f2690s1a3.htm

0001214659-09-000605.txt : 20090626 0001214659-09-000605.hdr.sgml : 20090626 20090317060242 ACCESSION NUMBER: 0001214659-09-000605 CONFORMED SUBMISSION TYPE: S-1/A PUBLIC DOCUMENT COUNT: 27 FILED AS OF DATE: 20090317 DATE AS OF CHANGE: 20090512 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SINOHUB, INC. CENTRAL INDEX KEY: 0001406574 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-ELECTRONIC PARTS & EQUIPMENT, NEC [5065] IRS NUMBER: 870438200 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-1/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-154731 FILM NUMBER: 09686320 BUSINESS ADDRESS: STREET 1: ROOM B, SECOND FLOOR, M-10, CENTRAL W. STREET 2: SHENZHEN HIGH-TECH PARK CITY: SHENZHEN STATE: F4 ZIP: 00000 BUSINESS PHONE: 86-755-2601-2223 MAIL ADDRESS: STREET 1: ROOM B, SECOND FLOOR, M-10, CENTRAL W. STREET 2: SHENZHEN HIGH-TECH PARK CITY: SHENZHEN STATE: F4 ZIP: 00000 FORMER COMPANY: FORMER CONFORMED NAME: Liberty Alliance, Inc. DATE OF NAME CHANGE: 20070713 S-1/A 1 f2690s1a3.htm AMENDMENT NO. 3 f2690s1a3.htm

As filed with the Securities and Exchange Commission on March 17, 2009

Registration No. 333-154731

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 3 to

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

SINOHUB, INC.

(Exact name of registrant as specified in its charter)

Delaware			5065			87-0438200
(State or other jurisdiction of incorporation or organization)			(Primary Standard Industrial Classification Code Number)			(I.R.S. Employer Identification Number)

6/F, Building 51, Road 5, Qiongyu Blvd.

Technology Park, Nanshan District

Shenzhen, People’s Republic of China 518057

+86-755- 2661-2106

(Address, including zip code, and telephone number,

including area code, of registrant’s principal executive offices)

Henry T. Cochran

6/F, Building 51, Road 5, Qiongyu Blvd.

Technology Park, Nanshan District

Shenzhen, People’s Republic of China 518057

(Name, address, including zip code, and telephone number,

including area code, of agent for service)

Copies to:

Gregory L White, Esq.

Mark A. Katzoff, Esq.

Seyfarth Shaw LLP

2 Seaport Lane

Boston, Massachusetts 02210

(617) 946-4800

(617) 946-4801 (fax)

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

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

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

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

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	o		Accelerated filer box.	o
Non-accelerated filer	o		Smaller reporting company	x

(Do not check if a smaller reporting company)

CALCULATION OF REGISTRATION FEE

Title of each class of securities to be registered	Amount to be registered			Proposed maximum offering price per unit (1)		Proposed maximum aggregate offering price(1)		Amount of registration fee

Common Stock, 0.001 par value issuable upon exercise of Class A Warrants		1,101,628		$	2.20	$	2,423,582	$
Common Stock, 0.001 par value issuable upon exercise of Class B Warrants		1,101,628			2.20		2,423,582
Common Stock, 0.001 par value		5,192,627			2.20		11,423,780
Common Stock, 0.001 par value		10,000	(3)		2.35		23,500

Total		7,405,883					16,294,444		641	(2)

(1)	Estimated solely for purposes of calculating the registration fee in accordance with Rule 457(c) under the Securities Act of 1933.
(2)	In connection with the initial filing of the registration statement on October 24, 2008 relating to 7,395,883 shares of the registrant’s common stock, a filing fee of $774 was paid. In connection with the filing of amendment no. 1 to the registration statement on December 17, 2008, an additional 10,000 shares of the registrant’s common stock were added to the registration statement and a filing fee of $1.00 was paid upon the filing of amendment no. 2 to the registration statement on January 20, 2009.
(3)	Added by Amendment No.1 to the Registration Statement

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

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE SELLING STOCKHOLDERS MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AND BECOMES EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE SALE IS NOT PERMITTED.

SUBJECT TO COMPLETION, DATED ___, 2009

PROSPECTUS

SINOHUB, INC.

7,405,883 SHARES OF COMMON STOCK

This prospectus relates to the resale by the selling stockholders identified in this prospectus of up to 7,405,883 shares of common stock, including shares of common stock issuable upon the exercise of warrants. All of the shares, when sold, will be sold by these selling stockholders. The selling stockholders may sell these shares from time to time in the open market at prevailing prices or in individually negotiated transactions, through agents designated from time to time or through underwriters or dealers. We will not control or determine the price at which the selling stockholders decide to sell their shares. The selling stockholders may be deemed underwriters of the shares of common stock, which they are offering. We will pay the expenses of registering these shares.

We are not selling any shares of common stock in this offering and therefore will not receive any proceeds from the sale of common stock hereunder. We will receive proceeds from any exercise of outstanding warrants by the selling stockholders if and when those warrants are exercised for cash. The warrants may also be exercised by surrender of the warrants in exchange for an equal value of shares in accordance with the terms of the warrants.

Our common stock is quoted on the Over-The-Counter Bulletin Board maintained by the Financial Industry Regulatory Authority, or FINRA, under the symbol “SIHI.” The last reported sale price per share of our common stock as reported by the Over-The-Counter Bulletin Board on March 16, 2009, was $2.40.

No underwriter or person has been engaged to facilitate the sale of shares of common stock in this offering. None of the proceeds from the sale of stock by the selling stockholders will be placed in escrow, trust or any similar account.

We may amend or supplement this prospectus from time to time by filing amendments or supplements as required. You should read the entire prospectus and any amendments or supplements carefully before you make your investment decision.

Investing in our common stock involves a high degree of risk. See “Risk Factors” beginning on page 4 to read about factors you should consider before buying shares of our common stock.

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

The date of this prospectus is ___________, 2009.

TABLE OF CONTENTS

	PAGE NO.
PROSPECTUS SUMMARY		1
OUR COMPANY		1
ABOUT THIS OFFERING		3
RISK FACTORS		4
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS		11
USE OF PROCEEDS		12
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS		12
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		14
DESCRIPTION OF BUSINESS		23
DIRECTORS AND EXECUTIVE OFFICERS		34
DIRECTOR AND EXECUTIVE COMPENSATION		37
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS		40
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT		42
DESCRIPTION OF SECURITIES		43
SELLING STOCKHOLDERS		47
PLAN OF DISTRIBUTION		49
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES		51
INDEMNIFICATION OF OFFICERS AND DIRECTORS		51
LEGAL MATTERS		52
EXPERTS		52
WHERE YOU CAN FIND MORE INFORMATION		52
FINANCIAL STATEMENTS		F-1

You should only rely on the information contained in this prospectus. We have not, and the selling stockholders have not, authorized any other person to provide you with different information. This prospectus is not an offer to sell, nor is it seeking an offer to buy, these securities in any state where the offer or sale is not permitted.

PROSPECTUS SUMMARY

The following summary highlights selected information contained in this prospectus. This summary does not contain all the information you should consider before investing in the securities. Before making an investment decision, you should read the entire prospectus carefully, including the "risk factors" section, the financial statements and the notes to the financial statements. As used throughout this prospectus, the terms “SinoHub,” “SIHI,” the “Company,” “we,” “us,” and “our” refer to SinoHub, Inc. and its subsidiaries, namely SinoHub International, Inc., SinoHub Electronics Shenzhen, Ltd., SinoHub Electronics Shanghai, Ltd., SinoHub SCM Shanghai, Ltd., B2B Chips, Limited, SinoHub Technology (Hong Kong) Limited and SinoHub SCM Shenzhen, Ltd. Note that we refer to SinoHub SCM Shenzhen, Ltd. herein as a “subsidiary” of SinoHub, Inc, because we hold a 100% beneficial interest in it pursuant to a declaration of trust. As used throughout this prospectus, the term “SinoHub International” refers to our subsidiary SinoHub International, Inc.

Historical share amounts set out in this prospectus have been adjusted to give retroactive effect to a 1-for-3.5 reverse stock split effected on July 18, 2008, and, with respect to the historical share amounts relating to stock initially issued by SinoHub International, the effects of the reverse merger pursuant to which SinoHub International became a subsidiary of the Company and in which the shareholders of SinoHub International received 3.718425 shares of SinoHub common stock for each outstanding share of SinoHub International common stock. Unless otherwise stated herein, all currency amounts have been expressed in United States dollars.

OUR COMPANY

SinoHub, Inc. (formerly known as Liberty Alliance, Inc.) is a Delaware corporation, originally incorporated in Utah in 1986, and subsequently merged and reorganized as Liberty Alliance, Inc. in Delaware in 1991. We have one direct subsidiary, SinoHub International, Inc. (formerly SinoHub, Inc.), a Delaware corporation, and a number of indirect subsidiaries based in the People’s Republic of China (the “PRC” or “China”) and Hong Kong.

SinoHub is engaged in electronic component sales and electronic component supply chain management (SCM) services. Our electronic component sales include procurement-fulfillment and individually negotiated electronic component sales to manufacturers. We deal only in original parts in original packing and do not alter or modify the parts in any way. Accordingly, any quality issues with respect to the parts would be the responsibility of the manufacturer of the parts, and we provide no warranties with respect to the components we sell. Our SCM services include warehousing, logistics and import/export. At present all of our component sales and SCM services occur in the PRC and Hong Kong.

Procurement-fulfillment starts when our manufacturer customer enters their bill of materials including a default supplier and price for each electronic component into our proprietary, SCM online software system named “SinoHub SCM” for a project (for example, to obtain the necessary components for the production of 50,000 mobile phones). SinoHub then tries to find better pricing on each component than the target price set by the customer enabling the Company to make a margin on the purchasing of the components. Then the electronic components are ordered and received in SinoHub’s Hong Kong warehouse. When the bill of materials is complete, the customer can order just-in-time shipping of the components to their factory floor.

Electronic component sales are driven by SinoHub’s in-house sales representatives who find arbitrage opportunities by looking at the pricing in our database of all of the electronic components we have ever imported. The database contains the price at which the part was imported, the quantities imported and descriptive information regarding the characteristics of the components and is updated in real time.

The Company provides SCM services to electronics manufacturers and component suppliers in the PRC. Our professional Supply Chain Management platform integrates our SinoHub SCM system, logistics service centers located in key distribution/manufacturing cities in the PRC, and a service team of over 100 employees.

As a seller of electronic components and an electronic component supply chain management service provider, we manage all aspects of the purchase and movement of electronic components from their receipt from suppliers in our Hong Kong warehouse to their import into China and delivery to a manufacturer. We also handle the export of the finished goods when that is required. Roughly seventy percent (70%) of our business with manufacturer customers is related to mobile phones. The components we source in this vertical market change rapidly in line with the rapid change of technology in this industry. This helps our business as more opportunities for price discrepancies occur than in vertical markets, such as refrigerator manufacture, where the same components are used year in and year out.

Each mobile phone built by one of our customers contains between 100 and 200 electronic components that have an aggregate resale value of between $15 and $30. At present, our business mix is weighted toward the lower end of the scale (the high end is “smart” phones) with the average purchase price of the electronic components that go into a phone one of our customers would make being around $20. We have customers who make hundreds of thousands of phones per month. In the past, we have only been able to handle part of their business because of liquidity constraints (our procurement-fulfillment business requires us to have available capital to purchase components for inventory prior to reselling them to customers). However, we are currently seeking to increase our business with several customers who want to give us the opportunity to supply them with components for a larger share of their business.

In the last three years, mobile phone components have accounted for approximately 70% of our business and network equipment components have accounted for approximately 15% of our business. We expect these percentages to grow slightly in 2009 as we focus on these two vertical markets. We believe that approximately 90% of our manufacturer customers in these areas sell their products into the local Chinese market. As a result, we have yet to feel much adverse effect from the global slowdown because demand has remained strong for these products in China. Because sales of mobile phones in the PRC typically spike around Chinese New Year which occurs in either January or February, the fourth calendar quarter is usually our biggest volume quarter. Normally, the first quarter is our weakest quarter because of this long holiday, with the second and third quarters showing consecutive increases. A typical pattern of revenue for our Company would be 15%, 20%, 25% and 40% for the first through fourth quarters, respectively. 2008 proved to be an exception as the third quarter was a robust quarter because of some delayed business coming over from the prior quarter and unusually strong demand.

The only inventory SinoHub carries is electronic components that we are staging for procurement-fulfillment projects. We do not buy components without a corresponding customer order to purchase the components. In 2008, SinoHub had three customers, all in the mobile phone business, who accounted for 12%, 10% and 7% of our revenue respectively. We expect this concentration to go down as our business expands. We do not have backlog orders, but with the successful completion of each procurement-fulfillment project and component sale, we look for repeat orders from existing customers.

ABOUT THIS OFFERING

This prospectus relates to the resale by the selling stockholders identified in this prospectus of up to 7,405,883 shares of common stock, including shares of common stock issuable upon the exercise of warrants. All of the shares, when sold, will be sold by these selling stockholders. The selling stockholders may sell their shares of common stock from time to time at prevailing market prices. We will not receive any proceeds from the sale of the shares of common stock by the selling stockholders. However, we may receive the sale price of any common stock we sell to the selling stockholders upon exercise of the outstanding warrants.

Common Stock Offered:	Up to 7,405,883 shares of common stock, including shares of common stock issuable upon the exercise of common stock warrants, of which (i) the Class A warrants are exercisable for an aggregate of 1,101,628 shares, have an initial exercise price equal to $2.15 per share, and expire on September 10, 2011, and (ii) the Class B warrants are exercisable for an aggregate of 1,101,628 shares, have an initial exercise price equal to $3.00 per share, and expire on September 10, 2013. All warrant exercise prices are subject to certain anti-dilution adjustments with respect to certain transactions in the Company’s common stock or rights to acquire common stock occurring prior to September 10, 2009. All of the warrants are beneficially owned by accredited investors and the issuance of any shares of common stock to these holders upon the exercise of warrants shall be effected as a private offering in accordance with Section 4(2) of the Securities Act.

Common Stock Outstanding at 12/31/2008:	24,501,989

Use of Proceeds:	We will not receive any proceeds from the sale of the 7,405,883 shares of common stock subject to sale by the selling stockholders under this prospectus. However, we may receive up to an aggregate of approximately $5.7 million from the sale price of any common stock we sell to the selling stockholders upon exercise of the outstanding Class A and Class B warrants, assuming all warrants are exercised for cash. Any net proceeds we receive from the selling stockholders through the exercise of warrants will be used for general corporate purposes.

OTC Bulletin Board Symbol:	SIHI

RISK FACTORS

An investment in our common stock is speculative and involves a high degree of risk and uncertainty. You should carefully consider the risks described below, together with the other information contained in this prospectus, including the consolidated financial statements and notes thereto of our Company, before deciding to invest in our common stock. The risks described below are not the only ones facing our Company. Additional risks not presently known to us or that we presently consider immaterial may also adversely affect our Company. If any of the following risks occur, our business, financial condition and results of operations and the value of our common stock could be materially and adversely affected.

Risks Related To Our Business

The industry in which we have chosen to concentrate our sales efforts is fast moving and our customers may not be successful in growing in pace with the industry.

We have chosen to concentrate our sales efforts in the fast moving mobile phone business, where the life cycles of new products can be relatively short, and our available capital limits the number of new customers we can handle at any given time. We face the risk of our customers’ growth not keeping pace with this dynamic market, whether as a result of manufacturing products for which there is lesser demand, lack of capitalization or otherwise. In addition, given our limited resources to evaluate new customers, if we ultimately select new customers who are less successful, it will provide a smaller return on our efforts than if we select more successful customers. Despite our requirement of non-cancelable purchase orders from our customers and our efforts to investigate the credit histories of our customers, there is no guarantee that all our customers will be able to pay for all of the goods they order.

Our management and a significant shareholder collectively own a majority of our common stock.

Collectively, our officers, directors and a single significant shareholder own approximately 51% of our outstanding common stock. As a result, investors may be prevented from affecting matters involving the company, including:

• the composition of our board of directors and, through it, any determination with respect to our business direction and policies, including the appointment and removal of officers;

• any determinations with respect to mergers or other business combinations;

• our acquisition or disposition of assets; and

• our corporate financing activities.

Furthermore, concentration of voting power could have the effect of delaying, deterring or preventing a change of control or other business combination that might otherwise be beneficial to our stockholders. This significant concentration of share ownership may also adversely affect the trading price for our common stock because investors may perceive disadvantages in owning stock in a company that is controlled by a small number of stockholders.

Changes in governmental regulations affecting the export of electronics from China may hurt our business.

While we believe that our manufacturer customers sell approximately 90% of their products in the Chinese market, to the limited extent the Company’s manufacturer customers sell overseas, factors which adversely affect export of electronic products from China may materially and adversely affect our business, financial condition, results of operations and business prospects, including regulatory restrictions, trade disputes, industry-specific quotas, tariffs, non-tariff barriers and taxes that may result in limiting exports from China.

Our business is sensitive to general economic conditions.

Our business may be negatively affected by rising labor and material costs in China and, to the limited extent the Company’s manufacturer customers sell overseas, by a downturn in general economic conditions in major importing countries and regions.

Negative perception or publicity of Chinese products may hurt our business.

Any negative perception or publicity of Chinese electronic products may cause a decline in demand for Chinese electronic products and in turn negatively affect our sales and revenue.

SinoHub envisions a period of rapid growth that may impose a significant burden on its administrative and operational resources which if not effectively managed, could impair its growth.

SinoHub’s strategy envisions a period of rapid growth that may impose a significant burden on its administrative and operational resources. The growth of SinoHub’s business will require significant investments of capital and management’s close attention. SinoHub’s ability to effectively manage its growth will require it to substantially expand the capabilities of its administrative and operational resources and to attract, train, manage and retain qualified management, technicians and other personnel. SinoHub may be unable to do so. If SinoHub is unable to successfully manage its growth, SinoHub may be unable to achieve its goals.

SinoHub may not be able to raise the additional capital necessary to execute its business strategy, which could result in the curtailment of SinoHub’s operations.

On September 10, 2008, the Company sold 4,406,533 shares of common stock and warrants to purchase an aggregate of 2,203,256 shares of common stock to certain accredited investors in a private offering, which resulted in aggregate gross proceeds to the Company of $7,491,110. Nevertheless, SinoHub will need to raise substantial additional funds to fully fund its existing operations and for development, component purchases and expansion of its business. An increasingly large proportion of the Company’s business (currently approximately 43%) is procurement-fulfillment which requires the Company to have available capital to purchase components for inventory prior to reselling them to customers. A lack of sufficient capital beyond cash on hand and funds available under the Company’s credit facilities significantly impairs the Company’s ability to take on new customers and the size of the orders the Company can take from existing customers. SinoHub has no current arrangements with respect to sources of additional financing and the needed additional financing may not be available on commercially reasonable terms, on a timely basis, or at all. The inability to obtain additional financing, when needed, would have a negative effect on SinoHub, including possibly requiring it to curtail operations. If any future financing involves the sale of the equity securities of SinoHub, the shares of common stock held by its stockholders could be substantially diluted. If SinoHub borrows money or issues debt securities, it will be subject to the risks associated with indebtedness, including the risk that interest rates may fluctuate and the possibility that it may not be able to pay principal and interest on the indebtedness when due.

Insufficient funds will prevent SinoHub from implementing its business plan and will require it to delay, scale back, or eliminate certain of its growth plans.

The competitive pressures the Company faces could have a material adverse affect on the Company’s business.

The market for the Company’s products and services is very competitive and subject to rapid technological change. Not only does the Company compete with in-house service teams and other third-party logistics providers, it also competes for customers with distributors and with many of its own suppliers. The Company’s failure to maintain and enhance its competitive position could adversely affect its business and prospects. Furthermore, the Company’s efforts to compete in the marketplace could cause deterioration of gross profit margins and, thus, overall profitability. The sizes of the Company’s competitors vary across market sectors, as do the resources the Company has allocated to the sectors in which it does business. Therefore, some of the competitors may have a more extensive customer base than the Company has in all or some of its market sectors or greater resources and funding to capture clients in such sectors.

SinoHub will be required to hire and retain skilled technical and managerial personnel.

SinoHub’s continued success depends in large part on its ability to attract, train, motivate and retain qualified management and highly-skilled employees, particularly managerial, technical, sales, and marketing personnel, technicians, and other critical personnel. Any failure to attract and retain the required highly-trained managerial and technical personnel who are integral to production and development and technical support teams may have a negative impact on the operation of SinoHub’s plants, which would have a negative impact on revenues. There can be no assurance that SinoHub will be able to attract and retain skilled persons and the loss of skilled technical personnel would adversely affect it.

SinoHub is dependent upon its officers for management and direction and the loss of any of these persons could adversely affect its operations and results.

SinoHub is dependent upon its officers for implementation of its proposed expansion strategy and execution of its business plan. The loss of any of its officers could have a material adverse effect upon its results of operations and financial position. SinoHub does not maintain “key person” life insurance for any of its officers. The loss of any of its officers could delay or prevent the achievement of its business objectives.

We may incur significant costs to ensure compliance with United States corporate governance and accounting requirements.

We may incur significant costs associated with our public company reporting requirements, costs associated with newly applicable corporate governance requirements, including requirements under the Sarbanes-Oxley Act of 2002 and other rules implemented by the Securities and Exchange Commission, or the Commission. We expect all of these applicable rules and regulations to significantly increase our legal and financial compliance costs and to make some activities more time consuming and costly. We also expect that these applicable rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified individuals to serve on our board of directors or as executive officers. We are currently evaluating and monitoring developments with respect to these newly applicable rules, and we cannot predict or estimate the amount of additional costs we may incur or the timing of such costs.

Compliance with Section 404 of the Sarbanes-Oxley Act on a timely basis may strain SinoHub’s limited financial and management resources, negatively affect its operating results, and cause SinoHub to fail to meet its reporting obligations.

The SEC, as directed by Section 404 of the Sarbanes-Oxley Act, adopted rules generally requiring each public company to include a report of management on the company’s internal controls over financial reporting in its annual report on Form 10-K that contains an assessment by management of the effectiveness of the company’s internal controls over financial reporting. In addition, commencing with our annual report for the fiscal year ending December 31, 2009 (unless such date is extended by the SEC) our independent registered accounting firm must attest to and report on management’s assessment of the effectiveness of our internal controls over financial reporting.

SinoHub is developing and is implementing a Section 404 plan. Before its reverse merger, the Company was a shell and had virtually no financial staff and its controls over financial reporting were ineffective. Before, during and after the reverse merger, SinoHub staff have been using controls with respect to the core business. SinoHub’s auditors have conferred with the Company and discussed their requirements. The officers of SinoHub are aware of the requirement for internal controls and believe that the internal controls SinoHub has in place are effective. SinoHub will continue to endeavor to improve its control environment as it adds staff and grows the company, and SinoHub believes that it will be able to meet the requirements of Section 404 of the Sarbanes-Oxley Act on a timely basis.

However, SinoHub may need to hire and/or engage additional personnel and incur incremental costs in order to complete and manage the work required by Section 404 of the Sarbanes-Oxley Act. SinoHub may not be able to completely implement its Section 404 plan on a timely basis. Additionally, upon completion of the implementation of its Section 404 plan, SinoHub may not be able to conclude that its internal controls are effective, or in the event that it concludes that its internal controls are effective, SinoHub’s independent accountants may disagree with its assessment and may issue a report that is qualified. The financial and management resources required to implement and comply with Section 404 of the Sarbanes-Oxley Act, and any failure to implement required new or improved controls or difficulties encountered in their management and implementation, could negatively affect SinoHub’s operating results or cause it to fail to meet its reporting obligations.

Risks Related to Conducting Business in the People’s Republic of China

SinoHub’s Chinese operations subject it to certain risks inherent in conducting business operations in China, including political instability and foreign government regulation, which could significantly impact its ability to operate in such countries and impact its results of operations.

SinoHub conducts substantially all of its business in China. SinoHub’s Chinese operations are, and will be, subject to risks generally associated with conducting businesses in foreign countries, such as:

	·	changes in applicable laws and regulations– for example, Customs regulations in China are quite complicated and are subject to change;
	·	challenges to, or failure of, title – should the Company purchase facilities, it is more difficult in China to perfect clear title than it is in the United States and this represents a potential risk;
	·	changes in foreign economic and political conditions – to the limited extent that the Company’s manufacturer customers sell overseas, economic downturns and political instability outside of China is bad for our business. Also, since China is an export driven economy, economic downturns overseas are bad for China generally and this will have some affect on our manufacturer customers which make products for the local Chinese market;
	·	export and import restrictions – as noted above, Customs regulations change frequently and such changes could have negative affects on our business;

	·	tariffs, Customs, duties and other trade barriers– VAT and Customs Duty make electronic components more expensive in China (85% are imported), which makes products such as mobile phones, components of which are core to the Company’s business, more expensive in China;
	·	difficulties in staffing and managing foreign operations– the number of qualified managers in China is much less than the need, therefore it is hard for the Company to hire highly qualified managers; and
	·	difficulties in enforcing agreements - China’s legal system is not as fully developed as the legal system in the United States, which means there is more risk that the Company could have difficulty enforcing agreements.

To the extent that the Chinese government may in the future to require local ownership of companies to perform certain activities, the Company’s ownership structure may not permit it to accomplish all of its business objectives in China. Foreign governments also may impose additional taxes and/or royalties on our business, which would adversely affect SinoHub’s profitability. Internal unrest, acts of violence or strained relations between a foreign government and SinoHub or other governments may adversely affect its operations. These developments may, at times, significantly affect SinoHub’s results of operations, and must be carefully considered by its management when evaluating the level of current and future activity in such countries.

SinoHub holds a beneficial ownership interest in SinoHub SCM Shenzhen, Ltd. through a trust to fully comply with PRC rules and regulations. However, such arrangements may be adjudicated by relevant PRC government agencies as not being in compliance with PRC governmental regulations on foreign investment in Chinese companies and such structures may limit our control with respect to such entities.

Over 70% of the electronic components that we sell are imported into China by SinoHub SCM Shenzhen, Ltd. (“SinoHub SCM SZ”), a PRC corporation organized by our wholly-owned subsidiary SinoHub Electronics Shenzhen, Ltd., also a PRC corporation (“SinoHub Electronics SZ”). In September 2008, SinoHub SCM SZ attained Client Coordinator Enterprise Coordinator status with the Customs authorities at the Huanggang border crossing with Hong Kong. As a Client Coordinator Enterprise, SinoHub SCM SZ is able to achieve expedited Customs clearance of its goods that it is importing into China and may defer the payment of Value Added Tax and Customs Duty for two weeks.

The success of our current import operations in China is based in part upon this status. If SinoHub SCM SZ were to lose its status as a Client Coordinator Enterprise for any reason, such loss of status may result in disruption of our business, diversion of management attention and the incurrence of substantial costs, and could have a material adverse effect on our results of operations and financial condition. A change in Chinese law, such as the elimination of Value Added Tax, that impacted the benefits of our Client Coordinator Enterprise status by removing our competitive advantage of passing on to our customers the deferral in the payment of the tax we receive from such status, could have a similar material adverse effect on our results of operations and financial condition.

In order to take advantage of favorable treatment available to enterprises whose registered owners are PRC citizens under certain PRC import/export regulations, on January 30, 2008 SinoHub Electronics SZ entered into a declaration of trust with Ms. Hantao Cui, a citizen of the PRC and the spouse of our President Lei Xia, as trustee (the “Trustee”), which provided for the registration of all of the ownership interests of SinoHub SCM SZ in the name of the Trustee and the retention of all of the beneficial ownership interests in SinoHub SCM SZ by SinoHub Electronics SZ. SinoHub Electronics SZ, as sole beneficial owner of SinoHub SCM SZ, retained all rights, title and interests in SinoHub SCM SZ, and the Trustee may only exercise those rights with respect to SinoHub SCM SZ that are expressly conveyed to the Trustee in the declaration of trust. The declaration of trust did not convey to the Trustee any authority to encumber the ownership interests in SinoHub SCM SZ. In general, the Trustee may not undertake any actions under the declaration of trust with respect to SinoHub SCM SZ unless it first receives instructions from SinoHub Electronics SZ, and the Trustee has agreed to, among other things, (i) vote its interests in SinoHub SCM SZ as directed by SinoHub Electronics SZ, and (ii) deliver all payments, distributions and other economic benefits received with respect to its interest in SinoHub SCM SZ to SinoHub Electronics SZ.

We believe that our operations in China through and by SinoHub Electronics SZ and SinoHub SCM SZ are valid under current PRC laws and regulations. However, many PRC import/export laws and regulations are relatively new and as the PRC legal system continues to rapidly evolve, the interpretations of many PRC laws, regulations and rules are not always uniform and enforcement of these laws, regulations and rules involves uncertainties. We cannot predict the effect of future developments in the PRC legal system, including the promulgation of new laws, changes to existing laws or the interpretation or enforcement thereof, the preemption of local regulations by national laws, or the overruling of local government’s decisions by the superior, national government. If we are required to restructure our operations to comply with new PRC laws or regulations, there can be no assurance that SinoHub SCM SZ would be able to preserve its status as a Client Coordinator Enterprise. Although the declaration of trust agreement between SinoHub Electronics SZ and the Trustee allows SinoHub Electronics SZ to purchase SinoHub SCM SZ at any time, there can be no assurance that such acquisition also would not result in the loss of SinoHub SCM SZ’s Enterprise Coordinator status.

China’s economic policies could affect our business.

Substantially all of our assets are located in China and substantially all of our revenue is derived from our operations in China. Accordingly, our results of operations and prospects are subject, to a significant extent, to the economic, political and legal developments in China.

While China’s economy has experienced a significant growth in the past twenty years, growth has been irregular, both geographically and among various sectors of the economy. The Chinese government has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures benefit the overall economy of China, but may also have a negative effect on us. For example, our operating results and financial condition may be adversely affected by the government control over capital investments or changes in tax regulations.

The economy of China has been transitioning from a planned economy to a more market-oriented economy. In recent years the Chinese government has implemented measures emphasizing the utilization of market forces for economic reform and the reduction of state ownership of productive assets and the establishment of corporate governance in business enterprises; however, a substantial portion of productive assets in China are still owned by the Chinese government. In addition, the Chinese government continues to play a significant role in regulating industry development by imposing industrial policies. It also exercises significant control over China's economic growth through the allocation of resources, controlling payment of foreign currency-denominated obligations, setting monetary policy and providing preferential treatment to particular industries or companies.

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

The value of our common stock will be indirectly affected by the foreign exchange rate between U.S. dollars and Chinese Renminbi (RMB) and between those currencies and other currencies in which our sales may be denominated, because substantially all of our earnings and cash assets are denominated in RMB. In addition, appreciation or depreciation in the value of the RMB relative to the U.S. dollar would affect our financial results reported in U.S. dollar terms without giving effect to any underlying change in our business or results of operations. Although we have no current intention to pay any dividends in the foreseeable future, fluctuations in the exchange rate would also affect the relative value of any dividend we issue that will be exchanged into U.S. dollars as well as earnings from, and the value of, any U.S. dollar-denominated investments we make in the future.

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

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

Currently, all of the components we sell to our Chinese customers are imported. In the event that the U.S. dollar appreciates against RMB, our costs will increase. If we cannot pass the resulting cost increases on to our customers, our profitability and operating results will be adversely affected.

We may be restricted from exchanging RMB to other currencies in a timely manner.

At the present time the RMB is not an exchangeable currency. The Company receives nearly all of its revenue in RMB, which may need to be exchanged to other currencies, primarily U.S. dollars, and remitted outside of the PRC. Effective from July 1, 1996, foreign currency “current account” transactions by foreign investment enterprises, including Sino-foreign joint ventures, are no longer subject to the approval of State Administration of Foreign Exchange, or SAFE, but need only a ministerial review, according to the foreign exchange regulations. Current account items include international commercial transactions, which occur on a regular basis, such as those relating to trade and provision of services. Distributions to joint venture parties also are considered a current account transaction. Other non-current account items, known as capital account items, remain subject to SAFE approval. Under current regulations, the Company can obtain foreign currency in exchange for RMB from swap centers authorized by the government. The Company does not anticipate problems in obtaining foreign currency to satisfy its requirements; however, there is no assurance that foreign currency shortages or changes in currency exchange laws and regulations by the PRC government will not restrict the Company from exchanging RMB in a timely manner. If such shortages or changes in laws and regulations occur, the Company may accept RMB, which can be held or reinvested in other projects.

Our subsidiaries and affiliated Chinese entities in China are subject to restrictions on paying dividends or making other payments to us, which may restrict our ability to satisfy our liquidity requirements.

SinoHub’s operating subsidiaries in China generate substantially all of the company’s consolidated revenues. To repatriate the cash generated to the US-based parent, these subsidiaries would need to declare a dividend or make some other type of payment to the US-based parent. Current PRC regulations permit our subsidiaries to pay dividends to us only out of their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, our subsidiaries in China are required to set aside at least 10% of our annual after-tax profits determined in accordance with PRC GAAP in a statutory general reserve fund until the amount in such fund reaches 50% of our registered capital. Allocations to these statutory reserve funds can only be used for specific purposes and are not transferable to us in the form of loans, advances or cash dividends. Further, if our subsidiaries and affiliated Chinese entities in China incur debt on their own behalf, the instruments governing the debt may restrict their ability to pay dividends or make other payments to us, which may restrict our ability to satisfy our liquidity requirements. Any limitations on the ability of our PRC subsidiaries to transfer funds to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends and otherwise fund and conduct our business.

We may face obstacles from the communist system in The People's Republic of China.

Foreign companies conducting operations in The People’s Republic of China face significant political, economic and legal risks. The Communist regime in The People's Republic of China may hinder Western investment.

We may have difficulty establishing adequate management, legal and financial controls in the People's Republic of China.

The People's Republic of China historically has been deficient in Western style management and financial reporting concepts and practices, as well as in modern banking, computer and other control systems. We may have difficulty in hiring and retaining a sufficient number of qualified employees to work in the People's Republic of China. 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.

Because our assets and operations are located in China, you may have difficulty enforcing any civil liabilities against us under the securities and other laws of the United States or any state.

We are a holding company, and all of our assets are located in the People’s Republic of China. In addition, some of our directors and officers are non-residents of the United States and all or a substantial portion of the assets of these non-residents are located outside the United States. As a result, it may be difficult for investors to effect service of process within the United States upon these non-residents, or to enforce against them judgments obtained in United States courts, including judgments based upon the civil liability provisions of the securities laws of the United States or any state.

There is uncertainty as to whether courts of the People’s Republic of China would enforce:

Judgments of United States courts obtained against us or these non-residents based on the civil liability provisions of the securities laws of the United States or any state; or

In original actions brought in the Republic of China, liabilities against us or non-residents predicated upon the securities laws of the United States or any state. Enforcement of a foreign judgment in the Republic of China also may be limited or otherwise affected by applicable bankruptcy, insolvency, liquidation, arrangement, moratorium or similar laws relating to or affecting creditors' rights generally and will be subject to a statutory limitation of time within which proceedings may be brought.

The PRC legal system embodies uncertainties, which could limit law enforcement availability.

The PRC legal system is a civil law system based on written statutes. Unlike common law systems, decided legal cases have little precedence. In 1979, the PRC government began to promulgate a comprehensive system of laws and regulations governing economic matters in general. The overall effect of legislation since 1979 has significantly enhanced the protections afforded to various forms of foreign investment in China. Each of our PRC operating subsidiaries and affiliates is subject to PRC laws and regulations. However, these laws and regulations change frequently and the interpretation and enforcement involve uncertainties. For instance, we may have to resort to administrative and court proceedings to enforce the legal protection that we are entitled to by law or contract. However, since PRC administrative and court authorities have significant discretion in interpreting statutory and contractual terms, it may be difficult to evaluate the outcome of administrative court proceedings and the level of law enforcement that we would receive in more developed legal systems. Such uncertainties, including the inability to enforce our contracts, could affect our business and operation. In addition, intellectual property rights and confidentiality protections in China may not be as effective as in the United States or other countries. Accordingly, we cannot predict the effect of future developments in the PRC legal system, particularly with regard to the industries in which we operate, including the promulgation of new laws. This may include changes to existing laws or the interpretation or enforcement thereof, or the preemption of local regulations by national laws. These uncertainties could limit the availability of law enforcement, including our ability to enforce our agreements with the government entities and other foreign investors.

Risks Related to Ownership of SinoHub Common Stock

There can be no assurance that a liquid public market for our common stock will exist in the future.

Although our common stock is eligible for quotation on the OTC Bulletin Board, very few shares trade on a regular basis and there may not be a significant market in our common stock in the future. The OTC Bulletin Board is a significantly more limited market than the New York Stock Exchange or NASDAQ system. The quotation of our shares on the OTC Bulletin Board may result in a less liquid market available for existing and potential stockholders to trade shares of our common stock, could depress the trading price of our common stock and could have a long-term adverse impact on our ability to raise capital in the future. There can be no assurance that a regular and established market will be developed and maintained for our common stock. There can also be no assurance as to the strength or liquidity of any market for our common stock or the prices at which holders may be able to sell their shares.

It is likely that there will be significant volatility in the trading price.

In recent years, the securities markets in the United States have experienced a high level of price and volume volatility, and the market price of securities of many companies has experienced wide fluctuations that have not necessarily been related to the operations, performance, underlying asset values or prospects of such companies. For these reasons, our shares of common stock can also be expected to be subject to volatility resulting from purely market forces over which we will have no control. If our business development plans are successful, we may require additional equity financing to continue our growth and our success in raising additional equity capital could be affected by such volatility. Market prices for our common stock will be influenced by many factors and can be expected to be subject to significant fluctuations in response to variations in our operating results and other factors. Our stock price will also be affected by the trading price of the stock of our competitors, investor perceptions of SinoHub, interest rates, general economic conditions and those specific to our industry, developments with regard to SinoHub’s operations and activities, our future financial condition, and changes in our management.

Our shares of common stock are currently subject to penny stock regulations and restrictions and you may have difficulty selling shares of our common stock.

The trading price of the common stock has remained been below $5.00. Since our common stock trades below $5.00 per share, trading in the common stock is subject to the requirements of certain rules promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), related to any trades involving a “penny stock” (defined generally, any non-NASDAQ equity security that has a market price of less than $5.00 per share, subject to certain exceptions). These rules impose additional sales practice requirements on broker-dealers that sell such securities to persons other than established customers and “accredited investors” (generally, individuals with a net worth in excess of $1,000,000 or annual incomes exceeding $200,000, or $300,000 together with their spouses). These rules require additional disclosure by broker-dealers in connection with any trades involving a “penny stock” and a two business day “cooling off period” before brokers and dealers can effect transactions in penny stocks. For these types of transactions, the broker-dealer must make a special suitability determination for the purchaser and have received the purchaser’s written consent to the transaction prior to the sale. The broker-dealer also must disclose the commissions payable to the broker-dealer, current bid and offer quotations for the penny stock and, if the broker-dealer is the sole market-maker, the broker-dealer must disclose this fact and the broker-dealer’s presumed control over the market. These, and the other burdens imposed upon broker-dealers by the penny stock requirements, could discourage broker-dealers from effecting transactions in our common stock which could severely limit the market liquidity of our common stock and the ability of holders of our common stock to sell it.

We do not intend to pay dividends.

We have not paid any cash dividends on any of our securities since inception and we do not anticipate paying any cash dividends on any of our securities in the foreseeable future.

Future sales of our securities, or the perception in the markets that these sales may occur, could depress our stock price.

As of December 31, 2008, we had issued and outstanding approximately (i) 24,501,989 shares of common stock, warrants for 2,511,712 shares of common stock and options exercisable for 660,175 shares of common stock. These securities will be eligible for public sale only if registered under the Securities Act or if the stockholder qualifies for an exemption from registration under Rule 144 or Rule 701 under the Securities Act, or other applicable exemption. In addition, an aggregate of 398,093 shares of SinoHub subject to Lock-Up Agreements entered into among such holders and SinoHub in connection with the Merger have lock-up restrictions that will expire on May 14, 2009 (provided that the restrictions do not apply to resale of the covered shares pursuant to this prospectus, and all of such shares are being registered for resale under this prospectus). An additional 2,100 shares of SinoHub subject to Lock-Up Agreements entered into among the holders of such shares and SinoHub in connection with the issuance of an aggregate of 1,900 shares of common stock to such holders to enable them to own a round lot of shares of SinoHub have lock-up restrictions that will expire on July 18, 2009, and a further 6,078,827 shares owned by our President and by our CEO subject to Lock-Up Agreements between the President and CEO and the placement agent for our September 2008 private placement have lock-up restrictions that will expire on ____________ [the first anniversary of the date of this prospectus]. The holders of an aggregate of 7,352,750 shares of SinoHub common stock issued in respect of SinoHub International’s Series A, B and C Convertible Preferred Stock in connection with the reverse merger were entitled to piggy back and demand registration rights with respect to the shares of SinoHub International common stock into which such preferred stock was convertible pursuant to the terms of certain Stock Purchase Agreements entered into among SinoHub International and such holders. While we do not believe that these rights extend to the shares of SinoHub common stock received by such holders in the Merger, it is possible that such holders may take a different view, and there can be no guarantee that, if they choose to litigate the matter, a court would find in our favor. An aggregate of 5,202,627 shares of outstanding common stock and 2,203,256 shares of common stock issuable upon exercise of outstanding warrants are being registered for resale in this prospectus. The market price of our capital stock could drop significantly if the holders of the shares being registered hereunder sell them or are perceived by the market as intending to sell them. Moreover, to the extend that additional shares of our outstanding These factors also could make it more difficult for us to raise capital or make acquisitions through the issuance of additional shares of our common stock or other equity securities.

The ability of the Board of Directors of SinoHub to issue “blank check” preferred stock and any anti-takeover provisions we adopt may depress the value of our Common Stock.

The authorized capital of SinoHub includes shares of “blank check” preferred stock. The SinoHub Board has the power to issue any or all of the authorized but unissued shares of its preferred stock, including the authority to establish one or more series and to fix the powers, preferences, rights and limitations of such class or series, without seeking stockholder approval. They may, in the future, adopt anti-takeover measures. The authority of the SinoHub Board of Directors to issue “blank check” preferred stock and any future anti-takeover measures it may adopt may in certain circumstances delay, deter or prevent takeover attempts and other changes in control of SinoHub not approved by its Board of Directors. As a result, SinoHub stockholders may lose opportunities to dispose of their shares at favorable prices generally available in takeover attempts or that may be available under a merger proposal and the market price of the Common Stock and the voting and other rights of its stockholders may also be affected.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Some of the statements under “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business,” and elsewhere in this prospectus constitute forward-looking statements. You can identify forward-looking statements by the use of the words “may,” “will,” “should,” “could,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “intends,” “potential,” “proposed,” or “continue” or the negative of those terms. These statements involve risks known to us, significant uncertainties, and other factors, many of which we cannot predict with accuracy and some of which we might not even anticipate, which may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by those forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements.

Among the factors about which we have made assumptions are:

·	our views on the potential growth of the mobile telephone and network equipment markets in China;
·	our ability to overcome competition from other suppliers;
·	any increase in the cost of component parts that we supply or increases in operating costs which cannot be passed on to our customers;
·	the availability of financing on attractive terms or at all, which may adversely impact our growth plans or increase our future interest expense;
·	changes in interest rate levels and volatility in securities markets;
·	the retention of import/export licenses and SinoHub SCM SZ’s Client Coordinator Enterprise Coordinator status with the Huanggang Customs authority;

·	economic, political, regulatory, legal and foreign exchange risks associated with our operations;
·	changes in governmental regulation, tax rates and similar matters;

·	retention of key members of our senior management; and
·	the abatement of the current global economic crisis over time.

Except as required by law, we assume no obligation to update any forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, even if new information becomes available in the future. For further information on factors which could impact us and the statements contained herein, see the “Risk Factors” beginning on page 4 of this prospectus. We assume no obligation to update and supplement forward-looking statements that become untrue because of subsequent events, new information or otherwise.

USE OF PROCEEDS

We will not receive any proceeds from the sale of our common stock by the selling stockholders. However, we may receive up to an aggregate of approximately $5.7 million from the sale price of any common stock we sell to the selling stockholders upon exercise of the outstanding Class A and Class B warrants, assuming all warrants are exercised for cash.

We anticipate that any net proceeds from the sale of stock we sell to the selling stockholders upon exercise of outstanding warrants will be used for general corporate purposes. Such general purposes may include acquisitions, investments, repayment of debt, capital expenditures, repurchase of our capital stock and any other purposes that we may specify in any prospectus supplement. We may invest the net proceeds temporarily until we use them for their stated purpose.

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information

SIHI common stock is quoted on the Over-the-Counter Electronic Bulletin Board under the symbol “SIHI” Presented below is the high and low closing bid information of SinoHub’s common stock for the periods indicated. These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions. No bid quotations were available for any of the quarterly periods for the year ended December 31, 2007. All quotations prior to July 18, 2008 were under the name of the Company’s predecessor, Liberty Alliance, Inc., under the symbol “LBTI.”

	SinoHub COMMON STOCK
	HIGH		LOW
FISCAL YEAR ENDING DECEMBER 31, 2009
First Quarter (through March 15, 2009)	$	2.50	$	2.15

	HIGH		LOW
FISCAL YEAR ENDING DECEMBER 31, 2008:
Fourth Quarter	$	2.74	$	1.02
Third Quarter	$	3.15	$	2.50
Second Quarter	$	3.15	$	2.80
First Quarter	$	N/A	$	N/A

Our common shares are issued in registered form. The registrar and transfer agent for our shares is:

Interwest Transfer Co. Inc.

1981 Murray Holladay Road, Suite 100

Salt Lake City, UT 84117

Telephone: 801-272-9294

Facsimile: 801-277-3147

Securities authorized for issuance under equity compensation plans

The Board of Directors of the Company has approved the 2008 Stock Plan and has reserved 3,000,000 shares for issuance under the Plan. The Company intends to present the plan to its stockholders for approval at the next annual meeting of stockholders. There are currently options to purchase an aggregate of 252,524 shares of common stock outstanding under the Plan. In connection with the reverse merger, the Company also assumed options to purchase an aggregate of 489,451 shares of common stock previously issued under SinoHub International’s 2000 Stock Incentive Plan, of which options to purchase an aggregate of 407,651 shares of common stock are currently outstanding and no other securities are authorized for issuance under the 2000 Plan.

Holders

As of December 31, 2008, there were approximately 550 holders of record of our common stock.

Dividends

We have not declared any dividends since incorporation and do not anticipate that we will do so in the foreseeable future. Although there are no restrictions that limit the ability to pay dividends on our common shares, our intention is to retain future earnings for use in our operations and the expansion of our business.

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

The following discussion and analysis is based on, and should be read in conjunction with our audited historical consolidated financial statements, which are included elsewhere in this Prospectus. Management’s Discussion and Analysis of Financial Condition and Results of Operations contains statements that are forward-looking. These statements are based on current expectations and assumptions that are subject to risk, uncertainties and other factors. Actual results could differ materially because of the factors discussed in “Risk Factors” above and elsewhere in this Prospectus, and other factors that we may not know. All amounts are expressed in United States dollars.

OVERVIEW

Our Business

SinoHub, Inc. (the “Company”) is engaged in electronic component sales and electronic component supply chain management (SCM) services. Our electronic component sales include procurement-fulfillment and individually negotiated electronic component sales to manufacturers. We deal only in original parts in original packing and do not alter or modify the parts in any way. Accordingly, any quality issues with respect to the parts would be the responsibility of the manufacturer of the parts, and we provide no warranties with respect to the components we sell. Our SCM services include warehousing, logistics and import/export. At present all of our component sales and SCM services occur in the PRC and Hong Kong.

Procurement-fulfillment starts when our manufacturer customer enters their bill of materials including default supplier and price for each electronic component into our proprietary, SCM online software system named “SinoHub SCM” for a project (for example, the production of 50,000 mobile phones). SinoHub then tries to find better pricing on each component than the target price set by the customer enabling the Company to make a margin on the purchasing of the components. Then the electronic components are ordered and received in SinoHub’s Hong Kong warehouse. When the bill of materials is complete, the customer can order just-in-time shipping of the components to their factory floor.

The Company provides SCM services to electronics manufacturers and component suppliers in the PRC). Our professional Supply Chain Management platform integrates SinoHub SCM, logistics service centers located in key distribution/manufacturing cities in the PRC, and a service team of over 100 employees.

As a seller of electronic components and an electronic component supply chain management service provider, we manage all aspects of the purchase and movement of electronic components from their receipt from suppliers in our Hong Kong warehouse to their import into China and delivery to a manufacturer. We also handle the export of the finished goods when that is required. Roughly seventy percent (70%) of our business with manufacturer customers is related to mobile phones. The components we source in this vertical market change rapidly as the technology changes very quickly. This actually helps our business because it means that there are many more opportunities for price discrepancies than there are in vertical markets, such as refrigerator manufacture, where the same components are used year in and year out.

In the last three years, mobile phone components have accounted for approximately 70% of our business and network equipment components have accounted for approximately 15% of our business. We expect these percentages to grow slightly in 2009 as we focus on these two vertical markets. We believe that 90% of our manufacturer customers in these areas sell their products into the local Chinese market. As a result, we have yet to feel much effect from the global economic downturn because demand has remained strong for these products in China. Because sales of mobile phones typically spike around Chinese New Year which always occurs in either January or February, the fourth calendar quarter is usually our biggest volume quarter. Normally, the first quarter is our weakest quarter because of this long holiday, with the second and third quarters showing consecutive increases. A typical pattern of revenue for our Company would be 15%, 20%, 25% and 40% for the first through fourth quarters respectively. 2008 proved to be an exception as the third quarter was a robust quarter because of some delayed business coming over from the prior quarter and unusually strong demand.

History and Basis of Reporting

SinoHub, Inc. (formerly known as Liberty Alliance, Inc.) is a Delaware corporation, originally incorporated in Utah in 1986, and subsequently merged and reorganized as Liberty Alliance, Inc. in Delaware in 1991. In May 2008, Liberty Alliance, Inc., its wholly-owned subsidiary SinoHub Acquisition Corp., SinoHub, Inc., and Steven L. White, the principal stockholder of Liberty Alliance, entered into an Agreement and Plan of Merger pursuant to which SinoHub Acquisition Corp. merged with and into SinoHub, Inc. and SinoHub, Inc. became a wholly-owned subsidiary of Liberty Alliance. After completion of the merger, the original stockholders of Liberty Alliance held approximately 6% of the issued and outstanding shares of Liberty Alliance common stock on a fully diluted basis and the former stockholders of SinoHub, Inc., including the shares issued to consultants for services rendered in connection with the merger, held approximately 94% of Liberty Alliance issued and outstanding shares of common stock.

