8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

___________

FORM 8-K

___________

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED):   June 27, 2008

CHINA ARMCO METALS, INC.

(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

Nevada	333-145712	26-0491904
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)	(COMMISSION FILE NO.)	(IRS EMPLOYEE IDENTIFICATION NO.)

One Waters Park Drive, Suite 98

San Mateo, CA 94403

(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

(650) 212-7620

(ISSUER TELEPHONE NUMBER)

COX DISTRIBUTING, INC.

P.O. Box 430

Cokeville, WY 83114

(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)

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

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

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

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

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

TABLE OF CONTENTS

Item No.	Description of Item	Page No.
Item 1.01	Entry Into a Material Definitive Agreement	1
Item 2.01	Completion of Acquisition or Disposition of Assets	1
Item 3.02	Unregistered Sales of Securities	34
Item 5.01	Changes In Control of Registrant	34
Item 5.02	Departure  of  Directors  or  Principal  Officers;  Election of  Directors; Appointment of Principal Officers	34
Item 9.01	Financial Statements and Exhibits	35

Ex-3.2	Amendment to Articles of Incorporation
Ex-10.4	Share Purchase Agreement between Cox Distributing, Inc. and Armco & Metawise (HK), Ltd. dated June 27, 2008.
Ex-10.5	Stock Option Agreement between Cox Distributing, Inc. and Feng Gao dated June 27, 2008.
Ex-10.6	Call Option Agreement between Kexuan Yao and Feng Gao, dated June 27, 2008.
Ex-10.7	Exclusive Consulting Agreement between Armco & Metawise (HK) Ltd. and Henan Armco & Metawise Trading Co., Ltd. dated June 27, 2008.
Ex-10.8	Exclusive Consulting Agreement between Armco & Metawise (HK) Ltd. and Armet (Lianyungang) Scraps Co., Ltd. dated June 27, 2008.
Ex-10.9	Consulting Agreement between Stephen E. Cox (“Client”), and Capital Once Resource Co., Ltd. dated June 27, 2008
Ex-10.10	Services Agreement between Stephen D. Cox Supply and Cox Distributing, Inc. dated June 27, 2008.

Ex-21	Description of Subsidiaries of the Company
Ex-99.1	Press Release dated June 30, 2008
Ex-99.2	Consolidated Financial Statements for the Years Ended December 31, 2007 and 2006
Ex-99.3	Consolidated Financial Statements for the Quarter Ended March 31, 2008 and 2007 (Unaudited)

(i)

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Our disclosure and analysis in this Current Report on Form 8-K contains some forward-looking statements. Certain of the matters discussed concerning our operations, cash flows, financial position, economic performance and financial condition, including, in particular, future sales, product demand, the market for our products in the People’s Republic of China and elsewhere, competition, exchange rate fluctuations and the effect of economic conditions include forward-looking statements.

Statements that are predictive in nature, that depend upon or refer to future events or conditions or that include words such as "expects," "anticipates," "intends," "plans," "believes," "estimates" and similar expressions are forward-looking statements. Although we believe that these statements are based upon reasonable assumptions, including projections of orders, sales, operating margins, earnings, cash flow, research and development costs, working capital, capital expenditures and other projections, they are subject to several risks and uncertainties, and therefore, we can give no assurance that these statements will be achieved.

Investors are cautioned that our forward-looking statements are not guarantees of future performance and the actual results or developments may differ materially from the expectations expressed in the forward-looking statements.

As for the forward-looking statements that relate to future financial results and other projections, actual results will be different due to the inherent uncertainty of estimates, forecasts and projections may be better or worse than projected. Given these uncertainties, you should not place any reliance on these forward-looking statements. These forward-looking statements also represent our estimates and assumptions only as of the date that they were made. We expressly disclaim a duty to provide updates to these forward-looking statements, and the estimates and assumptions associated with them, after the date of this filing to reflect events or changes in circumstances or changes in expectations or the occurrence of anticipated events.

We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. You are advised, however, to consult any additional disclosures we make in our reports on Form 10-KSB, Form 10-QSB, Form 8-K, or their successors. We also note that we have provided a cautionary discussion of risks and uncertainties under the caption "Risk Factors" in this Current Report. These are factors that we think could cause our actual results to differ materially from expected results. Other factors besides those listed here could also adversely affect us.

