to time pursuant to the agreement.

(5) Any statement or pledge made by the Pledger under the terms of this agreement is proven inaccurate, unreal or misleading.

(6) The Pledger agrees or proposes to alter sales contract so as to materially affect or harm the Pledgee’s interests without the Pledgee’s previously written permission.

(7) The Pledger or debtor violates any obligation under the terms of sales contract, and the violation will by the Pledgee’s reasonable judgments harm their guaranteed interests.

(8) The Pledger violates any other obligations under the terms of this agreement or there occur other thing which the Pledgee thinks will affect its rights under the terms of the agreement.

10.2 Once anything that is listed in Section 10.1 occurs, the Pledgee itself can decide on the proper time and way which it thinks is right to execute partial or all guarantees and exercise any right given by the agreement or applicable law, including but not limited to:

(1) Declaration that all the withdrawn loans expire and requiring the Pledger to return loans with the capital, interest and other payable items.

(2) Declaration to cancel the withdrawn loan by credit line letters

(3) Direct deduction of the corresponding money form the monitoring account

(4) Replevying or collecting receivables or all the money concerning to discharge the mortgage debts and present the valid receipt on behalf or the Pledger

(5) Replacement of the Pledger and the exercise of the Pledger’s property rights concerning receivables

(6) Undertaking or going through all the lawsuits or arbitration procedures concerning all or any receivables in the way which the Pledger thinks is proper by its own judgments and the practice, conciliation, removal or concession of the rights propositions concerning all or any receivables.

(7) Conducting conciliation, arrangements of debts, concession of any issue or dispute concerning receivables or caused by it or relevant to this agreement in one way or another.

(8) Submitting to the arbitration concerning receivables or taking any legal actions or launching a lawsuit.

(9) Signing the documents or taking relevant actions which the Pledgee reasonably thinks are necessary and proper concerning the above-mentioned items.

10.3 Once the Pledgee requires, the Pledger should coordinate the Pledgee to acquire all the necessary approval or agreement from the Pledgee to realize their liens, or coordinate the Pledgee to handle all the other procedures.

10.4 The Pledgee distributes the acquired money form mortgaged receivables under the terms of this agreement as the following order goes:

First, to cover all the expenses and fees produced from or caused by the exercise of the Pledgee’s rights and distribution of receivables.

Second, to cover the tax money or governmental charge when the Pledgee distributes receivables.

Third, to pay mortgaged debts.

The surplus after the deduction of the above items should be handed over to the Pledger by the Pledgee.

If the Pledgee can not acquire enough money form receivables to pay off mortgaged debts, they reserve the rights to ask the Pledger for more.

10.5 When the Pledgee legally exercises its rights by the agreement, it does not need to take responsibility for the loss caused by the Pledger in the practice except for its own deliberation or gross negligence.

Article 11 Expenses and Compensation

11.1 The Pledger will pay the fees on the signing the agreement, handling necessary registration or notarization procedures, fulfilling or forcibly executing obligations (including but not limited to the Pledgee for the lawyers or lawsuit fees, etc)

11.2 The Pledger will compensate the Pledgee for all the loss and expenses caused by the Pledger’s failure to fulfill the prescribed obligations or promises by the agreement.

Article 12 Notification

12.1 All notices, requests and other communications to the Pledger or to the Pledgee hereunder shall be in writing, and shall be given to the addresses stated below.

If to the Pledger: Zhengzhou Shenyan Technologies Co., Ltd.

Address: 90, Gongren Road, Zhengzhou City, Henan Province

Postcode: 450007

Tel:  86 371 6797 9600

Fax No.: 86 371 6771 3121

Attention: Mr. Zhong Bo

If to the Pledgee: Austria Central Cooperation Bank Beijing Branch

Address: Beijing International Club, Rm. 200, 21 Jianguomenwai Street, Beijing

Postcode: 100020

Tel: 86 10 6532 3388 extension 356

Fax: 86 10 6532 5926

Attention: Monika Goluch

12.2 The notice and other communications required to be given by any party shall be in written. if in person (including express mail), on the date that the receiving Party or a person at the receiving Party’s address signs for the document; if by registered mail, on the 3rd day after the date that is printed on the receipt of the registered mail; telex and telegram shall be deemed effectively with confirmation of transmission, at the time displayed in the corresponding transmission record. But notice and other communications delivered by the Pledger to the Pledgee are deemed received after the actual receipt of the Pledgee.