Subsequent to the completion of the merger, on July 18, 2008, Liberty Alliance amended its certificate of incorporation to change its name to SinoHub, Inc. and effect a 3.5-to-1 reverse stock split of all issued and outstanding shares of its common stock.

For financial reporting purposes, the reverse takeover of the Company has been accounted for as a recapitalization of the Company with SinoHub International as the accounting acquirer whereby the historical financial statements and operations of SinoHub International became the historical financial statements of the Company, with no adjustment of the carrying value of the assets and liabilities. When we refer in this prospectus to business and financial information for periods prior to the consummation of the reverse acquisition, we are referring to the business and financial information of SinoHub International on a consolidated basis unless the context suggests otherwise.

For further details regarding the history of the Company, see “Description of Business – History” on page 23.

Business Operations

In the process of importing electronic components for our customers, SinoHub records the price, manufacturer, lead time and supplier name information for each part number in a database. The Company’s business operations use data contained in this database to source electronic components for our manufacturer customers at the lowest price indicated. We also use the same infrastructure we use to provide SCM services to our supplier customers (e.g. we use the same warehouses, trucks, import/export staff, third party freight forwarders) for our electronic component sales activities. We import electronic components into China and deliver them inside China. As a part of the procurement-fulfillment process, we assemble all of the electronic components needed to make the device to be manufactured by our customers in Hong Kong. After all parts related to a customer’s order have been assembled, we deliver the parts to the customer’s factory floor in the PRC. For example, if we were retained to process the procurement of 120 electronic components for a bill of material that will be used by the customer to make a mobile phone, we would collect all of the components in our warehouse in Hong Kong. When all the components are assembled, we import the components into China and transport them to the customer’s factory. Even though we derive only about 6% of our revenue from our SCM business, it is invaluable because it provides the information and the infrastructure that supports our procurement-fulfillment and electronic component sales.

The Company offers SCM customers the use of the SCM Platform under a fee based program where customers outsource the supply chain process to SinoHub, while retaining title to inventory, receivables, and commitments on supplier payables. SinoHub provides the customer a complete SCM solution that includes importing and exporting services, facilitating Customs clearance, performing warehouse and distribution functions, and enabling foreign currency settlements through SinoHub’s banking relationships and its licensed qualifications as a Client Coordinator Enterprise in China.

The Company also provides a unique procurement-fulfillment program for customers that integrates the use of the SCM platform with inventory procurement, handling, and distribution, as well as payment terms, if required. Customers may require “order fulfillment” services, where the customer outsources its electronic component purchasing process and specifies suppliers at pre-negotiated costs, and SinoHub receives a negotiated fee from its customer for services related to handling the purchasing, and for managing and financing the inventory through the supply chain. Additionally, customers may request “order procurement” services, where SinoHub sources and procures electronic components from the marketplace, and then resells the components to its customers at negotiated prices that include the component cost, supply chain management, and financing, if necessary. It is possible that a customer would only use fulfillment services, but using procurement services implies the use of fulfillment services too. Currently we do not have any customers who only use fulfillment services. In all cases, the procurement-fulfillment program provides customers with a streamlined management process for navigating all importing, Customs, warehousing, and delivery challenges, while addressing key objectives for working capital, inventory levels, order fill rates, and transaction costs.

SinoHub also supports customers by providing a sourcing channel for electronic components that are not part of a specific SCM or procurement-fulfillment program. In these cases, SinoHub utilizes its industry knowledge and relationships with components suppliers and manufacturers to source products at competitive prices and within time constraints. SinoHub responds to these “spot” orders from customers, sources the product, confirms pricing, and executes delivery. Customers are required to pay on delivery of product.

Our biggest competition in the procurement-fulfillment and component sales businesses where we make 94% of our revenue comes from electronic component distributors, and in-house purchasing departments of EMS providers and OEMs. We do have a few competitors such as Shenzhen Eternal Asia, HopeSea and Strongjet, but none of these companies focus exclusively on electronic components and none of them has an online SCM system with the functionality of SinoHub SCM.

Consolidated Results of Operations

The Company derives revenue and gross profit primarily from sales of electronic components and fees associated with the provision of SCM services.

The Company reports revenue from supply chain management services and electronic components sales. Revenues for supply chain management services are earned from both the SCM and procurement-fulfillment programs and are primarily based on a percentage of inventory value handled for a customer. The Company recognizes revenue from SCM services when the services are provided. Revenue from electronic components sales is based on quoted prices and is recognized at the time of shipment to customers. Sales are recorded net of discounts and allowances. In all cases, revenue is recognized when there is persuasive evidence of an arrangement, delivery has occurred or services rendered, the sales price is determinable, and collectability is reasonably assured.

Cost of sales for SCM services primarily represents direct costs incurred for providing SCM services, including logistics services, import/export services, warehouse services and a number of ancillary services such as kitting, insurance, repackaging and re-labeling. Cost of sales for electronic components primarily represents the cost of components and expenses directly related to component procurement.

SCM pricing is negotiated based on a percentage of the value of the goods handled. For procurement-fulfillment and electronic component sales the Company makes a margin based on the difference between the price at which it buys electronic components and the price at which it sells these parts to the customer. The margin SinoHub makes on this business varies based on the rapidly changing prices in the market into which the SinoHub SCM database give the Company a unique window.

Selling, general and administrative expenses include salaries paid to employees, employee related expenses, professional fees, marketing costs, technology costs, sales commissions, depreciation, rent, and related office and facility expenses.

Fiscal Years Ended December 31, 2008 Compared to December 31, 2007:

Overall Results

The company reported net income for the year ended December 31, 2008 was $8.5 million compared to $3.5 million in the prior year, an increase of 143%.

Net Sales

Net sales for the year ended December 31, 2008 was $79.5 million, up 176% from $28.8 million recorded in the prior year. The Company reports net sales on the basis of two business categories, supply chain management services and electronic component sales. In the year ended December 31, 2008, net sales of supply chain management services increased 138% to $5.0 million from $2.1 million in the prior year. This increase was primarily based on the addition of nine large manufacturer customers who, we believe, were attracted to SinoHub by our online software system, SinoHub SCM. In the year ended December 31, 2008, net sales of electronic components increased 179% to $74.5 million from $26.7 million in the prior year. We believe that the main driving force behind this increase was the Company’s ability to obtain from its supplier customers better pricing for its manufacturer customers than they were able to achieve on their own, and new functionality in SinoHub SCM, such as online bill of material management and the use of bar codes to pre-sort components for processing, that made it easier for manufacturer customers to operate their supply chains.

Growth was supported by additional access to financial resources and bank borrowings during 2008. In particular, the Company raised net proceeds of $1.3 million at the end of 2007 and $6.5 million in September 2008 from sales of new equity that was put to use financing additional procurement-fulfillment projects and increased component sales in 2008, and the Company was able to expand its bank lines with both China Construction Bank and China Industrial Bank.

Gross Profit

The Company recorded gross profit of $16.2 million in the year of 2008 compared with $6.7 million in the prior year. The gross profit margin for the year of 2008 decreased to 20.4% from 23.2% in the prior year. Gross margins are under pressure as a result of growth in larger procurement-fulfillment projects where the mix of components and competitive pricing configurations result in lower margins. While positive profit trends are expected as the Company’s sales grow, the trend toward lower gross profit margins may continue as the Company pursues and wins new business opportunities. In particular, in the Company’s electronic components sales business, as volume increases, gross margins may tend to gradually decline because the occasional opportunity for us to make a very high margin transaction caused by a large price discrepancy between what the Company buys a component for and its sales price will not have as dramatic an effect on the overall gross profit earned for the period.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased 65% to $3.8 million in 2008 from $2.3 million in 2007 to support the general growth in sales and expanded operations. These expenses were approximately 6% of revenues in the year of 2008 compared to 8% in the prior year as the Company experienced favorable leverage on infrastructure and operating expenses while sales increased. For example, the 138% increase in net sales of SCM services and the 179% increase in net sales of electronic components in the year of 2008 were accomplished with an average of 91 employees versus 61 employees in the prior year, a 49% increase in average number of employees.

Income from Operations

The Company recorded income from operations of $10.8 million in the year of 2008, as compared with operating income of $4.0 million in the prior year.

Income Taxes

The Company’s effective tax rate was 20.2% in the year of 2008 compared to 12.7% in 2007. The statutory tax rate in the PRC of 25% in 2008 and 33% in 2007 was reduced in both periods by favorable tax preferences experienced by the Company’s operations in special economic zones as designated by the Chinese government. The trend toward a higher effective tax rate is expected to continue as preferences lapse over time. The Chinese government recently lowered the corporate income tax rate from 33% to 25%. In Shenzhen, where the Company does most of its business, the special economic zone status means the corporate income tax rate for 2008 was 18% and, barring further changes, it will be 19% in 2009. The stated intention of the Chinese government is to gradually increase the corporate tax rate in special economic zones such as in Shenzhen to the national level, which is 25% at present. Income tax estimates in interim periods have varied as the Company has adjusted provisions and accruals in light of actual tax filings.

Foreign Currency Translation Gain and Comprehensive Net Income

The Company reported foreign currency translation gains of $541,000 in the year of 2008, compared with foreign currency translation gains of $285,000 in the prior year as the increase in value of the RMB versus the USD continued. Comprehensive net income (net income plus foreign currency translation gains) was $9.0 million in the year of 2008 compared with $3.8 million in the prior year.

CONSOLIDATED FINANCIAL CONDITION AND LIQUIDITY

Liquidity and Capital Resources

The Company’s strategic plans include continued expansion and support of our SCM Platform (consisting of SinoHub SCM, key service centers in Hong Kong, Shenzhen, and Shanghai, and a supply chain management service team providing real time support) and electronic component sales, including procurement-fulfillment programs. As a result of the working capital investments necessary to support these plans, the Company will continue to require cash and financing resources to meet and exceed its objectives. The Company’s cost of capital increased with the private financing we closed on September 10, 2008 for net proceeds of approximately $6.5 million. Since gross proceeds were approximately $7.5 million the cost burden of $1 million represented 13.3%. Our cost of capital with China Construction Bank and Industrial and Commercial Bank of China was approximately 6% at December 31, 2008. Most of the working capital the Company intends to raise in the near to medium term is expected to come from Chinese banks, which, to date, have not been affected by the global credit crisis nearly as much as the US and European banks. While there can be no assurance that we will not experience a problem in the future, to date we have not had any collection problems with any procurement-fulfillment project funded. We may also seek to raise additional capital in public or private equity financings.

We believe that SinoHub’s procurement-fulfillment and electronic component sales business can be expanded with additional funds depending on how quickly we can build out new infrastructure and hire additional staff. This is because the electronics business in China is very large relative to the size of the Company’s business. Additional working capital would enable us to purchase more electronic components from our suppliers, which should lower our costs, and thus enhance our profitability. Increased volume would also likely enable the Company to get favorable terms from suppliers which would lower our need for additional financing from third parties. Moreover, the addition of warehouse space to support the Company’s growth will require capital investment. Accordingly, if SinoHub is unsuccessful in raising additional working capital, the Company’s growth will be adversely affected.

We intend to raise these funds through the sale of additional equity or debt, long-term debt financings, and operating cash flows. Due to the risk factors discussed in this document there can be no assurance that we will be successful in raising the additional funds necessary to carry out management’s plans for the future on acceptable terms or at all. Our ability to obtain additional capital will also depend on market conditions, national and global economies and other factors beyond our control. We cannot be sure that we will be able to implement or capitalize on various financing alternatives. The terms of any debt or equity funding that we may obtain in the future may be unfavorable to us and to our stockholders.

At December 31, 2008 and December 31, 2007, the Company had cash and cash equivalents of $5.9 million and $4.3 million, respectively. During the year of 2008, the net amount of cash used in the Company’s operating activities was $6.4 million, the net amount of cash provided by investing activities was $5.0 million, and the net amount of cash provided by financing activities was $2.6 million. Exchange rate changes increased cash flow effects by $344,000 in 2008.

The Company must generally pay the purchase price of electronic components for procurement-fulfillment customers and then recoup the purchase price from the customer upon delivery. We only purchase standard components which are readily saleable. When a manufacturer customer gives us a procurement-fulfillment project, the customer inputs a bill of materials with their supplier and price information into SinoHub SCM. Our job is to purchase these electronic components, substituting our suppliers if we can get a better price and, when we have the entire bill of materials assembled, import the components into China and deliver the components to the customer’s factory floor. Our typical procurement-fulfillment sale to a customer requires the customer to post a deposit of 15% to 20% of the cost of the components and we generally provide 30 day payment terms. The terms begin when the project is approved, but SinoHub does not actually pay for the components until we receive them and in some cases we receive terms from the suppliers, with our cost of borrowing of approximately 0.5% per month in the year of 2008.

Cash Flows from Operating Activities

The Company maintains a significant investment in working capital, primarily accounts receivable and inventories. Accounts receivable and inventories represented approximately 74% and 42% of total assets at December 31, 2008 and December 31, 2007, respectively.

The net amount of cash used in the Company’s operating activities during the year of 2008 was $6.4 million, which primarily included earnings from operations that were more than offset by investments in accounts receivable and inventory to support the Company’s business growth. In addition, accounts payable reductions were made during the period to enable the Company to get favorable terms with suppliers. In the prior year period, net cash provided by operating activities was $2.1 million as cash flow from income was largely offset by investments in receivables as well as certain deposits with customers as procurement-fulfillment projects where completed.

Cash Flows from Investing Activities

The net amount of cash generated by investing activities during the year of 2008 was $5.0 million primarily the result of a release of restricted cash as the Company settled bank notes under letters of credit that required restricted cash balances. In the prior year period, investing activities used $5.6 million of cash due to the restricted cash buildup.

Cash Flows from Financing Activities

The net amount of cash provided by financing activities during the year of 2008 was $2.7 million, which included a private placement stock offering in the third quarter with gross proceeds of $7.5 million, proceeds from bank borrowings of approximately $2.1 million, and an amount of $1.6 million due from a related party offset by payments on bank loans of $7.3 million, expenses associated with the private placement of $1 million, and Note repayments of $251,000. The related company, GenNext Technology, Ltd., a company owned jointly by the Chairman and the President of the Company, which is based in Hong Kong, assisted the Company by facilitating certain foreign exchange transactions, and settled obligations to certain suppliers on behalf of the Company, and collected certain customer remittances on behalf of the Company. Over the course of the fourth quarter of 2008, the activities which were previously being conducted solely by GenNext Technology, Ltd. were transferred to B2B Chips, a wholly owned subsidiary of the Company that was used to conduct the Company’s Hong Kong business as it achieved the required assignment of customer contracts and bank accounts to support the necessary foreign exchange transactions. In the prior year period, cash flow from financing activities of $4.4 million included advance payments by investors of $1.4 million in connection with equity offerings that closed in November and December of 2007, and bank borrowing proceeds of $6.6 million, offset by Note repayments of $516,000 and reductions in related company payables to GenNext of approximately $3.1 million.

OFF-BALANCE SHEET ARRANGEMENTS

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our investors.

CRITICAL ACCOUNTING POLICIES

The preparation of our financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including but not limited to those related to income taxes and impairment of long-lived assets. We base our estimates on historical experience and on various other assumptions and factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Based on our ongoing review, we plan to adjust to our judgments and estimates where facts and circumstances dictate. Actual results could differ from our estimates.

We believe the following critical accounting policies are important to the portrayal of our financial condition and results and require our management's most difficult, subjective or complex judgments, often because of the need to make estimates about the effect of matters that are inherently uncertain.

Concentrations and Risks

Substantially all of Company's assets are located in the PRC and Hong Kong and substantially all of the Company's revenues were derived from customers located in the PRC, with roughly seventy percent (70%) of the Company’s business with manufacturer customers related to mobile phones. In addition, financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of accounts receivable. The Company mitigates credit risk through procedures that include determination of credit limits, credit approvals, and related monitoring procedures to ensure delinquent receivables are collected.

Cash and Cash Equivalents

For the purpose of the statements of cash flows, cash and cash equivalents include cash on hand and demand deposits with a bank with a maturity of less than three months. Cash amounts held as security for the Company’s bank loans are reported as restricted cash and are not included with cash and cash equivalents on the balance sheet until the security for such funds has been released.

Accounts Receivable

The Company extends unsecured credit to its customers in the ordinary course of business but mitigates the associated risks by performing credit checks and actively pursuing past due accounts. An allowance for doubtful accounts is established and recorded based on managements’ assessment of customer credit history, overall trends in collections and write-offs, and expected exposures based on facts and prior experience. At December 31, 2008, the Company made $1.2 million in provision, or 5% of accounts receivable, due to ongoing severe global financial crisis. In the prior year, the Company considered all outstanding accounts receivable to be collectible and no provision for doubtful accounts was made in the financial statements.

Inventories

Inventories are stated at cost, cost being determined on a first in first out method. No allowance is made for excess or obsolete inventories as inventories are held for a short period of time and are substantially related to specific customer order commitments. Inventory consists of electronic components purchased from suppliers.

Property and Equipment

Depreciation is provided on a straight-line basis, less estimated residual values over the assets’ estimated useful lives. The estimated useful lives are as follows:

Plant and machinery	5 Years
Motor vehicles	5 Years
Furniture, fixtures and equipment	2 to 5 Years

Long-lived assets held and used by the Company are reviewed for impairment whenever changes in circumstances or events indicate that the carrying amount of an asset may not be recoverable. For purposes of evaluating the recoverability of long-lived assets, the Company considers various factors, including future cash flows, to determine whether the carrying amount exceeds fair value, and in that case, the asset is written down to fair value. The Company believes that no impairment of property and equipment exists at December 31, 2008.

Financial Instruments

The Company analyzes all financial instruments that may have features of both liabilities and equity under SFAS 150, “Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity,” SFAS No 133, “Accounting for Derivative Instruments and Hedging Activities” and EITF 00-19, “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock.” At present, there are no such instruments in the financial statements. The Company also analyzes registration rights agreements associated with any equity instruments issued to determine if penalties triggered for late filing should be accrued under FSP EITF 00-19-2, “Accounting for Registration Payment Arrangements.”

Fair Value of Financial Instruments

SFAS No. 107, "Disclosure About Fair Value of Financial Instruments," requires certain disclosures regarding the fair value of financial instruments. Fair value of financial instruments is made at a specific point in time, based on relevant information about financial markets and specific financial instruments. As these estimates are subjective in nature, involving uncertainties and matters of significant judgment, they cannot be determined with precision. Changes in assumptions can significantly affect estimated fair values.

The carrying value of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, bank borrowings, notes payable and other liabilities approximate their fair values because of the short-term nature of these instruments. Management believes the Company is not exposed to significant interest or credit risks arising from these financial instruments.

The Company’s operations are primarily based in the PRC, which may give rise to significant foreign currency risks and opportunities from fluctuations and the degree of volatility of foreign exchange rates between the United States dollar (“USD”) and the Chinese Renminbi (“RMB”). In July 2005, the PRC allowed the RMB to fluctuate within a narrow range ending its decade-old valuation peg to the USD. Since this change in 2005, the RMB has experienced positive trends in valuation against the USD; such trends are reflected in part by the foreign currency translation gains reported in the Company’s financial statements.

Derivative Instruments

The Company does not utilize derivative or hedge instruments in its financing activities.

Stock-Based Compensation

The Company adopted SFAS No. 123R, “Share-Based Payments.” This Statement requires a public entity to measure the cost of services received in exchange for an award of equity instruments based on the grant-date fair value of the award. That cost will be recognized over the period during which services are received. Stock compensation for stock granted to non-employees has been determined in accordance with SFAS 123R and the Emerging Issues Task Force consensus Issue No. 96-18, "Accounting for Equity Instruments that are issued to Other than Employees for Acquiring, or in Conjunction with Selling Goods or Services" ("EITF 96-18"), as the fair value of the consideration received or the fair value of equity instruments issued, whichever is more reliably measured.

Revenue Recognition

The Company reports revenue from supply chain management, or SCM, services and electronic components sales. Revenues for supply chain management services are earned from both the SCM and procurement-fulfillment programs and are primarily based on a percentage of inventory value handled for a customer. The Company recognizes revenue from SCM services when the services are provided. Revenues from electronic components sales including procurement-fulfillment procurement are based on quoted prices and are recognized at the time of shipment to customers. Revenues are recognized on the gross amount billed to customers. Sales are recorded net of discounts and allowances. In all cases, revenue is recognized when there is persuasive evidence of an arrangement, delivery has occurred or services rendered, the sales price is determinable, and collectability is reasonably assured.

Income Taxes

The Company accounts for income taxes under the SFAS No. 109, “Accounting for Income Taxes.” Under SFAS 109, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under SFAS 109, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date.

Foreign Currency Translation

SinoHub, Inc., SinoHub International, Inc., B2B Chips, Ltd., and SinoHub Technology Hong Kong, Ltd. maintain accounting records using the functional currencies, USD and Hong Kong Dollars (“HKD”) respectively. SinoHub SCM Shenzhen, Ltd., SinoHub Electronics Shenzhen, Ltd., SinoHub SCM Shanghai, Ltd. and SinoHub Electronics Shanghai, Ltd. maintain accounting records using RMB as the functional currency.

The Company uses United States Dollars (“USD”) as its reporting currency. The Company accounts for foreign currency translation pursuant to SFAS No. 52, “Foreign Currency Translation” (“SFAS No. 52”). The subsidiaries of the Company’s functional currencies are the Hong Kong Dollar (“HKD”) and Chinese Renminbi (“RMB”). Under SFAS No. 52, all assets and liabilities are translated into United States dollars using the current exchange rate at the balance sheet date. The capital and various reserves are translated at historical exchange rates prevailing at the time of the transactions while income and expenses items are translated at the average exchange rate for the period. Translation adjustments are included in other comprehensive income (loss) for the period.

Foreign currency transactions during the year are translated to their functional currencies at the approximate rates of exchange on the dates of transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the approximate rates of exchange at that date. Non-monetary assets and liabilities are translated at the rates of exchange prevailing at the time the asset or liability was acquired. Exchange gains or losses are recorded in the statement of operations.

Comprehensive Income

The foreign currency translation gain or loss resulting from the translation of the financial statements expressed in HKD and RMB to USD is reported as other comprehensive income in the statements of operations and stockholders’ equity.

Earnings Per Share

Earnings per share in accordance with the provisions of SFAS No. 128, "Earnings Per Share." SFAS 128 requires presentation of basic and diluted earnings per share in conjunction with the disclosure of the methodology used in computing such earnings per share. Basic earnings per share excludes dilution and is computed by dividing income available to common stockholders by the weighted average common shares outstanding during the period. Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted into common stock using the treasury method.

RECENT ACCOUNTING PRONOUNCEMENTS

In December 2007, the Financial Accounting Standards Board (FASB) issued SFAS No. 141 (revised 2007), “Business Combinations” (“SFAS 141R”). SFAS 141R establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any noncontrolling interest in the acquiree and the goodwill acquired. SFAS 141R also establishes disclosure requirements to enable the evaluation of the nature and financial effects of the business combination. This statement is effective beginning January 1, 2009. The Company does not expect the adoption of SFAS 141R to have a material impact on its financial position and results of operations.

In December 2007, FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements – an amendment of ARB No. 51.” This statement improves the relevance, comparability, and transparency of the financial information that a reporting entity provides in its consolidated financial statements by establishing accounting and reporting standards that require; the ownership interests in subsidiaries held by parties other than the parent and the amount of consolidated net income attributable to the parent and to the noncontrolling interest be clearly identified and presented on the face of the consolidated statement of income, changes in a parent’s ownership interest while the parent retains its controlling financial interest in its subsidiary be accounted for consistently, when a subsidiary is deconsolidated, any retained noncontrolling equity investment in the former subsidiary be initially measured at fair value, entities provide sufficient disclosures that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. SFAS 160 affects those entities that have an outstanding noncontrolling interest in one or more subsidiaries or that deconsolidate a subsidiary. SFAS 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. Early adoption is prohibited. The adoption of this statement did not have a material effect on the Company's financial statements.

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133.” This statement is intended to improve transparency in financial reporting by requiring enhanced disclosures of an entity’s derivative instruments and hedging activities and their effects on the entity’s financial position, financial performance, and cash flows. SFAS 161 applies to all derivative instruments within the scope of SFAS 133, “Accounting for Derivative Instruments and Hedging Activities” (SFAS 133) as well as related hedged items, bifurcated derivatives, and nonderivative instruments that are designated and qualify as hedging instruments. Entities with instruments subject to SFAS 161 must provide more robust qualitative disclosures and expanded quantitative disclosures. SFAS 161 is effective prospectively for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application permitted. The adoption of this statement did not 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 162 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that presented in conformity with generally accepted accounting principles in the United States of America. SFA 162 will be effective 60 days following the SEC’s approval of the PCAOB amendments to AU Section 411, The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles. The Company does not believe SFAS 162 will have a significant impact on the Company’s financial statements.

In May 2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee Insurance Contracts, an interpretation of FASB Statement No. 60.” The scope of this Statement is limited to financial guarantee insurance and reinsurance contracts, as described in the Statement, issued by enterprises included within the scope of Statement 60. Accordingly, this Statement does not apply to financial guarantee contracts issued by enterprises excluded from the scope of Statement 60 or to some insurance contracts that seem similar to financial guarantee insurance contracts issued by insurance enterprises (such as mortgage guaranty insurance or credit insurance on trade receivables). This Statement also does not apply to financial guarantee contracts that are derivative instruments included within the scope of SFAS No. 133, “Accounting for Derivative instruments and Hedging Activities.” SFAS 163 is effective prospectively for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years; disclosure requirements in paragraphs 30(g) and 31 are effective for the first period (including interim periods) beginning after May 23, 2008. The adoption of this statement did not have a material effect on the Company's financial statements.

In October 2008, the FASB issued FSP FAS 157-3, “Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active”, to clarify guidance on determining the fair value of a financial asset under SFAS 157 in a market that is not active. FSP FAS 157-3 was effective upon issuance, including prior periods for which financial statements had not been issued. The adoption of this statement effective September 30, 2008 did not have a material impact on the Company’s financial statements.

DESCRIPTION OF BUSINESS

Overview

SinoHub, Inc. (the “Company”) is engaged in electronic component sales and electronic component supply chain management (SCM) services. Our electronic component sales include procurement-fulfillment and individually negotiated electronic component sales to manufacturers. We only deal in original parts in original packing and do not alter or modify the parts in any way. Accordingly, any quality issues with respect to the parts would be the responsibility of the manufacturer of the parts. Our SCM services include warehousing, logistics and import/export. At present all of our component sales and SCM services occur in the PRC and Hong Kong.

Procurement-fulfillment starts when our manufacturer customer enters their bill of materials including default supplier and price for each electronic component into our proprietary, SCM online software system named “SinoHub SCM” for a project (for example, to obtain the necessary components for a project for the production of 50,000 mobile phones). SinoHub then tries to find better pricing on each component than the target price set by the customer enabling the Company to make a margin on the purchasing of the components. Then the electronic components are ordered and received in SinoHub’s Hong Kong warehouse. When the bill of materials is complete, the customer can order just-in-time shipping of the components to their factory floor.

The Company provides SCM services to electronics manufacturers and component suppliers in the People’s Republic of China (the “PRC”). Our professional Supply Chain Management platform integrates SinoHub SCM, logistics service centers located in key distribution/manufacturing cities in the PRC, and a service team of over 100 employees.

As a seller of electronic components and an electronic component supply chain management service provider, we manage all aspects of the purchase and movement of electronic components from their receipt from suppliers in our Hong Kong warehouse to their import into China and delivery to a manufacturer. We also handle the export of the finished goods when that is required. Roughly seventy percent (70%) of our business with manufacturer customers is related to mobile phones. The components we source in this vertical market change rapidly as the technology changes very quickly. This actually helps our business because it means that there are many more opportunities for price discrepancies than there are in vertical markets, such as refrigerator manufacture, where the same components are used year in and year out.

Each mobile phone built by one of our customers contains between 100 and 200 electronic components that have an aggregate value of between $15 and $30. At present, our business mix is weighted toward the lower end of the scale (the high end is “smart” phones) with the average purchase price of the electronic components that go into a phone one of our customers would make being around $20. We have customers who make hundreds of thousands of phones per month. In the past, we have only been able to handle part of their business because of liquidity constraints (our procurement-fulfillment business requires us to have available capital to purchase components for inventory prior to reselling them to customers). However, we are currently ramping up with several customers who want to give us the opportunity to supply them with components for a larger share of their business. In the last three years, mobile phone components have accounted for approximately 70% of our business and network equipment components have accounted for approximately 15% of our business. We expect these percentages to grow slightly in 2009 as we focus on these two vertical markets. 90% of our manufacturer customers in these markets sell their products into the local Chinese market. As a result, we have yet to feel much effect from the global slowdown because demand has remained strong for these products in China. Because sales of mobile phones typically spike around Chinese New Year which always occurs in either January or February, the fourth calendar quarter is usually our biggest volume quarter. Normally, the first quarter is our weakest quarter because of this long holiday, with the second and third quarters showing consecutive increases. A typical pattern of revenue for our Company would be 15%, 20%, 25% and 40% for the first through fourth quarters respectively. 2008 proved to be an exception as the third quarter was a very robust quarter because of some delayed business coming over from the prior quarter and unusually strong demand. The only inventory SinoHub carries is electronic components that we are staging for procurement-fulfillment projects. We never buy components without a corresponding order to purchase the components. In 2008, SinoHub had three customers, all in the mobile phone business, who accounted for 12%, 10% and 7% of our revenue respectively. We expect this concentration to go down as our business expands. We do not have backlog orders, but with the successful completion of each procurement-fulfillment project and component sale, we look for repeat orders from these customers.

History

Liberty Alliance, Inc. was a corporation organized in Utah in 1986. In 1991, Liberty Alliance completed its domestication as a Delaware corporation. Liberty Alliance filed for bankruptcy in 1994 and the bankruptcy proceedings were completed in 1995. From 1995 to 2006, Liberty Alliance had no or nominal assets and was not conducting any business operations. In August 2006, Liberty Alliance changed its name to Vestige, Inc., and in September 2006 it changed its name back to Liberty Alliance, Inc. On August 1, 2007, Liberty Alliance became a voluntary reporting company under the Exchange Act when it filed a Form 10 registration statement with respect to its shares of common stock. Shares of Liberty Alliance common stock began to be reported on the over-the-counter bulletin board under the symbol “LBTI” on November 14, 2007.

In May 2008, Liberty Alliance, Inc., its wholly-owned subsidiary SinoHub Acquisition Corp., SinoHub, Inc., and Steven L. White, the principal stockholder of Liberty Alliance, entered into an Agreement and Plan of Merger pursuant to which SinoHub Acquisition Corp. merged with and into SinoHub, Inc. and SinoHub, Inc. became a wholly-owned subsidiary of Liberty Alliance. In connection with the merger, Liberty Alliance issued to the former stockholders of SinoHub, Inc. 18,290,000 shares of Liberty Alliance common stock in exchange for all the outstanding shares of SinoHub, Inc.’s preferred and common stock, and Liberty Alliance assumed options to purchase shares of SinoHub, Inc. common stock which became exercisable for 489,451 shares of Liberty Alliance common stock. In addition, Liberty Alliance also issued 510,000 shares of its common stock to certain consultants for services rendered in connection with the merger, including 500,000 shares issued to JCGlobal Capital Partners LLC. These consulting services included investment banking advice and strategic advisory services relating to the structure and consummation of the reverse merger between SinoHub and Liberty Alliance that was eventually consummated. Immediately following the merger, Liberty Alliance had 20,000,000 shares of common stock outstanding and options exercisable for an additional 489,451 shares of common stock. The merger was accounted for as a reverse acquisition with SinoHub, Inc. as the acquirer for accounting purposes. After completion of the merger, the original stockholders of Liberty Alliance held approximately 6% of the issued and outstanding shares of Liberty Alliance common stock on a fully diluted basis and the former stockholders of SinoHub, Inc., including the shares issued to consultants for services rendered in connection with the merger, held approximately 94% of Liberty Alliance issued and outstanding shares of common stock.

Subsequent to the completion of the merger, on July 18, 2008:

- SinoHub, Inc. amended its certificate of incorporation to change its name to SinoHub International, Inc.;

- Liberty Alliance amended its certificate of incorporation to change its name to SinoHub, Inc. and effect a 3.5-to-1 reverse stock split of all issued and outstanding shares of its common stock; and

- Shares of SinoHub, Inc. (formerly Liberty Alliance) common stock began to be reported on the over-the-counter bulletin board under the new symbol “SIHI” on a post-merger, post-split basis.

Business Operations

SinoHub’s business operations are primarily dedicated toward utilizing the value of the SCM Platform to source and deliver electronic components and electronic products for our customers.

The Company offers customers the use of the SCM Platform under a fee based program whereby customers outsource the supply chain process to SinoHub, while retaining title to inventory, receivables, and commitments on supplier payables. SinoHub provides the customer a complete SCM solution that includes importing and exporting services, facilitating Customs clearance, performing warehouse and distribution functions, and enabling foreign currency settlements through SinoHub’s banking relationships and its licensed qualifications as a Client Coordinator Enterprise in China. Foreign currency settlement services are valuable since the Chinese government limits the volume of foreign currency exchange based on the volume of imported and exported goods. Because SinoHub has a high volume of imports, it has a high limit of foreign currency exchange. Moreover, the high volume of foreign currency exchange makes SinoHub an attractive customer to banks, who earn transaction fees on processing the settlements. In addition, the Company has credit facilities with China Construction Bank, which can immediately settle the value added tax and custom duty with the government, thus, speeding up the goods in and out of the Customs.

The Company also provides a procurement-fulfillment program for customers that integrates the use of the SCM Platform with inventory procurement, handling, and distribution. Customers may require “order fulfillment” services, where the customer outsources its electronic component purchasing process and specifies suppliers at pre-negotiated costs, and SinoHub receives a negotiated fee from its customer for services related to handling the purchasing, and for managing the inventory through the supply chain. Additionally, customers may request “order procurement” services, where SinoHub sources and procures electronic components from the marketplace, and then resells the components to its customers at negotiated prices that include the component cost and supply chain management. In all cases, the procurement-fulfillment program provides customers with a streamlined management process for navigating all importing, Customs, warehousing, and delivery challenges, while addressing key objectives for working capital, inventory levels, order fill rates, and transaction costs.

The Company has secured financing facilities (RMB based) with certain PRC banks to support its business operations. The facilities with each bank include:

Letter of credit facility with one bank in the amount of $3,200,000 to support trading activity. Restricted cash balances are required as security for draws against the facility and an annual commitment fee of 0.1% is assessed. In addition, the bank requires a third party guarantor. The third-party guarantor is Hong Feng Paper Industrial, Ltd., which required the Company to pay it a fee of $80,000 for providing its guaranty. Other than the guaranty and the additional guaranty described below, the only relationship between the Company and Hong Feng is that the principal of Hong Feng owns shares of the common stock of the Company. The facility renews each year and is available through August 2009. The Company also has a $1,460,000 Customs duty import facility and a $2,200,000 Customs export refund facility through this bank to support short term duty collections on trading activity. These facilities renew each year and are available through February 2010. The Customs export refund facility allows the Company to advance to its customers refunds of Value Added Tax to which such customers may be entitled by shipping products on which the tax was paid overseas prior to the receipt of the refunded amount.

Letter of credit facility with another bank in the amount of $3,400,000 to support trading activity. Restricted cash balances are required as security for draws against the facility and an annual commitment fee of 0.1% is assessed. In addition, the bank requires a third party guarantor. The third-party guarantor is Hong Feng Paper Industrial, Ltd., which required the Company to pay it a fee of $70,000 for providing its guaranty. The facility was terminated in December 2008

Letter of credit facility with another bank in the amount of $4,400,000 to support its component sales business. Restricted cash balances are required as security for draws against the facility and the bank requires guarantors from a subsidiary and shareholders and lien on a PRC property owned by a director. In addition, the bank requires a third party guarantor. The third-party guarantor required the Company to pay it a fee of $72,000 for providing its guaranty. The facility is available through September, 2009.

Subsidiaries

Our corporate structure is designed to comply with laws affecting ownership by foreign entities of PRC companies. When SinoHub SCM Shenzhen was incorporated, PRC laws prohibited a foreign owned company from owning an import/export license. That restriction has since been removed, but the mechanism for SinoHub Electronics Shenzhen to purchase SinoHub SCM Shenzhen without affecting SinoHub SCM Shenzhen’s status at Customs has not yet been defined. SinoHub Electronics Shanghai has the same purpose as SinoHub Electronics Shenzhen, with each company focused on operating in Shanghai and Shenzhen, respectively. SinoHub SCM Shanghai has the same purpose as SinoHub SCM Shenzhen, with each company focused on operating in Shanghai and Shenzhen, respectively. The reason for the use of two subsidiaries is driven by PRC law, which generally requires that a company be organized in the area in which it is operating.

The diagram below illustrates the current corporate structure of SinoHub, Inc. and its subsidiaries:

SinoHub International, Inc. was incorporated on March 23, 1999 as a Delaware corporation. Prior to the Merger, this company was named SinoHub, Inc. and was the primary holding company for the Chinese and Hong Kong subsidiaries listed below. SinoHub International, Inc. is wholly owned by SinoHub, Inc.

SinoHub Electronics Shenzhen, Ltd. was incorporated on September 19, 2000 in the People’s Republic of China to provide one-stop SCM services for electronic manufacturers and distributors in southern China. SinoHub Electronics Shenzhen, Ltd. is wholly owned by SinoHub International, Inc.

SinoHub SCM Shanghai, Ltd. was incorporated on March 9, 2005 in the PRC to provide one-stop SCM services for electronic manufacturers and distributors in northern China. SinoHub SCM Shanghai, Ltd. is wholly owned by SinoHub Electronics Shenzhen, Ltd. which acquired record ownership of the company on January 17, 2008. Prior to that date, SinoHub Electronics Shenzhen had borne all costs of forming SinoHub SCM Shanghai and was the sole beneficial owner of SinoHub SCM Shanghai with record ownership of SinoHub SCM Shanghai being held in the name of a trustee pursuant to a Declaration of Trust substantially similar to, and for the same reasons as, the current arrangement with SinoHub SCM Shenzhen. SinoHub Electronics Shenzhen was willing to terminate the trust arrangement with respect to the shares of SinoHub SCM Shanghai because, unlike SinoHub SCM Shenzhen, SinoHub SCM Shanghai does not have Client Coordinator Enterprise status with Chinese Customs. SinoHub Electronics Shenzhen paid nominal consideration for the transfer of the shares.

SinoHub Electronics Shanghai, Ltd. was incorporated on July 5, 2005 in the PRC to provide one-stop SCM services for electronic manufacturers and distributors in the PRC. SinoHub Electronics Shanghai, Ltd. is wholly owned by SinoHub International, Inc.

B2B Chips, Limited was incorporated on June 12, 2006 in Hong Kong to purchase and sell electronic components. B2B Chips is wholly owned by SinoHub Electronics Shenzhen, Ltd.

SinoHub Technology (Hong Kong) Limited was incorporated on May 8, 2007 in Hong Kong and has not yet commenced business. SinoHub Technology (Hong Kong) is wholly owned subsidiary of B2B Chips and was acquired on April 10, 2008. B2B Chips acquired SinoHub Technology (Hong Kong) from its owners, Henry T. Cochran and Lei Xia, for HKD 10,000.

Import/Export Licenses; Client Coordinator Enterprise

The various companies listed above hold import/export licenses as follows:

SinoHub Electronics Shenzhen, Ltd. obtained its import/export license on April 30, 2004. The current license is renewable within 30 days prior to September 19, 2010.

SinoHub SCM Shenzhen, Ltd. obtained its import/export license on January 18, 2002. The current license is renewable within 30 days prior to January 18, 2011.

SinoHub SCM Shanghai, Ltd. obtained its import/export license on April 1, 2006. The current license is renewable within 30 days prior to April 6, 2011.

The licenses will expire if not renewed by the respective dates set forth above. The licenses can be terminated prior to expiration if, among other reasons:

the license owner declares bankruptcy,

the license owner engages in smuggling,

the license owner fails to pay Customs duties and Value Added Taxes when due, or

the license owner fails to otherwise comply with the conditions of the license.

In addition to its license, in September 2008, SinoHub SCM Shenzhen attained Client Coordinator Enterprise Coordinator status with the Huanggang Customs authority in China. As a Client Coordinator Enterprise, SinoHub SCM Shenzhen is able to achieve expedited Customs clearance of its goods that it is importing into China and may defer the payment of Value Added Tax and Customs Duty for two weeks.

Available Information

The Company’s mailing address and executive offices are located at 6/F, Building 51, Road 5, Qiongyu Blvd., Technology Park, Nanshan District, Shenzhen 518057, People’s Republic of China. The Company’s telephone number, including the International Code and Area Code is +86-755-2661-2106 and its corporate website is www.sinohub.com. The reports that the Company files with the Securities and Exchange Commission pursuant to the Exchange Act are available on the Securities and Exchange Commission website at http://www.sec.gov. The public may read and copy any materials filed by the Company with the Securities and Exchange Commission at the Public Reference Room at 100 F Street, N.E., Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the Securities and Exchange Commission at 1-800-SEC-0330. The Securities and Exchange Commission maintains an Internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the Securities and Exchange Commission at http://www.sec.gov. The contents of these websites are not incorporated into this filing.

Market Overview: The Electronic Component Industry in China

The world has witnessed the enormous growth of the Chinese electronic manufacturing industry over the past decade. Accordingly, China is a major consumer of electronic components. This growth is expected to continue to increase with the rapid development of new technologies and in turn to lead to the growth in the consumption of electronics products and China’s continuing growth as the world’s electronics factory. According to Global Sources, China consumed $117.4 billion of electronic components in 2008.

Whereas in North America and Europe the top manufacturers generally purchase components directly from the component manufacturers themselves, in China, to date, even the largest multinational OEMs like Nokia and Sony Ericsson and EMS providers like Flextronix and Foxconn are generally unable to purchase components in China directly from U.S. and European component manufacturers, in large part because these component manufacturers do not have well-established supply chains into China. The rapid growth of electronic component distributors in China and the growth of Web-based Internet procurement have created a very fragmented electronic components market, with no distributor capturing significant market share. To date even the biggest electronic component distributors in China (WPG, Arrow, Avnet and Yosun) do not provide complete SCM services to their customers, unlike in the US and Europe where large component manufacturers and franchise distributors provide complete SCM services to their customers. SinoHub believes that the fragmented market for electronics components in China and the lack of an end-to-end SCM create an opportunity to combine the sale of electronic components with efficient SCM services to garner a share of the growing market for such components and services in China.

SinoHub’s Strategy

SinoHub seeks to implement a strategy of expanding its customer base for electronic component sales in China by delivering SCM efficiencies to its customers to drive on-time deliveries and customer satisfaction. We plan to do this by maintaining and enhancing the quality and efficiency of our SCM services, including our proprietary SinoHub SCM online software service. In particular, we intend to focus on continuing to build the procurement-fulfillment portion of our business.

Development of SinoHub’s Business; Component Sales; and Component Procurement-Fulfillment Programs

SinoHub’s original business was the provision of SCM software to assist suppliers of electronic components with their supply chains into PRC. We refer to these customers as our “supplier” customers. Eventually SinoHub developed an integrated SCM service offering, including warehousing, logistics and import/export to assist suppliers deliver products to Chinese manufacturers. As a result of SinoHub’s position as a provider of SCM services in China and our close relationships with a number of electronic component suppliers and Chinese manufacturers as well as our experience in the electronic components industry, we eventually decided we had an opportunity to supply certain Chinese manufacturers with electronic components and began to source and sell components for our own account. As these sales grew as a percentage of revenue, we increased the resources which we dedicated to sales of components. As our component customers and the market became more aware of and confident in our SCM service offering, the opportunity arose for us to generate integrated sales of components and SCM services is a streamlined approach to inventory management and order procurement-fulfillment. Currently, the vast majority of our revenues are the result of sales of electronic components. Our sales of components currently fall into two different categories, namely individually negotiated component sales, which currently account for approximately 51% of our sales (compared to 63% in 2007) and component sales as part of procurement-fulfillment programs which currently account for approximately 43% of our sales (compared to 30% in 2007).

Currently, our electronic component procurement and sales staff of 15 full time employees look for opportunities to source components for manufacturer customers at more competitive prices than the manufacturer customer is currently receiving. If a lower price can be achieved and the customer agrees with the price we quote, an opportunity to lower customer costs and increase our revenues and profits exits. Although we are not contractually obligated to refrain from any sales activity, if a manufacturer customer of ours is buying a specific component directly from one of SinoHub’s supplier customers, we will not interrupt that purchase. To mitigate the risk of purchasing and taking title to the components in these sales of components, we purchase only standard components that, if necessary, can be sold to other customers, and we limit the size of each order.

SinoHub’s Solution

While we derive the vast majority of our revenues from the sale of electronic components, we believe our SCM services are important to our business and drive our ability to attract customers. SinoHub offers a full SCM Platform solution. The SinoHub SCM Platform brings a systems approach to our customers, which enables them to understand, manage, and coordinate the flow of products and services, within their supply chain. SinoHub’s SCM Platform consists of a Web-based online supply chain management system (SinoHub SCM), key service centers in Hong Kong, Shenzhen, and Shanghai, and a supply chain management service team that is able to work with our customers through our online system in real time.

SinoHub SCM

SinoHub SCM is a proprietary, web-based software system that provides our customers information along with security, accuracy and ease of use. Because we only deal with electronic components, we can more easily implement features our customers require. Since our SCM Platform is Web based, our customers can quickly determine the status of shipments, the status and location of inventory in our warehouses, and the status of financial transactions. The SinoHub SCM is accessible in both Chinese and English. The following flow chart illustrates the SinoHub SCM functionality.

As described by the graph, SinoHub SCM operates in Simplified Chinese and English, providing the following functionality for electronic component suppliers:

	·	Order entry with automated price and category checking
	·	Order tracking
	·	Inventory management information system (warehouse management)
	·	Shipment information system
	·	Payment system
	·	Finished orders database
	·	Operations results tracking
	·	Executive reporting system

And for OEMs and EMS companies it provides:

	·	Order tracking
	·	Shipment tracking
	·	Payment system
	·	Bonded inventory control system
	·	Operations results tracking
	·	Vendor Managed Inventory
	·	VAT tracking for recovery on export
	·	Online payment

SinoHub Service Centers

SinoHub utilizes its physical locations as service centers for electronic component suppliers and OEM/EMS manufacturers. Geographical distances can significantly affect the ability to provide effective SCM services. Establishing multifunctional and technologically advanced service centers in major cities in China may lower costs and improve service standards. SinoHub has established service centers in Shenzhen and Shanghai which are connected through the SinoHub SCM.

SCM Service Team

SinoHub has expended time and resources to hire employees with experience in the electronic component field and to provide additional training to ensure the highest quality of service to our customers. Our SCM Service Team includes more than 100 employees.

SinoHub SCM Services

SinoHub’s supply chain management services include:

1.	Import and export services:
	·	Customs applications and declaration: bonded Customs declaration, application of import approval document, help with inspection & quarantine of the imports & exports
	·	Tax reports generation and recording
	·	Value added Tax advances and insurance (required by our customers for future rebate purposes)
	·	Certificates for paid custom tax
	·	A flexible combination of payment methods, including currency exchange.

2.	Warehouse services in Hong Kong, Shenzhen and Shanghai
	·	Inventory management
	·	Kitting, Repacking
	·	Warehouse storage and insurance

3.	Delivery services
	·	Door-to-door just-in-time delivery service
	·	Guarantee one day for Shenzhen and two day delivery for other cities in China from Hong Kong.

Our customers may access the status of their components in real time through SinoHub SCM and interact directly with our Customer Service representatives to resolve problems. The system has helped reduce errors, save cost and time and enable customers to get shorter time to market for their end products.

We believe approximately 50% of the electronic components entering China are imported at Huanggang Customs in Shenzhen. SinoHub has achieved Client Coordinator Enterprise status with Huanggang Customs (the highest status possible). This special status affords the Company priority status at Huanggang Customs and enables SinoHub to obtain Customs clearance efficiently, by allowing us to input import/export documents online, resulting in time savings of at least one hour for each order, which means faster imports and exports for our customers. To achieve Client Coordinator Enterprise status at Huanggang Customs a company must have had no incidents of undeclared goods being discovered in Customs clearance for 3 years consecutively and it must have paid RMB 100 million in value-added tax annually. We believe that there are fewer than ten import/export companies focused on electronic components which have this status. There is currently no expiration on this status as long as these criteria continue to be met.

We believe that through providing SCM services to our customers we gain critical information about the market for electronic components used in the industries we serve, including information about price and availability. We believe that providing these services also allows us to gain visibility and credibility in the Chinese market for electronic components for our industry. We plan to establish the SinoHub brand to be synonymous with SCM services for electronic components in China, and to complement our procurement-fulfillment services with our total SCM solution.

Unlike express forwarders, SinoHub is able to charge for its SCM services as a percentage of the value of the goods it handles. SinoHub’s processing volume for SCM services in 2008 exceeded US$300 million in inventory value processed on behalf of our customers. We estimate that approximately 85% of all of the electronic components that are used in manufacturing in China must be imported as China’s production of electronic components is very limited at this point. Our manufacturer customers, who are all located in China, must import electronic components from outside the PRC to operate their businesses. Our supplier customers are mainly companies incorporated outside of China who have representative offices in China and supply electronic components to Chinese manufacturers. Supplier customers use our warehousing, logistics and import/export services. Our supply chain management platform for the electronic components industry in China connects manufacturer customers, supplier customers and SinoHub in real time.

Customers

SinoHub has approximately 25 manufacturer customers. Our manufacturer customers are Chinese companies which are in the business of contract manufacturing or are design houses (currently limited to mobile phone design) in China. These customers purchase components from us and ancillary to these purchases we also provide them procurement-fulfillment, electronic component sales and SCM services including warehousing, logistics and import/export. Sales of components to these customers constituted approximately $74.5 million in 2008 and sales of services to these customers were $1.49 million in 2008.