Information regarding market and industry statistics contained in this Current Report is included based on information available to us which we believe is accurate. We have not reviewed or included data from all sources, and cannot assure shareholders of the accuracy or completeness of the data included in this Current Report. Forecasts and other forward-looking information obtained from these sources are subject to the same qualifications and the additional uncertainties accompanying any estimates of future market size, revenue and market acceptance of products and services.

The Renminbi is not freely convertible into foreign currencies and no representation is made that the Renminbi or U.S. Dollar amounts referred to herein could have been or could be converted into U.S. Dollars or Renminbi, as the case may be, at the stated rate or at all. Unless otherwise noted, all currency figures in this filing are in U.S. dollars. References to "yuan" or "RMB" are to the Chinese yuan (also known as the renminbi).

(ii)

Explanatory Note

This Current Report on Form 8-K is being filed by China Armco Metals, Inc. (f/k/a Cox Distributing, Inc.) (the “Company”) in connection with a transaction in which the Company has acquired all of the issued and outstanding capital stock (the “Armco Shares”) of Armco & Metawise (HK), Ltd., a limited liability company established under the laws of Hong Kong (“Armco”). Armco owns 100% of the capital stock of each of Armet (Lianyungang) Renewable Resources Co., Ltd. (a/k/a Armet (Lianyungang) Scraps Co., Ltd.)  (“Armet Lianyungang”) and Henan Armco & Metawise Trading Co., Ltd. (“Henan Armco”), both of which are limited liability companies established under the laws of the People’s Republic of China (“PRC”).

The Company’s acquisition of the Armco Shares occurred on June 27, 2008, through a share purchase (the “Share Purchase”) in which the Company paid Feng Gao, the sole shareholder of Armco $6,890,000 by delivery of our purchase money promissory note.  In addition, the Company issued to Ms. Gao a stock option entitling Ms. Gao to purchase 5,300,000 shares of our common stock, par value $.001 per share (the “Common Stock”) at a price of $1.30 per share and 2,000,000 shares at $5.00 per share.  Within 30 days after the Share Purchase, the Company will redeem 7,694,000 shares of Common Stock held by Stephen E. Cox (the “Redemption”).

Item 1.01. Entry into a Material Definitive Agreement. 

Item 2.01. Completion of Acquisition or Disposition of Assets.

The following agreements were entered into in connection with the acquisition of the business of Armco:

The Share Purchase Agreement and the Stock Option Agreement with the Former Stockholder of Armco

On June 27, 2008, China Armco Metals, Inc. (“we,” “us” or the “Company”) entered into a share purchase agreement (the “Share Purchase Agreement”) and consummated a share purchase (the “Share Purchase”) with Armco and Feng Gao, who owned 100% of the outstanding shares of Armco (the “Armco Shareholder”).

Under the Share Purchase Agreement, we purchased from the Armco Shareholder 100% of the issued and outstanding shares of Armco’s capital stock, all of which were owned by the Armco Shareholder for $6,890,000 by delivery of our purchase money promissory note. As a result of the consummation of the Share Purchase, Armco now is a wholly-owned subsidiary of the Company.

Gao Stock Option

We issued to Ms. Gao a stock option entitling Ms. Gao to purchase 5,300,000 shares of our common stock, par value $.001 per share (the “Common Stock”) at a price of $1.30 per share which expires on September 30, 2008 and 2,000,000 shares at $5.00 per share which expires on June 30, 2010 (the “Gao Option”).  In the event Ms. Gao does not exercise her option on the 5,300,000 shares of Common Stock, we may demand that the holder of such option purchase all or part of the Common Stock subject to the $1.30 exercise price.  The shares issuable under the Gao Option represent 42.2% of our total outstanding Common Stock immediately after the consummation of the Share Purchase and upon completion of the Redemption, 76% of our total outstanding Common Stock.

Earn-In of Shares by Kexuan Yao

Pursuant to an agreement entered into between our Chairman and Chief Executive Officer, Kexuan Yao and Feng Gao, Mr. Yao has the right to acquire up to 5,300,000 shares of our Common Stock (the “Earn In Shares”) from Ms. Gao, upon the occurrence of the conditions described below.