Article 13 Effectuation, Amendment, and Termination of the Contract

13.1 This contract becomes effective after signed by the authorized representatives of both parties.

13.2 The amendment, modification of the contract shall be made in written. Such documents shall be regard as the appendices of this contract and integral part of this Agreement.

13.3 The Pledgee shall agree to discharge the collateral security under this Agreement and handle the cancellation of registration after the full repayments of the secured liabilities and performance in full of the obligations under this agreement, and the hereunder fare and fees are at the Pledger’s expense. The Pledgee should offer necessary assistance to the Pledger in the cancellation process.

Article 14 Applicable Laws and Dispute Settlement

14.1 The conclusion, interpretation and dispute resolution shall be subject to the Laws of the People's Republic of China.

14.2 The disputes arising from execution of this contract or relevant to this contract shall be settled through friendly consultation by the parties. In case no settlement can be reached 30 days after the written consultation proposal is forwarded by one party, the dispute shall be submitted by either party to China International Economic and Trade Arbitration Commission for judgment according to the arbitration rules in effect. The verdict of arbitration is final and conclusive, binding on both parties. The place of arbitration is Beijing, and the arbitration conducted in the Chinese language. The out-of-pocket expense (including but not limited to arbitration fees, attorney fees) of the winning party should be paid by the party fails in the arbitration.

Article 15 Miscellaneous

15.1 No failure or delay by the Pledgee in exercising any right, power or remedy hereunder shall impair such right, power or remedy or operate as a waiver thereof, nor shall any single or partial exercise of the same preclude any further exercise thereof or the exercise of any other right, power or remedy. Any provision under this Agreement being illegal, ineffective or default shall not affect its legality, effectiveness and feasibility under other clause, nor affect the legality, effectiveness and feasibility of any other provision.

15.2 Any modification, waiver or other change of this agreement must be confirmed and become effective after signed by all parties in writing.

15.3 The Pledgee shall have the right to transfer all of its rights hereunder to another party without the consent of the Pledger. The Pledger shall not transfer any of its rights and obligations hereunder.

15.4 This Contract is prepared in 3 original copies, all of which are equally effective, with the Pledger and the Pledgee retaining one original copy each, and one copy for registration in the registration bureau.

IN WITNESS WHEREOF, the authorized representatives of the parties hereto have caused this Agreement to be duly executed as of the date first written above.

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Signing page

The Pledger (official seal): Zhengzhou Shenyang Technologies Co., Ltd.

(Sealed)

Legal representative /Authorized signature (signature):

Zhong Bo (Signed)

The Pledgee (official seal): Austria Central Cooperation Bank Beijing Branch

(Sealed)

Authorized signature (signature): (Signed)

Annex I Contract Form of Receivable Pledge Registration

Herein the Zhengzhou Shenyang Technologies Co., Ltd. (hereinafter referred to as the “Pledger”) and the Austria Central Cooperation Bank Beijing Branch (hereinafter referred to as the “Pledgee”) signed the Receivable Pledge Agreement (hereto referred to as the “Pledge Agreement”) on January 4th, 2008, the two parties have reached the following agreement concerning the registration of the above-mentioned pledge receivable under the Receivable Pledge Agreement:

1. The Pledgee should be responsible for the registration of the pledge receivable under the Pledge Agreement, the out-of-pocket expense at the Pledgee’s expense;

2. The Pledger should provide promptly the necessary documents and information, including but not limited to the corporate legal registration name, registered address, the name of the legal representative, certificate of organization code, required by the Pledgee for the registration of the Pledge Agreement. The Pledger should be responsible for the authenticity and accuracy of the documents and information provided.

3. This Agreement herein is for the registration of the Pledge Agreement, and should not affect the meaning or interpretation of any provision hereof.

The Pledger (official seal): Zhengzhou Shenyang Technologies Co., Ltd.

Legal representative /Authorized signature (signature):

The Pledgee (official seal): Austria Central Cooperation Bank Beijing Branch

Authorized signature (signature):

EX-21

EXHIBIT 21.1

Subsidiaries of the Registrant

Company	Country
World Orient Universal Limited	British Virgin Islands
Global Asia Universal Limited	British Virgin Islands
EverFair Technologies, Ltd.	Hong Kong
Zhengzhou Shenyang Technology Company Limited	People’s Republic of China