SinoHub has approximately 95 supplier customers. Our supplier customers are mainly companies incorporated outside of China which have representative offices in China and supply electronic components to Chinese manufacturers. The services we provide to our supplier customers are SCM services comprised of warehousing, logistics and import/export support. Pricing for our supplier customers is negotiated, but on average it is about 1% of the value of the goods we handle for them. Sales of services to these customers (which do not involve sales of components) were $3.48 million in 2008.

Company Strengths

We believe the strengths outlined below have contributed to our growth so far:

specialized knowledge about component sourcing and pricing which we obtain from our supply chain management operations and use in our procurement-fulfillment and component sales business;

our ability to provide one-stop-shop for our customers who wish to purchase components from us for delivery to the factory without the need to handle sourcing, import/export, or any other aspect of logistics or fulfillment;

SinoHub SCM SZ’s Client Coordinator Enterprise Coordinator status with the Huanggang Customs authority, which facilitates our ability to clear shipments through Customs and enables us to permit our customers to defer payment of Value Added Tax;

a strong and seasoned management team with many years experience in the electronic components industry.

a supply chain management platform for the electronic components industry in China that connects manufacturer customers, supplier customers and SinoHub in a real time, transparent environment to allow our customers to manage their own components supply chain operations with efficiency;

continuous innovation of our proprietary supply chain management system to expand functionality and improve customer satisfaction; and

dedication and focus on providing supply chain management services for the electronic components sector in China.

SinoHub’s Strategy

SinoHub is a complete SCM service provider in China dedicated to electronic product manufacturers, suppliers and distributors. Our goal is to make the SinoHub SCM Platform the most effective SCM Platform for electronic components manufacturers and suppliers. To accomplish this strategy, we plan to:

increase brand awareness of SinoHub as a leading electronic component sales and SCM service provider for electronic component manufacturers and distributors;

continue to expand our SCM Platform and improve process efficiency. We will continue to invest in improving our processing efficiencies by enhancing our technologies and expanding our service team;

optimize our SinoHub SCM software system, to create a dominant position;

continue to expand the services we provide to our customers. We believe that the scope of our services differentiates us from many of our competitors. We will continue to look for ways to provide more value added services to become a best-in-class service provider; and

expand our SCM Platform to locations outside China, including the United States, through strategic acquisitions. We intend to leverage our reputation to aggressively pursue strategic acquisitions.

Major Customers and Suppliers

For the year ended December 31, 2008, one customer represented 12% and one customer accounted for 10% of SinoHub’s total revenues, respectively. For the year ended December 31, 2008, two suppliers represented 6% and 5% respectively of the electronic components we purchased. The level of sales to any customer and purchases from any supplier may vary from quarter to quarter.

SinoHub does not expect significant customer concentration to continue in the future since our customers are generally small to medium size equipment manufacturers in China. As our business has grown our customer base has expanded and the percentage of business we do with any one customer has declined. Because procurement-fulfillment projects are based on a particular product being made, it is unlikely that new customers will have so many projects that they will become more than 10% of our revenue.

Supplies of the electronic components that we currently purchase are readily available from numerous suppliers and resellers most of whom are based overseas but have representative offices in China. Our three largest suppliers are Willas-Array, Yosun and Future Electronics, which account for 6%, 5% and 3%, respectively, of the components purchased in the year ended December 31, 2008. Purchases are generally made based on purchase orders and we do not have any long term supply agreements. Conversely, we do not have long term contracts with our customers to buy the components from us.

Competition

We compete with a number of companies in China that sell or distribute electronic component parts and which may also offer import/export, logistics and other SCM services. We also compete with “in house” purchasing departments of large electronic component vendors, EMS providers and OEMs. We believe that many of the distributors against which we compete provide some but not all of the SCM services that we provide. We do not believe that any other company distributing electronic components in China currently provides a complete SCM solution, although some electronic component vendors and distributors provide logistic services to their customers and we expect that our competitors will eventually seek to offer, directly or indirectly, a greater number of SCM services. We also face competition from local import/export companies, such as Shenzhen Eternal Asia Supply Chain Company, Ltd., Shenzhen Strongjet Technology Company, Ltd. and Shenzhen Huafuyang Import and Export Company, Ltd. (HopeSea), which also offer logistics services, although none of these companies focuses exclusively on the electronic components market. Professional freight forwarders such as Federal Express and DHL provide express delivery to customers, however, they do not provide electronic component inventory management, currency exchange, VAT invoicing, and Customs and excise tax services, and they are not focused on the electronics field. We believe that SinoHub’s primary advantage over in-house purchasing departments is that the up-to-date sourcing and pricing knowledge which we gain from the large volume of components we handle as part of our SCM service business for suppliers and the knowledge we gain from the purchase transactions for our own component resales allows us to obtain better pricing and availability than these in-house departments in product categories such as mobile phones where the technology, pricing and availability of parts changes rapidly. We believe that our advantage over many electronic component distributors is that we have very detailed knowledge of what manufacturers are buying and that we have a broader knowledge of electronic component pricing from our database of parts that we import. Many of our competitors have much greater financial resources than we do and we expect competition to grow over time and to present greater challenges for us, especially if any of our competitors were to effectively adopt the elements of our business model.

Employees

As of December 31, 2008 SinoHub had 114 full-time employees:

76 employees in Shenzhen:

52 in our headquarters’ office in sales, customer support, MIS, administration, accounting, and general management;

14 in the warehouse and distribution center in the same location as our headquarters’ office in supply chain management (primarily warehouse management and logistics); and

10 in our office near Huanggang Customs providing import and export services.

22 employees in Hong Kong in supply chain management (primarily warehouse management and logistics);

14 employees in Shanghai in sales, customer support, administration, accounting and supply chain management (primarily warehouse management and logistics); and

2 employees in Beijing doing electronic component sales.

Properties

Corporate Office. We lease 27,600 square feet of combined office and warehouse space located at 6/F, Building 51, Road 5, Qiongyu Blvd., Technology Park, Nanshan District,, Shenzhen 518053, People’s Republic of China. This location is our corporate headquarters. We occupy this facility under a lease that commenced on August 10, 2008 and ends on August 30, 2013. The base rent for this facility is approximately $12,690 per month for the first three years of the lease term.

Import/Export Department Office near Huanggang Customs. We lease 1,076 square feet of office space located at Unit 1904, Huang Cheng Guang Chang Da Sha, Rd. Huanggang, Futian District, Shenzhen, People’s Republic of China. We occupy this facility under a lease that commenced on May 16, 2008 and ends on May 16, 2010. Our monthly rental cost is about $805.

Shanghai Pudong Facility. We lease approximately 12,084 square feet of office and warehouse space at 3rd floor, No. 796 YunShang Road, Pudong district, Shanghai, PRC 201206 for a monthly rental of about $3, 750. We occupy this facility under a lease that commenced on March 23, 2006 and ends on March 22, 2011.

Shanghai Wai Gao Qiao Facility. We lease approximately 6,448 square feet of warehouse space at D, Floor 5, Building 5, No. 350 XiYa Road, WaiGaoQiao Free Trade Zone, Shanghai, PRC 200131 for a monthly rental of approximately $2,240. We occupy this facility under a lease that commenced on June 1, 2008 and ends on May 31, 2011.

Hong Kong Facility. We lease approximately 26,500 square feet of warehouse space at Unit B, 17th Floor, Tins Plaza, 3 San On Street, Tuen Mun, N.T. Kowloon, Hong Kong SAR for a monthly rental of about $14,996. We occupy this facility under a lease that commenced on July 2, 2008 and ends on June 1, 2011.

Legal Proceedings

None.

DIRECTORS AND EXECUTIVE OFFICERS

Set forth below is information regarding our current directors and current executive officers. Except as set forth below, there are no family relationships between any of our directors or executive officers. Executive officers are elected annually by our Board of Directors. Each executive officer holds his office until he resigns or is removed by the Board or his successor is elected then qualified. Directors are elected each year by our stockholders at the annual meeting. Each director holds his office until he resigns or is removed and his successor is elected and qualified.

Name	Age	Position	Term as a Officer or Director (1)
Henry T. Cochran	65	Chief Executive Officer and Chairman of the Board	May 2008 to the Present
Lei Xia	40	President and Director	May 2008 to the Present
Li De Hai	39	Chief Financial Officer	November 2008 to the present
Charles T. Kimball	63	Director	November 2008 to the Present
Will Wang Graylin	40	Director	January 2009 to the Present
Richard L. King	70	Director	February 2009 to the Present
Robert S. Torino	55	Director	February 2009 to the Present
Afshin Yazdian	35	Director	February 2009 to the Present

_______________
(1)	Reflects the date appointed to the Board of SinoHub, Inc. For those persons who served as directors or officers of SinoHub International, Inc. prior to the reverse merger, their terms as directors or officers of SinoHub International, Inc. commenced on the following dates: Henry T. Cochran – March 1999, Lei Xia – July 2000 and Li De Hai – March 2005.

The following is a brief description of the business experience and background of the Company’s current directors and executive officers:

Henry T. Cochran – Chief Executive Officer and Chairman of the Board

Mr. Cochran is the Chief Executive Officer of SinoHub, Inc. (the business currently known as SinoHub) and a founder of SinoHub International. Mr. Cochran is a co-owner with Mr. Xia in GenNext Technology, Ltd. Mr. Cochran has served as Chairman of the Board of the predecessor company since inception in March 1999 and of SinoHub since the reverse merger in May 2008 with that predecessor and as Chief Executive Officer of the predecessor since May 2005. From April 2001 until becoming CEO of SinoHub International, Mr. Cochran was a business consultant. Mr. Cochran was President and CEO of Content Integrity, Inc. until April 2001. Prior to the formation of Content Integrity, Mr. Cochran was President and CEO of Advanced Visual Systems Inc., a leader in data visualization software for developers. Before AVS, he was Vice President of the Advanced Indexing Products department of Sybase, Inc. to which he sold his former company, Expressway Technologies. Mr. Cochran was the founder and CEO of Expressway Technologies, formerly known as Henco Software. Henco was founded in 1975. Mr. Cochran is regarded in the industry as one of the pioneering entrepreneurs in fourth-generation languages for his design of INFO, the product that launched Henco into the front lines of the software industry in the early 1980s. Mr. Cochran holds a M.S. degree in mathematics from the University of Maryland and a B.S. in mathematics and economics from Vanderbilt University.

Lei Xia – President

Mr. Xia has been the President of SinoHub since the reverse merger in May 2008 and was a founder of SinoHub International. Mr. Xia is a co-owner with Mr. Cochran in GenNext Technology, Ltd. Since May 2005 Mr. Xia has been responsible for the strategic business development, sales and marketing of first SinoHub International and, after the reverse merger, SinoHub. From July 2000 until May 2005, Mr. Xia was the Chief Executive Officer of SinoHub International and oversaw all of SinoHub International’s operations. Prior to founding SinoHub International, Mr. Xia founded RGL Beijing, a high-end software distributor and solution provider. Prior to RGL Beijing, Mr. Xia helped to start NEFAB (China). NEFAB is a Swedish manufacturer and packaging solution provider to major OEMs such as Ericsson, Nokia, Motorola and Nortel. Mr. Xia held the position of China country sales manager for NEFAB and built a nationwide sales and service team from ground up. He started his career in the Chinese electronics industry in 1995 as general manager of Arrow Electronics Shanghai branch, where he built the most successful sales team of Arrow China. To begin his career in electronics, Mr. Xia worked in Arrow Electronics’ headquarters under Steve Kaufman, Arrow’s CEO, in 1994 as a management trainee for one year. Mr. Xia holds a B.S. in Electrical Engineering from the University of Alabama.

Li De Hai – Chief Financial Officer

Mr. Li was re-appointed Chief Financial Officer of SinoHub on November 28, 2008. Mr. Li initially became Chief Financial Officer of SinoHub in May 2008 following the reverse merger and on September 11, 2008, he resigned his position as Chief Financial Officer of SinoHub and became Vice President of Finance. Mr. Li joined SinoHub International as its Chief Financial Officer on March 1, 2005. Prior to joining SinoHub, Mr. Li was the Chief Financial Officer of Shenzhen Excellence Investment Development Co., Ltd., which provides international logistics management, bonded warehouse, international shipment, international trading, real estate management and construction services. Mr. Li became the Chief Financial Officer of Shenzhen Excellence in May 2003. While at Shenzhen Excellence, Mr. Li raised capital of RMB 120 million, managed the acquisition of a State-owned company and created an effective financial management system for all seven subsidiaries. Prior to Excellence, Mr. Li was the Chief Financial Officer of Hong Kong B&D Engine Co., Ltd. (Shenzhen) a large scale OEM for Mercedes Benz. Mr. Li began his career in The Fourth Survey and Design Institute of China Railway where he progressed from bookkeeper, accountant, accounting supervisor and financial controller to chief finance officer. Mr. Li holds a Bachelor’s degree in Economics and Management from Hubei University.

Charles T. Kimball – Director

Since April 2006, Mr. Kimball has served as the chief research consultant for Bosera Fund Management Co., Ltd., one of the first mutual fund companies established in China, where he advises senior management on best practices in asset management and investment research. From April 2000 to March 2006 he was a partner at CTK Financial Services an independent financial advisor, focused on extended financial markets research and asset allocation. Until March 2000, Mr. Kimball held a near 28-year career with JP Morgan and related entities, where among his roles, he served as head of international investments for the Multi-Markets Funds Group at JP Morgan Asset Management; head of investment research at Morgan Trust Bank in Tokyo; and equity analyst at Morgan Guaranty Trust, covering the electrical equipment and electronics industries, including electronic component distribution companies.

Mr. Kimball received a bachelor’s degree with honors in economics from Harvard University and an MBA from Stanford University Graduate School of Business. He recently received a certificate in environmental economics, management and finance from the Center for Environment Research and Conservation (CERC) at Columbia University.

Will Wang Graylin – Director

Will Wang Graylin, has started five companies focused on mobile computing, security and payments since his graduate thesis on “Addressing the Complexity of Mobile Computing” at MIT nearly a decade ago. Mr. Graylin is currently the founder and CEO of ROAM Data, a premier Mobile Application and Payment Services company, helping enterprises extend valuable data and transactions to the cell phones of their mobile professionals. Before ROAM, from December 2001 to April 2007 he was founder and CEO of WAY Systems, a mobile Point of Sales (POS) services company. He grew WAY from zero to the #2 Mobile POS provider in the U.S. and was honored with the 2005 “Movers & Shakers Award” by Transaction World magazine. Prior to WAY from March 2000 to November 2001 he was founder and CEO of EntitleNet, a security software company, sold to BEA Systems for a profit in 2001. Before that from March 1999 to March 2000 he was founding President of Marbles, later Skyfire Technologies, the first mobile thin client software company focused on enterprise applications for mobile workforces. He earned two Masters degrees from MIT (MBA & MSEECS) through the Leaders for Manufacturing program, after serving as a US Navy Nuclear Submarine Officer for nearly 6 years, the first naturalized China born immigrant to serve in this program. Will is fluent in English, Mandarin and Cantonese.

Richard L. King – Director

Dr. Richard L. King, Ph.D. has been a venture partner at Los Angeles-based GRP, which manages more than $600 million in assets, since May 2001. Dr. King also serves on the science advisory board at New York University. He began his career in finance as an electronics analyst, applying his advanced sciences education at leading Wall Street firms and initiating investment banking relationships with such companies as National Semiconductor, Mostek and Unitrode. Dr. King moved on to become an investment banker, and then a venture capitalist concentrating exclusively in high technology ventures. Born in Shanghai, Dr. King is a grandson of two of the original founders of the Bank of China. He is a member and former director of the Committee of 100, an organization of prominent Chinese Americans founded to encourage stronger relations between the U.S. and Greater China, and a member of the World Affairs Council of San Francisco. He has lectured in Taiwan on the venture capital industry at the invitation of the Minister of Finance. Dr. King received his Doctorate in Physics from New York University and attended Stern Graduate School of Business at New York University.

Robert S. Torino – Director

Robert S. Torino is the chief operating officer of iPayment, Inc., a provider of credit and debit card-based payment processing services to small merchants, where he has been an officer since January 2001. Prior to that, Mr. Torino held the positions of chief financial officer, executive vice president and chief operating officer of iPayment Technologies, Inc., a predecessor of iPayment, Inc. Mr. Torino was also CEO of M80 Technologies, Inc., a software development company, and was president and CEO of software development company TRUE Software Inc. Mr. Torino received a Bachelor of Arts degree in Accounting from Boston College, Magna Cum Laude, and is a Certified Public Accountant.

Afshin Yazdian – Director

Afshin Yazdian has served as the executive vice president and general counsel for iPayment, Inc. since 2001. He previously was general counsel and vice president of mergers and acquisitions for eConception, a technology venture fund. Mr. Yazdian also has previously practiced in the corporate and mergers and acquisitions groups at Waller Lansden Dortch & Davis, PLLC, a Nashville, Tennessee-based law firm. Mr. Yazdian received a Bachelor of Business Administration degree from Emory University in Atlanta, and graduated with honors from the University of Miami School of Law.

There are no family relationships, or other arrangements or understandings between or among any of the directors, executive officers or other person pursuant to which such person was selected to serve as a director or officer.

Classification of Directors

We do not have a classified or “staggered” Board.

Committees of the Board of Directors

The Company’s Board of Directors has not established any committees. In accordance with Section 3(a)(58) of the Exchange Act, the entire Board of Directors functions as the Company’s audit committee. The Company is not currently subject to any law, rule or regulation requiring that it establish or maintain a separate audit committee. The Company believes that while the members of its Board of Directors are collectively capable of analyzing and evaluating financial statements and understanding internal control over financial reporting and disclosure controls procedures, the Board of Directors has determined that only Mr. Torino qualifies as an “audit committee financial expert.” The Company’s Board of Directors may establish audit, nominating and compensation committees when the board determines it to be advisable, and currently intends to establish a separate audit committee in March 2009. The audit committee would be primarily responsible for reviewing the services performed by our independent auditors and evaluating our accounting policies and our system of internal control over financial reporting. The nominating committee would be primarily responsible for nominating directors and setting policies and procedures for the nomination of directors. The nominating committee would also be responsible for overseeing the creation and implementation of our corporate governance policies and procedures. The compensation committee would be primarily responsible for reviewing and approving salary and benefit policies (including stock options), including compensation of the Company’s executive officers.

DIRECTOR AND EXECUTIVE COMPENSATION

The following table sets forth information concerning all cash and non-cash compensation awarded to, earned by or paid to (i) all individuals serving as the Company’s principal executive officer or acting in a similar capacity during the last two completed fiscal years, regardless of compensation level, and (ii) the Company’s two most highly compensated executive officers other than the principal executive officers serving at the end of the last two completed fiscal years.

Summary Compensation Table

Name and Principal Position	Year		Salary			Bonus		Stock Awards(1)		Total Compensation

Henry T. Cochran, Chief Executive Officer	2008	$	100,985	(2)	$	5,124	$	-	$	106,109
	2007	$	55,611		$	4,637	$	-	$	60,254
Lei Xia, President	2008	$	82,847		$	3,660	$	-	$	86,507
	2007	$	39,722		$	3,310	$	-	$	43,032
De Hai Li, Chief Financial Officer	2008	$	80,474		$	3,953	$	-	$	84,427
	2007	$	31,778		$	11,703	$	108,900	$	152,381
Steven L. White, Chief Executive Officer(3)	2008	$	0		$		$		$
	2007	$	0		$	0	$	0	$	0

(1) The amounts in this column represent the amount recognized for financial statements reporting purposes under FAS 123R. The assumptions made when calculating the amounts in this table are found in Note 11 to the SinoHub consolidated financial statements for the year ended December 31, 2007 included herein.

(2) As disclosed below under “Employment Contracts,” pursuant to an employment agreement with the Company Mr. Cochran’s base salary has increased to $230,000 for 2009.

(3) Upon consummation of the reverse merger in May 2008, Mr. White resigned as Chief Executive Officer. Mr. White was not paid any compensation for service in such role in 2007 or 2008 because the company was not operating while he served as Chief Executive Officer but he was reimbursed for expenses incurred on behalf of SinoHub.

Outstanding Equity Awards at Fiscal Year End

The following table sets forth information with respect to the value of all unvested stock held by the Company’s Named Executive Officers at December 31, 2008.

	Stock Awards
Name	# of Unvested Shares	Market Value of Unvested Shares(1)
Henry T. Cochran	-	$	-
Lei Xia	-	$	-
De Hai Li	29,375	$	73,438

(1) The market value of the unvested shares of common stock was determined by the Board of Directors of the Company on December 31, 2008 to be $2.35 per share, the closing price of the common stock on December 30, 2008 as quoted on the over-the-counter bulletin board. The option vests at a rate of 6.25% of the shares subject to the original grant each quarter until fully vested on December 31, 2009.

Director Compensation

The following table sets forth all compensation awarded to, earned by or paid to the directors in 2008:

Name	Fees Earned Or Paid in Cash ($)		Stock Awards ($)		Option Awards ($)		Non-Equity Incentive Plan Compensation ($)		Nonqualified Deferred Compensation Earnings ($)		All Other Compensation ($)		Total ($)

Henry T. Cochran		0		0		0		0		0	$	)	$	0
Lei Xia		0		0		0		0		0	$	)	$	0
Zan Wang(1)		0		0		0		0		0	$	)	$	0
Steven White(1)		0		0		0		0		0	$	)	$	0
Charles T. Kimball(2)	$	1,000		0	$	3,420		0		0	$	)	$	4,420
		0		0		0		0		0		0		0

(1) These persons have resigned as directors of the Company.

(2) Non-qualified option to purchase 2,524 shares of SinoHub Common Stock at $2.48 (average of 5 prior trading days closing price) for a period of 3 years granted on January 14, 2009 for service to the Company for the fourth quarter of 2008. The Black-Scholes price of the option was calculated at $1.355. The company has booked a related expense of $3,420 for the fourth quarter of 2008.

All compensation paid to our employee directors is set forth in the tables summarizing executive officer compensation above. Beginning July 1, 2008, non-employee directors were entitled to receive $1,000 for each meeting attended in person and quarterly stock option grants of an amount of shares that will produce a value of $5,000 under the Black-Scholes pricing model. As set forth in the table above, Mr. Kimball received $1,000 in 2008 for one meeting attended and in January 2009 received options with a value equal to a pro rated portion of the $5,000 due to his partial quarter of service in the fourth quarter of 2008. The Company anticipates providing additional compensation to the members and chairman of the audit committee when formed.

Employment Contracts

The officers have entered into standard employment contracts with subsidiaries of SinoHub, pursuant to which the officers are engaged to serve in their respective positions. The employment contract sets forth the officer’s annual salary, hours of work, social insurance requirements and other terms. This is the standard form of employment contract entered into with all of SinoHub’s employees. The terms of the employment contracts include the following:

Name	Term	Monthly Wage		Job Title
Henry T. Cochran	January 1, 2009 through December 31, 2009	$	19,167	Chief Executive Officer
Lei Xia	January 1, 2009 through December 31, 2009	$	16,667	President
De Hai Li	January 1, 2009 through December 31, 2009	$	15,000	Chief Financial Officer

There are no material terms of the contracts that provide for payments in connection with the resignation, retirement or other termination of a named executive officer or in connection with a change of control and except as disclosed above, there are no other arrangements with any Named Executive Officer with respect to termination of employment or change of control transactions.

Corporate Governance Matters

The Company may create separate audit and compensation committees of its board when the board determines it to be advisable. The Company presently intends to establish a separate audit committee in March 2009.

Code of Ethics. A code of business conduct and ethics is a written standard designed to deter wrongdoing and to promote (a) honest and ethical conduct, (b) full, fair, accurate, timely and understandable disclosure in regulatory filings and public statements, (c) compliance with applicable laws, rules and regulations, (d) the prompt reporting violation of the code and (e) accountability for adherence to the code. We are not currently subject to any law, rule or regulation requiring that we adopt a code of ethics; however, we intend to adopt one in the near future.

Audit Committee. The Board of Directors has not yet established a separate audit committee, and the functions of the audit committee are currently performed by our Board of Directors as a whole in accordance with Section 3(a)(58) of the Exchange Act. We are not currently subject to any law, rule or regulation requiring that we establish or maintain a separate audit committee. We intend to establish a separate audit committee in March 2009.

Board of Directors Independence. Our Board of Directors consists of seven members. We are not currently subject to any law, rule or regulation requiring that all or any portion of our Board of Directors include “independent” directors. Five of the members of the Board of Directors are “independent” as defined in Section 4200(a)(15) of NASDAQ Stock Market Rules.

Audit Committee Financial Expert. The Board of Directors has determined that Robert Torino is an “audit committee financial expert” who is “independent” as defined in Item 407(d)(5) of Regulation S-K of the Securities Exchange Act of 1934, as amended. We intend to establish a separate audit committee in March 2009.

Nominating Committee. We have not yet established a nominating committee. Our Board of Directors, sitting as a board, performs the role of a nominating committee. We are not currently subject to any law, rule or regulation requiring that we establish a nominating committee.

Compensation Committee. We have not yet established a compensation committee. Our Board of Directors, sitting as a board, performs the role of a compensation committee. We are not currently subject to any law, rule or regulation requiring that we establish a compensation committee. We intend to establish a compensation committee if the Board determines it to be advisable or we are otherwise required to do so by applicable law, rule or regulation.

Indemnification Agreements

We have entered into indemnification agreements with our officers and directors Under the terms of the indemnification agreements, we agreed to indemnify our officers and directors against expenses, judgments, fines, penalties or other amounts actually and reasonably incurred by the independent director in connection with any proceeding if the officer or director acted in good faith and did not derive an improper personal benefit from the transaction or occurrence that is the basis of the proceeding .

Director Independence

Five of the members of the board of directors are “independent” as defined under the rules of the NASDAQ Stock Market.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

During the last two fiscal years, we have not entered into any material transactions or series of transactions that would be considered material in which any officer, director or beneficial owner of 5% or more of any class of our capital stock, or any immediate family member of any of the preceding persons, had a direct or indirect material interest. There are no transactions presently proposed, except as follows:

On January 17, 2007, Henry T. Cochran, CEO and Chairman of SinoHub’s Board of Directors, purchased a one year 7.69% Note from SinoHub, Inc. in the amount of RMB 1,658,000 (approximately $213,000) which was repayable on demand. This Note was repaid by SinoHub on March 20, 2007. Interest expense paid on this Note for the year ended December 31, 2007 was $3,500.

On March 20, 2007, SinoHub issued 371,842 shares of its common stock to the spouse of Henry T. Cochran, the Company’s CEO and Chairman for agreeing to let SinoHub use the condominium in which she holds 50% ownership (and Henry T. Cochran owns the remaining 50%) as collateral for a bank loan. The shares were valued at $43,000. The value of the payment was determined by CFO of the Company, taking into account, among other factors, the value of the asset provided as collateral.

On January 17, 2008, SinoHub’s subsidiary SinoHub Electronics Shenzhen, Ltd. acquired beneficial ownership of SinoHub SCM Shanghai, Ltd. from Sai Lin Xu with the shares of SinoHub SCM Shanghai, Ltd. being held for the benefit of SinoHub Electronics Shenzhen, Ltd. by a trustee pursuant to a Declaration of Trust In accordance with the terms of the Declaration of Trust, no material monetary payment was associated with this acquisition because through the Declaration of Trust, SinoHub Electronics Shenzhen had borne all costs. The trustee was Sai Lin Xu, the mother-in-law of Lei Xia, the Company’s President.

4.	The Company distributed electronic components to and resold electronic products purchased from GenNext Technology, Ltd., a company owned jointly by Henry T. Cochran, the Company’s CEO and Chairman and Lei Xia, the Company’s President and member of the Board of Directors of the Company. The goods were electronic components. Since China’s currency is not freely convertible there are a number of customers who require their financial transactions to be domiciled in Hong Kong using a “hard” currency (usually USD or HKD). The related company was used for transactions that the customer required to be domiciled in Hong Kong. Hong Kong was used to operate outside PRC and to take advantage of its existing banking relationships. The related company assisted the Company by facilitating certain foreign exchange transactions, and settled obligations to certain suppliers on behalf of the Company, and collected certain customer remittances on behalf of the Company. Commencing in the fourth quarter of 2008, the Company discontinued these related company activities as the Company’s Hong Kong operation achieved the required assignment of customer contracts and bank accounts to support foreign exchange transactions. In addition, the related company provided certain warehousing and logistics services to the Company during the development of its Hong Kong operation. In each case the amount of consideration was based on the cost of goods plus labor costs. The labor costs were based on actual square feet of GenNext’s warehouse that the Company used. Payment amounts to the related party were determined by cost pass-through without mark-up. During the year of 2008 and 2007, the Company sold goods totaling approximately $1.5 million and $1.2 million to the related company and purchased goods totaling approximately $3,000,000 and $504,000 from the related company. The Company paid no service fees to the related company in 2008 and paid service fees totaling $197,000 in 2007. During 2008, the Company received rental income of $154,000 for the lease of warehouse space to the related company. At December 31, 2007, the related company owed the Company $1,493,000, which was interest free and repayable on demand. At December 31, 2008, there was no amount outstanding between the Company and the related company. At December 31, 2006, the Company owed the Chairman and CEO $203,000 which was payable on demand. Interest expense was charged at 6.5% per annum on the amount due. Interest expense related to this obligation was $4,000 and $15,000 in 2007 and 2006. The amount was repaid in 2007.

5.	On April 10, 2008, B2B Chips acquired SinoHub Technology (Hong Kong) from its owners, Henry T. Cochran, the Company’s CEO and Chairman, and Lei Xia, the Company’s President and member of the Board of Directors, for HKD 10,000 ($1,290), which represented the initial capital contributions of Messrs. Cochran and Xia in the company. SinoHub Technology never conducted any business and its sole asset at all times was a Hong Kong bank account holding the balance of the capital contributions. The acquisition of SinoHub Technology by B2B Chips was a purchase for convenience and the purchase price was fixed by the SinoHub’s CFO at HKD 10,000 ($1,290), the value of SinoHub Technology’s sole asset, i.e., the cash balance of its bank account, and the cash spent on organizing SinoHub Technology.

6.	In May 2008, Liberty Alliance, Inc., SinoHub Acquisition Corp., known as the Merger Sub, SinoHub, Inc., known as the Acquired Sub, and Steven L. White, the principal stockholder of Liberty Alliance, entered into an Agreement and Plan of Merger pursuant to which the Merger Sub agreed to merge with and into the Acquired Sub, with the Acquired Sub being the surviving corporation. In connection with the merger, Liberty Alliance, Inc. issued to the stockholders of the Acquired Sub 18,290,000 shares (as adjusted for reverse stock split) of the Company’s common stock in exchange for all the outstanding shares of the Acquired Sub’s preferred and common stock and the Company assumed options exercisable for additional shares of common stock. In connection with the Company’s reverse merger, Steve White, the controlling shareholder of the company while it was a dormant shell and its sole director, was granted piggyback registration rights under the terms of the Merger Agreement. Mr. White also executed a lock-up agreement with the Company that expires on May 14, 2009.

7.	A PRC property owned by a director and his spouse is pledged to a bank to secure banking facilities for the Company.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following tables set forth information as of December 31, 2008 regarding the beneficial ownership of stock by (a) each stockholder who is known by the Company to own beneficially in excess of 5% of the Company’s outstanding stock; (b) each director; (c) the Company’s chief executive officer; and (d) the executive officers and directors as a group. Except as otherwise indicated, all persons listed below have (i) sole voting power and investment power with respect to their shares of common stock (the only class of outstanding stock), except to the extent that authority is shared by spouses under applicable law, and (ii) record and beneficial ownership with respect to their shares of stock. The percentage of beneficial ownership is based upon 24,501,989 shares of common stock outstanding, as of December 31, 2008. Except as otherwise indicated in the footnotes to the table, the persons and entities named in the table have sole voting and investment power with respect to all shares beneficially owned, subject to community property laws, where applicable.

	Common Stock
Name of Beneficial Owner		#		% (1)
Officers and Directors
Henry T. Cochran (2)		3,835,290			15.7
Lei Xia (2)		2,443,537			10.0
De Hai Li (2) (3)		889,766			3.6
Charles T. Kimball (4)(5)		2,524			-
Will Wang Graylin (6)		-			-
Richard L. King (7)		-			-
Robert S. Torino (8)		-			-
Afshin Yazdian (9)		-			-

All Officers and Directors as a Group (8 persons)		7,171,117	(3)		29.3

5% Holders
Jan Rejbo		4,400,925			18.0
Russell Cleveland		3,529,406	(10)		14.4

(1)	The percentage of Common Stock is calculated based upon 24,501,989 shares issued and outstanding.
(2)	The business address for these individuals is 6/F, Building 51, Road 5, Qiongyu Blvd., Technology Park, Nanshan District, Shenzhen 518053, People’s Republic of China.
(3)	Includes 39,840 shares issuable pursuant to an outstanding stock option within 60 days after December 31, 2008.
(4)	The home address for this individual is Swan Castle, Block 1, Building E 12-C, Portofino, OCT, Nanshan District, Shenzhen, People’s Republic of China
(5)	Includes 2,524 shares issuable pursuant to an outstanding stock option within 60 days after December 31, 2008.
(6)	The home address for this individual is 15 Birch Pond Dr., Saugus, MA 01906
(7)	The home address for this individual is 1000 Mason Street, San Francisco, CA 94108
(8)	The business address for this individual is c/o iPayment, Inc., 26707 West Agoura Road, Suite 100, Calabasas, CA 91302
(9)	The business address for this individual is c/o iPayment, Inc., 40 Burton Hills, Suite 415, Nashville, TN 37215
(10)	Includes: (i) 1,764,704 held by Renaissance US Growth Investment Trust Plc, which includes 588,234 shares which may be purchased pursuant to currently exercisable warrants, (ii) 882,351 held by Global Special Opportunities Trust Plc, which includes 294,116 shares which may be purchased pursuant to currently exercisable warrants and (iii) 882,351 held by Premier RENN US Emerging Growth Fund Ltd., which includes 294,116 shares which may be purchased pursuant to currently exercisable warrants.

DESCRIPTION OF SECURITIES

Description of Capital Stock

Common stock

We are authorized to issue up to 100,000,000 shares of common stock, $0.001 par value. As of December 31, 2008, 24,501,989 shares of our common stock were outstanding.

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

The holders of shares of our common stock are entitled to dividends out of funds legally available when and as declared by our board of directors. We have never declared or paid cash dividends. Our board of directors does not anticipate declaring a dividend in the foreseeable future. Should we decide in the future to pay dividends, as a holding company, our ability to do so and meet other obligations depends upon the receipt of dividends or other payments from our operating subsidiaries and other holdings and investments.

Preferred Stock

We are authorized to issue up to 5,000,000 shares of preferred stock, $0.001 par value per share, no shares of which were issued and outstanding as of December 31, 2008.

Our Certificate of Incorporation authorizes our board to issue shares of preferred stock in one or more classes or series within a class upon authority of the board without further stockholder approval. Any preferred stock issued in the future may rank senior to the common stock with respect to the payment of dividends or amounts upon liquidation, dissolution or winding up of us, or both. In addition, any such shares of preferred stock may have class or series voting rights. Moreover, under certain circumstances, the issuance of preferred stock or the existence of the un-issued preferred stock might tend to discourage or render more difficult a merger or other change in control. The issuance of preferred stock, while providing desirable flexibility in connection with possible acquisitions and other corporate purposes, could have the effect of making it more difficult for a third party to acquire, or of discouraging a third party from acquiring, a majority of our outstanding voting stock.

Registration Rights

On September 10, 2008, SinoHub entered into and closed a Securities Purchase Agreement with certain accredited investors in a private offering, referred to as a PIPE offering for an aggregate of (i) 4,406,533 shares of common stock, (ii) three-year warrants to purchase an aggregate of 1,101,628 shares of common stock at an exercise price of $2.15 per share and (iii) five-year warrants to purchase an aggregate of 1,101,628 shares of common stock at an exercise price of $3.00 per share.

The investors in the PIPE offering are entitled to have the 4,406,533 shares of common stock and the 2,203,256 shares of common stock issuable upon exercise of the three-year and five-year warrants registered under the Securities Act pursuant to the terms and subject to the conditions set forth in a Registration Rights Agreement entered into among the Company and such holders. Registration of these shares under the Securities Act would result in these shares becoming freely tradable without restriction under the Securities Act immediately upon the effectiveness of the registration statement.

Pursuant to a registration rights agreement, the Company has agreed to file this registration statement covering the resale of the shares of Common Stock issued and issuable upon the exercise of the warrants, to the investors in the PIPE offering no later than October 25, 2008, and to have such registration statement declared effective on or before January 9, 2009. The Company has received an extension of this date to May 12, 2009 from the investors in the PIPE offering. If the Company does not cause the registration statement to be declared effective by May 12, 2009, then each selling shareholder will be entitled to liquidated damages, payable in cash or common stock, at the Company’s option, equal to 1% of the aggregate purchase price paid by such selling shareholder for the securities, and an additional 1% for each month that the Company does not cause the registration statement to be declared effective, with such damages determined as if January 9, 2009 remained the deadline for the effectiveness of the registration statement. Notwithstanding the foregoing, in no event shall liquidated damages exceed 10% of the aggregate gross proceeds of the offering to the selling shareholders.

Piggy Back Registration Rights. An aggregate of 796,094 shares of SinoHub subject to Lock-Up Agreements entered into among such holders and SinoHub in connection with the Merger are entitled to piggyback registration rights under the terms of the Merger Agreement entered into in connection with SinoHub’s reverse merger. The lock-up restrictions expired with respect to 398,000 of these shares on November 14, 2009, and expire with respect to the balance of the shares on May 14, 2009. The lock-ups were entered into by Lorikeet, Inc., the controlling shareholder of the Company while it was a dormant shell, and the Company’s consultant at such time John Leo (and John Leo’s subsequent transferees: Jeffrey Grossman, Daniel Carlson, John Tammaro, Grace King and Beilei Dong). The 796,094 shares owned by the persons subject to the Lock-Up Agreements have been included in this registration statement, and the lock-up restrictions with respect to the 796,094 shares do not apply to shares included in a registration statement. Registration of these shares under the Securities Act would result in these shares becoming freely tradable without restriction under the Securities Act immediately upon the effectiveness of the registration statement. The holders of an aggregate of 7,352,750 shares of SinoHub common stock issued in respect of SinoHub International’s Series A, B and C Convertible Preferred Stock in connection with the reverse merger were entitled to piggy back and demand registration rights with respect to the shares of SinoHub International common stock into which such preferred stock was convertible pursuant to the terms of certain Stock Purchase Agreements entered into among SinoHub International and such holders. While those agreements provided that they were binding on the “successors or assigns” of SinoHub International, as SinoHub International remained a separate legal entity after the merger, we do not believe that SinoHub is a “successor or assign” of SinoHub International. Accordingly, we do not believe that these rights extend to the shares of SinoHub common stock received by such holders in the merger, it is possible that such holders may take a different view, and there can be no guarantee that, if they choose to litigate the matter, a court would find in our favor. The Company does not presently intend to register these shares, but reserves the right to do so if so required by a court of competent jurisdiction or if the Company otherwise deems it prudent to do so.

Resale of Restricted Securities

Rule 144

Rule 144 provides an exemption from registration under the Securities Act of 1933 for sales by holders of "restricted securities" (i.e., securities acquired directly or indirectly from the issuer or an affiliate of the issuer in a transaction or chain of transactions not involving a public offering) and for sales of "control securities" (i.e., securities held by affiliates, regardless of how they acquired them).

In February 2008, amendments to Rule 144 under the Securities Act of 1933 that substantially liberalized the rules governing the resale of securities issued in private transactions or held by affiliates became effective. The amendments shortened the holding periods for restricted securities of public companies, significantly reduced the conditions applicable to sales of restricted securities by non-affiliates, and modified other aspects of the rules.

Under amended Rule 144, holders of restricted securities of reporting companies (i.e., companies that have been subject to public reporting requirements for at least 90 days before the sale) are able to sell their securities after holding them for only six months, subject to specified conditions. Sales under Rule 144 may also limited by manner of sale provisions and notice requirements and to the availability of current public information about the combined company.

Sales by Non-Affiliates under Rule 144

After six months but prior to one year from the date of acquisition of securities from the issuer or an affiliate of the issuer, non-affiliates of reporting companies may resell those securities under Rule 144 subject only to the current public information requirement described below. They will not have to file a Form 144, follow manner-of-sale requirements, or stay within the volume limitations. After holding securities for one year, non-affiliates of both reporting and non-reporting companies may resell those securities freely without any additional conditions under Rule 144.

Sales by Affiliates

In general, affiliates are subject to all of the requirements under Rule 144.

	·	Current public information. There must be adequate current public information available about the issuer. Reporting companies must have been subject to public reporting requirements for at least 90 days immediately before the Rule 144 sale and must have filed all required reports (other than Forms 8-K) during the 12 months (or shorter period that the company was subject to public reporting) before the sale. For non-reporting companies (including companies that have been subject to the public reporting requirements for less than 90 days), certain other specified public information must be available.

	·	Holding period. Restricted securities must be held for at least six months before they may be sold (securities issued in registered transactions are not subject to a holding period). The holding period for restricted securities of non-reporting companies is one year.

	·	Volume limitations. For equity securities, in any three-month period, resales may not exceed a sales volume limitation equal to the greater of (i) the average weekly trading volume for the preceding four calendar weeks, or (ii) one percent of the outstanding securities of the class. The volume limitation for debt securities permits the sale of up to 10% of a tranche or class of debt securities in any three-month period.

	·	Manner-of-sale requirements. Resales of equity securities must be made in unsolicited "brokers' transactions" or transactions directly with a "market maker" and must comply with other specified requirements. Equity securities may be sold in "riskless principal transactions" (in addition to "brokers' transactions" and transactions directly with a "market maker").

	·	Filing of Form 144. The seller must file a Form 144 if the amount of securities being sold in any three-month period exceeds the lesser of 5,000 shares or $50,000 in aggregate sales price.

Shares of Former Shell Company

Under Rule 144, persons owning shares in a company that is or at any time was a shell company (as defined in the Exchange Act) will not be entitled to sell the shares received pursuant to Rule 144 until such time as information about the former shell company that is equivalent to the information required under Form 10 of the Exchange Act has been on file with the SEC for a period of one year. As a result, the SinoHub stockholders who received shares of SinoHub in the merger would generally be unable to avail themselves of Rule 144 until one year after the Current Report on Form 8-K announcing the consummation of the Merger and complying with the requirements thereof was filed with the SEC, on May 20, 2008. However, the Current Report on Form 8-K announcing the consummation of the Merger did not contain interim financial statements and pro forma financial information relating to the Merger and certain information regarding prior transactions in unregistered securities of SinoHub (including its predecessor, Liberty Alliance) and SinoHub International (including its predecessor, SinoHub, Inc.). We intend to include this information in an amendment to the Form 8-K.

Accordingly, we believe that none of our shares of common stock can currently be sold under Rule 144 under the Securities Act and that our stockholders will not be entitled to sell SinoHub shares pursuant to Rule 144 until one year after the amended Form 8-K is filed.

Anti-Takeover Effects of Our Certificate of Incorporation, Bylaws and Delaware Law

Some provisions of Delaware law and our Certificate of Incorporation and amended and restated bylaws could make the following transactions more difficult:

acquisition of our company by means of a tender offer, a proxy contest or otherwise; and

Removal of our incumbent officers and directors.

These provisions of our amended and restated certificate of incorporation and amended and restated bylaws, summarized below, are expected to discourage and prevent coercive takeover practices and inadequate takeover bids. These provisions are designed to encourage persons seeking to acquire control of our company to negotiate first with our board of directors. They are also intended to provide our management with the flexibility to enhance the likelihood of continuity and stability if our board of directors determines that a takeover is not in the best interests of our stockholders. These provisions, however, could have the effect of discouraging attempts to acquire us, which could deprive our stockholders of opportunities to sell their shares of common stock at prices higher than prevailing market prices.

No Cumulative Voting

Under Delaware law, cumulative voting for the election of directors is not permitted unless a corporation’s certificate of incorporation authorizes cumulative voting. Our amended and restated certificate of incorporation does not provide for cumulative voting in the election of directors. Cumulative voting allows a minority stockholder to vote a portion or all of its shares for one or more candidates for seats on the board of directors. Without cumulative voting, a minority stockholder will not be able to gain as many seats on our board of directors based on the number of shares of our stock the stockholder holds as the stockholder would be able to gain if cumulative voting were permitted. The absence of cumulative voting makes it more difficult for a minority stockholder to gain a seat on our board of directors to influence our board’s decision regarding a takeover.

Undesignated Preferred Stock

The authorization of undesignated preferred stock makes it possible for our board of directors, without the approval of our stockholders, to amend our certificate of incorporation to create one or more series of preferred stock with voting, liquidation, dividend or other rights or preferences that supersede the rights and preferences of the holders of our common stock and which could impede the success of any attempt to change control of our company.

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

Warrants

At December 31, 2008, the following warrants were outstanding:

Investor Warrants:

Warrants to purchase 1,101,628 shares of common stock at any time on or prior to September 10, 2011 at an initial exercise price of $2.15 per share. Pursuant to the terms of such warrants, the exercise price of such warrants is, subject to adjustment in the event of stock splits, combinations or the like of our common stock.

Warrants to purchase 1,101,628 shares of common stock at any time on or prior to September 10, 2013 at an initial exercise price of $3.00 per share. Pursuant to the terms of such warrants, the exercise price of such warrants is subject to adjustment in the event of stock splits, combinations or the like of our common stock.

Placement Agent Warrants:

Warrants to purchase 154,228 shares of common stock at any time on or prior to September 10, 2011 at an initial exercise price of $2.15 per share. Pursuant to the terms of such warrants, the exercise price of such warrants is, subject to adjustment in the event of stock splits, combinations or the like of our common stock.

Warrants to purchase 154,229 shares of common stock at any time on or prior to September 10, 2013 at an initial exercise price of $3.00 per share. Pursuant to the terms of such warrants, the exercise price of such warrants is subject to adjustment in the event of stock splits, combinations or the like of our common stock.

SELLING STOCKHOLDERS

The following table sets forth as of December 31, 2008, information regarding the current beneficial ownership of our common stock by the persons identified, based on information provided to us by them, which we have not independently verified. Although we have assumed for purposes of the table that the selling stockholders will sell all of the shares offered by this prospectus, because they may from time to time offer all or some of their shares under this prospectus or in another manner, no assurance can be given as to the actual number of shares that will be resold by the selling stockholder (or any of them), or that will be held after completion of the resales. In addition, a selling stockholder may have sold or otherwise disposed of shares in transactions exempt from the registration requirements of the Securities Act or otherwise since the date he or she provided information to us. The selling stockholders are not making any representation that the shares covered by this prospectus will be offered for sale. Except as set forth below, no selling stockholder has held any position nor had any material relationship with us or our affiliates during the past three years. Except as set forth below, each of the selling stockholders has advised the Company that it is not a registered broker-dealer or an affiliate of a registered broker-dealer.

	Shares of Common Stock Beneficially Owned Prior to Offering(1)				Shares Being Offered	Shares of Common Stock Beneficially Owned After Offering(2)
Selling Stockholder	Shares		%			Shares		%

Norman Zada (3)+		176,469	*		176,469		0	*
Ultima Partner, LLC (4)+		352,940	1.4		352,940		0	*
Fred L. Astman/Wedbush Securities Inc CF IRA R/O Holding 10/13/92 (5)+		132,450	*		132,450		0	*
Lake Street Fund LP (6)+		795,000	3.2		795,000		0	*
MKM Opportunity Master Fund, Ltd. (7)+		882,351	3.5		882,351		0	*
The USX China Fund (8)+		300,000	1.2		300,000		0	*
Renaissance US Growth Investment Trust Plc (9)+		1,764,704	7.0		1,764,704		0	*
Global Special Opportunities Trust Plc (10)+		882,351	3.5		882,351		0	*
Premier RENN US Emerging Growth Fund Ltd (11)+		882,351	3.5		882,351		0	*
Micro Pipe Fund I, LLC (12)+		264,704	1.1		264,704		0	*
Wedbush Opportunity Partners, L.P. (13)+		176,469	*		176,469		0	*

Lorikeet, Inc. (14)♦		196,093	*		196,093		0	*
John C. Leo ♦		145,001	*		145,001		0	*
Jeffrey A. Grossman ♦		200,000	*		200,000		0	*
Daniel Carlson ♦		70,000	*		70,000		0	*
John Tammaro ♦		10,000	*		10,000		0	*
Grace King ♦		25,000	*		25,000		0	*
Beilei Dong ♦		150,000	*		150,000		0	*


Total		7,405,883	27.7	%	7,405,883		0	*	%

* Less than one percent

+ Investors in the PIPE offering.

♦ Lock-up investors with piggy-back rights

(1)

This table is based upon information supplied by the selling shareholder. The number and percentage of shares beneficially owned are based on an aggregate of 24,501,989 shares of our common stock outstanding as of December 31, 2008 and, to the extent applicable, the warrants to purchase common stock held by .the persons for whom such number and percentage is being calculated.