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Condition	Number of Ms. Gao's Shares which may be acquired
Entry by Mr. Yao and Armco into a binding employment agreement for a term of not less than three years for Mr. Yao to serve as the Chief Executive Officer and Chairman of our subsidiaries Armet Lianyungang and Henan Armco.	1,325,000
The U.S. Securities and Exchange Commission declaring a registration statement filed by us under the Securities Act of 1933 effective, or, investors who purchase Common Stock from us pursuant to a securities purchase agreement to be entered into after the closing of the Share Purchase Agreement, being able to sell their Common Stock under Rule 144, as then effective under the U.S. Securities Act of 1933, as amended.	1,325,000
Armco achieving not less than $5,000,000 in pre-tax profits, as determined under United States Generally Accepted Accounting Principles consistently applied (“US GAAP”) for the calendar year ending December 31, 2008.	1,325,000
Armco achieving not less than $75,000,000 in Gross Revenues, as determined under US GAAP for the calendar year ending December 31, 2008.	1,325,000

The purposes of the arrangement between Mr. Yao and Ms. Gao are: (i) to incentivize Mr. Yao in connection with Armco’s business and (ii) to comply with PRC laws and rules which regulate the acquisition of PRC companies by non-PRC entities.

Consulting Agreements

      On June 27, 2008, Armco entered into exclusive consulting agreements with each of its subsidiaries, Armet Lianyungang and Henan Armco. Under the consulting agreements, Armco agreed to advise, consult, manage, operate and provide certain financial accommodations to Armet Lianyungang and Henan Armco, respectively, in exchange for their payment of all of their operating cash flow to Armco.

BUSINESS

Our History

China Armco Metals, Inc. formerly known as Cox Distributing, Inc., was founded as an unincorporated business in January 1984 and became a “C” corporation in the state of Nevada on April 6, 2007. Prior to the completion of the Share Purchase, we had one employee, Stephen E. Cox, our founder and president who devotes his full business time to the operation of our fertilizer distribution business in the United States.

Prior to the Share Purchase, our sole business was the distribution of organic fertilizer products used to improve soil and growing conditions for the potato farmers of eastern Idaho. These products, which are bio-based rather than petroleum-based, add nutrients to the soil and serve as fungicides intended to increase the size and quality of crops.

 On June 27, 2008, we acquired Armco, as discussed in Item 1.01 of this Current Report.

Organizational History of Armco & and its Subsidiaries

Armco & Metawise (HK), Ltd. (“Armco”), a Hong Kong limited liability company, was established on July 13, 2001.

In 2002, Henan Armco & Metawise Trading Co., Ltd. (“Henan Armco”), a Chinese limited liability company, was formed with registered capital of $1.55 million on June 6, 2002.  In March 2008, Henan Armco was restructured as a wholly owned subsidiary of Armet (Lianyungang) Renewable Resources Co., Ltd. (“Armet Lianyungang”).

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In January 2007, Armet (Lianyungang) Renewable Resources Co., Ltd. (“Armet Lianyungang”), a Chinese limited liability company, was formed as a wholly owned foreign enterprise by Armco with registered capital of $15 million on January 9, 2007.  Armet Lianyungang is a wholly owned subsidiary of Armco.

Overview of the Business

We import, sell and distribute metal ores and non-ferrous metals to the metal refinery industry in China.  We are seeking to expand our business operations within China by entering into the scrap metal recycling business.  We plan to construct a scrap metal recycling facility capable of producing 1 million metric tons of recycled metal per year.  We believe this scrap metal recycling facility can increase our operating results.

There have been no material changes to our U.S. based fertilizer distribution business as previously disclosed and the following discussion relates to Armco and its subsidiaries.

Organization & Subsidiaries

Our organization structure was developed to abide by the laws of Hong Kong and the PRC and is summarized in the diagram below:

The Company

Our U.S. operations are engaged in the distribution of organic fertilizer products used to improve soil and growing conditions for the potato farmers of eastern Idaho.  These products, which are bio-based rather than petroleum-based, add nutrients to the soil and serve as fungicides intended to increase the size and quality of crops.  The nature and size of this business has been relatively unchanged for the past several years.  We serve, and only have the resources to serve, a limited geographic area in eastern Idaho.  The number of farms in that area is not increasing, and is unlikely to increase but may decrease if family farms are consolidated into larger agricultural businesses.  However, we are now seeing an increase in the demand of our customers in eastern Idaho for organic fungicides.  This increase in demand, which comes from farms and small distributors, is likely to result in increasing sales levels.  However, our gross margin for organic fungicide products is less than on other products, in part because the customers include distributors that need a price that permits them to make a profit when they sell to their customers, meaning that our profitability is unlikely to increase at the same rate as our expected increase in revenue.  The unknown factor in this area is whether other producers of fungicides will develop and introduce their own distributors of organic fungicides to take advantage of increasing demand.  We lack the information or resources to perform a study as to the trends affecting our marketplace and are limited solely to our own observations.