(2)	Because the selling shareholder identified in this table may sell some, all or none of the shares owned by it that are registered under this registration statement, and because, to our knowledge, there are currently no agreements, arrangements or understandings with respect to the sale of any of the shares registered hereunder, no estimate can be given as to the number of shares available for resale hereby that will be held by the selling shareholders at the time of this registration statement. Therefore, we have assumed for purposes of this table that the selling shareholder will sell all of the shares beneficially owned by it.
(3)	Norman Zada exercises voting and investment control over the securities to be offered for resale by the selling shareholder. This amount includes 58,822 shares which may be purchased pursuant to currently exercisable warrants.
(4)	Norman Zada exercises voting and investment control over the securities to be offered for resale by the selling shareholder. This amount includes 117,646 shares which may be purchased pursuant to currently exercisable warrants.
(5)	Fred L. Astman exercises voting and investment control over the securities to be offered for resale by the selling shareholder. This amount includes 44,150 shares which may be purchased pursuant to currently exercisable warrants. Fred L. Astman is an affiliate of First Wilshire Securities Management, Inc., a broker dealer. He has advised the Company he bought the Registrable Securities in the ordinary course of business, and at the time of the purchase of the Registrable Securities to be resold, he had no agreements or understandings, directly or indirectly, with any person to distribute the Registrable Securities.
(6)	Fred L. Astman and Scott Hood exercise voting and investment control over the securities to be offered for resale by the selling shareholder. This amount includes 265,000 shares which may be purchased pursuant to currently exercisable warrants. Fred L. Astman and Lake Street Fund LP are affiliates of First Wilshire Securities Management, Inc., a broker dealer. They have advised the Company they bought the Registrable Securities in the ordinary course of business, and at the time of the purchase of the Registrable Securities to be resold, they had no agreements or understandings, directly or indirectly, with any person to distribute the Registrable Securities.
(7)	David Skriloff exercises voting and investment control over the securities to be offered for resale by the selling shareholder. This amount includes 294,116 shares which may be purchased pursuant to currently exercisable warrants.
(8)	Stephen L. Parr exercises voting and investment control over the securities to be offered for resale by the selling shareholder. This amount includes 100,000 shares which may be purchased pursuant to currently exercisable warrants.
(9)	Russell Cleveland exercises voting and investment control over the securities to be offered for resale by the selling shareholder. This amount includes 588,234 shares which may be purchased pursuant to currently exercisable warrants.
(10)	Russell Cleveland exercises voting and investment control over the securities to be offered for resale by the selling shareholder. This amount includes 294,116 shares which may be purchased pursuant to currently exercisable warrants.
(11)	Russell Cleveland exercises voting and investment control over the securities to be offered for resale by the selling shareholder. This amount includes 294,116 shares which may be purchased pursuant to currently exercisable warrants.
(12)	Randall S. Goulding exercises voting and investment control over the securities to be offered for resale by the selling shareholder. This amount includes 88,234 shares which may be purchased pursuant to currently exercisable warrants.
(13)	Jeremy Q. Zhu and Eric D. Wedbush exercise voting and investment control over the securities to be offered for resale by the selling shareholder. This amount includes 58,822 shares which may be purchased pursuant to currently exercisable warrants.
(14)	Steven L. White exercises voting and investment control over the securities to be offered for resale by the selling shareholder.

Shares of SinoHub subject to Lock-Up Agreements entered into among such holders and SinoHub in connection with the Merger are entitled to piggyback registration rights under the terms of the Merger Agreement entered into in connection with SinoHub’s reverse merger. The lock-up restrictions expire on May 14, 2009 and do not apply to shares included on a registration statement. The lock-ups were entered into by Lorikeet, Inc., the controlling shareholder of the Company while it was a dormant shell, and the Company’s consultant at such time John Leo (and John Leo’s subsequent transferees: Jeffrey Grossman, Daniel Carlson, Grace King, John Tammaro and Beilei Dong). These 796,094 shares have been included in this registration statement. The shares of common stock held by Lorikeet were purchased from the Company in a private placement on June 20, 2006 for an aggregate purchase price of $20,000 pursuant to a subscription agreement between the Company and the stockholder. These shares held by the balance of the stockholders subject to the lock-ups were initially sold by Lorikeet and certain other shareholders of the Company to John C. Leo upon the closing of the Merger. Mr. Leo then transferred the shares set forth above to Messrs. Grossman, Tammaro and Carlson and Ms. King on August 14, 2008. On October 9, 2008, Mr. Leo sold 150,000 shares to Beilei Dong for $100,000.

PLAN OF DISTRIBUTION

The selling stockholders and any of their pledgees, donees, transferees, assignees and successors-in-interest may, from time to time, sell any or all of their shares of Common Stock on any stock exchange, market or trading facility on which the shares are traded or quoted or in private transactions. These sales may be at fixed or negotiated prices. The selling stockholders may use any one or more of the following methods when selling shares:

ordinary brokerage transactions and transactions in which the broker-dealer solicits investors;

block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;

purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

an exchange distribution in accordance with the rules of the applicable exchange;

privately negotiated transactions;

to cover short sales made after the date that this Registration Statement is declared effective by the SEC;

broker-dealers may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share;

a combination of any such methods of sale; and

any other method permitted pursuant to applicable law.

The selling stockholders may also sell shares under Rule 144 under the Securities Act, if available, rather than under this prospectus.

Broker-dealers engaged by the selling stockholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the selling stockholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the purchaser) in amounts to be negotiated. The selling stockholders do not expect these commissions and discounts to exceed what is customary in the types of transactions involved.

The selling stockholders may from time to time pledge or grant a security interest in some or all of the securities owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell shares of Common Stock from time to time under this prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act of 1933 amending the list of selling stockholders to include the pledgee, transferee or other successors in interest as selling stockholders under this prospectus.

Upon the Company being notified in writing by a selling stockholder that any material arrangement has been entered into with a broker-dealer for the sale of Common Stock through a block trade, special offering, exchange distribution or secondary distribution or a purchase by a broker or dealer, a supplement to this prospectus will be filed, if required, under the Securities Act, disclosing (i) the name of each such selling stockholder and of the participating broker-dealer(s), (ii) the number of shares involved, (iii) the price at which such the shares of Common Stock were sold, (iv) the commissions paid or discounts or concessions allowed to such broker-dealer(s), where applicable, (v) that such broker-dealer(s) did not conduct any investigation to verify the information set out or incorporated by reference in this prospectus, and (vi) other facts material to the transaction. In addition, upon the Company being notified in writing by a selling stockholder that a donee or pledgee intends to sell more than 500 shares of Common Stock, a supplement to this prospectus will be filed if then required in accordance with applicable securities law .

The selling stockholders also may transfer the shares of Common Stock in other circumstances, in which case the transferees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.

The selling stockholders and any broker-dealers or agents that are involved in selling the shares may be deemed to be "underwriters" within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Discounts, concessions, commissions and similar selling expenses, if any, that can be attributed to the sale of Securities will be paid by the selling stockholder and/or the purchasers. Each selling stockholder has represented and warranted to the Company that it acquired the securities subject to this Registration Statement in the ordinary course of such selling stockholder’s business and, at the time of its purchase of such securities such selling stockholder had no agreements or understandings, directly or indirectly, with any person to distribute any such securities.

The Company has advised each selling stockholder that it is the view of the SEC that it may not use shares registered on this Registration Statement to cover short sales of common stock made prior to the date on which this Registration Statement shall have been declared effective by the SEC. If a selling stockholder uses this prospectus for any sale of the common stock, it will be subject to the prospectus delivery requirements of the Securities Act. The selling stockholders will be responsible to comply with the applicable provisions of the Securities Act and Exchange Act, and the rules and regulations thereunder promulgated, including, without limitation, Regulation M, as applicable to such selling stockholders in connection with resales of their respective shares under this Registration Statement.

The Company is required to pay all fees and expenses incident to the registration of the shares, but the Company will not receive any proceeds from the sale of the common stock. The Company has agreed to indemnify the selling stockholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act.

We agreed to keep this prospectus effective until the earlier of (i) the date on which the shares may be resold by the selling stockholders without registration and without regard to any volume limitations by reason of Rule 144(k) under the Securities Act or any other rule of similar effect or (ii) all of the shares have been sold pursuant to this prospectus or Rule 144 under the Securities Act or any other rule of similar effect. The resale shares will be sold only through registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in certain states, the resale shares may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.

DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION FOR SECURITIES ACT LIABILITIES

The Company's directors and executive officers are indemnified as provided by the Delaware General Corporation Law and the Company's Bylaws. These provisions state that the Company's directors may cause the Company to indemnify a director or former director against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, actually and reasonably incurred by him as a result of him acting as a director. The indemnification of costs can include an amount paid to settle an action or satisfy a judgment. Such indemnification is at the discretion of the Company's board of directors and is subject to the Securities and Exchange Commission's policy regarding indemnification.

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

In the event that a claim for indemnification against such liabilities (other than the payment of expenses incurred or paid by a director, officer or controlling person in a 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 its counsel the matter has been settled by controlling precedent, submit to the court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

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

INDEMNIFICATION OF OFFICERS AND DIRECTORS

Indemnification of Directors and Officers.

Section 145 of the Delaware General Corporation Law provides that a corporation may indemnify directors and officers as well as other employees and individuals against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with any threatened, pending or completed actions, suits or proceedings in which such person is made a party by reason of such person being or having been a director, officer, employee or agent of the corporation. Section 145 of the Delaware General Corporation Law also provides that expenses (including attorneys’ fees) incurred by a director or officer in defending an action may be paid by a corporation in advance of the final disposition of an action if the director or officer undertakes to repay the advanced amounts if it is determined such person is not entitled to be indemnified by the corporation. The Delaware General Corporation Law provides that Section 145 is not exclusive of other rights to which those seeking indemnification may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise. The Company’s Bylaws provide that, to the fullest extent permitted by law, the Company shall indemnify and hold harmless any person who was or is made or is threatened to be made a party or is otherwise involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative by reason of the fact that such person, or the person for whom he is the legally representative, is or was a director or officer of the Company, against all liabilities, losses, expenses (including attorney’s fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such proceeding.

Section 102(b)(7) of the Delaware General Corporation Law permits a corporation to provide in its certificate of incorporation that a director of the corporation shall not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) for unlawful payments of dividends or unlawful stock repurchases, redemptions or other distributions, or (iv) for any transaction from which the director derived an improper personal benefit. The Company’s Certificate of Incorporation provides for such limitation of liability.

The Company’s Amended and Restated Bylaws provide for the indemnification of, and advancement of expenses to, directors and officers of the Company (and, at the discretion of the Board of Directors of the Company, employees and agents of the Company to the extent that Delaware law permits the Company to provide indemnification to such persons) in excess of the indemnification and advancement otherwise permitted under Section 145 of the DGCL, subject only to limits created by applicable Delaware law (statutory or non-statutory), with respect to actions for breach of duty to the Company, its stockholders and others. The provision does not affect directors’ responsibilities under any other laws, such as the federal securities laws or state or federal environmental laws.

The Company has entered into agreements with its directors and executive officers, that require the Company to indemnify such persons to the fullest extent permitted by law, against expenses, judgments, fines, settlements and other amounts incurred (including attorneys’ fees), and advance expenses if requested by such person, in connection with investigating, defending, being a witness in, participating, or preparing for any threatened, pending, or completed action, suit, or proceeding or any alternative dispute resolution mechanism, or any inquiry, hearing, or investigation (collectively, a “Proceeding”), relating to any event or occurrence that takes place either prior to or after the execution of the indemnification agreement, related to the fact that such person is or was a director or officer of the Company, or while a director or officer is or was serving at the request of the Company as a director, officer, employee, trustee, agent, or fiduciary of another foreign or domestic corporation, partnership, joint venture, employee benefit plan, trust, or other enterprise, or was a director, officer, employee, or agent of a foreign or domestic corporation that was a predecessor corporation of the Company or of another enterprise at the request of such predecessor corporation, or related to anything done or not done by such person in any such capacity, whether or not the basis of the Proceeding is alleged action in an official capacity as a director, officer, employee, or agent or in any other capacity while serving as a director, officer, employee, or agent of the Company. Indemnification is prohibited on account of any Proceeding in which judgment is rendered against such persons for an accounting of profits made from the purchase or sale by such persons of securities of the Company pursuant to the provisions of Section 16(b) of the Securities Exchange Act of 1934, as amended, or similar provisions of any federal, state, or local laws. The indemnification agreements also set forth certain procedures that will apply in the event of a claim for indemnification thereunder.

Insurance. The Company may purchase and maintain insurance on behalf of any person who is or was a director, officer or employee of the Company, or is or was serving at the request of the Company as a director, officer, employee or agent of another company, partnership, joint venture, trust or other enterprise against liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Company would have the power to indemnify him against liability under the provisions of this section. The Company currently maintains such insurance.

Settlement by the Company. The right of any person to be indemnified is subject always to the right of the Company by its Board of Directors, in lieu of such indemnity, to settle any such claim, action, suit or proceeding at the expense of the Company by the payment of the amount of such settlement and the costs and expenses incurred in connection therewith.

LEGAL MATTERS

The legality of the issuance of the shares offered in this prospectus will be passed upon for us by Seyfarth Shaw LLP of Boston, Massachusetts.

EXPERTS

The consolidated financial statements of our company as of December 31, 2008 and 2007 included in this prospectus have been audited by Jimmy C.H. Cheung & Co, Independent registered public accountants, as stated in its report appearing herein and elsewhere in this prospectus, and have been so included in reliance upon the report of this firm given upon their authority as experts in auditing and accounting.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the Securities and Exchange Commission a registration statement on Form S-1 (including exhibits) under the Securities Act, with respect to the shares to be sold in this offering. This prospectus does not contain all the information set forth in the registration statement. For further information with respect to our company and the common stock offered in this prospectus, reference is made to the registration statement, including the exhibits filed thereto. With respect to each such document filed with the SEC as an exhibit to the registration statement, reference is made to the exhibit for a more complete description of the matter involved.

We file quarterly and annual reports, proxy statements and other information with the SEC. You may read and copy any document that we file at the public reference facilities of the SEC in Washington, D.C. You may call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. Our SEC filings are also available to the public from the SEC’s website at http://www.sec.gov.

SINOHUB, INC. AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Financial Statements for the Years Ended December 31, 2008 and 2007

Consolidated Balance Sheets	F-2

Consolidated Statements of Operations and Comprehensive Income	F-3

Consolidated Statements of Stockholders’ Equity	F-4

Consolidated Statements of Cash Flows	F-5

Notes to Consolidated Financial Statements	F-6 to F-17

Report of Independent Registered Public Accounting Firm	F-18

SINOHUB, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

ASSETS	December 31, 2008		December 31, 2007

CURRENT ASSETS
Cash and cash equivalents	$	5,860,000	$	4,282,000
Restricted cash		374,000		5,509,000
Accounts receivable, net of allowance		22,282,000		9,748,000
Inventories, net		435,000		853,000
Prepaid expenses and other		370,000		426,000
Due from related company		-		1,493,000
Total current assets		29,321,000		22,311,000

PROPERTY AND EQUIPMENT, NET		703,000		846,000

TOTAL ASSETS	$	30,024,000	$	23,157,000
LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES
Accounts payable	$	764,000	$	6,777,000
Accrued expenses and other		234,000		307,000
Bank borrowings		2,123,000		6,904,000
Notes payable to third parties		-		251,000
Income and other taxes payable		3,391,000		1,457,000
Total current liabilities		6,512,000		15,696,000

STOCKHOLDERS’ EQUITY
Preferred stock, $0.001 par value, 5,000,000 shares authorized; no shares issued		-		-
Common stock, $0.001 par value, 100,000,000 shares authorized; 24,501,989 shares and 18,290,000 shares issued and outstanding as of December 31, 2008 and December 31, 2007, respectively		25,000		18,000
Additional paid-in capital		11,529,000		4,509,000
Retained earnings
Unappropriated		10,424,000		2,309,000
Appropriated		724,000		356,000
Accumulated other comprehensive income		810,000		269,000
Total stockholders’ equity		23,512,000		7,461,000

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	30,024,000	$	23,157,000

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

F-2

SINOHUB, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

	Years ended December 31,
	2008			2007
NET SALES
Supply chain management services	$	4,973,000		$	2,096,000
Electronic components		74,511,000			26,698,000
Total net sales		79,484,000			28,794,000
COST OF SALES
Supply chain management services		1,444,000			995,000
Electronic components		61,830,000			21,130,000
Total cost of sales		63,274,000			22,125,000

GROSS PROFIT		16,210,000			6,669,000

OPERATING EXPENSES
Selling, general and administrative		3,787,000			2,297,000
Depreciation		389,000			383,000
Allowance for doubtful debts		1,237,000			-
Loss on disposal of property and equipment		5,000			-
Total operating expenses		5,418,000			2,680,000

INCOME FROM OPERATIONS		10,792,000			3,989,000
OTHER INCOME (EXPENSE)
Interest expense		(251,000	)		(146,000	)
Interest income		66,000			124,000
Other, net		27,000			43,000
Total other income (expense)		(158,000	)		21,000

INCOME BEFORE INCOME TAXES		10,634,000			4,010,000
Income tax expense		2,151,000			509,000

NET INCOME		8,483,000			3,501,000

OTHER COMPREHENSIVE INCOME
Foreign currency translation gain		541,000			285,000

COMPREHENSIVE INCOME	$	9,024,000		$	3,786,000

SHARE AND PER SHARE DATA
Net income per share-basic	$	0.41		$	0.22
Weighted average number of shares-basic		20,925,000			15,797,000
Net income per share-diluted	$	0.40		$	0.22
Weighted average number of shares-diluted		21,460,000			15,929,000

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

F-3

SINOHUB, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the years ended December 31, 2008 and 2007

								Retained earnings			Appropriated		Accumulated
	Common stock				Additional			(Accumulated			retained		other comprehensive
	Shares		Amount		paid-in capital			deficit)			earnings		income (loss)			Total

Balances at December 31, 2006		14,707,257	$	15,000	$	2,941,000		$	(849,000	)	$	13,000	$	(16,000	)	$	2,104,000
Stock issued on exercise of warrants		385,229		-		49,000			-			-		-			49,000
Stock issued for cash		1,699,852		2,000		1,278,000			-			-		-			1,280,000
Warrants issued for cash						50,000			-			-		-			50,000
Exercise of stock options		100,597		-		57,000			-			-		-			57,000
Stock compensation - shares issued		956,166		1,000		108,000			-			-		-			109,000
Stock compensation - options issued		-		-		6,000			-			-		-			6,000
Stock issued for services		440,899		-		51,000			-			-		-			51,000
Warrants issued for services		-		-		9,000			-			-		-			9,000
Distribution to stockholders		-		-		(40,000	)		-			-		-			(40,000	)

Net income for the year		-		-		-			3,501,000			-		-			3,501,000
Foreign currency translation gain		-		-		-			-			-		285,000			285,000
Comprehensive income		-		-		-			-			-		-			3,786,000

Transfer to appropriated retained earnings		-		-		-			(343,000	)		343,000		-			-

Balances at December 31, 2007		18,290,000	$	18,000	$	4,509,000		$	2,309,000		$	356,000	$	269,000		$	7,461,000
Reverse merger recapitalization		1,200,000		1,000		(1,000	)		-			-		-			-
Stock issued for services		510,000		1,000		433,000			-			-		-			434,000
Stock issued for cash		4,406,533		5,000		6,477,000			-			-		-			6,482,000
Stock compensation - options issued		-		-		53,000			-			-		-			53,000
Exercise of stock options		71,166		-		8,000			-			-		-			8,000
Stock compensation - shares issued		22,200		-		50,000			-			-		-			50,000
Odd lots issued due to the reverse share split		2,090		-		-			-			-		-			-

Net income for the year		-		-		-			8,483,000			-		-			8,483,000
Foreign currency translation gain		-		-		-			-			-		541,000			541,000
Comprehensive income		-		-		-			-			-		-			9,024,000

Transfer to appropriated retained earnings		-		-		-			(368,000	)		368,000		-			-

Balances at December 31, 2008		24,501,989	$	25,000	$	11,529,000		$	10,424,000		$	724,000	$	810,000		$	23,512,000

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

F-4

SINOHUB, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Years ended December 31,
		2008			2007

CASH FLOWS FROM OPERATING ACTIVITIES
Net income		$	8,483,000		$	3,501,000
Adjustments to reconcile net income to cash provided by (used in) operation:
Depreciation			389,000			383,000
Allowance for doubtful accounts			1,237,000			-
Loss on disposal of property and equipment			5,000			-
Stock compensation expense			53,000			109,000
Stock option compensation amortization			50,000			6,000
Stock issued for services			434,000			50,000
Warrants issued for services			-			9,000
Changes in operating assets and liabilities:
Accounts receivable			(12,934,000	)		(3,701,000	)
Inventories			468,000			679,000
Prepaid expenses and other			84,000			2,676,000
Accounts payable			(6,367,000	)		1,494,000
Accrued expenses and other			(93,000	)		(3,895,000	)
Income and other taxes payable			1,808,000			815,000
Net cash (used in) provided by operating activities			(6,383,000	)		2,126,000

CASH FLOWS FROM INVESTING ACTIVITIES
Release of restricted cash			5,135,000			(5,509,000	)
Proceeds from disposal of property and equipment			10,000			-
Purchase of property and equipment			(172,000	)		(103,000	)
Net cash provided by (used in) investment activities			4,973,000			(5,612,000	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock, net of costs			6,482,000			-
Proceeds from exercise of warrants issued for service			8,000			-
Advances from investors			-			1,396,000
Due to director repaid			-			(203,000	)
Bank borrowing proceeds			2,123,000			6,629,000
Bank borrowing repayments			(7,286,000	)		-
Notes payable repayments			(251,000	)		(313,000	)
Related company proceeds (repayments)			1,568,000			(3,113,000	)
Net cash provided by financing activities			2,644,000			4,396,000

EFFECT OF EXCHANGE RATES ON CASH			344,000			372,000

NET INCREASE IN CASH AND CASH EQUIVALENTS			1,578,000			1,282,000

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD			4,282,000			3,000,000

CASH AND CASH EQUIVALENTS AT END OF PERIOD		$	5,860,000		$	4,282,000

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest expense		$	251,000		$	146,000
Cash paid for income tax		$	409,000		$	6,000

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

F-5

SINOHUB, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION

Overview

SinoHub, Inc. (the “Company”) provides products and services to suppliers and purchasers of electronic components in connection with the manufacture and assembly of electronic products in the People’s Republic of China (the “PRC” or “China”). Approximately 94% of the Company’s revenues are derived from the sale of electronic components and assemblies to contract manufacturers and design houses which are engaged in the manufacture of mobile phones, network equipment and other electronics products in the PRC. These sales occur either as procurement-fulfillment project or as one-off electronic component sale.

In connection with the supply of such components and products, the Company also provides supply chain management services from which we derive approximately 6% of our revenues.

History and Basis of Reporting

SinoHub, Inc. (formerly known as Liberty Alliance, Inc.) is a Delaware corporation, originally organized in Utah in 1986, and subsequently merged and reorganized as Liberty Alliance, Inc. in Delaware in 1991. Liberty Alliance, Inc. filed for bankruptcy in 1994 and the filing was closed in 1995. Liberty Alliance, Inc. remained dormant until 2006 when it began preparing to become a public shell company and seek new business opportunities. In August 2006 the Company changed its name to Vestige, Inc., and in September 2006 the Company changed its name back to Liberty Alliance, Inc.

In May 2008, Liberty Alliance, Inc., SinoHub Acquisition Corp., known as the Merger Sub, SinoHub, Inc., known as the Acquired Sub, and Steven L. White, the principal stockholder of Liberty Alliance, entered into an Agreement and Plan of Merger pursuant to which the Merger Sub agreed to merge with and into the Acquired Sub, with the Acquired Sub being the surviving corporation. In connection with the merger, Liberty Alliance, Inc. issued to the stockholders of the Acquired Sub 18,290,000 shares (as adjusted for reverse stock split) of the Company’s common stock in exchange for all the outstanding shares of the Acquired Sub’s preferred and common stock and the Company assumed options exercisable for additional shares of common stock. At the closing, Liberty Alliance, Inc. also issued 510,000 shares (as adjusted for reverse stock split) of the Company’s common stock to certain consultants for services rendered in connection with the Merger. Immediately following the merger, the Company had 20,000,000 shares of common stock outstanding and options exercisable for an additional 489,451 shares (as adjusted for reverse stock split) of common stock. The conclusion of these events was deemed to be a reverse takeover transaction, or RTO, after which the original stockholders of the Company held approximately 6% of the issued and outstanding shares of the Company’s common stock on a fully diluted basis and the Acquired Sub’s stockholders, including the shares issued to consultants, held approximately 94% of the Company’s issued and outstanding shares of common stock.

In June 2008, the Company approved a reverse stock split of 1 share for every 3.5 common stock outstanding whereupon outstanding common stock and stock options were adjusted to account for the effects of the reverse stock split.

In July 2008, the Company changed its name from Liberty Alliance, Inc. to SinoHub, Inc. and the Acquired Sub changed its name from SinoHub, Inc. to SinoHub International, Inc.

For financial reporting purposes, the RTO has been accounted for as a recapitalization of the Company whereby the historical financial statements and operations of the Acquired Sub become the historical financial statements of the Company, with no adjustment to the carrying value of assets and liabilities. Share and per share amounts reflect the effects of the recapitalization and reverse stock split for all periods presented. In addition, the presentation for all periods includes equity transactions of the Acquired Sub as adjusted for the effects of the recapitalization and reverse stock split.

Organization Structure

The current operations of the Company include the following subsidiaries:

SinoHub International, Inc. was incorporated in March 1999 as a Delaware C corporation in the United States of America. This company is the holding company for the Chinese and Hong Kong subsidiaries listed below. SinoHub International, Inc. is wholly owned by SinoHub, Inc.

SinoHub Electronics Shenzhen, Ltd. was incorporated in September 2000 in the People’s Republic of China to provide one-stop SCM services for electronic manufacturers and distributors in southern China. SinoHub Electronics Shenzhen, Ltd. is wholly owned by SinoHub International, Inc.

F-6

SinoHub SCM Shenzhen, Ltd. was incorporated in December 2001 in the PRC to hold an import and export license in the PRC. SinoHub SCM Shenzhen, Ltd. purchases and sells electronic component parts and provides Customs clearance services to our customers. 100% of the equity interest in SinoHub SCM Shenzhen, Ltd. is held on behalf of SinoHub by SinoHub Electronics Shenzhen, Ltd. through a Declaration of Trust with SinoHub Electronics Shenzhen, Ltd. dated January 30, 2008. Through this trust agreement, SinoHub Electronics Shenzhen, Ltd. owns 100% of the beneficial interest in SinoHub SCM Shenzhen, Ltd. and accordingly, SinoHub SCM Shenzhen Ltd is treated as a wholly-owned subsidiary of the Company for accounting purposes.

SinoHub SCM Shanghai, Ltd. was incorporated in March 2005 in the PRC to provide one-stop SCM services for electronic manufacturers and distributors in northern China. SinoHub SCM Shanghai, Ltd. is wholly owned by SinoHub Electronics Shenzhen, Ltd.

SinoHub Electronics Shanghai, Ltd. was incorporated in July 2005 in the PRC to provide one-stop SCM services for electronic manufacturers and distributors in the PRC. SinoHub Electronics Shanghai, Ltd. is wholly owned by SinoHub International, Inc.

B2B Chips, Limited was incorporated in June 2006 in Hong Kong to purchase and sell electronic components. B2B Chips is wholly owned by SinoHub Electronics Shenzhen, Ltd.

SinoHub Technology (Hong Kong) Limited was incorporated in May 2007 in Hong Kong and has not yet commenced business. SinoHub Technology (Hong Kong) Limited is wholly owned by B2B Chips.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

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

Concentrations and Risks

Substantially all of Company's assets are located in the PRC and Hong Kong and substantially all of the Company's revenues were derived from customers located in the PRC. In addition, financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of accounts receivable. The Company mitigates credit risk through procedures that include determination of credit limits, credit approvals, and related monitoring procedures to ensure delinquent receivables are collected.

Cash and Cash Equivalents

For purpose of the statements of cash flows, cash and cash equivalents include cash on hand and demand deposits with a bank with a maturity of less than three months. Cash amounts held as security for the Company’s bank loans is reported as restricted cash and is not included with cash or cash equivalents on the balance sheet until the lien against such funds has been released.

Accounts Receivable

Inventories

Property and Equipment

Property and equipment are stated at cost, less accumulated depreciation. Expenditures for additions, major renewals and betterments are capitalized and expenditures for maintenance and repairs are charged to expense as incurred. Depreciation is provided on a straight-line basis, less estimated residual values over the assets’ estimated useful lives. The estimated useful lives are as follows:

F-7

Plant and machinery	5 Years
Motor vehicles	5 Years
Furniture, fixtures and equipment	2 to 5 Years

Financial Instruments

Fair Value of Financial Instruments

Derivative Instruments

The Company does not utilize derivative or hedge instruments in its financing activities.

Stock-Based Compensation

Revenue Recognition

The Company reports revenue from supply chain management, or SCM, services and electronic components sales. Revenues for supply chain management services are earned from both the SCM and procurement-fulfillment programs and are primarily based on a percentage of inventory value handled for a customer. The Company recognizes revenue from SCM services when the services are provided. Revenues from electronic components sales are based on quoted prices and are recognized at the time of shipment to customers. Revenues are recognized on the gross amount billed to customers. Sales are recorded net of discounts and allowances. In all cases, revenue is recognized when there is persuasive evidence of an arrangement, delivery has occurred or services rendered, the sales price is determinable, and collectability is reasonably assured.

Income Taxes

F-8

Foreign Currency Translation

The Company uses United State Dollar (“USD”) as its reporting currency. The Company accounts for foreign currency translation pursuant to SFAS No. 52, “Foreign Currency Translation” (“SFAS No. 52”). The subsidiaries of the Company’s functional currencies are the Hong Kong Dollar (“HKD”) and Chinese Renminbi (“RMB”). Under SFAS No. 52, all assets and liabilities are translated into United States dollars using the current exchange rate at the balance sheet date. The capital and various reserves are translated at historical exchange rates prevailing at the time of the transactions while income and expenses items are translated at the average exchange rate for the period. Translation adjustments are included in other comprehensive income (loss) for the period.

Foreign currency transactions during the year are translated to their functional currencies at the approximate rates of exchange on the dates of transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated to the reporting currency at the approximate rates of exchange at that date. Non-monetary assets and liabilities are translated at the rates of exchange prevailing at the time the asset or liability was acquired. Exchange gains or losses are recorded in the statement of operations.

Comprehensive Income

Earnings Per Share

Segments

The Company operates in one business segment.

Recent Accounting Pronouncements

F-9

In May 2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee Insurance Contracts, an interpretation of FASB Statement No. 60.” The scope of this Statement is limited to financial guarantee insurance and reinsurance contracts, as described in the Statement, issued by enterprises included within the scope of Statement 60. Accordingly, this Statement does not apply to financial guarantee contracts issued by enterprises excluded from the scope of Statement 60 or to some insurance contracts that seem similar to financial guarantee insurance contracts issued by insurance enterprises (such as mortgage guaranty insurance or credit insurance on trade receivables). This Statement also does not apply to financial guarantee contracts that are derivative instruments included within the scope of SFAS No. 133, “Accounting for Derivative instruments and Hedging Activities.” SFAS 163 is effective prospectively for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years; disclosure requirements in paragraphs 30(g) and 31 are effective for the first period (including interim periods) beginning after May 23, 2008. The adoption of this statement is not expected to have a material effect on the Company’s financial statements.

2. ACCOUNTS RECEIVABLE

Accounts receivable at December 31, 2008 and 2007 consisted of the following:

	2008		2007

Accounts receivable	$	23,519,000	$	9,748,000
Less: allowance for doubtful accounts		1,237,000		-
Accounts receivable, net of allowance	$	22,282,000	$	9,748,000

As of December 31, 2008 and 2007, the Company recorded an allowance for doubtful accounts of $1,237,000 and $Nil respectively.

3. PREPAID EXPENSES AND OTHER

Prepaid expenses and other current assets at December 31, 2008 and 2007 consisted of the following:

	2008		2007

Prepaid expenses	$	277,000	$	200,000
Other receivables		93,000		226,000
	$	370,000	$	426,000

4. PROPERTY AND EQUIPMENT

The following is a summary of property and equipment at December 31, 2008 and 2007:

	2008			2007

Furniture, fixtures and equipment	$	1,333,000		$	1,084,000
Plant and machinery		767,000			719,000
Motor vehicles		288,000			251,000
		2,388,000			2,054,000
Less: accumulated depreciation		(1,685,000	)		(1,208,000	)
Property and equipment, net	$	703,000		$	846,000

Depreciation expenses for the years ended December 31, 2008 and 2007 were $389,000 and $383,000, respectively. During 2008 the Company recognized a loss on disposal of property and equipment of $5,000.

F-10

5. ACCRUED EXPENSES AND OTHER

Accrued expenses and other liabilities at December 31, 2008 and 2007 and consisted of the following:

	2008		2007

Accrued expenses	$	163,000	$	156,000
Other liabilities		71,000		151,000
	$	234,000	$	307,000

6. BANK BORROWINGS AND FINANCING ARRANGEMENTS

The Company has secured financing facilities (RMB based) with certain PRC banks to support its business operations. The facilities with each bank include:

Letter of credit facility with one bank in the amount of $3,200,000 to support its component sales business. Restricted cash balances are required as security for draws against the facility and an annual commitment fee of 0.1% is assessed. In addition, the bank requires a third party guarantor. The third-party guarantor required the Company to pay it a fee of $80,000 for providing its guaranty. The facility renews each year and is available through August 2009. The Company also has a $1,460,000 Customs duty import facility and a $2,200,000 Customs export refund facility through this bank to support short term duty collections for its component sales business. These facilities renew each year and are available through February 2010.

Letter of credit facility with another bank in the amount of $3,400,000 to support its component sales business. Restricted cash balances are required as security for draws against the facility and an annual commitment fee of 0.1% is assessed. In addition, the bank requires a third party guarantor. The third-party guarantor required the Company to pay it a fee of $70,000 for providing its guaranty. The facility was terminated in December 2008.

Letter of credit facility with another bank in the amount of $3,650,000 to support its component sales business. Restricted cash balances are required as security for draws against the facility and the bank requires guarantors from a subsidiary and shareholders and lien on a PRC property owned by a director and his spouse. In addition, the bank requires a third party guarantor. The third-party guarantor required the Company to pay it a fee of $72,000 for providing its guaranty. The facility is available through September, 2009.

Borrowings against these facilities at December 31, 2008 and 2007 were as follows:

F-11

	2008		2007
Note payable to a bank, interes t rate of 7.128%
per annum, due M arch 2008	$	-	$	273,444

Note payable to a bank, interes t rate of 7.128%
per annum, due February 2008		-		205,083

Note payable to a bank, interes t rate of 7.128%
per annum, due January 2008		-		205,083

Note payable to a bank, interes t rate of 7%
per annum, due September 2008		-		502,854

Note payable to a bank, interes t rate of 7%
per annum, due September 2008		-		513,771

Note payable to a bank, interes t rate of 3.06%
per annum, due June 2008		-		3,059,447

Note payable to a bank, interes t rate of 3.33%
per annum, due July 2008		-		2,144,748

Note payable to a bank, interes t rate of 6.19%
per annum, due February 2009		954,000		-

Note payable to a bank, interes t rate of 6.83%
per annum, due M arch 2009		730,000		-

Note payable to a bank, interes t rate of 5.54%
per annum, due M arch 2009		162,000		-

Note payable to a bank, interes t rate of 5.54%
per annum, due January 2009		121,000

Note payable to a bank, interes t rate of 5.54%
per annum, due January 2009		156,000		-
		2,123,000		6,904,430
Less : current maturities		2,123,000		6,904,430
Long -term portion	$	-	$	-

Interest expense paid for the years ended December 31, 2008 and 2007 was $251,000 and $111,000 respectively.

7. NOTES PAYABLE TO THIRD PARTIES

Notes payable to third parties are due on demand or normally within one year. During 2008, all notes payable were fully repaid and as of December 31, 2008, no amounts were outstanding.

8. COMMITMENTS AND CONTINGENCIES

Employee Benefits

The full time employees of subsidiaries based in the PRC are entitled to employee benefits including medical care, welfare subsidies, unemployment insurance and pension benefits through a Chinese government mandated multi-employer defined contribution plan. The Company is required to accrue for those benefits based on certain percentages of the employees’ salaries and make contributions to the plans out of the amounts accrued for medical and pension benefits. The total provision and contributions made for such employee benefits for the years ended December 31, 2008 and 2007 were $90,000 and $75,000 respectively. The Chinese government is responsible for the medical benefits and the pension liability to be paid to these employees.

Commitments

The Company leases warehouse and office spaces from third parties under operating leases which expire at various dates from May 2010 through July 2013. Rent expense for the years ended December 31, 2008 and 2007 was $373,000 and $151,000 respectively. At December 31, 2008, the Company has outstanding commitments with respect to operating leases, which are due as follows:

F-12

2009	$	405,000
2010		400,000
2011		266,000
2012		153,000
2013		89,000
	$	1,313,000

Contingencies

The Company accounts for loss contingencies in accordance with SFAS 5, “Accounting for Loss Contingencies” and other related guidelines. Set forth below is a description of certain loss contingencies as of December 31, 2008 and management’s opinion as to the likelihood of loss in respect of loss contingency.

Pursuant to the Securities Purchase Agreement entered into between the Company and a group of accredited investors (“Securities Purchase Agreement”) on September 10, 2008, the Company was obligated to make efforts to file a registration statement with the SEC for the registration of 6,609, 789 shares of Common Stock offered by selling stockholders to be declared effective by the Securities and Exchange Commission on or before January 9, 2009. The Company has received an extension of this date to February 20, 2009 from the accredited investors. If the Company does not timely file the registration statement or cause it to be declared effective by the required dates, then each selling shareholder will be entitled to liquidated damages, payable in cash or Common Stock, at the Company’s option, equal to 1% of the aggregate purchase price paid by such selling shareholder for the securities, amounting to approximately $75,000 in the aggregate, and an additional 1% for each month that the Company does not file the registration statement or cause it to be declared effective. As provided by such extension, if the Company does not cause the registration statement to be declared effective by May 12, 2009, the liquidated damages will be calculated as if the deadline for effectiveness were January 9, 2009, the original deadline under the Registration Rights Agreement. Notwithstanding the foregoing, in no event shall liquidated damages exceed 10% of the aggregate gross proceeds of the offering to the selling shareholders, or total liquidated damages of about $750,000.

9. EARNINGS PER SHARE

The elements for calculation of earnings per share for the years ended December 31, 2008 and 2007 were as follows:

	Years ended December 31,
	2008		2007
Net income for basic and diluted earnings per share	$	8,483,000	$	3,501,000

Weighted average shares used in basic computation		20,925,000		15,797,000
Effect of dilutive stock options and warrants		535,000		132,000
Weighted average shares used in diluted computation		21,460,000		15,929,000

Earnings per share:
Basic	$	0.41	$	0.22
Diluted	$	0.40	$	0.22

10. STOCKHOLDERS’ EQUITY

Merger and Reverse Stock Split

The company’s reverse merger transaction has been accounted for as a recapitalization of the Company whereby the historical financial statements and operations of the Acquired Sub become the historical financial statements of the Company, with no adjustment of the carrying value of the assets and liabilities. Share and per share amounts reflect the effects of the recapitalization and reverse stock split for all periods presented. In addition, the presentation for all periods includes equity share transactions of the Acquired Sub as adjusted for the effects of the recapitalization and reverse stock split. All costs associated with the transaction were expensed as incurred. (See Note 1)

F-13

Equity Share Transactions

In May 2007, the Company issued 956,166 shares to an officer of the Company. The shares were valued at the market price on the date of issuance, at fair value of $109,000.

In May 2007, the Company issued 371,842 shares to the spouse of the President at fair value of $43,000 for agreeing to let the Company use the condominium in which she holds 50% ownership as collateral for a bank loan.

In November 2007, the Company issued 69,057 shares to third parties for consulting services at fair value of $8,000.

In a series of related equity share transactions in November and December 2007, the Company issued to investors 1,699,852 shares for total cash proceeds of $1,330,000.

In December 2007, warrants granted in 2004 for the purchase of 106,241 shares were exercised for total cash proceeds of $17,000.

In November 2006, warrants to purchase 148,537 shares of common stock were issued for services. The warrants were determined to have a market value of $9,000 using the Black-Scholes option pricing model with a market value per share of common stock of $0.0677, an exercise period of two years, and a volatility of 175%. The warrants were exercised in December 2007 for cash proceeds of $17,000.

In January 2007, warrants to purchase 130,451 shares of common stock were issued for services. The warrants were determined to have a market value of $9,000 using the Black-Scholes option pricing model with a market value per share of common stock of $0.0765, an exercise period of two years and a volatility of 175%. The warrants were exercised in December 2007 for cash proceeds of $15,000.

In September 2008, the Company entered into and closed a Securities Purchase Agreement with certain accredited investors in a private offering for shares of common stock and warrants to purchase common stock. The Company issued 4,406,533 shares of common stock, three-year warrants to purchase 1,101,633 shares of common stock at an exercise price of $2.15 per share, and five-year warrants to purchase 1,101,633 shares of common stock at $3.00 per share in return for gross proceeds of approximately $7.5 million in cash. During the third quarter of 2008, net offering proceeds of approximately $6.5 million were recorded as an addition to stockholders’ equity, after deducting offering and related closing costs of the transaction. The Company also issued warrants to the placement agent in connection with services for the private offering. These included three-year warrants to purchase 154,228 shares of common stock at an exercise price of $2.15 per share, and five-year warrants to purchase 154,229 shares of common stock at $3.00 per share.

In October 2008, the Company issued 22,200 shares for services to employees at fair value of $50,000.

Appropriated Retained Earnings

The Company’s PRC subsidiaries are required to make appropriations to reserve funds, comprising the statutory surplus reserve, statutory public welfare fund and discretionary surplus reserve, based on the after-tax net income determined in accordance with the laws and regulations of the PRC. Prior to January 1, 2006 the appropriation to the statutory surplus reserve should be at least 10% of the after tax net income determined in accordance with the laws and regulations of the PRC until the reserve is equal to 50% of the entities’ registered capital. Appropriations to the statutory public welfare fund are at 5% to 10% of the after tax net income determined by the Board of Directors. Effective January 1, 2006, the Company is only required to contribute to one statutory reserve fund at 10% of net income after tax per annum, such contributions not to exceed 50% of the respective companies’ registered capital.

The statutory reserve funds are restricted for use to set off against prior period losses, expansion of production and operation or for the increase in the registered capital of the Company. The statutory public welfare fund is restricted for use in capital expenditures for the collective welfare of employees. These reserves are not transferable to the Company in the form of cash dividends, loans or advances. These reserves are therefore not available for distribution except in liquidation. During 2008 and 2007, the Company appropriated $368,000 and $343,000 to the reserves funds based on its net income in accordance with the laws and regulations of the PRC.

11. STOCK OPTIONS

The Company granted qualified stock options under the Company’s 2000 Incentive Stock Option Plan (the “2000 ISOP”) and 2008 Incentive Stock Option Plan (the “2008 ISOP”). At December 31, 2008, stock options to purchase 660,175 shares of common stock at an exercise price ranging from $0.09 to $2.48 per share were outstanding. The exercise prices were determined by the Board at the time of grant. In each case the exercise price was not less than the fair market value of the common stock as determined by the Board in good faith taking into account such factors as recent issuances of preferred stock with an appropriate discount factored in relative to the common shares. The exercise prices for options issued under the 2000 ISOP following the sale of preferred stock by the Company during November and December of 2007 represent a discount to the issuance price of $0.78 for such preferred stock taking into account the added value of the conditions in the preferred stock (for example, it was redeemable with 10% appreciation). The exercise prices for options issued under the 2008 ISOP represent the closing price of the Company’s common stock on the business day preceding the grant date. The stock options granted become exercisable (“vested”) as to 25% of the original number of shares on the first anniversary of the grant date and as to an additional 6.25% of the original number of shares at the end of each successive three-month period following the first anniversary of the grant date until the fourth anniversary of the grant date. Unless earlier terminated, these stock options granted shall expire ten years after the grant date.

F-14

The fair value of stock options granted was estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions:

Expected	Expected	Dividend	Risk Free	Grant Date
Life	Volatility	Yield	Interest Rate	Fair Value
The 2000 ISOP
5 years	175%	0%	2.5%	$0.09 - $0.19
The 2008 ISOP
1 year	121%	0%	2.5%	$0.47

Expected Volatility: Expected volatility is computed based on the standard deviation of the continuously compounded rate of return of days when the stock price changed over the past five years.

Dividend Yield: The expected dividend yield is zero. The Company has not paid a dividend and does not anticipate paying dividends in the foreseeable future.

Risk Free Rate: Risk-free interest rate of 2.5% was used. The risk-free interest rate was based on U.S. Treasury yields with a remaining term that corresponded to the expected term of the option calculated on the granted date.

Expected Life: Because the Company has no historical share option exercise experience to estimate future exercise patterns, the expected life was determined using the simplified method as these awards meet the definition of "plain-vanilla" options under the rules prescribed by Staff Accounting Bulletin No. 107.

Stock compensation expense was recognized based on awards expected to vest. There was no estimated forfeiture as the Company has a short history of issuing options. SFAS No. 123R requires forfeiture to be estimated at the time of grant and revised in subsequent periods, if necessary, if actual forfeitures differ from those estimates.

The Company granted 252,524 and 424,431 stock options during 2008 and 2007 with a total fair value of approximately $299,000. The Company recognized $50,000 and $6,000 in stock compensation expense for the years ended December 31, 2008 and 2007, respectively. At December 31, 2008, unamortized compensation cost related to stock options was $238,000.

The following is a summary of the stock options activity:

	Number of Options Outstanding			Weighted- Average Exercise Price
Balance at December 31, 2006		150,436		$	0.09
Granted		424,431		$	0.19
Forfeited		(61,711	)		-
Exercised		(10,957	)	$	0.09
Balance at December 31, 2007		502,199		$	0.17
Granted		252,524		$	1.03
Forfeited		(23,382	)		-
Exercised		(71,166	)	$	0.11
Balance at December 31, 2008		660,175		$	0.50

The following is a summary of the status of options outstanding at December 31, 2008:

Outstanding Options			Exercisable Options
Exercise Price	Number	Average Remaining Contractual Life	Average Exercise Price	Number	Weighted Average Exercise Price
$0.09	45,950	6.7 years	$0.09	37,334	$0.09
$0.12	94,086	8.3 years	$0.12	41,163	$0.12
$0.19	267,615	9.0 years	$0.19	66,904	$0.19
$1.02	250,000	9.8 years	$1.02	0	$1.02
$2.48	2,524	10.0 years	$2.48	0	$2.48
Total	660,175			145,401	$0.14

F-15

In 2001, the Company granted a director 53,120 non-qualified stock options with an exercise price of $0.05 per share. These options were exercised in 2007. In addition, in 2005 the Company granted a former director 53,120 non-qualified stock options with an exercise price of $0.10 per share. In 2007, the former director exercised 36,520 options. Previously recognized and accrued stock option expense was credited to additional paid in capital upon exercise of these options.

12. RELATED PARTY TRANSACTIONS

On January 17, 2007, a director purchased a one year 7.69% Note from SinoHub, Inc. in the amount of RMB 1,658,000 (approximately $213,000) which was repayable on demand. This Note was repaid by SinoHub on March 20, 2007. Interest expense paid on this Note for the year ended December 31, 2007 was $3,500.

On March 20, 2007, SinoHub issued 371,842 shares of its common stock to the spouse of a director for agreeing to let SinoHub use the condominium in which she holds 50% ownership (the director owns the remaining 50%) as collateral for a bank loan. The shares were valued at $43,000.

On April 10, 2008, B2B Chips acquired SinoHub Technology (Hong Kong) from two directors of the Company for HKD 10,000 ($1,290), which represented the initial capital contributions in the company. SinoHub Technology never conducted any business and its sole asset at all times was a Hong Kong bank account holding the balance of the capital contributions.

The Company distributed electronic components to and resold electronic products purchased from a company owned jointly by the Chairman and the President of the Company. In addition, the related company provided certain warehousing and logistics services to the Company during the development of its Hong Kong operation. During the year of 2008 and 2007, the Company sold goods totaling approximately $1.5 million and $1.2 million to the related company and purchased goods totaling approximately $3,000,000 and $504,000 from the related company. The Company paid no service fees to the related company in 2008 and paid service fees totaling $197,000 in 2007. During 2008, the Company received rental income of $154,000 for the lease of warehouse space to the related company. At December 31, 2007, the related company owed the Company $1,493,000, which was interest free and repayable on demand. At December 31, 2008, there was no amount outstanding between the Company and the related company.

A PRC property owned by a director and his spouse is pledged to a bank to secure banking facilities for the Company.

13. INCOME TAXES

The Company and its subsidiaries are subject to income taxes on an “entity” basis that is, on income arising in or derived from the tax jurisdiction in which each entity is domiciled. It is management's intention to reinvest all the income earned by the Company’s subsidiaries outside of the US. Accordingly, no US federal income taxes have been provided on earnings of foreign based subsidiaries.

The Company and its wholly owned subsidiary, SinoHub International, Inc. are incorporated in the United States and have incurred operating losses since inception. The Company has operating loss carry forwards (NOLs) for income taxes purposes of approximately $881,000 at December 31, 2008 which may be available to reduce future years’ taxable income. These NOLs will expire, if not utilized, commencing in 2028. Management believes the realization of tax benefits from these NOLs is uncertain due to the Company’s current operating history and continuing losses in the US for tax purposes. Accordingly, a full deferred tax asset valuation allowance has been provided and no deferred tax benefit has been recorded.

The Company’s subsidiaries in Hong Kong are subject to Hong Kong profits tax at a statutory rate of 17.5%. No provision for Hong Kong profits tax was required as these entities incurred losses during 2008 and 2007. There are no tax loss carry forward provisions in Hong Kong.

F-16

The Company’s subsidiaries in China were subject to China income tax at a statutory rate of 25% in 2008 and 33% in 2007. However, these subsidiaries are located in special economic regions and/or qualify as “new or high-technology enterprises” that are allowed special tax reductions until 2012. The Company’s subsidiaries in China was subject to special tax rate was 18% and 15% in 2008 and 2007 respectively.

Income tax expense for 2008 and 2007 is summarized as follows:

	2008		2007

Current	$	2,151,000	$	509,000
Deferred		-		-
	$	2,151,000	$	509,000

The reconciliation of income taxes computed at the statutory income tax rates to total income taxes for the years ended December 31, 2008 and 2007 is as follows:

	2008					2007

Income before income taxes	$	10,634,000		100.0	%	$	4,010,000		100.0	%

China income taxes at statutory rate	$	2,658,500		25.0	%	$	1,323,000		33.0	%
China qualified income tax exemptions		(507,500	)	(5	%)		(815,000	)	(20.3	%)
Income tax expense	$	2,151,000		20.0	%	$	509,000		12.7	%

14. CONCENTRATIONS AND RISKS

During 2008 and 2007, 99% of the Company’s assets were located in China.

During 2008, 13% of revenues were derived from oversea sales.

Major customer and sales to this customer as a percentage of total sales were as follows:

	Customer A		Customer B
For the year ended
December 31, 2008		12%		10%
December 31, 2007		10%	-

At of December 31, 2008 and 2007, accounts receivable to this customer was $5,508,000 and Nil respectively.

Major suppliers and purchases from those suppliers as a percentage of total purchases were as follows:

	Vendor A		Vendor B		Vendor C
For the year ended
December 31, 2008		6%		5%		3%
December 31, 2007		13%		11%		13%

At of December 31, 2008 and 2007, accounts payable from those vendors were Nil.

15. SUBSEQUENT EVENT

On February 19, 2009, the Company entered into a Second Waiver and General Release Agreement (the “Waiver”) with respect to the Registration Rights Agreement (the “Registration Rights Agreement”), dated September 10, 2008, among the Company and the investors identified therein. The Waiver extended until May 12, 2009 the deadline by which the registration statement that was filed by the Company pursuant to the Registration Rights Agreement must become effective before the Company is required to pay to the investors liquidated damages, payable in cash or Common Stock, at the Company’s option, equal to 1% of the aggregate purchase price paid by the investors for the securities purchased in the private placement in connection with which the Registration Rights Agreement was executed, and an additional 1% for each month that the Company does not cause it to be declared effective, with maximum liquidated damages of 10% of the aggregate gross proceeds of the Offering. If the Company does not cause the registration statement to be declared effective by May 12, 2009, the liquidated damages will be calculated as if the deadline for effectiveness were January 9, 2009, the original deadline under the Registration Rights Agreement. A prior Waiver and General Release dated December 30, 2008 had extended the January 9, 2009 deadline to February 20, 2009.

F-17

Jimmy C.H. Cheung & Co

Certified Public Accountants

(A member of Kreston International)

Registered with the Public Company

Accounting Oversight Board

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors of:

SinoHub, Inc.

We have audited the accompanying consolidated balance sheets of SinoHub, Inc. and subsidiaries as of December 31, 2008 and 2007 and the related consolidated statements of operations and comprehensive income, stockholders’ equity and cash flows for the years ended December 31, 2008 and 2007. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of SinoHub, Inc. and subsidiaries as of December 31, 2008 and 2007, and the results of its operations and its cash flows for the years ended December 31, 2008 and 2007, in conformity with accounting principles generally accepted in the United States of America.

/s/ Jimmy C.H. Chung & Co.

JIMMY C.H. CHEUNG & CO

Certified Public Accountants

Hong Kong

Date: February 25, 2009

F-18

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

We estimate that expenses in connection with the distribution described in this registration statement (other than brokerage commissions, discounts or other expenses relating to the sale of the shares by the selling security holders) will be as set forth below. We will pay all of these expenses. The amounts shown below, with the exception of the Securities and Exchange Commission registration fee, are estimates.

SEC registration fee	$	774
Accounting Fees and Expenses		10,000
Legal Fees and Expense		20,000
Printing Expenses		1,000
Miscellaneous		0
		3,226
Total	$	35,000

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

II-1

ITEM 15 . RECENT SALES OF UNREGISTERED SECURITIES

The following securities were issued within the past three years and were not registered under the Securities Act of 1933. Shares issued to SinoHub’s shareholders were not registered under the Securities Act of 1933, as amended (“Securities Act”) in reliance upon the exemption from the registration requirements provided in Section 4(2) of, or the safe harbor from such registration provided by Regulation S, promulgated under the Securities Act.

Issuances of SinoHub International Securities

The following issuances of securities were made by SinoHub International prior to the Merger:

During April 2006, the Company issued 74,369 shares of common stock for services to third parties at fair value of $7,000.

During May 2006, the Company issued 956,166 shares of common stock to third parties for cash of $100,000.

During June 2006, the Company issued 1,062,407 shares of common stock to the spouse of the President in consideration for the forgiveness of $1,000,000 in outstanding debt.

During May 2007, the Company issued 371,842 shares of common stock for services to the spouse of the CEO at fair value of $43,000.

During May 2007, the Company issued 956,166 shares of common stock to the former Chief Financial Officer. The shares were valued at the market price on the date of issuance yielding an aggregate fair value of $109,000.

During November 2007, the Company issued 69,057 shares of common stock for services to third parties at fair value of $7,865.

II-2

On March 20, 2007, a former employee exercised his stock options to purchase 7,813 shares of common stock for $781.

On June 8, 2007, a former employee exercised his stock options to purchase 2,500 shares of common stock for $250.

On November 12, 2007, a warrant to purchase 148,537 shares was exercised for common stock. The warrant was initially issued for services on November 12, 2006 and was exercisable at $0.11 per share of the Company’s common stock. The warrant was determined to have a total market value of $9,000 using the Black-Scholes option pricing model.

On November 19, 2007, a former director exercised his non-qualified stock option to purchase 36,520 shares of common stock for $3,438. The option to purchase 53,120 common shares was initially issued on January 19, 2005. The remaining part of the option to purchase 15,625 common shares expired and was forfeited.

On December 5, 2007, a director exercised his non-qualified stock option to purchase 53,120 of common stock for $2,500. The option was initially issued on June 1, 2001.

On December 28, 2007, a stockholder exercised his warrant to purchase 130,451 shares of common stock for $15,000. The warrant was initially issued for services on January 27, 2007 and was exercisable at $0.11 per share of the Company’s common stock.

During November and December 2007, the Company sold 1,699,852 of Series C Convertible Preferred Stock for $1,330,000. The shares were sold to four accredited investors.

Issuances of Liberty Alliance Securities

The following issuances of securities were made by Liberty Alliance prior to its merger with SinoHub:

In June 2006, Liberty Alliance issued 5,714,286 shares of restricted common stock to Lorikeet, Inc., a company controlled by Steven L. White, its principal stockholder and sole officer and director prior to the merger with SinoHub, for $20,000.

In June 2006, the Company issued 142,858 shares of restricted common stock to a non-affiliate investor for $2,500 and an additional 142,858 shares to another non-affiliate investor for $2,500. In September of 2006, all of these shares were re-purchased by the Company.

In February 2007, the Company issued 142,858 shares of restricted common stock to a non-affiliate investor for $2,500 and an additional 142,858 shares to another non-affiliate investor for $2,500.

All of the shares issued by Liberty Alliance were issued pursuant to an exemption from registration under Section 4(2) of the Securities Act and no commissions were paid relating to any of the securities issued.

Issuances of Company Securities

The following issuances of securities were made by the Company in connection with or subsequent to the Merger:

Pursuant to the Agreement and Plan of Merger, on May 14, 2008, we issued 18,490,000 shares of our common stock to the former stockholders of SinoHub, Inc. (approximately 46 holders). Such securities were not registered under the Securities Act of 1933. The issuance of these shares was exempt from registration, in part pursuant to Regulation S and Regulation D under the Securities Act of 1933 and in part pursuant to Section 4(2) of the Securities Act of 1933. We made this determination based on the representations of the stockholders of SinoHub, Inc. that such stockholders were either (a) "accredited investors" within the meaning of Rule 501 of Regulation D promulgated under the Securities Act, or (b) not a "U.S. person" as that term is defined in Rule 902(k) of Regulation S under the Act, and that such stockholders were acquiring our common stock, for investment purposes for their own respective accounts and not as nominees or agents, and not with a view to the resale or distribution thereof, and that the entities and individuals understood that the shares of our common stock may not be sold or otherwise disposed of without registration under the Securities Act or an applicable exemption therefrom.

Upon the closing of the merger, we also issued 510,000 shares of the Company’s common stock to certain consultants for services rendered in connection with the Merger. The vast majority of these shares were issued to a consultant, JCGlobal Capital Partners LLC, who provided consulting services to help the company engage SEC counsel and investment bankers in the process of the Company’s Chinese operations becoming part of a public entity through a reverse merger and raising a private investment in public equity. In particular, JCGlobal advised SinoHub International directly in consummating a reverse merger involving Liberty Alliance, a NASD over-the-counter bulletin board shell company.

II-3

Between August 6, 2008 and November 19, 2008, we issued an aggregate of 1,900 shares of the Company’s common stock to odd lot holders in order to bring their holdings up to round lots. The holders were all holders of the shares of the Company’s common stock prior to the Merger but who otherwise had no relationship with the Company. The sole consideration for the shares was the execution and delivery of lock-up agreements by these stockholders pursuant to which they agreed to lock up their shares until July 18, 2009. The issuances were completed as a private placement exempt from registration pursuant to Section 4(2) of the Securities Act consistent with the relevant criteria established in SEC v. Ralston Purina Co., 346 U.S. 119 (1953), and its progeny. The shares were issued to a total of ten natural persons who acquired the shares for themselves or as trustees or guardians for other entities or persons.

On September 10, 2008, the Company entered into and closed a Securities Purchase Agreement with certain accredited investors named therein (“PIPE Investors”) in a private offering (the “Offering”) for an aggregate of (i) 4,406,533 shares of common stock, (ii) three-year warrants to purchase an aggregate of 1,101,628 shares of common stock at an exercise price of $2.15 per share and (iii) five-year warrants to purchase an aggregate of 1,101,628 shares of common stock at an exercise price of $3.00 per share, which resulted in gross proceeds to the Company of $7,491,110.

Global Hunter Securities, LLC (“Global Hunter”) acted as placement agent with respect to the Offering and received a cash fee of $524,378 (equal to 7% of the gross proceeds of the Offering) and warrants to purchase an aggregate of 308,457 shares of common Stock (equal to 7% of the number of shares of common stock issued in the Offering), with 154,228 shares at an exercise price of $2.15 per share and 154,229 shares at an exercise price of $3.00 per share. In addition, through December 10, 2009, Global Hunter is entitled to (i) serve as lead underwriter or exclusive placement agent to the Company for any equity financing and (ii) serve as exclusive financial advisor and may receive fees in the event of an extraordinary transaction with certain entities introduced to the Company by Global Hunter.

The warrants issued in the Offering may be exercised, at the option of the holder, by cash payment of the exercise price or by “cashless exercise” (in which case the Company will not receive additional proceeds) if after six months from the date of original issuance a registration statement permitting the PIPE Investors to resell the warrant shares is not then effective or the prospectus is not then available for the resale of the warrant shares. The warrants also provide the holder with anti-dilution price protection.

The common stock and warrants described above were offered and sold solely to “accredited investors” in reliance on the exemption from registration afforded by Rule 506 of Regulation D promulgated under Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”). In connection with the sale of these securities, the Company relied on each of the Investors' written representations that it was an "accredited investor" as defined in Rule 501(a) of the Securities and Exchange Commission. In addition, neither the Company nor anyone acting on its behalf offered or sold these securities by any form of general solicitation or general advertising.

In October 2008, the Company issued 22,200 shares for services to employees at fair value of $50,000 pursuant to the Company’s 2008 Stock Plan in reliance on the exemption from registration afforded by Rule 701 promulgated under Section 4(2) of the Securities Act.

Pursuant to a registration rights agreement, the Company has agreed to file a registration statement covering the resale of the shares of Common Stock issued and issuable upon the exercise of the warrants, to the PIPE Investors no later than October 25, 2008, and to have such registration statement declared effective on or before January 9, 2008. The Company has received an extension of this date to May 12, 2009 from the PIPE Investors. If the Company does not timely cause the registration statement to be declared effective by May 12, 2009, then each PIPE Investor will be entitled to liquidated damages, payable in cash or Common Stock, at the Company’s option, equal to 1% of the aggregate purchase price paid by such Investor for the securities, and an additional 1% for each month that the Company does not cause the registration statement to be declared effective, with such damages determined as if January 8, 2009 remained the deadline for the effectiveness of the registration statement. Notwithstanding the foregoing, in no event shall liquidated damages exceed 10% of the aggregate gross proceeds of the Offering.

Except as expressly set forth above, the individuals and entities to which we issued securities as indicated in this section of the registration statement are unaffiliated with us.

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ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

Exhibit No.	Description

2.1	Agreement and Plan of Merger by and among Liberty Alliance, Inc., a Delaware corporation, SinoHub Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of the Company, SinoHub, Inc., a Delaware corporation and Steven L. White, the principal stockholder of Liberty Alliance, Inc., dated May 12, 2008 (includes registration rights for the holders of shares subject to a lock-up). (1)
3.1	Amendment and Amended and Restated Certificate of Incorporation of SinoHub, Inc. **
3.3	Amended and Restated Bylaws of Liberty Alliance, Inc. (2)
3.3.1	Amendment No. 1 to Amended and Restated Bylaws of Liberty Alliance, Inc.*
4.1	Form of Series A and B Common Stock Warrant. (3)
5.1	Opinion of Seyfarth Shaw, LLP. *****
10.1	Lease dated June 10, 2008 between San On Investments No. 1 Limited and B2B Chips, Limited***
10.2	Lease Agreement by and between Zhou Dan and SinoHub SCM Shanghai, Ltd. dated March 23, 2006. (2)
10.3	Shanghai Wai Gao Qiao Bonded Zone Tenancy Agreement by and between Shanghai Xin Yong Logistics Ltd. and SinoHub Electronics Shanghai, Ltd., dated June 1, 2008. (2)
10.4	Lease Contract dated August 10, 2008 between China Great Wall Computer Shenzhen Co., Ltd. and SinoHub SCM Shenzhen, Ltd.***
10.5	Securities Purchase Agreement dated September 10, 2008, among SinoHub, Inc. and the investors listed on the Schedule of Buyers on Annex A. (3)
10.6	Registration Rights Agreement dated September 10, 2008, among SinoHub, Inc. and the investors signatory thereto. (3)
10.6.1	Waiver and General Release Agreement dated December 30, 2008 among SinoHub, Inc. and the investors signatory thereto.*
10.6.2	Second Waiver and General Release Agreement dated February 19, 2009 among SinoHub, Inc. and the investors signatory thereto.*
10.6.3	Third Waiver Agreement dated March 6, 2009 among SinoHub, Inc. and the investors signatory thereto.*
10.7	Declaration of Trust dated January 30, 2008 between SinoHub Electronics Shenzhen, Ltd., (as “Beneficial Owner”), and Hantao Cui (as the “Trustee”).***
10.8	Form of Contract of Employment. (2)
10.9	Form of Non-Solicitation, Invention Assignment and Non-Disclosure Agreement. (4)
10.10	Trade Financing Loan between Shenzhen Branch, China Construction Bank and SinoHub SCM Shenzhen, Ltd. commencing on August 22, 2008 *
10.11	Short Term Loan Contract between CIB Shenzhen Branch and SinoHub SCM Shenzhen, Ltd. for six months commencing on September 25, 2008.*
10.12	Credit Line Contract between CIB Shenzhen Branch and SinoHub SCM Shenzhen, Ltd. for one year commencing September 25, 2008.*
10.13	Promissory Note Issued by SinoHub, Inc. to Henry T. Cochran, dated January 17, 2007. (2)
10.14	Promissory Note Issued by SinoHub, Inc. to Peter Schech, dated January 27, 2007***
10.15	Promissory Note Issued by SinoHub, Inc. to Peter Schech, dated January 27, 2008***
10.16	Promissory Note Issued by SinoHub, Inc. to Jan Rejbo, dated June 20, 2007***
10.17	Promissory Note Issued by SinoHub, Inc. to Tracey C. Hutchinson, dated January 26, 2007***
10.18	Contract of Employment dated January 1, 2009 between SinoHub Electronics Shenzhen, Ltd and Henry T. Cochran****
10.19	Employment Contract dated January 1, 2009 between B2B Chips, Ltd. and Henry T. Cochran****
10.20	Contract of Employment dated January 1, 2009 between SinoHub Electronics Shenzhen, Ltd and Lei Xia****
10.21	Employment Contract dated January 1, 2009 between B2B Chips, Ltd. and Lei Xia*
10.22	Contract of Employment dated January 1, 2009 between SinoHub Electronics Shenzhen, Ltd and Li De Hai****
10.23	Employment Contract dated January 1, 2009 between B2B Chips, Ltd. and Li De Hai*
10.24	Guaranty Agreement dated June 26, 2007 between SinoHub SCM Shenzhen, Ltd. and Shenzhen Hongfeng Paper Products Co. Limited *
10.25	Form of Lock-Up Agreement between SinoHub, Inc, and certain shareholders of SinoHub, Inc.*
10.26	SinoHub, Inc. 2008 Stock Plan.*
10.27	Contract of Mortgage of Maximum Amount dated August 21, 2008 between CIB Shenzhen Nanxin and Linda Marie Hetue*

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10.28	Contract of Guarantee of Maximum Amount dated August 21, 2008 between CIB Shenzhen Nanxin and Lei Xia. Marie Hetue*
10.29	Contract of Guarantee of Maximum Amount dated August 21, 2008 between n CIB Shenzhen Nanxin and Hantao Cui*
10.30	Equity Transferring Agreement dated January 17, 2008 between SinoHub Electronics Shenzhen Ltd. and SinoHub SCM Shanghai Ltd.
1031	Equity Transferring Agreementdated April 10, 2008 between B2B Chips Limited and SinoHub Technology (Hong Kong) Limited
21.1	List of Subsidiaries.*
23.1	Consent of Independent Registered Public Accounting Firm. *
23.2	Consent of Seyfarth Shaw, LLP (contained in Exhibit 5.1)*****.
24	Power of Attorney (included on the signature page of this registration statement).*.

(1) Incorporated by reference from the Company’s Form 8-K filed with the Securities and Exchange Commission on May 15, 2008.

(2) Incorporated by reference from the Company’s Form 8-K filed with the Securities and Exchange Commission on May 20, 2008.

(3) Incorporated by reference from the Company’s Form 8-K filed with the Securities and Exchange Commission on September 16, 2008.

(4) Incorporated by reference from the Company’s Form 8-K filed with the Securities and Exchange Commission on September 22, 2008.

*Filed herewith.

** Previously filed with the Registration Statement on Form S-1 on October 24, 2008.

*** Previously filed with Amendment No. 1 to the Registration Statement on Form S-1 on December 17, 2008.

**** Previously filed with Amendment No. 2 to the Registration Statement on Form S-1 on January 20, 2009.

*****To be filed by amendment.

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ITEM 17. UNDERTAKINGS

(a) The undersigned registrant hereby undertakes:

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

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

(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

Provided however, that:

Paragraphs (a)(1)(i) and (a)(1)(ii) of this section do not apply if the registration statement is on Form S-8, and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement; and

Paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) of this section do not apply if the registration statement is on Form S-3 or Form F-3 and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.

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

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

(4) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

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

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

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

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

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

( c) [The undersigned registrant hereby undertakes to deliver or cause to be delivered with the prospectus, to each person to whom the prospectus is sent or given, the latest annual report to security holders that is incorporated by reference in the prospectus and furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of 1934; and, where interim financial information required to be presented by Article 3 of Regulation S-X are not set forth in the prospectus, to deliver, or cause to be delivered to each person to whom the prospectus is sent or given, the latest quarterly report that is specifically incorporated by reference in the prospectus to provide such interim financial information.]

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

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, in Shenzhen, the People’s Republic of China, on March 16, 2009.


	SINOHUB, INC.
		By: /s/ Henry T. Cochran
		Henry T. Cochran
		Chief Executive Officer

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Henry T. Cochran as true and lawful attorney-in-fact and agent with full power of substitution and resubstitution and for him/her and in his/her name, place and stead, in any and all capacities to sign any and all amendments (including pre-effective and post-effective amendments) to this Registration Statement, as well as any new registration statement filed to register additional securities pursuant to Rule 462(b) under the Securities Act, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates stated.

Signature	Title	Date

/s/ Henry T. Cochran	Director and Chief Executive Officer	March 16, 2009
Henry T. Cochran	(Principal Executive Officer)

/s/ Li De Hai	Chief Financial Officer	March 16, 2009
Li De Hai	(Principal Financial and Accounting Officer)

/s/ Lei Xia	Director	March 16, 2009
Lei Xia

/s/ Charles T. Kimball	Director	March 16, 2009
Charles T. Kimball

/s/ Will Wang Graylin	Director	March 16, 2009
Will Wang Graylin

/s/Richard L. King	Director	March 16, 2009
Richard L. King

/s/Robert S. Torino	Director	March 16, 2009
Robert S. Torino

/s/ Afshin Yazdian	Director	March 16, 2009
Afshin Yazdian

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EX-3.3.1 3 ex3_31.htm AMENDMENT NO. 1 TO THE AMENDED AND RESTATED BYLAWS ex3_31.htm

EXHIBIT 3.3.1

AMENDMENT NO. 1 TO THE AMENDED AND RESTATED BYLAWS

SINOHUB, INC

(a Delaware Corporation)

This Amendment No. 1 is made to the SinoHub, Inc. Amended and Restated Bylaws (the “Bylaws”) effective February 12, 2009.

Amendment to Reflect Name Change

In the Bylaws, the name “Liberty Alliance, Inc.” is hereby deleted each place it appears and the name “SinoHub, Inc.” is inserted in lieu thereof in each such place.

Amendment to Section 1.1 of the Bylaws

Section 1.1 of the Bylaws is hereby amended and restated to read in its entirety as follows:

“Section 1.1 Principal Office. The principal office for the transaction of the business of the Corporation shall be 6/F, Building 51, Road 5, Qiongyn Blvd., Technology Park, Nanshan District, Shenzhen, People’s Republic of China 518057, or otherwise as set forth in a resolution adopted by the Board.”

Amendment to Section 3.2 of the Bylaws

Section 3.2 of the Bylaws is hereby amended and restated to read in its entirety as follows:

“Section 3.2 Number and Term of Office. The number of directors which shall constitute the entire Board shall be determined by resolution of the Board. Each director shall hold office until the next annual meeting of the stockholders of the Corporation or until his or her successor shall have been elected and qualified, or until his or her earlier death, resignation or removal. Directors need not be stockholders.”

Amendment to Section 3.6 of the Bylaws

Section 3.6 of the Bylaws is hereby amended and restated to read in its entirety as follows:

“Section 3.6 Vacancies. Except as otherwise provided in the Certificate of Incorporation, any vacancy in the Board, whether because of death, resignation, disqualification, an increase in the number of directors, removal, or any other cause, may be filled by vote of the majority of the remaining directors, although less than a quorum. Directors chosen under this section shall hold office until the next annual meeting of the stockholders of the Corporation or until their successors shall have been elected and qualified, or until their earlier death, resignation or removal. No reduction of the authorized number of directors shall have the effect of removing any director prior to the expiration of such director’s term of office.”

As amended herein, the Bylaws shall remain in full force and effect.

EX-10.6.1 4 ex10_61.htm WAIVER AND GENERAL RELEASE AGREEMENT ex10_61.htm

EXHIBIT 10.6.1

WAIVER AND GENERAL RELEASE AGREEMENT

This Waiver and General Release Agreement ("Agreement") is entered into this 30th day of December, 2008, by and among SinoHub, Inc., a Delaware corporation (the "Company"), and the investors signatory hereto (each an "Investor" and collectively, the "Investors").

RECITALS

1. The Company and the Investors entered into that certain Registration Rights Agreement (the "Registration Agreement"), dated September 10, 2008 (the “Closing Date”), pursuant to which the Company agreed to cause a Registration Statement (as defined therein) covering resale of the Investors’ registrable securities to become effective within 120 days of the Closing Date.

2. The Company filed the Registration Statement within the time frame set forth in the Registration Agreement and is diligently working with the Securities and Exchange Commission to cause the Registration Statement to be declared effective. However, in the spirit of compromise and to avoid any additional expense that may be caused by claims arising out of any delay in the effective date of the registration statement, the parties have agreed to a 30-day extension of the effective date.

NOW, THEREFORE, the parties, in consideration of the mutual promises contained in this Agreement, agree as follows:

AGREEMENT

1. Waiver. Each Investor hereby waives all rights under the Registration Agreement that relate in any way to the Company’s failure to file the Registration Statement and have it declared effective in a timely manner, including but not limited to all rights to receive cash penalties or additional shares pursuant to Section 7(g) of the Registration Agreement and all rights under Section 2(a) of the Registration Agreement.

2. General Release. Each Investor, on behalf of their respective predecessors, successors, assignors and assignees, past and present, hereby fully releases and discharges the Company, its directors, officers, agents, representatives, attorneys and employees, past and present, and its predecessors, successors, assignors and assignees from all claims, actions and causes of action, of any kind or nature whatsoever, in law, equity, or otherwise, whether fixed or contingent, whether now known or unknown, whether suspected or unsuspected, which now exist, which existed before the date of this Agreement, or which may exist after the date of this Agreement, relating in any way to the provisions of the Registration Agreement which are referenced in Section 1 above.

3. The Company agrees to continue to work toward getting the Registration Statement effective. If the Registration Statement is not effective by February 20, 2009, the rights of the Investors waived in Section 1 of this Agreement will automatically be reinstated.

4. With respect to this Agreement, the Investors waive and relinquish, to the fullest extent that the law permits, the provisions, rights, and benefits of California Civil Code (S) 1542 and other statutes or common law principles of similar effect. Investors acknowledge that they have been advised of the provisions of California Civil Code (S) 1542, which provides as follows:

A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor.

5. The release set forth above does not release any claims for any breach of this Agreement or any claims that do not specifically pertain to the subjects of this Agreement.

6. This Agreement sets forth the entire agreement between the parties relating to the subject matter of this Agreement. This Agreement supersedes any and all prior or contemporaneous agreements or understandings between the parties. The parties may execute this Agreement in one or more counterparts, each of which constitutes an original, and all of which constitute one and the same Agreement.

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the above date.

	SINOHUB, INC.

	By:	/s/ Henry T. Cochran
		Name: Henry T. Cochran
		Title: Chief Executive Officer

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGES OF INVESTORS TO FOLLOW]

- 2 - -

IN WITNESS WHEREOF, the parties have executed this Agreement as of the above date.

Renaissance U.S. Growth Investment Trust PLC

By:

/s/Russell Cleveland _______________

	Name:	Russell Cleveland
	Title:	President of RENN Capital Group Inc.

Investment Advisor to

Renaissance U.S. Growth Investment Trust PLC

Global Special Opportunities Trust PLC

By:

/s/Russell Cleveland _______________

	Name:	Russell Cleveland
	Title:	President of RENN Capital Group Inc.

Investment Advisor to

Global Special Opportunities Trust PLC

Premier RENN Entrepreneurial Fund Limited

By:

/s/Russell Cleveland _______________

	Name:	Russell Cleveland
	Title:	President of RENN Capital Group Inc.

Investment Advisor to

Premier RENN Entrepreneurial Fund Limited

- 3 - -

IN WITNESS WHEREOF, the parties have executed this Agreement as of the above date.

NAME OF INVESTING ENTITY

Norman Zada


	By:	/s/ Norman Zada

Name: Norman Zada

Title:

- 4 - -

IN WITNESS WHEREOF, the parties have executed this Agreement as of the above date.

NAME OF INVESTING ENTITY

Ultima Partners, L.P.

EX-10.6.2 5 ex10_62.htm SECOND WAIVER AND GENERAL RELEASE AGREEMENT ex10_62.htm

EXHIBIT 10.6.2

SECOND WAIVER AND GENERAL RELEASE AGREEMENT

This Second Waiver and General Release Agreement ("Agreement") is entered into this 19th day of February, 2009, by and among SinoHub, Inc., a Delaware corporation (the "Company"), and the investors signatory hereto (each an "Investor" and collectively, the "Investors").

RECITALS

A. The Company and the Investors entered into that certain Registration Rights Agreement (the "Registration Agreement"), dated September 10, 2008 (the “Closing Date”), pursuant to which the Company agreed to cause a Registration Statement (as defined therein) covering resale of the Registrable Securities (as defined therein) to become effective within 120 days of the Closing Date.

B. The Company filed the Registration Statement within the time frame set forth in the Registration Agreement and is diligently working with the Securities and Exchange Commission to cause the Registration Statement to be declared effective.

C. On December 30, 2008, the Company and holders of a majority of the Registrable Securities entered into a Waiver and General Release Agreement pursuant to which such holders waived, for purposes of sections 2(a) and 7(g), the failure of the Company to cause the Registration Statement to become effective until February 20, 2009.

D. The Company and the undersigned Investors now wish to further extend the Effective Date until May 12, 2009 subject to the terms set forth herein.

NOW, THEREFORE, the parties, in consideration of the mutual promises contained in this Agreement, agree as follows:

AGREEMENT

2. General Release. Each Investor, on behalf of such Investor and such Investor’s predecessors, successors, assignors and assignees, past and present, hereby fully releases and discharges the Company, its directors, officers, agents, representatives, attorneys and employees, past and present, and its predecessors, successors, assignors and assignees from all claims, actions and causes of action, of any kind or nature whatsoever, in law, equity, or otherwise, whether fixed or contingent, whether now known or unknown, whether suspected or unsuspected, which now exist, which existed before the date of this Agreement, or which may exist after the date of this Agreement, relating in any way to the provisions of the Registration Agreement which are referenced in Section 1 above.

3. The Company agrees to continue to work toward getting the Registration Statement effective. If the Registration Statement is not effective by May 12, 2009, the rights of the holders of the Registrable Securities waived in Section 1 of this Agreement will automatically be reinstated.

5. The release set forth above does not release any claims for any breach of this Agreement or any claims that do not specifically pertain to the subjects of this Agreement.

6. This Agreement sets forth the entire agreement between the parties relating to the subject matter of this Agreement. This Agreement supersedes any and all prior or contemporaneous agreements or understandings between the parties relating to the subject matter of this Agreement. The parties may execute this Agreement in one or more counterparts, each of which constitutes an original, and all of which constitute one and the same Agreement. This Agreement shall take effect when signed by Investors who are the holders of at least a majority of the Registrable Securities under the Registration Agreement.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGES OF COMPANY AND INVESTORS TO FOLLOW]

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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the above date.

SINOHUB, INC.


By:	/s/ Henry T. Cochran
	Name:	Henry T. Cochran
	Title:	Chief Executive Officer

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGES OF INVESTORS TO FOLLOW]

- 3 - -

IN WITNESS WHEREOF, the parties have executed this Agreement as of the above date.

Renaissance U.S. Growth Investment Trust PLC

By:	/s/ Russell Cleveland
	Name:	Russell Cleveland
	Title:	President of RENN Capital Group Inc.
		Investment Advisor to Renaissance U.S. Growth Investment Trust PLC

- 4 - -

IN WITNESS WHEREOF, the parties have executed this Agreement as of the above date.

Global Special Opportunities Trust PLC

By:	/s/ Russell Cleveland
	Name:	Russell Cleveland
	Title:	President of RENN Capital Group Inc.
		Investment Advisor to Global Special Opportunities Trust PLC

- 5 - -

IN WITNESS WHEREOF, the parties have executed this Agreement as of the above date.

Premier RENN Entrepreneurial Fund Limited

By:	/s/ Russell Cleveland
	Name:	Russell Cleveland
	Title:	President of RENN Capital Group Inc
		Investment Advisor to Premier RENN Entrepreneurial Fund Limited

- 6 - -

IN WITNESS WHEREOF, the parties have executed this Agreement as of the above date.

NAME OF INVESTING ENTITY

The USX China Fund

By:	/s/ Stephen L. Parr
	Name:	Stephen L. Parr
	Title:	President

- 7 - -

IN WITNESS WHEREOF, the parties have executed this Agreement as of the above date.

	NAME OF INVESTING ENTITY

	Norman Zada

	By:	/s/ Norman Zada
		Name:
		Title:

- 8 - -

IN WITNESS WHEREOF, the parties have executed this Agreement as of the above date.

NAME OF INVESTING ENTITY

Ultima Partners, L.P.

By:	/s/ Norman Zada
	Name:
	Title:	President

-9-

EX-10.6.3 6 ex10_63.htm THIRD WAIVER AGREEMENT ex10_63.htm

EXHIBIT 10.6.3

THIRD WAIVER AGREEMENT

This Third Waiver Agreement ("Agreement") is entered into this 6th day of March, 2009, by and among SinoHub, Inc., a Delaware corporation (the "Company"), and the investors signatory hereto (each an "Investor" and collectively, the "Investors").

RECITALS

D. On February 19, 2009, the Company and holders of a majority of the Registrable Securities entered into a Second Waiver and General Release Agreement pursuant to which such holders waived, for purposes of sections 2(a) and 7(g), the failure of the Company to cause the Registration Statement to become effective until February 20, 2009.

E. The Company and the undersigned Investors now wish to provide for inclusion of the shares held by certain other stockholders of the Company in the Registration Statement subject to the terms set forth herein.

F The Investors are third party beneficiaries of a certain Lock-Up Agreement dated September 10, 2008 issued by Henry T. Cochran (“Cochran”) to Global Hunter Securities, LLC (the “Lock-Up Agreement”).

NOW, THEREFORE, the parties, in consideration of the mutual promises contained in this Agreement, agree as follows:

AGREEMENT

1. Waiver. Each Investor hereby waives all rights under the Registration Agreement that relate in any way to the Company’s inclusion in the Registration Statement of the shares of common stock of the Company held by the persons listed on Schedule 1 attached hereto and incorporated by reference herein, or their subsequent transferees prior to the effective date of the Registration Statement, in the numbers set forth next to their respective names on Schedule 1, including but not limited to all rights under Section 7(c) of the Registration Agreement. Each Investor further consents to the inclusion in the Registration Statement by Cochran of the 637,445 shares of common stock set forth on Schedule 1 and the sale by Cochran of a maximum of 100,000 shares of common stock included in the Registration Statement stock, provided, however, that: (i) such consent shall not otherwise waive the restrictions on transfer of Cochran’s shares set forth in the Lock-Up Agreement and (ii) the aggregate number of shares included in the Registration Statement sold by Cochran combined with any sales of shares of common stock of the Company made by Cochran pursuant to Rule 144 under the Securities Act of 1933 shall not exceed 100,000.

2. This Agreement sets forth the entire agreement between the parties relating to the subject matter of this Agreement. This Agreement supersedes any and all prior or contemporaneous agreements or understandings between the parties relating to the subject matter of this Agreement. The parties may execute this Agreement in one or more counterparts, each of which constitutes an original, and all of which constitute one and the same Agreement. This Agreement shall take effect when signed by Investors who are the holders of at least a majority of the Registrable Securities under the Registration Agreement. at which point, as provided in the Registration Rights Agreement and the Lock-Up Agreement, this Agreement will be binding on all Investors.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGES OF COMPANY AND INVESTORS TO FOLLOW]

- 2 - -

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the above date.

	SINOHUB, INC.


	By:	/s/ Henry T. Cochran
		Name: Henry T. Cochran
		Title: Chief Executive Officer

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGES OF INVESTORS TO FOLLOW]

- 3 - -

IN WITNESS WHEREOF, the parties have executed this Agreement as of the above date.

Renaissance U.S. Growth Investment Trust PLC


By:	/s/ Russell Cleveland
	Name:	Russell Cleveland
	Title:	President of RENN Capital Group Inc.
		Investment Advisor to
		Renaissance U.S. Growth Investment Trust PLC



Global Special Opportunities Trust PLC


By:	/s/Russell Cleveland
	Name:	Russell Cleveland
	Title:	President of RENN Capital Group Inc.
		Investment Advisor to
		Global Special Opportunities Trust PLC



Premier RENN Entrepreneurial Fund Limited


By:	/s/Russell Cleveland
	Name:	Russell Cleveland
	Title:	President of RENN Capital Group Inc.
		Investment Advisor to
		Premier RENN Entrepreneurial Fund Limited

- 4 - -

IN WITNESS WHEREOF, the parties have executed this Agreement as of the above date.

	NAME OF INVESTING ENTITY

	Norman Zada

	By:	/s/ Norman Zada
		Name: Norman Zada
		Title:

- 5 - -

IN WITNESS WHEREOF, the parties have executed this Agreement as of the above date.

	NAME OF INVESTING ENTITY

	Ultima Partners, L.P.

	By:	/s/ Norman Zada
		Name: Norman Zada
		Title: President

- 6 - -

Schedule 1

Lorikeet, Inc.			196,093
John C. Leo			145,001
Jeffrey A. Grossman			200,000
Daniel Carlson			70,000
John Tammaro			10,000
Grace King			25,000
Beilei Dong			150,000
Jan C. G. Rejbo			3,435,117
Zan Wang			849,926
Henry T. Cochran			637,445
Peter H. W. F. Schech			241,602
Helmut Lenkat			6,000
Michael Niemeyer			2,000
Hikka Wildt			5,000
Gerda Fritsche			4,000
Bianca Jaschinski			5,000
Bernd Schech			2,000
Ronald J. Hollmeier			227,623
Manfred J. Pfeifer			106,241
Lynn Hoopes			91,100
Donald G. Thomas			53,121
Ronald Cochrane			13,280
Xian Qiu Li			1,041,160
Sau Chun Kwong			451,524
Hui Ming Wu			106,241
Yi Zhang			31,873
Hai Feng Tang			21,249
Guo Qin Shi			21,248

EX-10.10 7 ex10_10.htm CONTRACT ex10_10.htm

EXHIBIT 10.10

Contract No. Borrow 2008 Trade 614001R

Party A：SinoHub SCM Shenzhen, Ltd.

Address：6/F, No. 5 Qiongyu Road, Central Area, Technology Park, Nanshan District, Shenzhen, China

The legal representative：Christina Cui Postcode：518057

Phone：86-755-26612106 Fax：86-755-26612060

Party B：Shenzhen Branch, China Construction Bank

Address：East Bldg, Financial center, Hongling Road, Luohu District, Shenzhen

The legal representative：Tian Hui Yu Postcode：518010

Phone：0755-82389079 Fax：0755-82389543

Party A applied for a trade financing loan (“loan”) from Party B, and Party A met the conditions required by Party B, Party B agreed to provide a trade financing loan for Party A. To make clear the rights and obligations of both parties, Party A and Party B agreed on the following terms and conditions in accordance with relevant laws and regulations:

1	Trade Financing Loan

Party B provides Party A with a trade financing loan under certain conditions. There are no restrictions on application time and amount (unless otherwise agreed) during the term of the trade financing loan, as long as the applied for amount is within the total amount of the loan.

2	Trade Financing Loan Type and Amount

Party B agreed to provide Party A with a maximum trade financing loan of RMB 22million, which includes the following items:

2.1	Party A may issue a Sight L/C (Party B has the goods control) of RMB 22million

2.2	Party A may issue a Sight L/C (Party B does not have the goods control) of RMB 22million

2.3	Party A may issue a Usance L/C (Within 90 days) of RMB 22million

2.4	L/C T/R loan may be RMB 22million

3	Term of the Trade Financing Loan

3.1	The term of the trade financing loan starts on August 22, 2008, and ends on August 21, 2009.

3.2	When the term ends, the loan terminates automatically, and the unused loan will expire.

3.3

Party A shall repay all outstanding amounts on the loan during the term of this contract, whether or not the term ends. Party B shall fulfill the approval procedures for applications that are submitted during the term in accordance with the contract, attachments and other relevant legal documents. The ending of the term does not affect the claims and debts.

EXHIBIT 10.10

4	Interest and Fees

4.1

The starting date, due date, amount, interest rate, interest-bearing manner, interest settlement, types of fees, fee rates, the calculation method of fees, and fee payments of the trade financing loan under this contract shall be in compliance with legal documents. If the two parties cannot reach an agreement on above items, Party B has the right to reject the application for the trade financing loan.

LIBOR refers to the interbank rates published by the British Bankers' Association on 11AM (London time), 2 working days before the financing day or the rates adjustment day.

HIBOR refers to the interbank rates published by the Hong Kong Association of Banks on 11AM (Hong Kong time), 2 working days before the financing day or the rates adjustment day.

4.2	Fees that Party A shall pay Party B include:

4.2.1

Actual cost paid by Party B for processing each financing under the loan.

4.2.2

Fees paid by Party B to recourse letters of credit, bills, guaranteed money under the loan.

4.2.3

Other fees agreed by both parties.

5	Use of the Trade Financing Loan

5.1	Within the term and amount of the loan, Party A may apply for financing by written application successively, Party B shall provide trade financing loans to Party A successively after approval.

5.2	Party B is obligated to provide trade financing loan to Party A if all of the following conditions are met:

5.2.1

Party A finished the approval process, registration, delivery, insurance and other legal procedures in accordance with the provisions and regulations of relevant laws.

5.2.2

The guarantee required by Party B has come into force.

5.2.3

Party A does not violate any of the provisions in this contract.

5.2.4

Party A has paid off management fees of trade financing loans in compliance with this contract.

5.2.5

Party A has provided all documents required by Party B.

5.2.6

Party A has gotten the approval from Party B on the trade financing loan application.

5.3

During the term of the trade financing loan, the sum of the amounts of the loans outstanding and the amount of the loan being applied for shall be within the total amount of the loan. For each financing project under the loan, the sum of the amounts used by all projects and the amount for the new project shall be within the total amount of that financing project.

6	Legal documents

6.1

Party A shall sign the following contracts with Party B when applying for the trade financing loan; those documents are integral parts of the contract and they are binding on both parties. Both parties shall chop on those documents, and neither party shall challenge the legal validity for the reason that there are no signatures on those documents.

EXHIBIT 10.10

6.1.1

Special agreements on the trade financing loan

Attachment #1: Special agreement on the Issue of Letter of Credit

Attachment #2: Special agreement on Trust Receipt

Attachment #3: Special agreement on Delivery Against Bank Guarantee

Attachment #4: Special agreement on Packing Credit

Attachment #5: Special agreement on Outward Documentary

Attachment #6: Special agreement on Export Negotiation

Attachment #7: Special agreement on Export Collection Loan

Attachment #8: Special agreement on Usance Bill Discount

6.2	When applying for the trade financing loan, Party A shall submit the following applications: (Approved Applications are integral parts to this contract and attachments, and they are binding on both parties.)

6.2.1

Applications for issuing L/C

6.2.2

Applications for Trust Receipt Loan

6.2.3

Applications for Delivery Against Bank Guarantee

6.2.4

Applications for Packing Credit

6.2.5

Applications for Outward Documentary

6.2.6

Applications for Export Negotiation

6.2.7

Applications for Export Collection Loan

6.2.8

Applications for Usance Bill Discount

6.3	When Party A applies for a Usance Credit, a Sight Credit (under which Party B has no goods control), a Delivery Against Bank Guarantee or a Trust Receipt loan, Party A shall also submit a Trust Receipt.

7	Rights and Obligations

7.1	Party A has the right to request Party B not to disclose any trade secrets on corporate information or business operations, unless the disclosure is required by rules and regulations，or otherwise agreed by the two parties.

7.2

Party A shall provide statistical reports, accounting statements, business operation information under the requirement of Party B, and Party A shall guarantee the authenticity, integrity and effectiveness for what he provided. If Party A is a group company, Party A shall provide a timely report on transactions whose amount is above 10% of the net assets. The report shall include: (1) relationships between the transaction parties; (2) transaction items and the nature of the transaction; (3) transaction amount and corresponding proportion; (4) pricing policies (including transactions which are not money related or are just a token payment).

7.3	Party A shall actively cooperate with Party B to inspect and supervise the business operation, financial activities, and the use of trade financing loan under this contract.

7.4	Party B has the right to adjust or terminate the trade financing loan when Party B notices that operational changes have occurred that will affect the business operations of Party A.

7.5	Party A shall open a RMB or foreign currency account at China Construction Bank, and shall authorize Party B to process export settlement, financing business for import and export, and other bank operations.

EXHIBIT 10.10

7.6	Party A shall use the trade financing loan for the purpose agreed by both parties.

7.7	Party A shall pay off debts within the time agreed by both parties.

7.8

Party A shall take the risk on exchange rate. When the total amount of the trade financing loan used may be or has been greater than the agreed amount due to the risk of exchange rate, Party A shall provide recognized guarantee after receiving a notice from Party B. When the total used trade financing loan may be or has been greater than the agreed amount due to the change of exchange rate, Party B has the right to terminate the trade financing loan.

7.9	Party A shall not surreptitiously withdraw funds, transfer capital or use associated transactions to evade the debt to Party B. Party A shall not use false contracts, false notes receivable, false account receivable to discount or pledge to the bank, taking bank funds or credit.

7.10	Party A shall immediately inform Party B by written notice when there are industrial and commercial registration changes on corporate name, legal representative (person in charge), address, business scope, registered capital or the corporate constitution.

7.11	Party A shall guarantee that Party A shall not sign any contracts, which are detrimental to the rights and interests of Party B with a third party.

7.12	During the contract until all outstanding debt has been repaid, without the written consent of Party B, Party A shall not provide a guarantee for any third party.

7.13	Party A shall take liability for any loss of Party B caused by the violation of this contract by Party A, or by a third party,.

8	Liabilities and Remedial Measures

8.1	Breach of Contract and Liabilities by Party B

8.1.1

If Party B violates this contract, attachments, or approved applications, Party A may require Party B to fulfill its obligations according to the contract;

8.1.2

If Party B charges Party A any interest or fee, which is prohibited according to laws and regulations, Party A has the right to request a refund from Party B.

8.2	Breach of Contract by Party A shall mean:

8.2.1

Party A violates this contract, attachments, or any approved application, or any statutory duty;

8.2.2

Party A makes it clear that Party A shall not fulfill this contract, attachments, or any obligations under approved applications.

8.3	Situations That Are Detrimental to the rights of Party B

8.3.1

Situations that are detrimental to the rights of Party B include: contracting, takeover, leasing, joint-stock reforming, registered capital reduction, investing, affiliation, merging, acquisition, restructuring, separation, equity participation, business rectification, applying for dissolution, applying for bankruptcy, changing of the controlling shareholder, significant changes to assets, shutting down of production or business, taking heavy fines, suspension of business registration, revocation of business license, involvement in major lawsuits, having serious difficulties in production and operation, financial deterioration, the legal representative or the primary responsible person can not perform their duties.

8.3.2

Situations that are detrimental to the rights of Party B include: Party A does not pay off other mature debts (including debts to other branches of China Construction Bank or a third-party), or transfers property at a low price, or abates a debt, or delays in exercising other rights, or offers a guarantee for a third-party.

EXHIBIT 10.10

8.3.3

Party A abuses the independent status of its legal representative, or limited liability for shareholders to avoid debts, which are detrimental to the rights of Party B.

8.3.4

Party A does not meet any of the prerequisites stipulated in this contract, attachments, or other agreements under trade financing loan.

8.3.5

Any of the following situations related to the guarantor shall be considered as detrimental to the rights of Party B:

8.3.5.1

Violates any provisions under the guarantee contract, or makes untrue, false, or incomplete representations and warranties.

8.3.5.2

The competency of the guarantor is negatively affected by the following situations: contracting, takeover, leasing, joint-stock reforming, registered capital reduction, investing, affiliation, merging, acquisition, restructuring, separation, equity participation, business rectification, applying for dissolution, applying for bankruptcy, changing of the controlling shareholder, significant changes to assets, shutting down of production or business, taking heavy fines, suspension of business registration, revoking the license, involving in major lawsuits, having serious difficulties in production and operation, financial deterioration, the legal representative or the primary responsibility can not perform their duties.

8.3.5.3

Other circumstances that may cause the loss or potential loss of the guarantee ability.

8.3.6

Any of the following situations relates to the mortgage or pledge shall be considered as detrimental to the rights of Party B:

8.3.6.1

Value of mortgage or pledge decreases because of national government collection, confiscation, expropriation, free-charge recover, demolition, changes in market conditions or any other reason;

8.3.6.2

Mortgage or pledge is seized, detained, frozen, deducted, confined, sold at auction, supervised by an administration, or under ownership dispute;

8.3.6.3

The mortgagor of pledgor violates any provisions under the mortgage or pledge contract, or makes untrue, false, incomplete representations and warranties.

8.3.6.4

Other circumstances that may be detrimental to the mortgage or pledge right of Party B.

8.3.7

Any of the following situations shall be considered as detrimental to the rights of Party B: guarantee is not established, or does not come into effect, or is revoked, or is relieved, or the guarantor violates the contract or makes it clear he will not to fulfill the guarantee responsibilities, or the guarantor loses some or all of the guarantee capabilities, or the value of the collateral is reduced or other circumstances.

8.4	Remedial Measures

Party B has the right to exercise one or more of the following measures when the circumstances of above Chapter 8.2 or 8.3 happen:

8.4.1

Party B shall adjust or terminate the trade financing loan or a single financing under the trade financing loan.

8.4.2

Party B shall terminate all the contracts and attachments, and request an immediate pay off on mature or undue principal, interest, and fees.

8.4.3

Party B shall charge defaut interest and compound interest.

8.4.4

Party B shall exercise the guarantee right.

EXHIBIT 10.10

8.4.5

Other remedial measures, include but are not limit to:

8.4.5.1

Recover money from the bank account of Party A at China Construction Bank, without advance notice to Party A;

8.4.5.2

Require Party A to provide a new recognized guarantee for the contract and attachments.

8.4.5.3

Terminate the contract and attachments.

8.4.5.4

Other remedial measures stipulated in attachments.

9	Miscellaneous clause

9.1	Fees payment

Fees under the contract such as retaining fee, insurance, evaluation fee, registration fee, custody fee, identification fee, and notary fee shall be paid by Party A, except as otherwise agreed.

Fees charged on Party B for carrying out the rights as the creditor (including but not limited to: legal expenses, arbitration fees, property preservation fees, travel expenses, implementation costs, evaluation fees, auction fees, notary fees, delivery fees, advertising costs, retaining fees) shall be paid by Party A.

9.2	The Use of Information

Party A authorizes Party B to check the credit status of Party A from the credit database, which is created under the permission of the People's Bank of China and the credit department. And Party A authorizes Party B to submit credit status of Party A to the database. In addition, Party A authorizes Party B to reasonably use and disclose information of Party A for business use.

9.3	Collection Notice

If Party A defaults on the outstanding loan principal and interest, or breaches this contract, Party B has the right to inform relevant departments or units, and carry out collection notices through public media.

9.4	Evidential Effects of Records of Party B

Unless there is reliable evidence to the contrary, all records of Party B, which include records of principal, interest, fees, and receipts of repayment, withdrawals, interest payments, and other collection notices and warranties, shall determine the debtor creditor relationship. Party A shall not challenge the legal validity for the reason that those records are unilaterally produced or retained by Party B.

9.5	Reservation of Right

Rights of Party B under this contract shall not exclude any other right in accordance with laws and regulations and other contracts. Any act of tolerance, grace period, concessions or delay of the exercise of the provisions of this contract following Party A’s violation can not be considered that Party B gives up its rights and interests under this contract, nor that Party B permits or approves of such violation. Moreover, there shall be no restrictions to prevent or impede Party B from exercising other rights, and any act of tolerance, grace period, concessions or delay of the exercise of the provisions of this contract does not obligate Party B to future acts of this kind toward Party A.

EXHIBIT 10.10

9.6	If there is other debt in addition to the debt under this contract, Party B has the right to recover money from the bank account of Party A in China Construction Bank to pay any of the mature debt. Party A agrees not to raise any objections.

9.7	Party A shall inform Party B by written notice of address or contact information changes, any loss caused by deferred notice shall be taken by Party A.

9.8	Charge of Accounts Receivable

9.8.1

For all accounts receivable under this contract, Party B has the right to recover money from the bank account of Party A in China Construction Bank, without advance notice to Party A. When the foreign exchange settlement and foreign exchange trading procedures are required, Party A shall cooperate with Party B, and Party A shall take the exchange rate risk.

9.9	Dispute settlement methods

During the term of the contract, all controversy and dispute shall be dealt with through negotiation. If the two parties are unable to reach an agreement, either Party can institute legal proceedings in the People’s Court at the place of Party B.

In the litigation or arbitration, terms or conditions that are not controversial shall continue to be fulfilled.

9.10	Effective conditions of the contract

This contract shall enter into force after the legal representative (primary person responsible) or authorized person of both parties sign and chop on the contract.

9.11	This Agreement will be executed in quadruplication.

9.12	Other issues agreed:

9.12.1

Deposit for each L/C shall be 30% of the issued amount.

9.12.2

The credit shall be granted only when Party A purchases electronic components for: Fen Lang Technology Shanghai Ltd., Heli Runxin Technology Beijing Co., Ltd., Xinjunlong Technology Beijing Co., Ltd., Hangzhou Jinling Technology Ltd., and beneficiaries of the letter of credit shall be world-renowned electronic component suppliers.

9.13	All the legal documents under this contract (including but are not limited to: attachments, applications, agreements, documents, warranties or the like) are an integral part of this contract to specify rights and liabilities of both parties.

10	Bank In Charge

Party B authorizes Cheng Dong Branch of CCB as the bank in charge. After the entry into force of this contract, Cheng Dong Branch has the right to perform the contract (in whole or in part), debt collection, litigation or arbitration, implementation, and chop on related materials or documents.

11	Acknowledgements

11.1	Party A is well aware of the business line and authorization of Party B.

11.2	Party A has read through this contract. Party B has made explanations on corresponding provisions. Party A is well aware of meanings of the contract, and the legal consequences.

EXHIBIT 10.10

11.3	Party A signs and performs it obligations under this contract in line with laws, regulations, and corporate constitutions, and Party A gets the authorization or approval from the corporate authority or state authority.

Party A (Corporate Chop): SinoHub SCM Shenzhen, Ltd.

Legal representative or authorized agent (signature): /s/Li Dehai

August 22, 2008

Party B (Corporate Chop): Shenzhen Branch, China Construction Bank

Legal representative or authorized agent (signature): /s/Zhu Jiusheng

August 22, 2008

EX-10.11 8 ex10_11.htm SHORT-TERM LOAN CONTRACT ex10_11.htm

EXHIBIT 10.11

Short-term Loan Contract

Contract NO. 2008-0012, Nanxin Branch, CIB Shenzhen

Lender: CIB Shenzhen

Postcode: 518052

Phone# 26077176 Fax# 26077085

Borrower: SinoHub SCM Shenzhen, Ltd.

Postcode: 518054

Phone# 26012478 Fax# 26012225

This contract was signed at CIB Shenzhen Branch, CIB Building, Futian district, Shenzhen.

The Borrower applied for a short-term loan from The Lender for business use, The Lender agreed to provide a loan to the Borrower. The Lender and the Borrower reached an agreement on the following Terms and Conditions:

I.	General Contract

This Contract is a sub-contract of General Credit Line Contract, NO. 2008-0004, Nanxin Branch, CIB Shenzhen, which provides RMB30,000,000 credit line to the Borrower. The credit line starts on September 25, 2008 and ends on September 25, 2009.

II.	Loan amount

The Lender agreed to provide a loan of RMB5, 000,000

III.	The use of Loan

This loan shall be used for customs duty.

IV.	Loan Duration

This loan duration will be 6 months, which starts on September 25, 2008 and ends on March 25, 2009.

V.	Loan interest

Interest for this loan is 6.831% per year. This interest is fixed regardless of the national bank interest change.

VI.	Interest payment

Interest shall be paid on the 20th of each month, the Borrower shall pay interest on a monthly basis, and the Borrower shall pay off the interest before the due date of the loan.

VII.	Defaut interest and compound interest

For amounts overdue on the loan and if the loan is used for purposes not stipulated in this contract, the Lender has the right to charge defaut interest on the overdue amount or the amount used for other purposes as per the stipulated interest. For overdue interest, the Lender has the right to charge compound interest.

2	For overdue loan, defaut interest shall be charged as follows:

2.1	The Lender shall charge defaut interest and compound interest for overdue period, the defaut interest rate is a 50% increase on the fixed loan interest.

3	For loan used for other purposes not stipulated in this contract, defaut interest shall be charged as follows:

3.1	The Lender shall charge default interest and compound interest for the period the amount was used, the default interest rate is a 100% increase on the fixed loan interest.

4	The charge of compound interest shall be in complying with the terms and conditions of this contract.

VIII.

Repaying of principal and interest

1	The Borrower should pay off principal and interest on the date stipulated in this contract.

2	The Borrower shall get the Lender’s consent if the Borrower wants to prepay the loan, and the Lender has the right to charge interest based on the loan duration stipulated in this contract.

3	Loan under this contract is a loan of foreign currency, the Borrower shall pay off the principal and interest in the same currency as was borrowed.

4	The Borrower hereby irrepealably authorizes the Lender to access any of the Borrower’s bank accounts for principal and interest as per Term #11 and Terms#12.

IX.

Guarantee

1	The first guarantee for Contract NO. 2008-0004A Nanxin Branch, CIB Shenzhen, The Highest Credit Line Guarantee Contract is the guarantee of the guarantor SinoHub Electronics Shenzhen Ltd.

2	The second guarantee for Contract NO. 2008-0004B Nanxin Branch, CIB Shenzhen, The Highest Credit Line Guarantee Contract is the guarantee of the guarantor Shenzhen Yin Zhao Co., Ltd.

3	The third guarantee for Contract NO. 2008-0004A Nanxin Branch, CIB Shenzhen, The Highest Credit Line Guarantee Contract is the personal guarantee of Lei Xia as a pledgor.

4	The fourth guarantee for Contract NO. 2008-0004B Nanxin Branch, CIB Shenzhen, The Highest Credit Line Guarantee Contract is the personal guarantee of Christina Cui as a pledgor.

5	The fifth guarantee (mortgage) for Contract NO. 2008-0004 Nanxin Branch, CIB Shenzhen, The Highest Mortgage Contract is a Mortgage on a property owned jointly (50/50) by HENRY THOMAS COCHRAN and LINDA MARIE HETUE (together the Mortgagor).

X.	Representations and Warranties

1	The Borrower hereby represents to the Lender:

1.1	The Borrower is a registered company, and legally exists during the loan duration. The Borrower has the right to sign and fulfill this contract.

1.2	The loan under this contract has been approved by the Board of Directors or the CEO of the Borrower, and is in comply with Laws, regulations, policies and Articles of Association. Otherwise, the Borrower shall take all the responsibilities and the Lender is not responsible.

1.3	Unless specified in the information provided to the Lender, the Borrower shall have no mortgage, pledge, lien and other debt, no outstanding litigation, arbitration and insolvency proceedings.

1.4	The Borrower did not cover up any of the following events that have taken place or are about to occur so that the Lender may not agree with granting loans:

1.4.1

The Borrower or the Borrower's principal leaders involved in a major violation of law and regulations, or claims,

1.4.2

Pending litigation, arbitration case,

1.4.3

The Borrower’s debt or assumed debt, or guarantee, mortgage, pledge security provided to a third-party,

1.4.4

The Borrower occurred in an event of default with any other loaners under contract,

1.4.5

Other things that may affect the financial condition and liquidity situation of the Borrower.

2	The Borrower hereby warrants to the Lender:

2.1	The Borrower shall provide authentic documents, statements, certifications as per the Lender’s request.

2.2	The Borrower shall open a bank account at CIB Shenzhen, and make transactions through that bank account.

2.3

The use of the loan shall be in compliance with this contact and the loan shall not be diverted for other use. The Borrower shall not use the loan for equity investment, or for speculation in securities, futures, real estate or the like. The Borrower shall not use the loan for inter-enterprise lending activities or other illegal activities. And the Borrower shall not divert or misappropriate funds derived from the loan.

2.4	The Borrower shall at any time agree and cooperate with the Lender to inspect the use the loan, business operations, financial activities, inventory of goods, assets and liabilities, bank deposits and cash on hand.

2.5	The Borrower shall provide full and approved guarantees that have been agreed to by the Lender.

2.6	The Borrower shall not reduce the registered capital in any way.

2.7	Without the written consent of the Lender, the Borrower shall not transfer part or all of the obligations under this contract to a third party.

2.8

Major changes in the ownership and business operation adjustment (including, but not limited to, signing a joint venture or co-operation contract with a foreign corporation, or a Hong Kong, Macao or Taiwan corporation; revoking the license of, closing, shutting down of production, changing of products, spin-off of any business, acquisition, merger; re-establish or alteration to a joint-stock company; making investments in joint-stock companies or investment companies by using fixed assets such as houses and equipment, or intangible assets such as trademarks, patents, proprietary technology, land use rights, transactions on property rights, business operation rights by leasing, contracting, joint venture) shall get the written consent of the Lender in advance.

3	Guarantor (or mortgagor, pledgor) hereby commits:

When the Borrower fails to fulfill obligations, regardless that the Lender may have other guaranties under this contract (including but not limited to, warranty, mortgage, pledge, bank line, or any other forms of guaranty methods), the Lender has the right to request a guarantor (or mortgagor, pledgor) to take all responsibilities under this contract, without exercising other guaranty rights.

XI.	Advance loan collection

Under the following circumstances the Lender has the right to collect the loan ahead of schedule. The Lender has the right to access to any of the Borrowers accounts for recovery of money.

1	The Borrower owes loan interest.

2	The Borrower has an operating loss or a sharp economic decline.

3	The Borrower is involved in or is about to be involved in litigation, arbitration or other legal disputes.

4	The Borrower provides untrue reports or information.

5	The Borrower uses the loan for purposes not stipulated in this contract.

6	The Borrower refuses to have the Lender to inspect or supervise its operating and financial activities, or refuses to provide reports or information.

7	The Borrower has major personnel changes.

8	Other situations that may jeopardize the loan security.

XII.	Liabilities

1	The following circumstances constitute a breach of this Contract:

1.1	The Borrower does not repay principal and interest on time in accordance with this contract.

1.2	The Borrower violates the Representations and Warranties as per Chapter 10 in this contract.

1.3	The Borrower violates other provisions of this contract.

2	When a breach of this Contract happens, the Lender has the right to take one or all of the actions as follows:

2.1	Order the Borrower to correct violations in a time limit.

2.2	Stop the Borrower from withdrawing money.

2.3	Terminate the loan contract, and require the Borrower to repay mature or undue principal and interest.

2.4	The Lender has the right to charge defaut interest for overdue loan amounts.

2.5	The Lender has the right to charge defaut interest on non-specified use of the loan.

2.6	The Lender has the right to charge compound interest on overdue loan amounts.

2.7	The Lender has the right to recover money from any of the Borrower’s bank accounts for owed principal and interest, and exchange the currency as per the bank rate when necessary.

2.8	The Lender has the right to take legal means to recover the loan principal and interest; all costs arising from litigation activities shall be borne by the Borrower.

3	In the case that the Lender does not provide loans to the Borrower in accordance with the agreed date and the amount, which results in a loss for the Borrower, the Lender shall pay the loss.

4	The Lender has the right to take actions in accordance with the provisions of this contract when a guarantor (or mortgagor, pledgor) has any of the following situations:

4.1	The guarantor violates this contract, or the guarantor’s credit has deteriorated, or the guarantor is not competent to support the guarantee.

4.2	The Mortgagor violates this contract, intentionally damages collateral, or the collateral value has been or may be significantly reduced, or other incidents happen which damage the Lender’s lien on the mortgage.

4.3	Any pledgor violates this contract, or any pledged property value has been or may significantly reduced, or the right to pledge must be fulfilled before the settlement of the loan, or other incidents happen which damage the Lender’s right on the pledge.

XIII.

Jurisdiction

The signing, legal validity, interpretation, performance or disputes of this contract shall apply to the law of the People's Republic of China. During the term of the contract, all controversy and dispute shall be dealt through negotiation. If the parties are unable to reach an agreement, either the Lender or the Borrower may demand for arbitration by the Shenzhen Arbitration Committee.

XIV.	Term of this Contract

This contract shall enter into force after the following conditions:

1	Both parties have signed or chopped this contract.

2	The guarantee contracts under this contract have entered into force.

3	The Lender requests for a notarization for this contract, and notarization procedures are fulfilled legally.

This contract shall cease to be in effect once the loan principal and interest and other debts are paid.

XV.

Copies

This Agreement will be executed in triplicate, both parties and the notary agency will have one copy.

XVI.	Supplementary provisions

Signature Page Follows

Lender (Corporate Chop)	Legal representative or authorized agent (signature)

Nanxin Branch, CIB Shenzhen		/s/Zhu Jiusheng

		September 24, 2008


Borrower (Corporate Chop)	Legal representative or authorized agent (signature)

SinoHub SCM Shenzhen, Ltd.		/s/ Li Dehai

		September 24, 2008

EX-10.12 9 ex10_12.htm CREDIT LINE CONTRACT ex10_12.htm

EXHIBIT 10.12

Credit Line Contract

Contract No：（2008）0004

Party A：Nanxin Branch, CIB Shenzhen

Address: 1st Floor, Nan Hai Tai Building, Nanxin Road, Nanshan District, Shenzhen, China

Postcode：518052

Phone # 0755-26077176, Fax # 0755-26077085

Party B: SinoHub SCM Shenzhen, Ltd.

Address：6/F, No. 5 Qiongyu Road, Central Area, Technology Park, Nanshan District, Shenzhen, China

Postcode：518057

Phone # 86-755-26612106, Fax # 86-755-26612060

This contract was signed at CIB Shenzhen Branch, CIB Building, Futian District, Shenzhen.

Party A agreed to provide a credit line to Party B. In order to specify responsibilities and obligations, Party A and Party B agreed on the following terms and conditions in accordance with relevant laws and regulations.

1	Definition and Interpretation

1.1	“Credit Granting” means Party A shall comprehensively evaluate the management situations and risk factors of Party B, and define the credit line of Party B, which includes foreign currency loans, trade financing, acceptance of bills, discount on bills, the opening of L/Cs, guarantees or the like.

1.2	“Basic credit granting” refers to a credit line granted to Party B for funds flow based on the basic conditions of Party B. Party B may use the credit line gradually and circularly within the term.

1.3

“Credit line term” refers to an uninterrupted period, in which Party B may apply for financing under the agreement of Party A. However, the time for Party B to fulfill obligations (including but not limited to the performance of payment of the main debt and responsibility for the guarantee) shall not be limited to the term.

1.4	Party A shall take a control of the credit line balance. The balance refers to the sum of outstanding credit line and the credit line at maturity:

1.4.1

Outstanding credit line refers to the sum of loans that are not due.

1.4.2

Credit line at maturity refers to sum of the loans that are overdue.

1.5

“Sub-contract” refers to contracts that regulate the amount, the performance terms of the debt instrument, rights and obligations for each financing under the credit line. This contract is the general contract, all sub-contracts have the same legal effect, and they are integral parts of the general contract.

1.6	“The main debt” refers to the principle, which includes but is not limited to loan principle for all currencies, trade financing principle, the principle of bill acceptance, the bill discount amount, L/C advances, debt principle of the guarantee provided by Party A to Party B.

2	Credit Line

Credit line under this contract is RMB 30 million. If there is a foreign currency financing under the credit line, that currency shall be exchanged to RMB according to the exchange rate published by Party A. This credit line can be used for the following items:

Business name	Amount( RMB）	Remark
1. Import L/C Opening	30,000,000.00	15% for deposit
2. Import Bill Advance	25,500,000.00
3. Import services	25,500,000.00
4. Short-term loan	5,000,000.00
The credit line can be used among above items.

3	Credit Line Term

Term of the credit line starts on September 25, 2008, and ends on September 25, 2009.

Guarantee

4.1	The following are the guarantee contracts for this general contract:

4.1.1

The first guarantee for Contract NO. 2008-0004A Nanxin Branch, CIB Shenzhen, The Highest Credit Line Guarantee Contract is the guarantee of the guarantor SinoHub Electronics Shenzhen Ltd.

4.1.2

The second guarantee for Contract NO. 2008-0004B Nanxin Branch, CIB Shenzhen, The Highest Credit Line Guarantee Contract is the guarantee of the guarantor Shenzhen Yin Zhao Co., Ltd.

4.1.3

The third guarantee for Contract NO. 2008-0004A Nanxin Branch, CIB Shenzhen, The Highest Credit Line Guarantee Contract is the personal guarantee of Lei Xia as a pledgor.

4.1.4

The fourth guarantee for Contract NO. 2008-0004B Nanxin Branch, CIB Shenzhen, The Highest Credit Line Guarantee Contract is the personal guarantee of Christina Cui as a pledgor.

4.1.5

The fifth guarantee (mortgage) for Contract NO. 2008-0004 Nanxin Branch, CIB Shenzhen, The Highest Mortgage Contract is a Mortgage on a property owned jointly (50/50) by HENRY THOMAS COCHRAN and LINDA MARIE HETUE (together the Mortgagor).

4.2	Unless otherwise agreed, all debts under the credit line shall be provided with maximum guarantee by the guarantor, the mortgagor, or the pledgor.

4.3	Party A has the right to take the measures according to Chapter 6.2 for the following situations:

4.3.1

The guarantor violates the The Highest Credit Line Guarantee Contract, or the guarantor’s credit has deteriorated, or the guarantor is not competent to support the guarantee.

4.3.2

The Mortgagor violates The Highest Mortgage Contract, intentionally damages collateral, or the collateral value has been or may be significantly reduced, or other incidents happen which damage the lien of Party A on the mortgage.

4.3.3

The pledgor violates The Highest Credit Line Guarantee Contract, or the pledged property value has been or may significantly reduced, or the right to pledge must be fulfilled before the settlement of the loan, or other incidents happen which damage the pledge right of Party A.

5	Rights and Obligations

5.1	Within the term and the amount limit, Party A shall grant credit to Party B after reviewing all the conditions.

5.2	Party B shall open a bank account at CIB, and have all the transactions go through that bank account.

5.3	Party A has the right to access to the financial report and other business information of Party B, Party B shall provide timely information to Party A of the marketing plans, investment and development plans, and funds demand. Party A shall not disclose any trade secrets of Party B.

5.4	Party B shall provide a full and valid guarantee recognized by Party A.

5.5	Party A shall provide guidance to Party B on economic policy, business management, and credit policy.

5.6	Party A has the right to charge fees relating to the credit line. Unless otherwise agreed, all necessary costs based on the credit line shall be paid by Party B.

5.7	Party A has the right to adjust or terminate the credit line for the following situations:

5.7.1

Party B is having serious operational difficulties and risks.

5.7.2

Party B is making significant changes in organization (including split-off, merging, revocation of license or the like)

5.7.3

The credit of Party B decreases, or Party B does not pay off debt on time.

5.7.4

Significant changes take place in the market.

5.7.5

Other situations under which Party A shall change the credit line.

5.8	Party B may apply for an increase on the credit line for a special occasion or a particular project.

6	Liabilities

6.1	Breach of Contract by Party B shall mean

6.1.1

Party B provides untrue information or covers up the truth of corporate matters.

6.1.2

Party B’s credit has deteriorated, or Party B is not competent to support the guarantee.

6.1.3

Party B violates the sub-contracts.

6.1.4

Party B violates the general contract.

6.2	If Party B violates the contract, Party A has the right to exercise one or more of the following measures:

6.2.1

Suspend, reduce, or terminate the credit line.

6.2.2

Declare the expiry of some or all of the credit line.

6.2.3

Request for full compensation for loss from Party B.

Fees

If either Party breaches the contract, the defaulting party shall pay for all fees, including but not limited to legal costs, lawyers fees, property preservation fees, implementation fees, handling fees or the like.

8	Jurisdiction

The signing, legal validity, interpretation, performance or disputes of this contract shall apply to the law of the People's Republic of China. During the term of the contract, all controversy and dispute shall be dealt through negotiation. If the two parties are unable to reach an agreement, either party may demand for arbitration by the Shenzhen Arbitration Committee.

9	Notification

9.1	Any notice under this contract shall be in writing and delivered to the other party as per the address or fax number on the front cover.

9.2	Either party shall promptly inform the other party of changes in their contact information.

9.3	All notices that are delivered as per the specified address shall be deemed as well received after:

9.3.1

5 days if the notice is delivered by a registered mail.

9.3.2

Receiving a confirmation after sending a fax.

9.3.3

Receiving a receipt with the receiver’s signature.

10	Effective Conditions of The Contract

10.1	This contract shall enter into full force after the following conditions:

10.1.1

Both parties sign and chop on the contract

10.1.2

The Guarantee (Mortgage, Pledge) contracts under this contract have come into effect.

10.1.3

Party A requests that this contract be notarized and notarization procedures are fulfilled legally.

10.2	This contract shall cease to be in effect once all the debts are paid.

11	Contract Documents

This contract will be executed in quadruplicate, each of the parties, the notary agency, and the guarantor will have one copy.

12	Supplementary Provision

The sum of the balances of Contract No.（2007）0004 and Contract No.（2008）0004 shall not be greater than RMB30million.

Signature Page Follows

Party A (Corporate Chop)	Legal representative or authorized agent (signature)

Nanxin Branch, CIB Shenzhen		/s/Zhang Lesheng



		August 21, 2008


Party B (Corporate Chop)	Legal representative or authorized agent (signature)

SinoHub SCM Shenzhen, Ltd.		/s/Cui Hantao



		August 21, 2008

EXHIBIT 10.24

Guarantee Agreement

THIS GUARANTEE AGREEMENT is made and entered into by and between SinoHub SCM Shenzhen, Ltd. (the “Trustor”) with Cui Han Tao as the legal representative and Shenzhen Hongfeng Paper Products Co. Limited (the “Guarantor”) with Li Xian Qiu as the legal representative.

WHEREAS, the Trustor, pursuant to the application made to China Construction Bank Shenzhen Chengdong Sub-branch (the “Beneficiary” or the “Creditor”) for credit line to open letters of credit, hereof to entrust the Guarantor to provide guarantee of credit.

WHEREAS, the Guarantor, has stated to provide guarantee of credit under the condition that the terms of this agreement is executed and delivered by the Trustor.

Hereinafter, the Trustor and the Guarantor have reached an agreement through friendly consultation to conclude the following contract.

Section I Issuance of the Guarantee

1.1	Classification of guarantee: provision of counter guarantee against the credit line according to letter of credit the Bank issued to the Trustor and trust receipt.

1.2	Purpose of guarantee: the Trustor applies the credit line issued by the Bank to open letter of credit.

1.3	the Beneficiary or the Creditor of this agreement (name and address): China Construction Bank Shenzhen Chengdong Sub-branch 11th Floor, Huadouyuan Mansion, No. 1034 Jiabin Road Luohu District, Shenzhen, P.R. China

1.4	The master contract of the guarantee made by the guarantor under this agreement: the Trustor applied to the Beneficiary or the Creditor by June, 2006 for the credit line of RMB22,000,000.00, and the contract number is: Borrow 2008 Trade 614001R.

1.5	Guarantee amount of this agreement: RMB22,000,000.00.

1.6	Guarantee term: 1 year.

1.7	Other major terms:

1.8	The Trustor entrusts the Guarantor to provide guarantee to the Beneficiary or the Creditor. Within the term all the occurring expenses, such as notarization fees, evaluation fees, appraisal fees, insurance fees, mortgage fees, witness fees, etc., shall be at the cost of the Trustor.

1.9	The Trustor and the Guarantor have agreed on condition that the Suretyship Contract or the guarantee letter the Guarantor issued to the Beneficiary or the Creditor is not compliant with this agreement, this agreement shall apply.

Section II Guarantee Fee

The guarantee fee is calculated and collected on the basis of guarantee amount and according to the guarantee term and rate of guarantee fee.

2.1	The guarantee fee of the agreement is RMB560,000.00, being calculated based on the yearly rate.

2.2	Guarantee term: 1 year.

2.3	Guarantee amount: RMB560,000.00

2.4	Payment options: Cash or cash cheque (cash/transfer)

2.5

Time of payment: the Trustor shall issue a cash cheque at RMB560,000.00 as the payment guarantee to the Guarantor in 20 days before the Guarantor issue the Suretyship Contract or guarantee letter to the Beneficiary or the Creditor, and simultaneously start transferring agreed amount of guarantee fee to the specified account of the Trustor in cash since the day when the Guarantor issues the Suretyship Contract or guarantee letter to the Beneficiary or the Creditor until the total amount reaches RMB560,000.00, and in the end the Guarantor, after confirming having received all the guarantee fee at RMB560,000.00, shall issue a cash cheque with the total amount of RMB560,000.00 back to the Trustor. If the Trustor fails to deliver the guarantee fee as required in time and amount after the Guarantor issues the Suretyship Contract or guarantee letter to the Beneficiary or the Creditor, the Guarantor is entitled to cash the cheque that the Trustor issued in advance as the guarantee fee.

2.6

Overdue guarantee fee: on the condition that the Trustor fails to execute the terms in the master Suretyship Contract on schedule, which lead to the overdue guarantee, then the Trustor is obliged to pay the Guarantor for overdue guarantee fee. Overdue guarantee fee is based on the total of overdue guarantee principal and interest, and shall be calculated and collected according to 3% per month; monthly charge will still periods less than a calendar month. The Guarantor shall collect 5‰ of the overdue guarantee fee as penalty for breach of contract from the Trustor in case of the overdue delivery of guarantee fee without the written consent of the Guarantor.

Section III Guarantee Fee and Other Counter Guarantee

3.1

After the Guarantor issues the above guarantee to the Beneficiary or the Creditor, the Trustor shall deposit no less than 30% of the credit line as guarantee money to the account specified by the Bank before applying for opening each letter of credit to the Bank. The guarantee money is performance bond, serving as counter guarantee against the guarantee that the Trustor executes the master contract with the Beneficiary or the Creditor.

3.2	The Trustor shall provide the Guarantor with the following mode of guarantee before the Guarantor provides the Beneficiary or the Creditor with the above guarantee:

The legal representative of the Trustor, Hantao Cui and Lei Xia, the couple, unlimited counter guarantee

3.3	The above counter Suretyship Contract or agreement shall be signed separately, and constitutes a part of this Agreement, having the same legal effect as this agreement.

3.4

The Trustor commits that the Guarantor shall be the only beneficiary of the above counter guarantee measures, and means the exclusive right. If the Trustor re-mortgages or re-pledges, sub-mortgages or sub-pledges, assigns, transfers, leases or uses the above counter guarantee for other purposes that may affect the interest of the Guarantor before or after signing this Agreement, then the Guarantor is entitled to claim the Trustor for criminal responsibility.

Sector IV Provision of the Documents

4.1

Before the Guarantor signs the Suretyship Contract or opens guarantee letter with the Beneficiary or the Creditor, the Trustor is obliged to provide the Guarantor with the original copies of the following documents, or the true and complete duplicates testified with the corporate chop and the signature of the legal representative of the Trustor. The original copy of the first document shall be returned to the Trustor after being validated; whereas the copy of this document with the corporate chop shall be retained.

1. Enterprise's legal person's business license of the Trustor;

2. The latest one-month commercial information of the Trustor;

3. Articles of association of the Trustor;

4. The list of all the incumbent directors and signature samples of the Trustor;

5. Resolutions of the meetings of the board of directors, resolutions of the meetings of the board of shareholders agreeing on Trustor signing this Agreement;

6. The financial report and auditing report of the prior year of the Trustor, together with the financial report of the prior month before application;

7. Ownership certificate of the collateral or pledge (if there’s any collateral or pledge) and other relative documents;

8. Relative documents of the third party.

Section V Representations and Warranties

5.1 The Trustor makes the following representations and warranties:

5.1.1 The Trustor is a valid company legally registered according to laws of People’s Republic of China, or the natural person with full capacity for civil rights and civil conduct;

5.1.2 The Trustor commits to operate legally and obeys the rules and regulations of People’s Republic of China. Its operation or investment shall not pollute the environment or do harm to the health of people;

5.1.3 The Trustor is fully entitled and legally capable of signing and executing this Agreement;

5.1.4 The Trustor is legally entitled to sign the contract with the Beneficiary or the Creditor, and fully capable of executing the contract;

5.1.5 The Trustor fully accepts the guarantee terms that the Guarantor proposes to the Beneficiary or the Creditor;

5.1.6 The Trustor is responsible for the authenticity of all the documents provided to the Guarantor;

5.1.7 The Trustor commits to exempt the Guarantor from any harm or losses incurred by the guarantee issues for the Trustor;

5.1.8 The Trustor shall take in use the guarantee letter within the coverage and purpose specified in this Agreement;

5.1.9 The Trustor shall execute the contract signed with the Beneficiary or the Creditor;

5.1.10 The Trustor is obliged to inform the Guarantor the significant issues occurring when executing the contract according to the facts, such as registered address, legal representative, contact number, changes of the ownership (stock ownership), litigation or arbitration, capital loans, reconstruction or reorganization, operation loss, etc. all the matters that may affect the debtor-creditor relationship;

5.1.11 The Trustor shall accept being examined by the Guarantor regularly or randomly for its operation and financial conditions, and cooperate with the work staff of the Guarantor to complete the monitoring work. The Trustor shall deliver the financial report for the first month to the Guarantor after signing the loan contract, and afterwards deliver the financial reports quarterly;

5.1.12 The Guarantor, in order to pay off the debt under the Suretyship Contract or guarantee letter, is entitled to deal with the collateral or pledge;

5.1.13 The Guarantor is not responsible for the authenticity of all the documents concerning claim for compensation, bill of document or testifying documents provided to the Beneficiary or the Creditor;

5.1.15 The Trustor shall not conduct any behaviour with any other third parties to harm the benefit of the Guarantor.

5.1.16 If the Trustor fails to execute this Agreement, then the Trustor shall authorize the Guarantor to publish the facts that the shareholders and senior management breach the terms on its website and media.

5.1.17 Within the term of this Agreement, the Guarantor is entitled to monitor the condition described as following:

(1) The Trustor shall inform the Guarantor in advance when applying for new bank loans or providing external guarantee.

Section VI Modification to Suretyship Contract or Guarantee Letter

6.1

The Trustor shall provide the application in written form or the written consent of the Beneficiary or the Creditor while asking the Guarantor to modify the contents of Suretyship Contract or guarantee letter. On the condition that the Trustor increases guarantee amount or extend the guarantee term, the Trustor shall increase or extend the counter guarantee collateral correspondingly, and pay the Guarantor for the guarantee fee of the enhanced amount or extended term. Otherwise, the Guarantor shall not accept the application of modification.

6.2	The modification shall not take effect until the Guarantor issues the confirmation letter in written form upon agreeing on the guarantee modification of this Agreement.

Section VII Event of Default

7.1	The Trustor and the Guarantor shall obey the terms described in this Agreement, and the following situations will be regarded as events of default.

7.1.1 The Trustor, after signing this Guarantee Agreement, fails to provide the Guarantor with any mode of counter guarantee in accordance with terms of this Agreement, or the counter guarantee option that the Trustor provides the Guarantor with does not comply with the regulations of this Agreement;

7.1.2 The counter guarantor, which signs and issues irrevocable counter guarantee statement with joint and several liability to the Guarantor, or signs counter guarantee contract with the Guarantor, has not been approved by the Guarantor;

7.1.3 The Trustor or the third party fails to sign the collateral or pledge contract with the Guarantor as specified in this Guarantee Agreement;

7.1.4 The Trustor or the third party fails to provide the Guarantor with collateral or pledge as specified in this Guarantee Agreement;

7.1.5 The Trustor or the third party signs the collateral or pledge contract with the Guarantor, but fails to complete the collateral or pledge procedure;

7.1.12 Other behavior that breach the terms of this Agreement.

7.2	The Guarantor is entitled to take all the following measures or partially when, before or after the above situation occurs:

(1)	Require the Trustor to continue offering the counter guarantor with the approval and acceptance of the Guarantor;

(2)	Require the Trustor or the third party to sign the collateral or pledge contract with the Guarantor as specified in this Guarantee Agreement, and keep on the registration procedures of relative collateral or pledge;

(3)	Require the Trustor or the third party to adopt other remedial measures, i.e. taking its assets as collateral or pledge to the Guarantor, and work on the registration procedures of relative collateral or pledge;

(4)	The Guarantor is entitled to terminate this Agreement on one party, and require the Trustor to be liable for compensation for the harm and losses of the Guarantor;

(5)	Entitled to investigate against the Trustor the liabilities for breaching this Agreement.

Section VIII Claim under the Suretyship Contract or Guarantee Letter

8.1	The Trustor pledges to fulfill its payment and other obligations specified in the contracts or agreements or other relative contracts and agreements (the “Contract” and “Agreement”) signed with the Beneficiary or the Creditor.

8.2

On the condition that the Beneficiary or the Creditor claims for compensation from the Guarantor in accordance with the regulations in the Suretyship Contract or Guarantee Letter under the loan contract or agreement or other relative contract or agreement, and the Guarantor testifies the claim documents, receipts or certificate comply with the regulations of the Suretyship Contract or Guarantee Letter, the Guarantor, while prepaying for the Trustor to the Beneficiary or the Creditor in order to fulfill its guarantee obligations, shall absolutely have the right of recourse against the Trustor and its successors or assignees, which won’t be affected by any commands directed by the senior authorizations of the Trustor or any contract or agreement signed between the Trustor and any units.

8.3

On the condition that the Trustor fails to fulfill its payment or obligations as stated in the above contract or agreement signed with the Beneficiary or the Creditor and enables the Guarantor to be liable for the guarantee obligations against the Beneficiary or the Creditor for the principal, interest, penalty interest, compound interest, penalty, compensation, expenses for ensuring the proprietyization of the creditor’s credits, then the Trustor shall be liable for the following obligations:

(1)	Pay the Guarantor for all the above advance payment;

(2)

Pay the Guarantor for the interest of above expenses in accordance with the loan interest rate stipulated by the bank for the corresponding period (shall be calculated from the day that the actual advance payment of the Guarantor to the Beneficiary or the Creditor until the day that the Trustor repays the Guarantor for the above expenses);

(3)	Pay the Guarantor for the penalty at 1‰ per day of the total delivered amount (i.e. penalty = total amount that the Guarantor has paid X 1‰ X actual days that the Guarantor advanced)

8.4	The Trustor shall pay the Guarantor all the advance payment, corresponding interest, and penalty unconditionally within 7 days after receiving the notice of claim from the Guarantor.

8.5

On the condition that the Trustor breaches the terms of the above contract or agreement signed with the Beneficiary or the Creditor and enforces the Guarantor to be responsible for the guarantee obligations against the Beneficiary or the Creditor, then the Trustor shall be liable for the following obligations other than those stated in article 8.3 of this Agreement:

(1)

When the Beneficiary or the Creditor brings litigation or arbitration to the Guarantor, or during the process of reconciliation, the Trustor shall be responsible for all the expenses on the cost of the Guarantor (including but not limited to the litigation or arbitration fee, property preservation or Property Preservation fee, enforcement fee, evaluation fee, auction fee, appraisal fee, legal fees, travel expenses, investigation and evidence collection fee, etc.) .

(2)

The Trustor shall be responsible for all the expenses on the cost of the Guarantor (including but not limited to the litigation or arbitration fee, property preservation or Property Preservation fee, enforcement fee, evaluation fee, auction fee, appraisal fee, legal fees, travel expenses, investigation and evidence collection fee, etc.) occured in order to resourse advance payment from the Trustor.

8.6

On the condition that the Trustor fails to fulfill its payment and other obligations as stated in the above contract or agreement signed with the Beneficiary or the Creditor and enables the Guarantor to be liable for the guarantee obligations against the Beneficiary or the Creditor, or the Trustor breaches the terms of this Guarantee Agreement, the Guarantor is entitled to select one or several requirements in the counter guarantee provided by the Trustor (stated in Section 3 of this Agreement, and the counter guarantee contract or agreement shall apply) to require the Trustor or the third party be liable for the prior guarantee responsibility.

8.7

On the condition that the Trustor fails to fulfill its obligations as stated in the master contract signed with the Beneficiary or the Creditor and enables the Guarantor to be liable for the guarantee obligations against the Beneficiary or the Creditor, the Trustor shall approve and authorize the Guarantor to release the fact about its/his breaches and relative information at financial organizations, monitoring organizations, government departments, new media, internet media or other enterprises, public institutions without reservation, and waive its/his right of defense.

Section IX Governing Law

9.1

This Guarantee Agreement shall be deemed to be a contract made under the laws of the People’s Republic Of china, and for all purposes shall be governed by and construed in accordance with such laws. Any disputes arising from the performance of this Agreement shall be resolved through a friendly negotiation of each party concerned. Where all the parties fail to solve it, the dispute shall be resolved through the following mode:

(1)	bring a suit directly at the local people's court where the Guarantor is located.

Section X Validity and Termination of the Agreement

10.1	This Agreement shall take effect in accordance with the following regulations:

10.1.1

On the condition that the Trustor is natural person, the Agreement becomes effective with the signature and humbprint of witness of the Trustor and signature of legal representative or authorized representative and chop of the Guarantor.

10.1.2

On the condition that the Trustor is a legal person, the Agreement becomes effective with the signature and corporate chop of legal representative or authorized representative of both parties.

10.2	This Guarantee Agreement shall be deemed to terminate after the rights and obligations are fulfilled.

Section XI Appendix

11.1	The other issues that both parties agreed hereinof:

11.2	This Agreement has two identical duplicates and a copy of which shall be kept by each of the two parties, holding the same legal effects.

11.3

Special reminder: the Guarantor has made a hint on all the articles in this Agreement, and made explanation correspondingly in answer to the request of the Trustor; moreover, the Trustor has studied and analyzed each articles of this Agreement and has got comprehensive and accurate understanding; therefore, both parties has reached an agreement to the meaning of each article of this Agreement.

Appendix: Counter Guarantee Agreement (Guarantee/Mortgage/Pledge)

The Trustor: (corporate chop)	The Guarantor: (corporate chop)

(Finger print of the natural person):
Legal representative or authorized representative: /s/Lei Xia	Legal representative or authorized representative: /s/Yi Zhang
Address:	Address:
Telephone:	Complaint telephone:

Date:	Date: June 26, 2007

EX-10.25 13 ex10_25.htm LOCK-UP AGREEMENT ex10_25.htm

EXHIBIT 10.25

LOCK-UP AGREEMENT

As an inducement to Liberty Alliance, Inc., a Delaware corporation (the “Company”), to issue a number of shares of the Company common stock to increase the undersigned stockholder’s holding to one round lot, or 100 shares, after the 1 for 3.5 reverse stock split effected on July 18, 2008 (the “Effective Date”), the undersigned stockholder hereby agrees that from the Effective Date for a period of one year,(the “Lock-up Period”) the undersigned will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly (a “Transfer”), any shares of capital stock of the Company issued to the undersigned in respect of shares of the Company now owned or hereafter acquired by the undersigned, including any securities convertible into or exchangeable or exercisable for any shares of capital stock of the Company (the “Securities”), or enter into a transaction which would have the same effect, or publicly disclose the intention to make any such offer, sale, pledge or disposal.

Any Securities received upon exercise of options granted to the undersigned will also be subject to this Agreement. A transfer of Securities to a family member or trust may be made, provided the transferee agrees to be bound in writing by the terms of this Agreement. Upon the execution of the Agreement, there shall be imprinted or otherwise placed, on certificates representing the Securities the following restrictive legend:

THE SALE OR TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND CONDITONS OF A CERTAIN LOCK-UP AGREEMENT BETWEEN THE CORPORATION AND CERTAIN HOLDERS OF STOCK OF THE CORPORATION. COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE CORPORATION.

In furtherance of the foregoing, the Company and its transfer agent and registrar are hereby authorized to decline to make any transfer of shares of Securities if such transfer would constitute a violation or breach of this Agreement.

This Lock-up Agreement shall be binding on the undersigned and the successors, heirs, personal representatives and assigns of the undersigned.


		Name


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EX-10.26 14 ex10_26.htm 2008 STOCK PLAN ex10_26.htm

EXHIBIT 10.26

SINOHUB, INC.

2008 STOCK PLAN

1. Purposes of the Plan. The purposes of this Plan are to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to Employees, Directors and Consultants and to promote the success of the Company’s business.

The Plan permits the grant of Incentive Stock Options, Nonstatutory Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Units, Performance Shares and other stock or cash awards as the Administrator may determine.

2. Definitions. As used herein, the following definitions shall apply:

(a) “Administrator” means the Board or any of its Committees as shall be administering the Plan in accordance with Section 4 hereof.

(b) “Applicable Laws” means the requirements relating to the administration of equity-based awards under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any other country or jurisdiction where Awards are, or will be, granted under the Plan.

(c) “Award” means, individually or collectively, a grant under the Plan of Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Units, Performance Shares and other stock or cash awards as the Administrator may determine.

(d) “Award Agreement” means the written or electronic agreement setting forth the terms and provisions applicable to each Award granted under the Plan. The Award Agreement is subject to the terms and conditions of the Plan.

(e) “Board” means the Board of Directors of the Company.

(f) “Change in Control” means the occurrence of any of the following events:

(i) A change in the ownership of the Company which occurs on the date that any one person, or more than one person acting as a group, (“Person”) acquires ownership of the stock of the Company that, together with the stock held by such Person, constitutes more than fifty percent (50%) of the total voting power of the stock of the Company; provided, however, that for purposes of this subsection (i), the acquisition of additional stock by any one Person, who is considered to own more than fifty percent (50%) of the total voting power of the stock of the Company will not be considered a Change in Control; or

(ii) A change in the ownership of a substantial portion of the Company’s assets which occurs on the date that any Person acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to or more than fifty percent (50%) of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions; provided, however, that for purposes of this subsection (ii), the following will not constitute a change in the ownership of a substantial portion of the Company’s assets: (A) a transfer to an entity that is controlled by the Company’s stockholders immediately after the transfer, or (B) a transfer of assets by the Company to: (1) a stockholder of the Company (immediately before the asset transfer) in exchange for or with respect to the Company’s stock, (2) an entity, fifty percent (50%) or more of the total value or voting power of which is owned, directly or indirectly, by the Company, (3) a Person, that owns, directly or indirectly, fifty percent (50%) or more of the total value or voting power of all the outstanding stock of the Company, or (4) an entity, at least fifty percent (50%) of the total value or voting power of which is owned, directly or indirectly, by a Person described in this subsection (ii)(B)(3). For purposes of this subsection (ii), gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.

For purposes of this Section 2(f), persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock, or similar business transaction with the Company.

(g) “Code” means the Internal Revenue Code of 1986, as amended.

(h) “Committee” means a committee of Directors or of other individuals satisfying Applicable Laws appointed by the Board in accordance with Section 4 hereof.

(i) “Common Stock” means the Common Stock of the Company.

(j) “Company” means SinoHub, Inc., a Delaware corporation, or any successor thereto.

(k) “Consultant” means any person who is engaged by the Company or any Parent or Subsidiary to render consulting or advisory services to such entity.

(l) “Determination Date” means the latest possible date that will not jeopardize the qualification of an Award granted under the Plan as “performance-based compensation” under Section 162(m) of the Code.

(m) “Director” means a member of the Board.

(n) “Disability” means total and permanent disability as defined in Section 22(e)(3) of the Code, provided that in the case of Awards other than Incentive Stock Options, the Administrator in its discretion may determine whether a permanent and total disability exists in accordance with uniform and non-discriminatory standards adopted by the Administrator from time to time.

(o) “Employee” means any person, including Officers and Directors, employed by the Company or any Parent or Subsidiary of the Company. Neither service as a Director nor payment of a director’s fee by the Company shall be sufficient to constitute “employment” by the Company.

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(p) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(q) “Exchange Program” means a program under which (i) outstanding Awards are surrendered or cancelled in exchange for Awards of the same type (which may have lower exercise prices and different terms), Awards of a different type, and/or cash, (ii) Participants would have the opportunity to transfer any outstanding Awards to a financial institution or other person or entity selected by the Administrator, and/or (iii) the exercise price of an outstanding Award is reduced. The Administrator will determine the terms and conditions of any Exchange Program in its sole discretion.

(r) “Fair Market Value” means, as of any date, the value of Common Stock determined as follows:

(i) If the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system on the day of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable;

(ii) If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, its Fair Market Value shall be the mean between the high bid and low asked prices for the Common Stock on the day of determination; or

(iii) In the absence of an established market for the Common Stock, the Fair Market Value thereof shall be determined in good faith by the Administrator.

(s) “Fiscal Year” means the fiscal year of the Company.

(t) “Incentive Stock Option” means an Option that by its terms qualifies and is otherwise intended to qualify as an incentive stock option within the meaning of Section 422 of the Code and the regulations promulgated thereunder.

(u) “Nonstatutory Stock Option” means an Option not intended to qualify as an Incentive Stock Option.

(v) “Officer” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.

(w) “Option” means a stock option granted pursuant to Section 8 of the Plan.

(x) “Parent” means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code.

(y) “Participant” means the holder of an outstanding Award.

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(z) “Performance Goals” will have the meaning set forth in Section 13 of the Plan.

(aa) “Performance Period” means any Fiscal Year of the Company or such other period as determined by the Administrator in its sole discretion.

(bb) “Performance Share” means an Award denominated in Shares which may be earned in whole or in part upon attainment of Performance Goals or other vesting criteria as the Administrator may determine pursuant to Section 12.

(cc) “Performance Unit” means an Award which may be earned in whole or in part upon attainment of Performance Goals or other vesting criteria as the Administrator may determine and which may be settled for cash, Shares or other securities or a combination of the foregoing pursuant to Section 12.

(dd) “Period of Restriction” means the period during which the transfer of Shares of Restricted Stock are subject to restrictions and therefore, the Shares are subject to a substantial risk of forfeiture. Such restrictions may be based on the passage of time, the achievement of target levels of performance, or the occurrence of other events as determined by the Administrator.

(ee) “Plan” means this 2008 Stock Plan.

(ff) “Restricted Stock” means Shares issued pursuant to an Award of Restricted Stock under Section 10 of the Plan, or issued pursuant to an early exercise of an Option.

(gg) “Restricted Stock Unit” means a bookkeeping entry representing an amount equal to the Fair Market Value of one Share, granted pursuant to Section 11. Each Restricted Stock Unit represents an unfunded and unsecured obligation of the Company.

(hh) “Rule 16b-3” means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3, as in effect when discretion is being exercised with respect to the Plan.

(ii) “Section 16(b)” means Section 16(b) of the Exchange Act.

(jj) “Service Provider” means an Employee, Director or Consultant.

(kk) “Share” means a share of the Common Stock, as adjusted in accordance with Section 16 below.

(ll) “Stock Appreciation Right” means an Award, granted alone or in connection with an Option, that pursuant to Section 9 is designated as a Stock Appreciation Right.

(mm) “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing, as defined in Section 424(f) of the Code.

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3. Stock Subject to the Plan.

(a) Subject to the provisions of Section 16 of the Plan, the maximum aggregate number of Shares that may be awarded and sold under the Plan is 3,000,000 Shares. The Shares may be authorized but unissued, or reacquired Common Stock.

(b) Share Reserve Increase. The number of Shares available for issuance under the Plan may by increased at any time to such number of Shares as may be determined by the Board.

(c) Lapsed Awards. If an Award expires or becomes unexercisable without having been exercised in full, or, with respect to Restricted Stock, Restricted Stock Units, Performance Shares or Performance Units, is forfeited to or repurchased by the Company, the unpurchased Shares (or for Awards other than Options and Stock Appreciation Rights, the forfeited or repurchased Shares) which were subject thereto will become available for future grant or sale under the Plan (unless the Plan has terminated). Upon exercise of a Stock Appreciation Right settled in Shares, the gross number of Shares covered by the portion of the Award so exercised will cease to be available under the Plan. Shares that have actually been issued under the Plan under any Award will not be returned to the Plan and will not become available for future distribution under the Plan; provided, however, that if unvested Shares of Restricted Stock, Restricted Stock Units, Performance Shares or Performance Units are repurchased by the Company or are forfeited to the Company, such Shares will become available for future grant under the Plan. Shares used to pay the tax and/or exercise price of an Award will become available for future grant or sale under the Plan. To the extent an Award under the Plan is paid out in cash rather than Shares, such cash payment will not result in reducing the number of Shares available for issuance under the Plan. Notwithstanding the foregoing provisions of this Section 3(c), subject to adjustment provided in Section 16, the maximum number of Shares that may be issued upon the exercise of Incentive Stock Options will equal the aggregate Share number stated in Section 3(a), plus, to the extent allowable under Section 422 of the Code, any Shares that become available for issuance under the Plan under this Section 3(c).

4. Administration of the Plan.

(a) Administrator. The Plan shall be administered by the Board or a Committee appointed by the Board, which Committee shall be constituted to comply with Applicable Laws.

(i) Section 162(m). To the extent that the Administrator determines it to be desirable to qualify Awards granted hereunder as “performance-based compensation” within the meaning of Section 162(m) of the Code, the Plan will be administered by a Committee of two (2) or more “outside directors” within the meaning of Section 162(m) of the Code.

(ii) Rule 16b-3. To the extent desirable to qualify transactions hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder will be structured to satisfy the requirements for exemption under Rule 16b-3.

(b) Powers of the Administrator. Subject to the provisions of the Plan and, in the case of a Committee, the specific duties delegated by the Board to such Committee, and subject to the approval of any relevant authorities, the Administrator shall have the authority in its discretion:

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(i) to determine the Fair Market Value;

(ii) to select the Service Providers to whom Awards may from time to time be granted hereunder;

(iii) to determine the number of Shares to be covered by each such Award granted hereunder;

(iv) to determine the terms and conditions of any, and to institute an Exchange Program;

(v) to approve forms of agreement for use under the Plan;

(vi) to determine the terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder. Such terms and conditions include, but are not limited to, the exercise price, the time or times when Awards may be exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation regarding any Award or the Common Stock relating thereto, based in each case on such factors as the Administrator, in its sole discretion, shall determine;

(vii) to prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations relating to sub-plans established for the purpose of satisfying applicable foreign laws;

(viii) to construe and interpret the terms of the Plan and Awards granted pursuant to the Plan;

(ix) to modify or amend each Award (subject to Section 18(c) of the Plan); and

(x) to make all other determinations deemed necessary or advisable for administering the Plan.

(c) Effect of Administrator’s Decision. All decisions, determinations and interpretations of the Administrator shall be final and binding on all Participants.

5. Eligibility. Nonstatutory Stock Options, Restricted Stock, Restricted Stock Units, Stock Appreciation Rights, Performance Units, Performance Shares, and such other cash or stock awards as the Administrator determines may be granted to Service Providers. Incentive Stock Options may be granted only to Employees.

6. At-Will Employment. Neither the Plan nor any Award shall confer upon any Participant any right with respect to continuing the Participant’s relationship as a Service Provider with the Company, nor shall it interfere in any way with his or her right or the Company’s right to terminate such relationship at any time, with or without cause, and with or without notice.

7. Term of Plan. Subject to stockholder approval in accordance with Section 24, the Plan shall become effective upon its adoption by the Board. Unless sooner terminated under Section 18, it shall continue in effect for a term of ten (10) years.

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8. Stock Options.

(a) Limitations.

(i) Incentive Stock Option Limit. Each Option shall be designated in the Award Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option. However, notwithstanding such designation, to the extent that the aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options are exercisable for the first time by the Participant during any calendar year (under all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such Options shall be treated as Nonstatutory Stock Options. For purposes of this Section 8(a), Incentive Stock Options shall be taken into account in the order in which they were granted. The Fair Market Value of the Shares shall be determined as of the time the Option with respect to such Shares is granted.

(ii) Number of Shares. The Administrator will have complete discretion to determine the number of Shares subject to an Option granted to any Participant. Notwithstanding the foregoing sentence, for Options intended to qualify as “performance-based compensation” within the meaning of Section 162(m) of the Code, during any Fiscal Year, no Participant will be granted an Option covering more than 50,000 Shares. Notwithstanding the limitation in the previous sentence, for Options intended to qualify as “performance-based compensation” within the meaning of Section 162(m) of the Code, in connection with his or her initial service as an Employee, an Employee may be granted Options covering up to an additional 150,000 Shares.

(b) Term of Option. The term of each Option shall be stated in the Award Agreement; provided, however, that the term shall be no more than ten (10) years from the date of grant thereof. In the case of an Incentive Stock Option granted to a Participant who, at the time the Option is granted, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the term of the Option shall be five (5) years from the date of grant or such shorter term as may be provided in the Award Agreement.

(i) Exercise Price. The per share exercise price for the Shares to be issued upon exercise of an Option shall be such price as is determined by the Administrator, but shall be subject to the following:

(A) In the case of an Incentive Stock Option

a) granted to an Employee who, at the time of grant of such Option, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the exercise price shall be no less than 110% of the Fair Market Value per Share on the date of grant; or

b) granted to any other Employee, the per Share exercise price shall be no less than 100% of the Fair Market Value per Share on the date of grant.

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(B) In the case of a Nonstatutory Stock Option, the per Share exercise price shall be no less than 100% of the Fair Market Value per Share on the date of grant.

(ii) Notwithstanding the foregoing provisions of this Section 8(c), Options may be granted with a per Share exercise price of less than 100% of the Fair Market Value per Share on the date of grant pursuant to a transaction described in, and in a manner consistent with, Section 424(a) of the Code.

(iii) Forms of Consideration. The consideration to be paid for the Shares to be issued upon exercise of an Option, including the method of payment, shall be determined by the Administrator (and, in the case of an Incentive Stock Option, shall be determined at the time of grant). Such consideration may consist of, without limitation, (i) cash, (ii) check, (iii) promissory note, (iv) surrender of other Shares which (x) shall be valued at its Fair Market Value on the date of exercise, and (y) must be owned free and clear of any liens, claims, encumbrances or security interests, and accepting such Shares, in the sole discretion of the Administrator, shall not result in any adverse accounting consequences to the Company, (v) consideration received by the Company under a cashless exercise program implemented by the Company in connection with the Plan, or (vi) any combination of the foregoing methods of payment. In making its determination as to the type of consideration to accept, the Administrator shall consider if acceptance of such consideration may be reasonably expected to benefit the Company.

(d) Exercise of Option.

(i) Procedure for Exercise; Rights as a Stockholder. Any Option granted hereunder shall be exercisable according to the terms hereof at such times and under such conditions as determined by the Administrator and set forth in the Award Agreement. An Option may not be exercised for a fraction of a Share.

An Option shall be deemed exercised when the Company receives: (i) written or electronic notice of exercise (in accordance with the Award Agreement) from the person entitled to exercise the Option, and (ii) full payment for the Shares with respect to which the Option is exercised (together with any applicable withholding taxes). Full payment may consist of any consideration and method of payment authorized by the Administrator and permitted by the Award Agreement and the Plan. Shares issued upon exercise of an Option shall be issued in the name of the Participant or, if requested by the Participant, in the name of the Participant and his or her spouse. Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to the Shares, notwithstanding the exercise of the Option. The Company shall issue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 16 of the Plan.

Exercise of an Option in any manner shall result in a decrease in the number of Shares thereafter available for sale under the Option, by the number of Shares as to which the Option is exercised.

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(ii) Termination of Relationship as a Service Provider. If a Participant ceases to be a Service Provider, other than upon the Participant’s termination as the result of the Participant’s death or Disability, the Participant may exercise his or her Option within ninety (90) days of termination, or such longer period of time as is specified in the Award Agreement to the extent that the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement). In the absence of a specified time in the Award Agreement, to the extent not exercised, the Option expires on the 90th day following the Participant’s termination. Unless otherwise provided by the Administrator, if, on the date of termination, to the extent the Participant is not vested as to his or her Option, the Shares covered by the unvested portion of the Option shall revert to the Plan. If, after termination, the Participant does not exercise his or her Option within ninety (90) days of termination, or such longer period of time as is specified in the Award Agreement, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.

(iii) Disability of Participant. If a Participant ceases to be a Service Provider as a result of the Participant’s Disability, the Participant may exercise his or her Option within six (6) months of termination, or such longer period of time as is specified in the Award Agreement to the extent the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement). In the absence of a specified time in the Award Agreement, to the extent not exercised, the Option shall expire six (6) months following the Participant’s termination. Unless otherwise provided by the Administrator, if, on the date of termination, to the extent the Participant is not vested as to his or her Option, the Shares covered by the unvested portion of the Option shall revert to the Plan. If, after termination, the Participant does not exercise his or her Option within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.

(iv) Death of Participant. If a Participant dies while a Service Provider, the Option may be exercised within six (6) months following the Participant’s death, or within such longer period of time as is specified in the Award Agreement to the extent that the Option is vested on the date of death (but in no event may the Option be exercised later than the expiration of the term of such Option as set forth in the Award Agreement), by the Participant’s designated beneficiary, provided such beneficiary has been designated prior to Participant’s death in a form acceptable to the Administrator. If no such beneficiary has been designated by the Participant, then such Option may be exercised by the personal representative of the Participant’s estate or by the person(s) to whom the Option is transferred pursuant to the Participant’s will or in accordance with the laws of descent and distribution. In the absence of a specified time in the Award Agreement, to the extent not exercised, the Option shall expire six (6) months following the Participant’s termination. Unless otherwise provided by the Administrator, if, at the time of death, to the extent the Participant is not vested as to his or her Option, the Shares covered by the unvested portion of the Option shall immediately revert to the Plan. If the Option is not so exercised within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.

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9. Stock Appreciation Rights.

(a) Grant of Stock Appreciation Rights. Subject to the terms and conditions of the Plan, a Stock Appreciation Right may be granted to Service Providers at any time and from time to time as will be determined by the Administrator, in its sole discretion.

(b) Number of Shares. The Administrator will have complete discretion to determine the number of Stock Appreciation Rights granted to any Participant, provided that during any Fiscal Year, no Participant will be granted Stock Appreciation Rights covering more than 50,000 Shares. Notwithstanding the limitation in the previous sentence, in connection with his or her initial service as an Employee, an Employee may be granted Stock Appreciation Rights covering up to an additional 150,000 Shares.

(c) Exercise Price and Other Terms. The Administrator, subject to the provisions of the Plan, will have complete discretion to determine the terms and conditions of Stock Appreciation Rights granted under the Plan, provided, however, that the exercise price will be not less than 100% of the Fair Market Value of a Share on the date of grant.

(d) Stock Appreciation Right Agreement. Each Stock Appreciation Right grant will be evidenced by an Award Agreement that will specify the exercise price, the term of the Stock Appreciation Right, the conditions of exercise, and such other terms and conditions as the Administrator, in its sole discretion, will determine.

(e) Expiration of Stock Appreciation Rights. A Stock Appreciation Right granted under the Plan will expire upon the date determined by the Administrator, in its sole discretion, and set forth in the Award Agreement; provided, however, that the term will be no more than ten (10) years from the date of grant thereof. Notwithstanding the foregoing, the rules of Section 8(d) also will apply to Stock Appreciation Rights.

(f) Payment of Stock Appreciation Right Amount. Upon exercise of a Stock Appreciation Right, a Participant will be entitled to receive payment from the Company in an amount determined by multiplying:

(i) The difference between the Fair Market Value of a Share on the date of exercise over the exercise price; times

(ii) The number of Shares with respect to which the Stock Appreciation Right is exercised.

At the discretion of the Administrator, the payment upon Stock Appreciation Right exercise may be in cash, in Shares of equivalent value, or in some combination thereof.

10. Restricted Stock.

(a) Grant of Restricted Stock. Subject to the terms and provisions of the Plan, the Administrator, at any time and from time to time, may grant Shares of Restricted Stock to Service Providers in such amounts as the Administrator, in its sole discretion, will determine.

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(b) Restricted Stock Agreement. Each Award of Restricted Stock will be evidenced by an Award Agreement that will specify the Period of Restriction, the number of Shares granted, and such other terms and conditions as the Administrator, in its sole discretion, will determine. Notwithstanding the foregoing sentence, for restricted stock intended to qualify as “performance-based compensation” within the meaning of Section 162(m) of the Code, during any Fiscal Year no Participant will receive more than an aggregate of 50,000 Shares of Restricted Stock. Notwithstanding the foregoing limitation, in connection with his or her initial service as an Employee, for restricted stock intended to qualify as “performance-based compensation” within the meaning of Section 162(m) of the Code, an Employee may be granted an aggregate of up to an additional 150,000 Shares of Restricted Stock. Unless the Administrator determines otherwise, Shares of Restricted Stock will be held by the Company as escrow agent until the restrictions on such Shares have lapsed.

(c) Transferability. Except as provided in this Section 10, Shares of Restricted Stock may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until the end of the applicable Period of Restriction.

(d) Other Restrictions. The Administrator, in its sole discretion, may impose such other restrictions on Shares of Restricted Stock as it may deem advisable or appropriate.

(e) Removal of Restrictions. Except as otherwise provided in this Section 10, Shares of Restricted Stock covered by each Restricted Stock grant made under the Plan will be released from escrow as soon as practicable after the last day of the Period of Restriction. The Administrator, in its discretion, may accelerate the time at which any restrictions will lapse or be removed.

(f) Voting Rights. During the Period of Restriction, Service Providers holding Shares of Restricted Stock granted hereunder may exercise full voting rights with respect to those Shares, unless the Administrator determines otherwise.

(g) Dividends and Other Distributions. During the Period of Restriction, Service Providers holding Shares of Restricted Stock will be entitled to receive all dividends and other distributions paid with respect to such Shares unless otherwise provided in the Award Agreement. If any such dividends or distributions are paid in Shares, the Shares will be subject to the same restrictions on transferability and forfeitability as the Shares of Restricted Stock with respect to which they were paid.

(h) Return of Restricted Stock to Company. On the date set forth in the Award Agreement, the Restricted Stock for which restrictions have not lapsed will revert to the Company and again will become available for grant under the Plan.

(i) Section 162(m) Performance Restrictions. For purposes of qualifying grants of Restricted Stock as “performance-based compensation” under Section 162(m) of the Code, the Administrator, in its discretion, may set restrictions based upon the achievement of Performance Goals. The Performance Goals will be set by the Administrator on or before the Determination Date. In granting Restricted Stock which is intended to qualify under Section 162(m) of the Code, the Administrator will follow any procedures determined by it from time to time to be necessary or appropriate to ensure qualification of the Award under Section 162(m) of the Code (e.g., in determining the Performance Goals).

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11. Restricted Stock Units.

(a) Grant. Restricted Stock Units may be granted at any time and from time to time as determined by the Administrator. Each Restricted Stock Unit grant will be evidenced by an Award Agreement that will specify such other terms and conditions as the Administrator, in its sole discretion, will determine, including all terms, conditions, and restrictions related to the grant, the number of Restricted Stock Units and the form of payout, which, subject to Section 11(d), may be left to the discretion of the Administrator. Notwithstanding anything to the contrary in this subsection (a), for Restricted Stock Units intended to qualify as “performance-based compensation” within the meaning of Section 162(m) of the Code, during any Fiscal Year of the Company, no Participant will receive more than an aggregate of 50,000 Restricted Stock Units. Notwithstanding the limitation in the previous sentence, for Restricted Stock Units intended to qualify as “performance-based compensation” within the meaning of Section 162(m) of the Code, in connection with his or her initial service as an Employee, an Employee may be granted an aggregate of up to an additional 150,000 Restricted Stock Units.

(b) Vesting Criteria and Other Terms. The Administrator will set vesting criteria in its discretion, which, depending on the extent to which the criteria are met, will determine the number of Restricted Stock Units that will be paid out to the Participant. After the grant of Restricted Stock Units, the Administrator, in its sole discretion, may reduce or waive any restrictions for such Restricted Stock Units. Each Award of Restricted Stock Units will be evidenced by an Award Agreement that will specify the vesting criteria, and such other terms and conditions as the Administrator, in its sole discretion will determine. The Administrator, in its discretion, may accelerate the time at which any restrictions will lapse or be removed.

(c) Earning Restricted Stock Units. Upon meeting the applicable vesting criteria, the Participant will be entitled to receive a payout as specified in the Award Agreement.

(d) Form and Timing of Payment. Payment of earned Restricted Stock Units will be made as soon as practicable after the date(s) set forth in the Award Agreement. The Administrator, in its sole discretion, may pay earned Restricted Stock Units in cash, Shares, or a combination thereof. Shares represented by Restricted Stock Units that are fully paid in cash again will be available for grant under the Plan.

(e) Cancellation. On the date set forth in the Award Agreement, all unearned Restricted Stock Units will be forfeited to the Company.

(f) Section 162(m) Performance Restrictions. For purposes of qualifying grants of Restricted Stock Units as “performance-based compensation” under Section 162(m) of the Code, the Administrator, in its discretion, may set restrictions based upon the achievement of Performance Goals. The Performance Goals will be set by the Administrator on or before the Determination Date. In granting Restricted Stock Units which are intended to qualify under Section 162(m) of the Code, the Administrator will follow any procedures determined by it from time to time to be necessary or appropriate to ensure qualification of the Award under Section 162(m) of the Code (e.g., in determining the Performance Goals).

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12. Performance Units and Performance Shares.

(a) Grant of Performance Units/Shares. Performance Units and Performance Shares may be granted to Service Providers at any time and from time to time, as will be determined by the Administrator, in its sole discretion. The Administrator will have complete discretion in determining the number of Performance Units/Shares granted to each Participant provided that during any Fiscal Year, for Performance Units or Performance Shares intended to qualify as “performance-based compensation” within the meaning of Section 162(m) of the Code, (i) no Participant will receive Performance Units having an initial value greater than $500,000, and (ii) no Participant will receive more than 50,000 Performance Shares. Notwithstanding the foregoing limitation, for Performance Shares intended to qualify as “performance-based compensation” within the meaning of Section 162(m) of the Code, in connection with his or her initial service, a Service Provider may be granted up to an additional 150,000 Performance Shares.

(b) Value of Performance Units/Shares. Each Performance Unit will have an initial value that is established by the Administrator on or before the date of grant. Each Performance Share will have an initial value equal to the Fair Market Value of a Share on the date of grant.

(c) Performance Objectives and Other Terms. The Administrator will set performance objectives or other vesting provisions. The Administrator may set vesting criteria based upon the achievement of Company-wide, business unit, or individual goals (including, but not limited to, continued employment), or any other basis determined by the Administrator in its discretion. Each Award of Performance Units/Shares will be evidenced by an Award Agreement that will specify the Performance Period, and such other terms and conditions as the Administrator, in its sole discretion, will determine. The Administrator, in its sole discretion, may provide at the time of or following the date of grant for accelerated vesting for an Award of Performance Units/Shares.

(d) Earning of Performance Units/Shares. After the applicable Performance Period has ended, the holder of Performance Units/Shares will be entitled to receive a payout of the number of Performance Units/Shares earned by the Participant over the Performance Period, to be determined as a function of the extent to which the corresponding performance objectives or other vesting provisions have been achieved. After the grant of a Performance Unit/Share, the Administrator, in its sole discretion, may reduce or waive any performance objectives or other vesting provisions for such Performance Unit/Share.

(e) Form and Timing of Payment of Performance Units/Shares. Payment of earned Performance Units/Shares will be made as soon as practicable after the expiration of the applicable Performance Period. The Administrator, in its sole discretion, may pay earned Performance Units/Shares in the form of cash, in Shares (which have an aggregate Fair Market Value equal to the value of the earned Performance Units/Shares at the close of the applicable Performance Period) or in a combination thereof.

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(f) Cancellation of Performance Units/Shares. On the date set forth in the Award Agreement, all unearned or unvested Performance Units/Shares will be forfeited to the Company, and again will be available for grant under the Plan.

(g) Section 162(m) Performance Restrictions. For purposes of qualifying grants of Performance Units/Shares as “performance-based compensation” under Section 162(m) of the Code, the Administrator, in its discretion, may set restrictions based upon the achievement of Performance Goals. The Performance Goals will be set by the Administrator on or before the Determination Date. In granting Performance Units/Shares which are intended to qualify under Section 162(m) of the Code, the Administrator will follow any procedures determined by it from time to time to be necessary or appropriate to ensure qualification of the Award under Section 162(m) of the Code (e.g., in determining the Performance Goals).

13. Performance-Based Compensation Under Code Section 162(m).

(a) General. If the Administrator, in its discretion, decides to grant an Award intended to qualify as “performance-based compensation” under Code Section 162(m), the provisions of this Section 13 will control over any contrary provision in the Plan; provided, however, that the Administrator may in its discretion grant Awards that are not intended to qualify as “performance-based compensation” under Section 162(m) of the Code to such Participants that are based on Performance Goals or other specific criteria or goals but that do not satisfy the requirements of this Section 13.

(b) Performance Goals. The granting and/or vesting of Awards of Restricted Stock, Restricted Stock Units, Performance Shares and Performance Units and other incentives under the Plan may be made subject to the attainment of performance goals relating to one or more business criteria within the meaning of Code Section 162(m) and may provide for a targeted level or levels of achievement (“Performance Goals”) including (i) annual revenue, (ii) cash from operations, (iii) earnings per Share, (iv) net income, (v) new orders, (vi) operating cash flow, (vii) operating income, (viii) pro forma net income, (ix) product shipments, (x) profit after taxes, (xi) profit before taxes, (xii) return on assets, (xiii) return on equity, (xiv) return on sales, (xv) revenue, and (xvi) total shareholder return. Any Performance Goals may be used to measure the performance of the Company as a whole or a business unit of the Company and may be measured relative to a peer group or index. The Performance Goals may differ from Participant to Participant and from Award to Award. Prior to the Determination Date, the Administrator will determine whether any significant element(s) will be included in or excluded from the calculation of any Performance Goal with respect to any Participant.

(c) Procedures. To the extent necessary to comply with the performance-based compensation provisions of Code Section 162(m), with respect to any Award granted subject to Performance Goals, within the first twenty-five percent (25%) of the Performance Period, but in no event more than ninety (90) days following the commencement of any Performance Period (or such other time as may be required or permitted by Code Section 162(m)), the Administrator will, in writing, (i) designate one or more Participants to whom an Award will be made, (ii) select the Performance Goals applicable to the Performance Period, (iii) establish the Performance Goals, and amounts of such Awards, as applicable, which may be earned for such Performance Period, and (iv) specify the relationship between Performance Goals and the amounts of such Awards, as applicable, to be earned by each Participant for such Performance Period. Following the completion of each Performance Period, the Administrator will certify in writing whether the applicable Performance Goals have been achieved for such Performance Period. In determining the amounts earned by a Participant, the Administrator will have the right to reduce or eliminate (but not to increase) the amount payable at a given level of performance to take into account additional factors that the Administrator may deem relevant to the assessment of individual or corporate performance for the Performance Period. A Participant will be eligible to receive payment pursuant to an Award for a Performance Period only if the Performance Goals for such period are achieved.

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(d) Additional Limitations. Notwithstanding any other provision of the Plan, any Award which is granted to a Participant and is intended to constitute qualified performance based compensation under Code Section 162(m) will be subject to any additional limitations set forth in the Code (including any amendment to Section 162(m)) or any regulations and ruling issued thereunder that are requirements for qualification as qualified performance-based compensation as described in Section 162(m) of the Code, and the Plan will be deemed amended to the extent necessary to conform to such requirements.

14. Leaves of Absence. Unless the Administrator provides otherwise, vesting of Awards granted hereunder will be suspended during any unpaid leave of absence. A Service Provider will not cease to be an Employee in the case of (i) any leave of absence approved by the Company, or (ii) transfers between locations of the Company or between the Company, its Parent, or any Subsidiary. For purposes of Incentive Stock Options, no such leave may exceed three (3) months, unless reemployment upon expiration of such leave is guaranteed by statute or contract. If reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, then three (3) months and one (1) day following the commencement of such leave any Incentive Stock Option held by the Participant will cease to be treated as an Incentive Stock Option and will be treated for tax purposes as a Nonstatutory Stock Option.

15. Transferability of Awards. Unless determined otherwise by the Administrator, Awards may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or the laws of descent and distribution, and may be exercised during the lifetime of the Participant, only by the Participant. If the Administrator makes an Award transferable, such Award may only be transferred (i) by will, (ii) by the laws of descent and distribution, or (iii) to a revocable trust.

16. Adjustments; Dissolution or Liquidation; Merger or Change in Control.

(a) Adjustments. In the event that any dividend or other distribution (whether in the form of cash, Shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Shares or other securities of the Company, or other change in the corporate structure of the Company affecting the Shares occurs, the Administrator, in order to prevent diminution or enlargement of the benefits or potential benefits intended to be made available under the Plan, shall adjust the number and class of Shares that may be delivered under the Plan and/or the number, class, price of Shares covered by each outstanding Award, and the numerical Share limits set forth in Sections 3, 8, 9, 10, 11, and 12.

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(b) Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, the Administrator shall notify each Participant as soon as practicable prior to the effective date of such proposed transaction. To the extent it has not been previously exercised, an Option or Stock Purchase Right will terminate immediately prior to the consummation of such proposed action.

(c) Merger or Change in Control. In the event of a merger of the Company with or into another corporation, or a Change in Control, each outstanding Award shall be assumed or an equivalent option substituted by the successor corporation or a Parent or Subsidiary of the successor corporation. In the event that the successor corporation in a merger or Change in Control refuses to assume or substitute for the Award, then the Participant will fully vest in and have the right to exercise all of his or her outstanding Options and Stock Appreciation Rights, including Shares as to which such Awards would not otherwise be vested or exercisable, all restrictions on Restricted Stock will lapse, and, with respect to Restricted Stock Units, Performance Shares and Performance Units, all Performance Goals or other vesting criteria will be deemed achieved at target levels and all other terms and conditions met. In addition, if an Option or Stock Appreciation Right is not assumed or substituted for in the event of a Change in Control, the Administrator will notify the Participant in writing or electronically that the Option or Stock Appreciation Right will be fully vested and exercisable for fifteen (15) days, and the Option or Stock Appreciation Right will terminate upon the expiration of such period.

For the purposes of this Section 16(c), an Award will be considered assumed if, following the Change in Control, the Award confers the right to purchase or receive, for each Share subject to the Award immediately prior to the Change in Control, the consideration (whether stock, cash, or other securities or property) or, in the case of a Stock Appreciation Right upon the exercise of which the Administrator determines to pay cash or a Performance Share or Performance Unit which the Administrator can determine to pay in cash, the fair market value of the consideration received in the merger or Change in Control by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the Change in Control is not solely common stock of the Successor Corporation, the Administrator may, with the consent of the Successor Corporation, provide for the consideration to be received upon the exercise of an Option or Stock Appreciation Right or upon the payout of a Performance Share or Performance Unit, for each Share subject to such Award (or in the case of Performance Units, the number of implied shares determined by dividing the value of the Performance Units by the per share consideration received by holders of Common Stock in the Change in Control), to be solely common stock of the Successor Corporation equal in fair market value to the per share consideration received by holders of Common Stock in the Change in Control.

Notwithstanding anything in this Section 16(c) to the contrary, an Award that vests, is earned or paid-out upon the satisfaction of one or more Performance Goals will not be considered assumed if the Company or its successor modifies any of such Performance Goals without the Participant’s consent; provided, however, a modification to such Performance Goals only to reflect the Successor Corporation’s post-Change in Control corporate structure will not be deemed to invalidate an otherwise valid Award assumption.

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17. Time of Granting Awards. The date of grant of an Award shall, for all purposes, be the date on which the Administrator makes the determination granting such Award, or such later date as is determined by the Administrator. Notice of the determination shall be given to each Service Provider to whom an Award is so granted within a reasonable time after the date of such grant.

18. Amendment and Termination of the Plan.

(a) Amendment and Termination. The Board may at any time amend, alter, suspend or terminate the Plan.

(b) Stockholder Approval. The Board shall obtain stockholder approval of any Plan amendment to the extent necessary and desirable to comply with Applicable Laws.

(c) Effect of Amendment or Termination. No amendment, alteration, suspension or termination of the Plan shall impair the rights of any Participant, unless mutually agreed otherwise between the Participant and the Administrator, which agreement must be in writing and signed by the Participant and the Company. Termination of the Plan shall not affect the Administrator’s ability to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such termination.

19. Tax Withholding

(a) Withholding Requirements. Prior to the delivery of any Shares or cash pursuant to an Award (or exercise thereof), the Company will have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy federal, state, local, foreign or other taxes (including the Participant’s FICA obligation) required to be withheld with respect to such Award (or exercise thereof).

(b) Withholding Arrangements. The Administrator, in its sole discretion and pursuant to such procedures as it may specify from time to time, may permit a Participant to satisfy such tax withholding obligation, in whole or in part by (without limitation) (i) paying cash, (ii) electing to have the Company withhold otherwise deliverable cash or Shares having a Fair Market Value equal to the minimum amount required to be withheld, (iii) delivering to the Company already-owned Shares having a Fair Market Value equal to the amount required to be withheld, or (iv) selling a sufficient number of Shares otherwise deliverable to the Participant through such means as the Administrator may determine in its sole discretion (whether through a broker or otherwise) equal to the amount required to be withheld. The amount of the withholding requirement will be deemed to include any amount which the Administrator agrees may be withheld at the time the election is made, not to exceed the amount determined by using the maximum federal, state or local marginal income tax rates applicable to the Participant with respect to the Award on the date that the amount of tax to be withheld is to be determined. The Fair Market Value of the Shares to be withheld or delivered will be determined as of the date that the taxes are required to be withheld.

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20. Conditions Upon Issuance of Shares.

(a) Legal Compliance. Shares shall not be issued pursuant to the exercise of an Award unless the exercise of such Award and the issuance and delivery of such Shares shall comply with Applicable Laws and shall be further subject to the approval of counsel for the Company with respect to such compliance.

(b) Investment Representations. As a condition to the exercise of an Award, the Administrator may require the person exercising such Award to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required.

21. No Effect on Employment or Service. Neither the Plan nor any Award will confer upon a Participant any right with respect to continuing the Participant’s relationship as a Service Provider with the Company, nor will they interfere in any way with the Participant’s right or the Company’s right to terminate such relationship at any time, with or without cause, to the extent permitted by Applicable Laws.

22. Inability to Obtain Authority. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained.

23. Reservation of Shares. The Company, during the term of this Plan, shall at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan.

24. Stockholder Approval. The Plan shall be subject to approval by the stockholders of the Company within twelve (12) months after the date the Plan is adopted by the Board. Such stockholder approval shall be obtained in the degree and manner required under Applicable Laws.

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EX-10.27 15 ex10_27.htm CONTRACT OF MORTGAGE OF MAXIMUM AMOUNT ex10_27.htm

EXHIBIT 10.27

Contract of Mortgage of Maximum Amount

(for credits)

No: CIB Shenzhen Nanxin (credit) Mortgage (2008)0004

Trustor: Nanxin Branch, Shenzhen, Industrial Bank Co., Ltd.

Address: 1st Floor, Nanhaitai Mansion, Nanxin Road, Nanshan District

Postal Code: 518052 Telex number: ___________

Telephone: 26077176 Fax number: 26077085

Mortgagor: Henry Thomas Cochran, Linda Marie Hetue

Address: ____________________________________________________

Postal Code: 518028 Telex number: ___________

Telephone: 26012225 Fax number: 26012224

Primary deposit account: ________________________________________

General deposit account: ________________________________________

Place of signing the contract: CIB Mansion, Futian District, Shenzhen

Shenzhen Branch, Industrial Bank Co., Ltd.

EXHIBIT 10.27

The mortgagor shall adopt his or her own asset as the mortgage (the “Mortgagee”) to provide SinoHub SCM Shenzhen Limited (the “debtor” and the “fiduciary”) with guarantee for its credit amount. In order to clarify obligations, both sides signing this Contract must scrupulously keep their word and strictly execute the contract in compliance with the relative law and regulations.

Article I Definition

Unless otherwise agreed upon by both parties, then:

(1)	“Credit” here means the creditor comprehensively appraises the operation and risks of the fiduciary, and ascertains on the comprehensive maximum amount of the fiduciary, including RMB/foreign currency loan, trade financing, acceptance, discount, opening L/C, guarantee, etc.

(2)	“Primary credit” refers to the credit amount specified according to the basic information of the client, used for the current fund turnover of the client. The amount of the primary credit can be used several times and be recycled within the period of validity.

(3)

“Specialized credit” refers to the credit given for some special projects and the amount exceeding the primary credit with the changes of the national policy, market situation and the special requirement of the fiduciary. The amount of specialized credit shall be given once, could be used several times but not in recycling.

(4)

“Valid term of credit” means that within a non-in period, with the consent of the creditor, the fiduciary is entitled to deal with its business under the credit amount at the creditor. The time of the fiduciary to fulfill its obligations (including but not limited to the term of fulfilling the master liabilities, the term of guarantee undertaking) specified in the terms of this contract could be after the valid term of credit.

(5)	Creditor shall implement control over balance for the fiduciary. This balance refers to the sum of the balance incurred during the credit term, the fiduciary takes in use of the credit given by the creditor, including the pending balance before due and overdue outstanding balance, i.e.:

1.	pending balance before due is all kinds of outstanding debt before expiration that the fiduciary correspondingly shall pay when the creditor processes the transactions for the fiduciary according to this Contract.

overdue outstanding balance, is all kinds of outstanding debt before expiration that the fiduciary correspondingly shall pay but not fulfilled yet and the amount that the creditor has fulfilled to maintain its external credit standing when the creditor processes the transactions for the fiduciary according to this Contract.

(6)

“Sub-contract” is the contract based on the terms of the primary credit contract or specialized credit contract, the fiduciary shall sign with the creditor after getting approval of the creditor to concretely specify the amount and term of each master liability, and other rights and obligations. Primary credit contract or specialized credit contract is the Principal Contract of the sub-contracts. The sub-contracts, is an integral part of the Principal Contract, and has the same legal effect.

(7)

“Prime liability” is the principal debt due for repayment incurred when by the fiduciary for its business, including but not limited to the RMB/foreign currency principal, trade financing principal, bankers' acceptance bill, bills discounted, interest under the item of L/C, principal that the creditor is liable to guarantee for the fiduciary, etc.

Article II Principal Contract

The Principal Contract of this Contract is “Primary Credit Contract” and its sub-contracts (No: CIB Shenzhen Nanxin (credit) Mortgage (2008)0004). The credit amount is RMB30,000,000, and the term of the credit is from September 25, 2008 to September 25, 2009.

Article III Mortgage

The mortgagor shall provide his own house property with address at 17C, Building 35, Phase II, Costal Rose Garden as the mortgage for all the liabilities under the term of credit. Please refer to the Mortgage List for the name, amount, specification, and value, etc.

Article IV The scope of Mortgage

The mortgage applies to all the liabilities, including the prime liability, interest (penalty interest), penalty, compensation for loss and expenses for the creditor to fulfill his claim under the credit.

The expenses for the creditor to fulfill his claim includes but not limited to the litigation fee, property preservation fee, application fee for execution, lawyer fee, auction(Sale) expenses, etc.

EXHIBIT 10.27

As the requirement of the mortgage registration department, the scope of mortgage cannot exceed RMB___________, so when the time limit for his performance of the obligation provided in the principal contract expires, if the debtor fails to pay off the principal liabilities, then the mortgagor shall be responsible for all the liabilities based on the whole value of the mortgage.

Article V Custody of Mortgaged Property

1.	The mortgagor shall keep the mortgaged property of this Contract in custody, and the voucher for the rights pledged of the mortgaged property should be kept by creditor. The mortgagor agrees to accept the investigation of the mortgaged property from the creditor at any time.

The mortgagor shall keep a proper care of the mortgaged property, and take effective measures to ensure the safety, completion of the mortgaged property. On the condition that the mortgaged property needs fixing, then the mortgagor shall put up the repairing work in time and be responsible for the corresponding expenses.

Article VI Insurance of Mortgaged Property

1.	The mortgagor shall insure the mortgaged property in its full value as required by the creditor before transferring the mortgaged property to the creditor.

During the valid term of this Contract, the mortgagor shall ensure the continuity of the insurance. On the condition that the mortgagor ceases the insurance, the creditor is entitled to renew the insurance, and the expenses shall be at the cost of the mortgagor. The mortgagor shall be liable for all the losses of the creditor due to the intermission of the insurance.

3.	The creditor is the first beneficiary of the insurance on the mortgaged property. If the indemnity is not enough to pay off the liability of the mortgage, the creditor is entitled to seek compensation.

Article VII Mortgage Term

The mortgage right and mortgage liability of this Contract exist at the same time. When the primary liability is paid off, the mortgage right perishes.

As the requirement of the mortgage registration department, the mortgage term is registered as from September 25, 2008 to September 25, 2009. When the mortgage term expires but the debtor fails to pay off the primary liability, then:

1.	The mortgage right shall be granted to creditor according to law;

2.	The mortgagor shall complete the mortgage registration procedure.

Article VIII Mortgage Registration

1.	Upon signing this Contract, the mortgagor, together with the Mortgagee, shall take this Contract to the relative organizations to complete the registration of mortgaged property according the regulations of The Guaranty Law of the People's Republic of China.

2.	After completing the mortgage registration procedure, the mortgagor shall deliver the relative registration documents to the creditor. Within the valid term of the Principal Contract, when the mortgage registration expires, the mortgagor is obliged to renewing the registration.

3.	The mortgagor shall register the maximum amount of the mortgaged property, which takes effect for all the sub-contracts, and no need to make the registration for each contract.

Article IX Expenses

The mortgagor shall be liable for all the expenses related to the mortgaged property under this Contract (including but not limited to the registration fee, notarization fee and insurance, transportation, warehousing, safe-keeping, appraisal, repair, maintenance, disposure, etc. of the mortgaged property).

EXHIBIT 10.27

Article X Materialization of Mortgage Right

On the condition that the fiduciary fails to fulfill its liabilities (including the liability occurred when fiduciary or mortgagor breaches the contract and the creditor announces the debt due prematurely) according to the terms of this Contract for whatever reason, the mortgagor shall irrevocably authorize the creditor to dispose the mortgaged property directly and take the earnings to pay off debt.

Article XI Representations and Warrants

1.	Representations of the Mortgagor:

(1)	The documents, materials, reports and vouchers that the mortgagor provides the creditor with is true and accurate. In case of any falsity or dishonesty, the mortgagor shall be responsible for all legal liabilities.

(2)

The mortgagor has the complete ownership of the mortgaged property. If the mortgaged property is the public property, then the co-owners agrees in written form to provide the maximum amount to mortgage under the terms of this contract. The mortgagor shall be responsible for any disputes due to the ownership of the mortgaged property.

(3)	No restriction on the lease, mortgage, pledge or other rights of the mortgaged property, and there’s no barrier on the circulation of the mortgaged property in terms of law or contract.

2.	Warrant of the Mortgagor:

(1)

Upon completion of the mortgage liabilities, the mortgagor is entitled to seek for compensation without affecting the fiduciary to pay off the debt in the future. But on the condition that the fiduciary faces the claim of compensation of the mortgagor and the requirement of payment under the Principal Contract, the mortgagor agrees that the fiduciary pay off his debt against the creditor in priority.

(2)	If the fiduciary and mortgagor have signed or shall sign a counter guarantee contract under the guarantee liabilities of this Contract, then this counter guarantee contract shall not do any harm to the rights and interest that the creditor has under this mortgage contract legally or factually.

(3)

If there’s any natural disaster, accidental events, infringing act and other factors that lead to the vanishing or obvious decrease on the value of the mortgaged property, then the mortgagor shall take measures to stop the loss from being worsening, and inform the creditor in written form immediately.

(4)

Before the prime liability is cleared off, no matter what reason that lead to the decrease and insufficiency on the value of the mortgaged property to pay off the liability, the creditor is entitled to require the mortgagor to restore the value of the mortgaged property or provide new, adequate and valid mortgaged property.

(5)	Before the mortgage liability specified in this Contract is cleared off, the mortgagor ensures to keep, use and maintain the mortgaged property properly, and ensures not to rent, re-mortgage, pledge, sell the mortgaged property without the written consent of the creditor.

(6)

On the condition that the debtor fails to fulfill its liabilities according to this Contract, no matter what other ways that the mortgagee has guaranteed the claim under the Principal Contract (including but not limited to guarantee, mortgage, pledge, guarantee letter, Standby and any other guarantee way), the mortgagee is entitled to required the mortgagor to be responsible for all the guarantee liabilities, without exercising any mortgage rights.

Article XII Liabilities for Breach of Contracts

1.	On condition that one of the following situation occurs, it will be regarded as breaching the contract:

(1)	The mortgagor fails to fulfill the representations and warrants of Article XI of this Contract;

(2)	The mortgagor fails to fulfill the other terms of this Contract;

2.	The creditor is entitled to take one or several of the following measure in case that the mortgagor breaches the contract:

(1)	Setting a deadline for the rectification of the breach;

(2)	Requiring the mortgagor to provide new and adequate and valid mortgaged property;

(3)	Disposing the mortgaged property directly and paying off the debt with the earnings;

(4)	Claiming compensation on the loss from the mortgagor.

EXHIBIT 10.27

Article XIII Independent Guarantee

1.	The guarantee stated in this Contract is independent. This contract shall not be invalid due to the invalidity of its Principal Contract under any circumstances.

The mortgagor ensures that the fiduciary performs all kinds of obligations specified in this Contract. On the condition that the fiduciary breaches the terms of the Contract (including but not limited to the behavior that the fiduciary does not use the loan as the agreed purpose of loan in this Contract), the guarantee obligations of the mortgagor under this Contract shall not be influenced.

Article XIV Governance

The establishment, validity, explanation, performance and resolving of disputes of this Contract applies to the law of People’s Republic of China. During the term of this Contract, any arguments, disputes related to this contract shall be resolved on the basis of friendly negotiation of both parties. When the negotiation fails, one of the following measures shall be adopted:

√ Apply for arbitration at Shenzhen Arbitration Committee

Bring an accusation at the People’s Court where the Contract was signed

Article XV Notification1.

1.	Any notification or all kinds of communication of this Contract shall be delivered to another party according to the address, telex or other contact means on the cover of this Contract in written form.

2.	Any changes of the contact information of any party of this Contract shall be notified to another party immediately.

3.	Any notice or contact that was delivered according to the above address (address after change shall apply) shall be regarded as to arrive at the following dates:

(1)	5 work days after being delivered with registration for ordinary letter;

(2)	The day while receiving the confirmation of another party for telex;

(3)	Upon signing and receiving the mail for express mail.

Article XVI Effective Clause of the Contract

1.	According to law and regulations of China, the mortgage specified in this Contract shall only be effective after being registered, and the contract shall take effect when the following clause is satisfied:

(1)	Both parties sign or chop on this Contract;

(2)	The mortgage registration already becomes effect;

(3)	When the creditor requires notarization of this Contract, the notarization procedures has been completed legally.

2.	This contract shall take effect when both parties sign or chop when there’s no need to register the mortgage.

3.	This contract shall be terminated on the condition that all the liabilities of the Principal Contract is cleared off. After the termination of this Contract, the creditor shall return the ownership certificate of the mortgaged property in his custody to the mortgagor.

Article XVII Text

The original copies of this Contract are in quintuplicate. Both parties, registration organization, notarization organization, and the fiduciary shall keep a copy properly.

EXHIBIT 10.27

Article XVIII Appendix:

Creditor (Corporate Chop): Nanxin Branch, Shenzhen, Industrial Bank Co., Ltd.

Legal representative or authorized agent (signature): /s/Zhu Jiusheng

August 21, 2008

Mortgagor (Corporate Chop):

Legal representative or authorized agent (signature): /s/Henry Thomas Cochran, Linda Marie Hetue

August 21, 2008

Registration organization (Corporate Chop):

EXHIBIT 10.27

Appendix I:

Mortgaged Property (Estate)

Name of the mortgaged property: 17C, Building 35, Phase II, Costal Rose Garden

Owner: Henry Thomas Cochran & Linda Marie Hetue

Purpose: Residential

Term of usage: 70 years

Location: South of Wanghai Road, west to Shekou Port, Nanshan District

Construction space: 176.71㎡

Cost: RMB1,405,479

No. of certificate of property right/title: Shenzhen 4000267933

Issuing organization: Shenzhen Real Estate Registration center

Issuing date: May 11, 2006

Category of insurance: Asset insurance

September 21, 2008

EX-10.28 16 ex10_28.htm CONTRACT OF GUARANTEE OF MAXIMUM AMOUNT ex10_28.htm

EXHIBIT 10.28

Contract of Guarantee of Maximum Amount

(for individual guarantee)

No: CIB Shenzhen Nanxin (credit) IG (2008)0004B

Trustor: Nanxin Branch, Shenzhen, Industrial Bank Co., Ltd.

Address: 1st Floor, Nanhaitai Mansion, Nanxin Road, Nanshan District

Postal Code: 518052 Telex number: ___________

Telephone: 26077176 Fax number: 26077085

Mortgagor: Lei Xia

Address: ___________________________________________________

Postal Code: __________ Telex number: ___________

Telephone: ___________ Fax number: ___________

Primary deposit account: ________________________________________

General deposit account: ________________________________________

Place of signing the contract: CIB Mansion, Futian District, Shenzhen

Shenzhen Branch, Industrial Bank Co., Ltd.

EXHIBIT 10.28

The guarantor is willing to offer the guarantee of maximum amount for the Loaner (“Creditor”) against SinoHub SCM Shenzhen Ltd. (the “debtor”). In order to clarify obligations, both sides signing this Contract must scrupulously keep their word and strictly execute the contract in compliance with the relative law and regulations.

Article I Definition

Unless otherwise agreed upon by both parties, then:

(1)	“Credit” here means the creditor comprehensively appraises the operation and risks of the debtor, and ascertains the comprehensive maximum amount of the debtor, including RMB/foreign currency loan, trade financing, acceptance, discount, opening L/C, guarantee, etc.

(2)	“Primary credit” refers to the credit amount specified according to the basic information of the client, used for the current fund turnover of the client. The amount of the primary credit can be used several times and in recycle within the period of validity.

(3)

“Specialized credit” refers to the credit given for some special projects and the amount exceeding the primary credit with the changes of the national policy, market situation and the special requirement of the debtor. The amount of specialized credit shall be given once, could be used several times but not in recycling.

(4)

“Valid term of credit” means that within a non-in period, with the consent of the creditor, the debtor is entitled to deal with his business under the credit amount at the creditor. The time of the debtor to fulfill his obligations (including but not limited to the term of fulfilling the master liabilities, the term of guarantee undertaking) specified in the terms of this contract could be after the valid term of credit.

(5)	Creditor shall implement control over balance for the debtor. This balance refers to the sum of the balance incurred during the credit term the debtor takes in use of the credit given by the creditor, including the pending balance before due and overdue outstanding balance, i.e.:

1.	pending balance before due is all kinds of outstanding debt before expiration that the debtor correspondingly shall pay when the creditor processes the transactions for the debtor according to this Contract.

overdue outstanding balance, is all kinds of outstanding debt before expiration that the debtor correspondingly shall pay but not fulfilled yet and the amount that the creditor has fulfilled to maintain its external credit standing when the creditor processes the transactions for the debtor according to this Contract.

(6)

“Sub-contract” is the contract based on the terms of the primary credit contract or specialized credit contract, the debtor shall sign with the creditor after getting approval of the creditor to concretely specify the amount and term of each master liability, and other rights and obligations. Primary credit contract or specialized credit contract is the Principal Contract of the sub-contracts. The sub-contracts, is an integral part of the Principal Contract, and has the same legal effect.

(7)

“Prime liability” is the principal debt due for repayment occurred when the debtor process his business, including but not limited to the RMB/foreign currency principal, trade financing principal, bankers' acceptance bill, bills discounted, interest under the item of L/C, principal that the creditor is liable to guarantee for the debtor, etc.

Article II Principal Contract

The Principal Contract of this Contract is “Primary Credit Contract” and its sub-contracts (No: CIB Shenzhen Nanxin (credit) Mortgage (2008)0004). The credit amount is RMB30,000,000.00, and the term of the credit is from September 25, 2008 to September 25, 2009.

Article III Guarantee Liability

The guarantor is responsible for suretyship of joint and several liability under the terms of this Contract. Under any circumstances that the debtor fails to fulfill his liabilities (including the liability occurred when debtor or mortgagor breaches the contract and the creditor announces the debt due prematurely), the guarantor shall perform his liability of paying off the debit in compliance with this contract.

EXHIBIT 10.28

Article IV The scope of Guarantee

The guarantee applies to all the liabilities within the credit amount (including several sub-contracts under the principal contract), including the prime liability, interest (penalty interest), penalty, compensation for loss and expenses for the creditor to fulfill his claim under the credit.

The expenses for the creditor to fulfill his claim includes but not limited to the litigation fee, property preservation fee, application fee for execution, lawyer fee, legal fee, announcement fee, appraisal fee, auction fee, etc.

Article V Term of Guarantee

The guarantee term of all the liabilities under the credit is 2 years from the date of execution of each primary liability.

On the condition that the creditor takes back the loan prior of the agreed time, the primary liability shall be regarded as early execution, and the guarantee term of the liability is put ahead correspondingly.

Article VI Demand Guarantees

The liability of the guarantor under this Contract is demand guarantees, i.e. the guarantor shall fulfill his liabilities of paying off debt upon receiving the overdue notification specifying the liabilities under the guarantee contract and balance of debts provided by the creditor.

Article VII Representations and Warrants

1.	The Guarantor makes the following representations to the creditor:

(1)	The documents, materials, reports and vouchers that the mortgagor provides the creditor with is true and accurate.

(2)	The guarantor ensures to use all of his personal property and income to fulfill the guarantee obligations, and shall not sell or transfer his own personal property to any third party with any reason within the guarantee term.

(3)	The guarantor hereby confirms having acquired the co-owner’s consent when making the family property as the guarantee, and the co-owner shall issue announcement to creditor in written form.

(4)	The guarantor does not hide any of the following situations that has already happened or is going to happen and will disable the creditor to accept the guarantor:

1.	Unsettled litigation or arbitration;

2.	all kinds of debts of the guarantor or guarantee, mortgage or pledge provided to the third party;

3.	Any default events occurred under the contract the guarantor signed with the creditor or any other creditors

4.	other situation that influences the guarantee ability of the guarantor.

2.	The guarantor makes the following warranties to the creditor:

(1)

Upon completion of the guarantee liabilities, the guarantor is entitled to seek compensation without affecting the debtor to pay off the debt in the future. But on the condition that the debtor faces the claim of compensation of the mortgagor and the requirement of payment under the Principal Contract, the mortgagor agrees that the debtor pay off his debt against the creditor in priority.

(2)	If the debtor and guarantor have signed or shall sign a counter guarantee contract under the guarantee liabilities of this Contract, then this counter guarantee contract shall not do any harm to the rights and interest that the creditor has under this guarantee contract legally or factually.

(3)	The guarantor commits to inform the creditor in written form immediately on the events of default occurred under this contract, or any contract, guarantee contract or other contracts signed with any department of the creditor, organizations, other banks, non-financial organizations or units.

EXHIBIT 10.28

(4)	Within the guarantee term, the guarantor shall not transfer, conceal, abandon property or exercise his right of claim passively.

(5)

On the condition that the debtor fails to fulfill its liabilities according to this Contract, no matter what other ways that the creditor has guaranteed the claim under the Principal Contract (including but not limited to guarantee, mortgage, pledge, guarantee letter, Standby and any other guarantee way), the creditor is entitled to required the guarantor to be responsible for all the guarantee liabilities, without exercising any guarantee rights.

Article VIII Liabilities for Breach of Contracts

1.	On condition that one of the following situation occurs, it will be regarded as breaching the contract:

(1)	The mortgagor fails to fulfill the representations and warrants of Article XI of this Contract;

(2)	The mortgagor fails to fulfill the other terms of this Contract;

2.	The creditor is entitled to take one or several of the following measures, and in the meanwhile, the guarantor shall irrevocably authorize the creditor to take the measure 6 below without going through the legal procedures in case that the mortgagor breaches the contract:

(1)	Setting a deadline for the rectification of the breach;

(2)	Announcing the early expiration of the primary liability, and requiring the guarantor to be responsible for the jointly liabilities.

(3)	Requiring the guarantor to pay 10% of the loan of the principal contract as penalty;

(4)	Requiring the guarantor to pay for the actual loss that the indemnity is not sufficient to make up;

(5)	Cancelling the behavior that the guarantor does harm to the profit of the creditor according to law;

(6)	Deducting money from any account of the guarantor to pay off the debt within the guarantee liabilities;

(7)	Entitled to investigate against the guarantor the liabilities for breaching this Agreement.

Article IX Independent Guarantee

1.	The guarantee stated in this Contract is independent. This contract shall not be invalid due to the invalidity of its Principal Contract under any circumstances.

2.	On the condition that the creditor and debtor agree to amend or supplement the principal contract, there’s no necessity of getting the approval of guarantor, and there’s no changes on the obligations of the guarantor under this Contract.

On the condition that the debtor breaches the terms of the Contract (including but not limited to the behavior that the debtor does not use the loan as the agreed purpose of loan in this Contract), the guarantee obligations of the guarantor under this Contract shall not be influenced, and the guarantor shall not make it an excuse to alleviate or exempt from the obligations.

Article X Execution of Obligations and Abandonment of Rights

1.	The obligations of the guarantor under this Contract is independent, and shall not be influenced by the relationship between any party of the contract and any third party, except as provided elsewhere in the contract.

Any tolerance, extension, favorable conditions or any delay on exercising the rights under this Contract that the Creditor offers to the guarantor shall not influence, harm or restrict any rights and interests of the creditor according to this Contract and relative law and regulations, and shall not be considered as abandonment of rights and interests against the terms of this Contract, neither shall it affect any obligations of the guarantor specified in the Contract.

Article XI Notification

1.	Any notification or all kinds of communication of this Contract shall be delivered to another party according to the address, telex or other contact means on the cover of this Contract in written form.

2.	Any changes of the contact information of any party of this Contract shall be notified to another party immediately.

EXHIBIT 10.28

3.	Any notice or contact that was delivered according to the above address (address after change shall apply) shall be regarded as to arrive at the following dates:

(6)	5 work days after being delivered with registration for ordinary letter;

(7)	The day while receiving the confirmation of another party for telex;

(8)	Upon signing and receiving the mail for express mail.

Article XII Governance

√ Apply for arbitration at Shenzhen Arbitration Committee

Bring an accusation at the People’s Court where the Contract was signed

Article XIII Validity and Termination of the Agreement

This contract shall take effect when both parties sign or chop. When the creditor requires notarization of this Contract, this contract shall take effect upon the completion of the notarization procedures.

This contract shall be terminated on the condition that all the liabilities of this Contract is cleared off.

Article XIV Text

The original copies of this Contract is in triplicate. Both parties, registration organization, notarization organization, and the debtor shall keep a copy properly.

Article XV Appendix:

Creditor (Corporate Chop): Nanxin Branch, Shenzhen, Industrial Bank Co., Ltd.

Legal representative or authorized agent (signature): /s/Zhu Jiusheng

September 21, 2008

Guarantor (Signature in block letters): /s/Lei Xia

ID or Passport number: 713199472

September 21, 2008

EX-10.29 17 ex10_29.htm CONTRACT OF GUARANTEE OF MAXIMUM AMOUNT ex10_29.htm

EXHIBIT 10.29

Contract of Guarantee of Maximum Amount

(for individual guarantee)

No: CIB Shenzhen Nanxin (credit) IG (2008)0004B

Trustor: Nanxin Branch, Shenzhen, Industrial Bank Co., Ltd.

Address: 1st Floor, Nanhaitai Mansion, Nanxin Road, Nanshan District

Postal Code: 518052 Telex number: ___________

Telephone: 26077176 Fax number: 26077085

Mortgagor: Hantao Cui

Address: ___________________________________________________

Postal Code: __________ Telex number: ___________

Telephone: ___________ Fax number: ___________

Primary deposit account: ________________________________________

General deposit account: ________________________________________

Place of signing the contract: CIB Mansion, Futian District, Shenzhen

Shenzhen Branch, Industrial Bank Co., Ltd.

EXHIBIT 10.29

Article I Definition

Unless otherwise agreed upon by both parties, then:

(1)	“Credit” here means the creditor comprehensively appraises the operation and risks of the debtor, and ascertains the comprehensive maximum amount of the debtor, including RMB/foreign currency loan, trade financing, acceptance, discount, opening L/C, guarantee, etc.

(2)	“Primary credit” refers to the credit amount specified according to the basic information of the client, used for the current fund turnover of the client. The amount of the primary credit can be used several times and in recycle within the period of validity.

(3)

“Specialized credit” refers to the credit given for some special projects and the amount exceeding the primary credit with the changes of the national policy, market situation and the special requirement of the debtor. The amount of specialized credit shall be given once, could be used several times but not in recycling.

(4)

(5)	Creditor shall implement control over balance for the debtor. This balance refers to the sum of the balance incurred during the credit term the debtor takes in use of the credit given by the creditor, including the pending balance before due and overdue outstanding balance, i.e.:

1.	pending balance before due is all kinds of outstanding debt before expiration that the debtor correspondingly shall pay when the creditor processes the transactions for the debtor according to this Contract.

(6)

(7)

Article II Principal Contract

The Principal Contract of this Contract is “Primary Credit Contract” and its sub-contracts (No: CIB Shenzhen Nanxin (credit) Mortgage (2008)0004). The credit amount is RMB30,000,000.00, and the term of the credit is from September 25, 2008 to September 25, 2009.

Article III Guarantee Liability

EXHIBIT 10.29

Article IV The scope of Guarantee

Article V Term of Guarantee

The guarantee term of all the liabilities under the credit is 2 years from the date of execution of each primary liability.

Article VI Demand Guarantees

Article VII Representations and Warrants

1.	The Guarantor makes the following representations to the creditor:

(1)	The documents, materials, reports and vouchers that the mortgagor provides the creditor with is true and accurate.

(2)	The guarantor ensures to use all of his personal property and income to fulfill the guarantee obligations, and shall not sell or transfer his own personal property to any third party with any reason within the guarantee term.

(3)	The guarantor hereby confirms having acquired the co-owner’s consent when making the family property as the guarantee, and the co-owner shall issue announcement to creditor in written form.

(4)	The guarantor does not hide any of the following situations that has already happened or is going to happen and will disable the creditor to accept the guarantor:

1.	Unsettled litigation or arbitration;

2.	all kinds of debts of the guarantor or guarantee, mortgage or pledge provided to the third party;

3.	Any default events occurred under the contract the guarantor signed with the creditor or any other creditors

4.	other situation that influences the guarantee ability of the guarantor.

2.	The guarantor makes the following warranties to the creditor:

(1)

(2)	If the debtor and guarantor have signed or shall sign a counter guarantee contract under the guarantee liabilities of this Contract, then this counter guarantee contract shall not do any harm to the rights and interest that the creditor has under this guarantee contract legally or factually.

(3)	The guarantor commits to inform the creditor in written form immediately on the events of default occurred under this contract, or any contract, guarantee contract or other contracts signed with any department of the creditor, organizations, other banks, non-financial organizations or units.

EXHIBIT 10.29

(4)	Within the guarantee term, the guarantor shall not transfer, conceal, abandon property or exercise his right of claim passively.

(5)

Article VIII Liabilities for Breach of Contracts

1.	On condition that one of the following situation occurs, it will be regarded as breaching the contract:

(1)	The mortgagor fails to fulfill the representations and warrants of Article XI of this Contract;

(2)	The mortgagor fails to fulfill the other terms of this Contract;

2.	The creditor is entitled to take one or several of the following measures, and in the meanwhile, the guarantor shall irrevocably authorize the creditor to take the measure 6 below without going through the legal procedures in case that the mortgagor breaches the contract:

(1)	Setting a deadline for the rectification of the breach;

(2)	Announcing the early expiration of the primary liability, and requiring the guarantor to be responsible for the jointly liabilities.

(3)	Requiring the guarantor to pay 10% of the loan of the principal contract as penalty;

(4)	Requiring the guarantor to pay for the actual loss that the indemnity is not sufficient to make up;

(5)	Cancelling the behavior that the guarantor does harm to the profit of the creditor according to law;

(6)	Deducting money from any account of the guarantor to pay off the debt within the guarantee liabilities;

(7)	Entitled to investigate against the guarantor the liabilities for breaching this Agreement.

Article IX Independent Guarantee

1.	The guarantee stated in this Contract is independent. This contract shall not be invalid due to the invalidity of its Principal Contract under any circumstances.

2.	On the condition that the creditor and debtor agree to amend or supplement the principal contract, there’s no necessity of getting the approval of guarantor, and there’s no changes on the obligations of the guarantor under this Contract.

Article X Execution of Obligations and Abandonment of Rights

1.	The obligations of the guarantor under this Contract is independent, and shall not be influenced by the relationship between any party of the contract and any third party, except as provided elsewhere in the contract.

Article XI Notification

1.	Any notification or all kinds of communication of this Contract shall be delivered to another party according to the address, telex or other contact means on the cover of this Contract in written form.

2.	Any changes of the contact information of any party of this Contract shall be notified to another party immediately.

EXHIBIT 10.29

3.	Any notice or contact that was delivered according to the above address (address after change shall apply) shall be regarded as to arrive at the following dates:

(6)	5 work days after being delivered with registration for ordinary letter;

(7)	The day while receiving the confirmation of another party for telex;

(8)	Upon signing and receiving the mail for express mail.

Article XII Governance

√ Apply for arbitration at Shenzhen Arbitration Committee

Bring an accusation at the People’s Court where the Contract was signed

Article XIII Validity and Termination of the Agreement

This contract shall be terminated on the condition that all the liabilities of this Contract is cleared off.

Article XIV Text

The original copies of this Contract is in triplicate. Both parties, registration organization, notarization organization, and the debtor shall keep a copy properly.

Article XV Appendix:

Creditor (Corporate Chop): Nanxin Branch, Shenzhen, Industrial Bank Co., Ltd.

Legal representative or authorized agent (signature): Zhu Jiusheng

September 21, 2008

Guarantor (Signature in block letters): Hantao Cui

ID or Passport number: 310104196802110422

September 21, 2008

EX-10.30 18 ex10_30.htm EQUITY TRANSFERRING AGREEMENT ex10_30.htm

EXHIBIT 10.30

Equity Transferring Agreement

Party A (Assignor): SinoHub SCM Shanghai Ltd.

Party B (Assignee): SinoHub Electronics Shenzhen Ltd.

In order to expand the logistic business in the east China, and better serve and assist with the goods circulation in the eastern and southern area of China, SinoHub Electronics Shenzhen Ltd. (Party B) invested RMB10,000,000 in Shanghai in 2005 to establish SinoHub SCM Shanghai Ltd. (Party A), the business scope of which involves the international trade and commissioned customs declarations. Due to the policy restriction of the time being, only the domestic-funded companies are authorized to be engaged in commissioned customs declarations for import and export business; therefore, SinoHub SCM Shanghai Ltd. (Party A) was only capable of being registered under domestic capital. As a matter of fact, SinoHub Electronics Shenzhen Ltd. (Party B) is a fully foreign-capital-owned company, its investment on Party A could only be entrusted to domestic personnel for registration. Upon the approval of the board of directors of Party B, Ms. Sailan Xu was entrusted to hold the equity of SinoHub SCM Shanghai Ltd. as trustee under a declaration of trust agreement. Both parties agreed that SinoHub Electronics Shenzhen would purchase the equity of SinHub SCM Shanghai Limited for a nominal amount of money when it was regarded as proper by Party B.

Party A and Party B do hereby agree on changing the equity of Party A as follows:

Now Party B ratifies the necessity of withdrawing the administration of Party A, and negotiates with Party A that Party A shall sell the equity under its investor Ms. Sailan Xu to Party B at the price of RMB100, and Party A shall be liable for all the rights and obligations from the day when Party B was funded to the day when it was sold. The original investor and its legal representative of Party A, Ms. Sailan Xu, shall not have any administrative rights and ownership of the SinoHub SCM Shanghai Limited after January 17, 2008.

Upon the signature of both parties on this Agreement, Party B shall set about the relative issues concerning the equity transfer, and Party A shall assist with all the procedures without reserve.

Party A: SinoHub SCM Shanghai Ltd.	Party B: SinoHub Electronics Shenzhen Ltd.
Legal representative: /s/Sailan Xu	Legal representative: /s/Henry T. Cochran
January 17, 2008	January 17, 2008

EX-10.31 19 ex10_31.htm EQUITY TRANSFERRING AGREEMENT ex10_31.htm

EXHIBIT 10.31

Equity Transferring Agreement

Party A (Assignor): SinoHub Technology (Hong Kong) Ltd.

Party B (Assignee): B2B Chips Ltd.

Party A and Party B do hereby agree on equity transferring issue as following:

Party A agrees to sell its whole equity registered under SinoHub HK Technology Ltd. to Party B at the price of HK$10,000. Upon the completion of the equity transfer, Party B shall be liable for all the rights and obligations of Party A, and all the tax return and documents, profiles, corporate chops, etc. shall be transferred to Party A.

Upon the signature of both parties on this Agreement, Party B shall set about the relative issues concerning the equity transfer, and Party A shall assist with all the procedures without reserve.

Party A: SinoHub Technology (Hong Kong) Ltd.	Party B: B2B Chips Ltd.
Legal representative: /s/Henry T. Cochran	Legal representative: /s/Willa Li
April 10, 2008	April 10, 2008

EX-21.1 20 ex21_1.htm SUBSIDIARIES OF THE REGISTRANT ex21_1.htm

EXHIBIT 21.1

SUBSIDIARIES OF THE REGISTRANT

SinoHub, International, Inc., a Delaware corporation

SinoHub Electronics Shanghai, Ltd., a PRC company, wholly owned by SinoHub International, Inc.

SinoHub Electronics Shenzhen, Ltd., a PRC company, wholly owned by SinoHub International, Inc.

SinoHub SCM Shenzhen, Ltd., a PRC company, wholly beneficially owned by SinoHub Electronics Shenzhen, Ltd.*

SinoHub SCM Shanghai, Ltd., a PRC company, wholly owned by SinoHub Electronics Shenzhen, Ltd.

B2B Chips, Limited, a Hong Kong company, wholly owned by SinoHub Electronics Shenzhen Ltd.

SinoHub Technology (Hong Kong) Limited, a Hong Kong company, wholly owned by B2B Chips, Limited.

*The record owner is Hantao Cui of the shares of SinoHub SCM Shenzhen, Ltd. Under a Declaration of Trust, Ms. Cui owns the shares as trustee for the benefit of SinoHub Electronics Shenzhen, Ltd., and SinoHub Electronics Shenzhen, Ltd. Is the beneficial owners of such shares with all voting and economic rights with respect to such securities and the right to direct the trustee with respect to the disposition of the secuurities and the exercise of any rights thereunder.

EX-23.1 21 ex23_1.htm ex23_1.htm

EXHIBIT 23.1

JIMMY C.H. CHEUNG & CO.

Certified Public Accountants

Members of Kreston International

Registered with the Public

Company

Accounting Oversight Board

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

THE BOARD OF DIRECTORS

SINOHUB, INC.

We hereby consent to the use in this Registration Statement of SinoHub, Inc. on Form S-1 (Amendment No. 3) dated March 17, 2009 of our report dated February 25, 2009 on the audit of the consolidated financial statements of SinoHub, Inc. for the years ended December 31, 2008 and 2007.

We also consent to the reference to our firm under the caption “Experts” in such prospectus.

/s/ Jimmy C.H. Cheung & Co.

JIMMY C.H. CHEUNG & CO.

Certified Public Accountants

Hong Kong

Date: March 17, 2009

1607 Dominion Centre, 43 Queen’s Road East,

Wanchai, Hong Kong

Tel: (852) 25295500 Fax: (852) 28651067

Email : jimmycheung@jimmycheungco.com

Website : http://www.jimmycheungco.com

Kreston International with offices in Europe

America, The Middle East, The Far East and Australia

	World Trade Center East Two Seaport Lane Suite 300 Boston, MA 02210-2028 (617) 946-4800 fax (617) 946-4801 www.seyfarth.com
(617) 946 4853 gwhite@seyfarth.com

March 16, 2009

VIA EDGAR

Russell Mancuso

United States Securities and Exchange Commission

Division of Corporation Finance

Amendment No. 2 to Registration

Statement on Form S-1

Filed January 20, 2009

File No. 333-154731

Dear Mr. Mancuso:

This letter responds to certain comments of the Staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) contained in the letter from the Staff to SinoHub, Inc. (the “Company”) dated February 4, 2009.

For your convenience, we have included each of the Staff’s comments in italics before each of the Company’s responses. References in this letter to “we,” “our” or “us” mean the Company or its advisors, as the context may require.

Prospectus Summary, page 1

Staff Comment 1: Please reconcile your statement in the first paragraph regarding a reverse stock split effected in June 2008 with the statement in your information statement filed June 24, 2008 that the split will occur approximately 20 days after mailing the information statement and that the information statement was to be mailed “on or about” June 27, 2008.

1. We have revised the statement in the first paragraph to indicate that the reverse stock split became effective on the over-the-counter bulletin board (the “OTCBB”) on July 18, 2008. As indicated in the information statement, the split was approved by the shareholders by written consent dated as of June 6, 2008 and became effective 20 days after the mailing of the information statement.

Russell Mancuso

March 16, 2009

Page 2

Staff Comment 2: We reissue prior comment 3. Please ensure that your prospectus summary does not include disproportionate emphasis on your supply chain management business relative to its contribution to your revenue. From your disclosure on page 10, it appears that you are primarily a supplier of electronic components.

2. We have revised the description of the Company’s business on page 24. With respect to this and the following comment, we note that while supply chain management directly provides only a small portion of the Company’s revenues it also is the primary impetus for customers to purchase electronic components through the Company and accordingly the Company believes that some extended discussion of supply chain management is warranted.

Staff Comment 3: Likewise, the more detailed description of your business later in your document should not disproportionately represent your supply chain management business. That disclosure should fully describe your electronic components business with all disclosure required by Regulation S-K Item 101 for that business, including specific information regarding which electronic components you sell and how the mix of products has changed during the periods that you are required to describe.

3. We have revised the description of the Company’s business in the MD&A section on page 14.

Staff Comment 4: Regarding your response to the seventh bullet of prior comment 15:

Tell us with specificity where in the agreement the trustee agrees not to encumber the securities without the consent of SinoHub;

Discuss the conflicts of interest and potential termination of the trust; and

Identify counsel mentioned in the last paragraph of the risk factor, and file counsel’s consent as an exhibit.

4. SinoHub Electronics Shenzhen Limited is our wholly-owned subsidiary organized as a wholly-owned foreign enterprise under the laws of the PRC (“SinoHub China”) to facilitate our operations in China. In order to take advantage of favorable treatment available to enterprises whose registered owners are PRC citizens under certain PRC import/export regulations, SinoHub China organized its wholly-owned subsidiary SinoHub SCM Shenzhen Limited under the laws of PRC (the “China Sub”) and on January 30, 2008 entered into a declaration of trust with Ms. Hantao Cui, a citizen of the PRC, as trustee (the “Trustee”), which provided for the registration of all of the ownership interests of China Sub in the name of Ms. Cui and the retention of all of the beneficial ownership interests in China Sub by the SinoHub China. While the trustee is the record owner of the shares of China Sub, SinoHub China, as sole beneficial owner of China Sub, retained all rights and interests in China Sub, and the Trustee may only exercise those rights with respect to China Sub that are expressly conveyed to the Trustee in the declaration of trust. The declaration of trust did not convey to the Trustee any authority to encumber its interest in China Sub. In general, the Trustee may not undertake any actions under the declaration of trust with respect to China Sub unless it first receives instructions from SinoHub China.

Russell Mancuso

March 16, 2009

Page 3

We note that the Trustee is the spouse of Lei Xia, our President. Based upon the terms and conditions of the declaration of trust, we do not believe that there is any conflict of interest between the Trustee and us or SinoHub China.

We have revised the language in the risk factor relating to the trust as appropriate. We have stricken the reference to having the opinion of Chinese counsel.

Future Sales of our Securities, page 6

Staff Comment 5: Please reconcile the date of the expiration of the lock-ups disclosed here with the information your Form 8-K filed May 15, 2008. If you subsequently amended the lock-ups, please tell us which exhibit represents the amendment.

5. We have revised the disclosure in the registration statement to indicate that the lock-ups expire May 14, 2009. There was no subsequent amendment of the lock-ups.

History, page 8

Staff Comment 6: We reissue prior comment 5. This section continues to refer to you as if you were not an “over-the-counter bulletin board shell company” at the time you acquired your operations in China. Please revise to state clearly when you became a company with reporting obligations under the Exchange Act and when the price of your securities began to be reported on the over-the-counter bulletin board relative to when you acquired your operations in China. Likewise, at the bottom of page 11, you refer to “a publicly traded company” as if it were a third party; if you are referring to your acquisition of your current operations through the merger, please say so clearly.

6. Liberty Alliance, Inc. became a voluntary reporting company under the Exchange Act when it filed with the Commission a registration statement on Form 10 on August 1, 2007. The price of shares of common stock of Liberty Alliance began to be reported on the OTCBB on November 14, 2007 under the symbol “LBTI.” After completion of the merger of SinoHub, Inc. into a wholly-owned subsidiary of Liberty Alliance on May 20, 2008, Liberty Alliance undertook certain stockholder actions to amend its charter to change the name of the Company to SinoHub, Inc., effect a 3.5-to-1 reverse stock split of the Company’s common stock, and to effect the reporting of the Company’s common stock on the OTCBB. On July 18, 2008, the Company’s name change and reverse stock split became effective, and its common stock began to be reported on the OTCBB under the new stock symbol “SIHI.”

We have revised the disclosure in the “History and Basis of Reporting” section on page 15 to clarify these points.

Russell Mancuso

March 16, 2009

Page 4

Business Operations, page 9

Staff Comment 7: We note your responses to prior comments 3 and 6; however, it remains unclear how the “SCM business” described in the first paragraph of this section differs from the VMI “order procurement” program mentioned in the third paragraph. Also, it is unclear how these programs differ from the spot orders you describe in the fourth paragraph. Please revise for clarity.

7. We have revised the disclosure in Business Operations section on page 15 to clarify the differences between the various lines of the Company’s business.

Gross Profit, page 10

Staff Comment 8: With a view toward more complete disclosure, please tell us whether the market for the type of electronic components you sell are experiencing margin trends and how you are responding to those trends.

8. The technology for the electronic components that are used in mobile phones (approximately 70% of our current business) changes very rapidly, we believe there are no typical margin trends for our business as a whole or for specific components which we sell. We believe that the margins on components typically fluctuate with the product lifecycles and that these lifecycles, although difficult to predict from a timing standpoint, can be described in terms of their general impact on our business.

We have revised the disclosure in the Gross Profit section on page 17 to provide additional information with respect to margin trends for the electronic components and the Company’s response to such trends.

Liquidity and Capital Resources, page 12

Staff Comment 9: From your revisions in response to prior comment 9, the following remains unclear:

the terms on which you “advance money” to your VMI customers as mentioned here and the terms on which you “finance the purchase price” as mentioned on page 24;

the effect on your liquidity of such transactions;

the portion of your business that relies on these arrangements; and

the trends that you have experienced in your cost of capital. Your disclosure that your cost of capital declined does not discuss or explain how you determined your cost of capital or quantify the amount of the decline.

Russell Mancuso

March 16, 2009

Page 5

It also remains unclear why you have not included a risk factor to highlight your borrowing to fund VMI projects.

Therefore, we reissue the comment.

9. We do not advance funds to any of our customers, except with respect to refunds of Value Added Tax for products shipped outside of China, for which we have a dedicated line of credit and minimal risk that the amounts will not be repaid for an extended period of time. Our “procurement-fulfillment” (previously referred to as “VMI”) customers will furnish us with an order specifying a list of parts and quantities and generally pay a deposit of between 15-20% of the order size. We coordinate with various suppliers to obtain the parts required to fill the procurement-fulfillment order and we fund these acquisitions from working capital and borrowings under its existing bank lines. After we have obtained all of the parts in the required quantities to fill a procurement-fulfillment order, we notify the procurement-fulfillment customer and deliver the materials and collect payment from the procurement-fulfillment customer in the ordinary course of business and repay any borrowed amounts from our lenders. Approximately 35% of our revenues are derived from our procurement-fulfillment business. Generally, borrowings from our lenders have not exceeded $6,000,000, or 53% of our available capacity. As a supply chain management service provider, we do not manufacture any of the component products that we supply. Consequently, the interest expense on borrowings from our lenders is the only cost of capital that we incur. Currently, the interest rates under our borrowing arrangements with our lenders range from 5% to 6.83%, and our outstanding borrowings of $2,300,000 at February 28, 2009 had a weighted average interest rate of 5.5%.

We have revised the disclosure on page 24 to clarify these points.

Cash Flows from Operating Activities, page 13

Staff Comment 10: We reissue prior comment 10. It is unclear how your changes address the comment.

10. We have further revised the disclosure in this section to clarify that the Company takes deposits from customers rather than giving deposits to customers.

Cash Flows from Financing Activities, page 18

Staff Comment 11: We note your disclosure here that you discontinued your related-party program in the fourth quarter of 2008 because of your “recently” established Hong Kong operations. However, on page 20, you disclose that the Hong Kong corporation, B2B Chips, was incorporated in 2006. Please clarify what you mean by “recently” and, in an appropriate section of your document, explain the reasons for the period between that time and the discontinuation of the related-party program.

B2B Chips was incorporated in 2006 with an eye toward building a Web based platform for electronic component purchases and sales. It was only in late 2007 that we realized the need to use B2B Chips to take over the functions for which we had used GenNext up until that time. The transition from GenNext to B2B Chips involved re-writing contracts with customers and building banking relationships which took a substantial amount of time. We used GenNext’s services through the 4th quarter of 2008 while B2B Chips established a bank account in China and have ceased using their services commencing in the first quarter of 2009. We have revised the disclosure in this section to clarify the points raised by the Commission in their comment.

Business Operations, page 18

Staff Comment 12: Regarding your response to prior comment 13:

disclose the date that the relevant credit facility with China Construction Bank expires;

tell us where you filed as exhibits the Hong Feng Paper guarantees;

disclose why the bank is requiring you to pay the guarantor $80,000; and

disclose why Hong Feng Paper is guaranteeing your obligations. For example, is Hong Feng Paper related to you? If so, how is Hong Feng Paper related to you?

12. The term of the trade financing loan with China Construction Bank starts on August 22, 2008, and ends on August 21, 2009. The Hong Feng Paper guarantee is being filed with Amendment No. 3 as Exhibit 10.24. We have revised the disclosure with respect to the $80,000 fee, and the additional $70,000 fee for a second guarantee referenced in that section to clarify that the fees are a requirement of the guarantor and not the bank. Hong Feng Paper has agreed to provide the guarantees for the fees listed. Other than the guarantees and the ownership by a principal of Hong Feng Paper of under 5% of the Company’s common stock, Hong Feng Paper does not have a relationship with the Company.

Staff Comment 13: We note your response to prior comment 42. Please tell us how you determined that:

the letter of credit facility filed as exhibit 10.10 is available through May 2009. It appears that from page 1 of exhibit 10.10 that the facility is available through August 21, 2009;

the letter of credit facility filed as exhibit 10.11 is available through December 2009. It appears from page 1 of exhibit 10.11 that the facility is through September 25, 2009;

the line of credit is available through December 2009. It appears from section 3 of exhibit 10.12 that the credit line is available through May 11, 2009; and

Russell Mancuso

March 16, 2009

Page 7

the draws on the line of credit agreement filed as exhibit 10.12 currently bear interest at 7.1%.

Also, tell us where you filed as an exhibit the general credit line contract referred to in section I of exhibit 10.11. We note that section 1 states the contract filed is a sub-contract of the general credit line contract.

13. We have revised the disclosure to conform to the contracts. The general credit line contract is the revolving line of credit facility filed with Amendment No. 3 as Exhibit 10.12.

Subsidiaries, page 18

Staff Comment 14: We note from the diagram that you now include SinoHub International, Inc. as a subsidiary; however, you did not include SinoHub International in exhibit 21.1. Please advise or revise. Also, tell us how you determined that SinoHub SCM Shenzhen, Ltd. is a wholly owned subsidiary as disclosed in exhibit 21.1

14. The Exhibit 21.1 previously incorporated by reference in the Registration Statement was filed prior to the former SinoHub Inc.’s change of name to SinoHub International, Inc. We have revised Exhibit 21.1 to reflect SinoHub International, Inc.’s current name and to clarify the relationship of SinoHub SCM Shenzhen, Ltd. to the Company resulting from the declaration of the trust. The revised Exhibit 21.1 is filed with Amendment No. 3 to the Registration Statement.

Staff Comment 15: We note your response to prior comment 14. Please briefly disclose how the reason for the use of two subsidiaries to conduct the same business in separate geographic areas is driven by the laws of the People’s Republic of China.

15. It is the Company’s understanding that in China to do business in a city or a tax free zone, one needs to do business through a company that is registered in that city or tax free zone.

Staff Comment 16: We reissue the fourth bullet of prior comment 15 in part. Please disclose who “considers” SinoHub SCM Shenzhen, Ltd. your wholly owned subsidiary as a result of the trust.

16. We have revised this reference to SinoHub SCM Shenzhen, Ltd. to eliminate the statement that it is considered a wholly owned subsidiary.

Staff Comment 17: We note your response to the fifth bullet of prior comment 15 that a “majority” of the products you sell are imported by SinoHub SCM Shenzhen. Please revise to quantify the “majority” or otherwise provide more specific disclosure.

17. We have revised the disclosure accordingly.

Staff Comment 18: We reissue the sixth bullet of prior comment 15. It appears that you did not revise the disclosure to clarify how the trust can be terminated.

Russell Mancuso

March 16, 2009

Page 8

18. We have revised the disclosure to clarify that while the declaration of trust does not expressly provide for the trust’s termination, .SinoHub Electronics Shenzhen, Ltd. has the power to effectively terminate the trust by causing the distribution of the trust’s assets.

Staff Comment 19: Please disclose your relationship with Hantao Cui. Also provide additional information regarding the trustee so that investors can understand the trustee’s business. For example, is the trustee a lawyer? Is the trustee’s occupation serving as trustee for you and other companies?

19. As noted in our response to comment 4, Ms. Cui is the spouse of Lei Xia, our President. We have revised the disclosure to provide additional information with respect to Ms. Cui. She is neither a professional trustee nor a lawyer.

Staff Comment 20: Please disclose when each subsidiary obtained its import/export license. Also disclose the material terms of the license, including the duration and termination provisions.

20. We have revised the disclosure to provide the requested information with respect to the import/export licenses.

SinoHub SCM Services, page 23

Staff Comment 21: We note your response to prior comment 21. Please clarify which services you sell to suppliers and which you sell to manufacturers. Also, expand your Management’s Discussion and Analysis of Financial Condition and Results of Operations to discuss separately the results of sales to these different types of customers during the periods presented. For example, does the business from these customers generate different revenue, margins, and trends?

21. We have revised the disclosure to provide the additional information requested.

Directors and Executive Officers, page 27

Staff Comment 22: Please state clearly in your table the date that the individuals became directors and executive officers of the registrant. While you should also include disclosure regarding the individuals’ experience with the operations you acquired in China in 2008, you should not imply that the individuals were serving the registrant before the acquisition in 2008 if they were not in fact doing so.

22. We have revised the disclosure with respect to directors and executive officers to indicate the dates the individuals began in such capacities and to distinguish service with the acquired company from service with the registrant.

Russell Mancuso

March 16, 2009

Page 9

Staff Comment 23: Please reconcile the disclosure that Mr. Xia is the president and Mr. Li is the chief financial officer with section 2 of exhibits 10.21 and 10.23 that require these individuals to serve as chief executive officer.

23. The titles specified in those exhibits were typographical errors. The Company has corrected the errors and is filing updated exhibits with Amendment No. 3 to the registration statement.

Summary Compensation Table, page 29

Staff Comment 24: Please include a row in the table for each individual serving as your principal executive officer during the last completed fiscal year, even if you did not provide compensation to that individual.

24. We have revised the table to include Steven White, who was principal executive officer of the public shell company prior to the reverse merger.

Outstanding Equity Awards at Fiscal Year End, page 29

Staff Comment 25: We note your disclose in footnote 1 that the board determined the market value was $.19 per share on December 31, 2008. We also note that you disclosed in previous amendment the board determined the market value was $.19 per share at December 31, 2007. Please tell us how the board determined that your shares had the same value on both dates.

25. The reference to the market value being $.19 per share on December 31, 2008 was a typographical error and has been corrected in the registration statement. The actual value on that date was $2.35, the closing trading price of the stock on the preceding business day, which was the methodology used by the Board at that time to price stock option grants. We have revised the disclosure accordingly.

Because the merger of Liberty Alliance and SinoHub that was completed on May 20, 2008 was a reverse merger pursuant to which SinoHub was the accounting acquirer, SinoHub became the successor to all of Liberty Alliance’s reporting obligations under the Exchange Act and the historical financial statements of SinoHub became the historical financial statements of the reporting company as of May 20, 2008. The value of our outstanding equity awards as of December 31, 2008 was based upon the last reported sales price for our common stock in 2008, which was $0.19. At December 31, 2007, SinoHub’s shares of common stock were not listed on an exchange or reported on any over-the-counter market. In determining the value of outstanding equity awards as of December 31, 2007, our board of directors arbitrarily determined the market value of SinoHub’s common stock based upon available information about SinoHub’s contemporaneously completed issuance of approximately $1.3 million of shares of series C preferred stock in November 2007 and December 2007 at a per share issue price of $0.78 per share. In consideration of the liquidation and distribution preferences of the Series C preferred stock, its redemption rights, and the contractual registration rights of the holders of the series C preferred shares, our board of directors determined to value the shares of the SinoHub common stock at December 31, 2007 at approximately a 75% discount to the series C preferred stock, or $0.19 per share.

Russell Mancuso

March 16, 2009

Page 10

Director Compensation, page 29

Staff Comment 26: Pleas provide the director compensation table required by Regulation S-K Item 402.

26. We have revised the Registration Statement to provide the required table.

Employment Contracts, page 29

Staff Comment 27: Regarding your response to prior comment 26:

tell us, with a view to disclosure, why Messrs. Cochran, Xia and Li are employed by the registrant’s subsidiaries rather than directly by the registrant; and

provide the disclosure required by Item 402(q)(2) of Regulation S-K. For example, we note section 6 of the employment agreements with Messrs. Cochran, Xia and Li filed as exhibits 10.19, 10.21 and 10.23.

27. Messrs. Cochran, Xia and Li are employed by the Company’s principal subsidiaries that are located in the areas where they spend most of their time, Shenzhen and Hong Kong. Were they to be employed by SinoHub, Inc. in the USA, it would make it very difficult for Mr. Cochran and Mr. Xia (both US citizens) to get Shenzhen resident permits. In Mr. Li’s case, since he is a Chinese citizen, if he were to be employed by SinoHub, Inc. in the US it might raise potential issues for him, including obtaining the requisite work permits and possible tax liability.

We have added the disclosure required by Item 402(q)(2) of Regulation S-K to the registration statement.

Certain Relationships and Related Transactions, page 31

Staff Comment 28: With a view toward clarified disclosure, please tell us why and how the disclosed numbers of shares were “adjusted for the recapitalization.”

28. Where shares of common stock were issued by the former SinoHub, Inc. prior to its merger with Liberty Alliance on May 20, 2008 or by Liberty Alliance prior to the July 18, 2008 3.5-to-1 reverse stock split, the number of those shares reported throughout the Form S-1 registration statement have been adjusted to account for the 3.718425 exchange ratio in the merger and the result of the reverse stock split, as applicable, such that the number of shares identified is the actual number of shares of our common stock today. We have revised the disclosure in the “Prospectus Summary” section on page 1 of the registration statement with a notation at the beginning of the prospectus to clarify that all such historical shares have been so adjusted and have eliminated the parenthetical citations to share numbers being “adjusted for the recapitalization” throughout the document to avoid confusion.

Russell Mancuso

March 16, 2009

Page 11

Staff Comment 29: We note your disclosure on page 28 in response to prior comment 23. Please tell us why this section does not discuss the transactions with Xin Jun Long.

29. We did not disclose the transactions with Xin Jun Long in this section because Zan Wang, our now-former director, did not have a “direct or indirect material interest” in such transactions within the meaning of Item 404 of Regulation S-K. While Mr. Wang’s biography, included in the prior versions of the registration statement, described his position with Xin Jun Long as the “general manager” this was a mistranslation. Mr. Wang’s role with Xin Jun Long was, and is, the equivalent of a director. In addition, while he is a shareholder of Xin Jun Long, he owns less than 10% of the outstanding equity securities of the company.

Staff Comment 30: We note your response to prior comment 27. With a view toward clarified disclosure, please tell us why you would issue debt and shares to one individual in consideration for loans from several individuals.

30. Hantao Cui, the spouse of Lei Xia represented to us that she had acquired all of the loans that we received in December 2001 from their initial lenders. Ms. Cui forgave all of these loans in exchange for the shares of our common stock that we issued to her in June 2006.

Staff Comment 31: Please expand your disclosure provided in response to prior comment 28 to clarify when you obtained the bank loan, the amount of the loan, and when the loan must be repaid. Also, from exhibit 10.11, it appears that your chief executive officer also owns the property and that other related parties provided guarantees. Please tell us why those relationships are not disclosed and where the related agreements are filed.

31. We have revised the disclosure accordingly. The related party guarantee agreements are being filed as Exhibits 10.27-10.29.

Staff Comment 32: Please reconcile the disclosure in the paragraph numbered 3 of the issuance of 371,842 shares for the use of a condominium with the reference on page 41 to the issuant of 371,842 shares for services.

32. We have revised the disclosure on page 41 to indicate that the shares were issued in exchange for allowing use of the condominium as collateral for a bank loan.

Staff Comment 33: We reissue prior comment 29 in part. It appears that you did not respond to the second bullet.

33. We have revised the disclosure on page 41 of the Registration Statement to clarify why transactions had to be domiciled in Hong Kong and how GenNext was able to do this in a manner that SinoHub could not.

Russell Mancuso

March 16, 2009

Page 12

Staff Comment 34: Refer to the last bullet point of prior comment 29. Please disclose how the $1,000,000 amount mentioned in the fourth paragraph of the section numbered 4 was determined. Likewise, please clarify how the amount of service fees mentioned in that paragraph was determined.

34. We have revised the registration statement to disclose how the two amounts were determined.

Staff Comment 35: Refer to the paragraph numbered 5. Please disclose the principle followed in determining the amount that you would pay the affiliate for B2B Chips. Also disclose the persons making that determination and their relationship to you. If the assets were acquired by the related party within two years prior to their sale to you, state the cost of the assets to the related party.

35. To clarify, the Company did not “acquire” B2B Chips. B2B Chips is our indirectly, wholly-owned subsidiary in Hong Kong that acquired SinoHub Technology (Hong Kong) Limited. In connection with the formation of SinoHub Technology (Hong Kong) Limited in May 2007 by Henry T. Cochran, our CEO and Chairman, and Lei Xia, our President and a member of our Board of Directors, Messrs. Cochran and Xia made an aggregate capital contribution of approximately HKD 10,000 ($1,290) to SinoHub Technology. SinoHub Technology never conducted any business and its sole asset at all times was a Hong Kong bank account with a cash balance equal to the initial capital contributions of HKD 10,000 ($1,290),less organizational expenses. The acquisition of SinoHub Technology by B2B Chips on April 10, 2008, (less than a year after the formation of SinoHub Technology) was a purchase for convenience and the purchase price was fixed by our CFO of the Company, Le De Hai at HKD 10,000 ($1,290), the value of SinoHub Technology’s sole asset, i.e., the cash balance of its bank account and the prior organizational expenses of the company. A copy of the acquisition agreement with respect to SinoHub Technology (Hong Kong) Limited is being filed with Amendment No. 3 to the Registration Statement as Exhibit 10.31.

Staff Comment 36: Please tell us why the acquisition of SinoHub SCM Shanghai mentioned in page 19 is not a related-party transaction that must be described in this section.

36. We have revised the related transactions section to disclose this acquisition.

Sales by Affiliates, page 34

Staff Comment 37: Please expand your response to prior comment 33 to:

clarify how the Form 8-K provided all disclosure required by Form 10 Item 10 for the full period required by Regulation S-K Item 701 as it relates to securities issuances by the operating company; and

tell us where you provided the financial statements for the period ended March 31, 2008 that would have been required in a Form 10 filed on May 20, 2008, the date you filed the Form 8-K.

Russell Mancuso

March 16, 2009

Page 13

37. The Form 8-K filed on May 20, 2008 did not include the disclosures required by Item 701 of Regulation S-K or the financial statements for Liberty Alliance or SinoHub, Inc. for the period ended March 31, 2008. We have taken and will take the following steps to remedy these disclosure deficiencies:

The Form S-1 registration statement includes, and we will file an amendment to the Form 8-K which will include, all of the disclosures required by Item 701 of Regulation S-K with respect to SinoHub, Inc. for the four years ending December 31, 2008, thereby covering the three year period of disclosure that was required in the Form 8-K and that will be required in the Form 10-K; and

The amendment to the Form 8-K will include the financial statements for Liberty Alliance and SinoHub, Inc. for the period ended March 31, 2008, as well as the pro forma financial information for the year ended December 31, 2007 and March 31, 2008 required by Regulation S-X.

Selling Stockholders, page 36

Staff Comment 38: With regard to the offered shares that were not originally required in the September 30, 2008 “PIPE offering,” please disclose when selling stockholders acquired the offered shares. Include the date of the transaction and, the amount of consideration paid. If securities were issued for services, please disclose the nature, amount and duration of the services.

38. We have added disclosure to the “Selling Stockholders” section on page 49 with respect to the Selling Stockholders who did not participate in the PIPE offering.

Consolidated Financial Statements, page F-1

Staff Comment 39: Please update the financial statements as required by Rule 3-12 of Regulation S-X, as necessary.

39. In Amendment No. 3 we are providing financial statements as of December 31, 2008. To the extent required by Regulation S-X, we will update the financial statements in subsequent amendments.

Note 10. Stock Options, page F-29

Staff Comment 40: Please refer to prior comment 38. Although we note the disclosure added, it is not clear why it identifies “preferred stock” issuances in November and December 2007 since the consolidated statements of stockholders’ equity on page F-18 presents the equity transaction as the issuance of common stock. Please tell us in detail how these common stock transactions impacted your assessment of the fair value of your common stock used to determine the exercise price of the stock options. Additionally, tell us why the stock options were issued at a discount relative to the November and December 2007 equity transactions.

Russell Mancuso

March 16, 2009

Page 14

40. Because the merger of Liberty Alliance and SinoHub that was completed on May 14, 2008 was a reverse merger pursuant to which SinoHub was the accounting acquirer, SinoHub became the successor to all of Liberty Alliance’s reporting obligations under the Exchange Act and the historical financial statements of SinoHub became the historical financial statements of the reporting company as of May 14, 2008. The shares of Series C preferred stock issued in November and December 2007 by SinoHub, Inc. were exchanged for shares of common stock of Liberty Alliance in the merger that was completed on May 14, 2008. As described in our response to comment 25 herein above, the options to purchase common stock of SinoHub issued in December 2007 contemporaneously with the Series C preferred stock were issued with an exercise price fixed at approximately a 75% discount to the purchase price of the preferred stock as determined by the Board of Directors.

Recent Sales of Unregistered Securities, page 41

Staff Comment 41: Please expand your response to prior comment 39 to clearly show us how to reconcile the disclosure in this section with the information in your publicly filed Statements of Stockholders’ Equity and to the number of shares that you disclose as currently outstanding.

41. At December 31, 2008 SinoHub, Inc. had 24,501,989 shares of common stock outstanding. These shares include the 20,000,190 shares that were outstanding at the conclusion of the reverse 1 for 3.5 split on July 18, 2008 (the odd amount is the result of rounding up) and 4,406,533 shares sold in a private investment in public equity on September 10, 2008. Employee stock grants of 22,200 shares were made on October 29, 2008. From July 29, 2008 to November 19, 2008, SinoHub issued an aggregate of 1,900 shares to investors in the interest of obtaining as many round lot stockholders as possible. In 2008, employees exercised options to purchase 71,166 shares. The total of these figures is 24,501,989 shares.

Staff Comment 42: Please reconcile your revised disclosure here that you issued 510,000 to the consultants in July 2008 with the disclosure on page 9 that you issued the shares at the May 2008 closing of the merger.

42. We have revised the disclosure relating to the 510,000 shares in all instances to indicate that the shares were issued upon the closing of the merger on May 14, 2008.

Staff Comment 43: Please tell us where this section discloses the issuances to the odd lot stockholders mentioned in your information statement filed June 24, 2008. Clearly disclose how those issuances “in consideration for” a lock-up were exempt from registration under the Securities Act. Also, with a view toward disclosure in an appropriate section of your document, please tell us:

the identity of each person who received shares to increase the investor’s holdings to a round lot;

Russell Mancuso

March 16, 2009

Page 15

the relationship of that person to you;

the number of shares issued; and

the exhibit number of the lock-up agreement.

43. The issuance of an aggregate of 1,900 shares of our common stock to odd lot holders in May 2008 as the sole consideration for the execution and delivery of lock-up agreements by these stockholders was completed as a private placement exempt from registration pursuant to Section 4(2) of the Securities Act consistent with the relevant criteria established in SEC v. Ralston Purina Co., 346 U.S. 119 (1953), and its progeny. All of the shares were issued to ten natural persons who acquired the shares for themselves or as trustees or guardians for other entities or persons. All of these investors were current stockholders of the Company at the time of issuance who were shareholders of Liberty Alliance prior to the merger but who otherwise had no relationship with the Company. The names of these investors and the number of shares issued to each investor is set forth on Exhibit A attached hereto. A copy of the form of lock-up agreement executed by these investors was Exhibit B of the information statement filed with the Commission on June 24, 2008. A copy of the form of that lock-up agreement executed by these investors will be filed as exhibit 10.25 to Amendment No. 3 to the Registration Statement.

Exhibits, page 43

Staff Comment 44: Please file the acquisition agreements mentioned in your disclosure in response to prior comment 16 regarding the acquisition of SinoHub SCM Shanghai and B2B Chips.

44. The agreements relating to the acquisition of SinoHub SCM Shanghai and SinoHub Technology (Hong Kong), the latter by B2B Chips, are being filed as Exhibits 10.28 and 10.29 respectively to Amendment No. 3 to the Form S-1 registration statement.

Staff Comment 45: Please file as an exhibit the agreement to extend the date of effectiveness of the registration statement. We note the disclosure on page 33.

45. There has been a subsequent extension since Amendment No. 2 to the Registration Statement was filed superseding the initial extension and a further amendment to the registration rights agreement. Both extensions and the subsequent amendment are being filed as Exhibits 10.6.1 and 10.6.2 to Amendment No. 3 to the Registration Statement. We have updated the disclosure in the Registration Statement accordingly.

Staff Comment 46: We reissue prior comment 40. Your exhibit index continues to be unclear as to where you filed exhibit 3.1. Likewise, the location of other exhibits, like 10.1 and 10.4 appears to be misidentified in your exhibit index.

Russell Mancuso

March 16, 2009

Page 16

46. We have updated the exhibit index as appropriate.

Staff Comment 47: Please expand your response to prior comment 41 to clarify who was the party identified in the previous version of the exhibits you filed. Why is that party no longer identified in the exhibits?

47. This is the result of an error in translation. The prior party identified in the translation and in the exhibit index was SinoHub SCM Shenzhen, the Company’s subsidiary which is party to the agreement. The prior translation translated the Chinese characters in SCM Shenzen’s name instead of using the English version of SCM Shenzen’s name. The current index and translated exhibit reflect the SCM Shenzen name.

Staff Comment 48: Please file complete exhibits. For example, we note the missing signature pages in exhibits 10.10 – 10.12.

48. We are filing complete copies of our current loan agreements as Exhibits 10.10-10.12 to Amendment No. 3 to the Registration Statement.

Form 10-Q for the quarter ended September 30, 2008

Evaluation of Disclosure Controls and Procedures, page 25

Staff Comment 49: We note your statement that a “control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.” Please revise to state clearly, if true, that your disclosure controls and procedures are designed to proved reasonable assurance of achieving their objectives and that your principal executive officer and principal financial officer concluded that your disclosure controls and procedures are effective at that reasonable assurance level. In the alternative, remove the reference to the level of assurance of your disclosure controls and procedures. Please refer to Section II.F.4 of Management’s Reports on Internal Control Over Financial Reporting and Certification of Disclosure in Exchange Act Periodic Reports, SEC Release No. 33-8238, available on our website at <http://www.sec.gov/rules/final/33-8238.hmt>.

49. We have filed an amended Form 10-Q for the quarter ended September 30, 2008 which amends and restates Item 4T. to conform to the requirements of Items 307 and 308 of Regulation S-K and Release No. 33-8238.:

The Company acknowledges that:

The Company is responsible for the adequacy and accuracy of the disclosure in the filing;

Staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and

Russell Mancuso

March 16, 2009

Page 17

The Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

The Company appreciates the staff’s comments with respect to the Registration Statement. Comments or questions regarding this letter may be directed to the undersigned at (617) 946-4853 or by fax to 617-946-4801 or to Mark Katzoff of our office at (617) 946-4887.

	Very truly yours,

	SEYFARTH SHAW LLP

	/s/Gregory L. White
	Gregory L. White

RECIPIENTS OF ODD LOT SHARES

Last Name	First Name	Shares owned Prior to Odd- Lot Issuance	Odd- Lot Share Issuance	Odd-Lot Share Issue_Date	State
Tidwell	Hannah	22	78	8/6/2008	UT
Haun	Evaloy R	22	78	8/6/2008	UT
Harker	Brent	36	64	8/6/2008	UT
Claerhout	Arthur	36	64	8/12/2008	UT
Hoehne C/F Jonathan Mali Hoehne	Darrell Ray	2	98	8/13/2008	IA
Hoehne C/F David Rodney Hoehne	Darrell Ray	2	98	8/13/2008	IA
Hoehne C/F Amy Josephine Hoehne	Darrell Ray	2	98	8/13/2008	IA
Hoehne C/F David Rodney Hoehne	Doah Ravu	2	98	8/13/2008	IA
Hoehne C/F Michelle Ropa Hoehne	Doah Ravu	2	98	8/13/2008	IA
Hoehne C/F Amy Josephine Hoehne	Doah Ravu	2	98	8/13/2008	IA
Hoehne C/F Jonathan Mali Hoehne	Doah Ravu	2	98	8/13/2008	IA
Hoehne &	Doah Ravu	2	98	8/13/2008	IA
Hoehne &	Darrell Ray	2	98	8/13/2008	IA
Hoehne &	Darrell Ray	2	98	8/13/2008	IA
Hoehne	Doah Ravu	2	98	8/13/2008	IA
Hoehne	Darrell Ray	2	98	8/13/2008	IA
Hoehne C/F Michelle Ropa Hoehne	Darrell Ray	2	98	8/13/2008	IA
Wood	Lorraine H	4	96	9/2/2008	UT
Burnett	Neil	15	85	10/23/2008	UT
Adams	Rhonda	36	64	10/23/2008	UT
Chen	Tzu C	3	97	11/19/2008	OH