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As a result of our acquisition of Armco and its subsidiaries on June 27, 2008, we entered the metal ore business and plan to construct a scrap metal recycling facility.

Steel Industry and Market for Iron Ore

Background.  China is the largest developing country in the world, and the demand for steel has been growing steadily over the past decade as the country continues to experience an industrial revolution.  We believe that domestic steel production will continue to witness significant growth as China continues to grow.  The steel industry is an important basic industry of the national economy of China, and plays a vital role in the recent industrialization efforts of the country.  As witnessed over the last decade, the production of steel has increased dramatically throughout the world, and in particular in China.  According to the www.worldsteel.org3, in 2007 worldwide crude steel production amounted to 1,344 million metric tons while China accounted for approximately 489 million metric tons.  In 2006, worldwide crude steel production amounted to 1,244 million metric tons with China accounting for 422 million metric tons.  Globally, this increase represents an increase of approximate 8% from 2006 to 2007.   However steel production in China increased by approximately 16% from 2006 to 2007.

We are an importer, seller and distributor of metal ores and non-ferrous metals to the metal refinery industry in China.  We are considered a metal ore provider in the China market and purchase metal ore from global suppliers in Brazil, India, South America, Oman, Turkey, Iran, Libya, Nigeria, Indonesia, and the Philippines.  We resell the metal ore to manufacturers of steel and other metal products in China.  We source a range of raw materials which includes iron ore, coal, chrome ore, nickel ore, copper ore, scrap steel, and manganese ore. We have established strong relationships with our clients and service their needs through our internal sales representatives.

We have established cooperative business relationships with global suppliers and China’s large iron and steel enterprises.  We typically enter into long-term contracts with both suppliers and customers.  Overseas suppliers ship cargo to a designated seaport in China and, in most of cases, the cargo is then shipped to customers directly. Payments are made in the form of telegraphic transfer (T/T) and occasionally by a letter of credit. Depending on the transaction terms specified in the contract, the customer or supplier is responsible for all shipping costs.

Scrap Steel Recycling Industry

The steel industry has been actively recycling for more than 150 years, in large part because it is economically advantageous to do so. Scrap steel can replace iron ore in the production of steel.  It is cheaper to recycle steel than to mine iron ore and manipulate it through the production process to form 'new' steel.  Steel does not lose any of its inherent physical properties during the recycling process, and has drastically reduced energy and material requirements than refinement from iron ore. The continued utilization of scrap steel is a vital component of the domestic steel manufacturing industry.  The energy saved by recycling reduces the annual energy consumption of the industry by about 75%.

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As China continues to industrialize, we believe that recycled materials will witness growing demand.  According to the Chinese government’s statistics, the crude steel produced during the PRC 5 year plan from 2006 to 2010 is estimated to be 1.18 billion metric tons.  During this period, it is estimated that the amount of scrap steel used in steel production will account for approximately 239 million metric tons, approximately 20% of the steel output.  While this amount is well below global scrap steel recycling usage rates which accounted for approximately 40% to 45% of total steel production, it does represent an increase of 26% over the usage rate in 2006.  In 2006 the amount of scrap steel recycled globally was approximately 425 million metric tons1. In China the amount of scrap steel used in steel production in 2006 amounted to approximately 67 million metric tons2, accounting for approximately 15.8% of the total.

The scrap steel recycling industry in China is highly fragmented and there are no major recycling companies in the China market. In 2006, the top 5 scrap steel processors only accounted for 11.5% of the scrap steel recycling processing volume and capacity in China.  Their average scrap steel processing volume was only 875,000 metric tons per year.  There are more than 2,000 scrap steel recycling companies which accounted for approximately 22 million metric tons of scrap steel processing volume in 2006 which accounted for approximately 57.2% of total scrap steel processing capacity in China, with the average volume for each producer being less than 11,000 metric tons per year3.

The PRC identified the scrap steel recycling industry as a way to minimize the use of scarce natural resources and reduce energy consumption and emissions in the steel manufacturing industry.   In July 2005, China’s “Steel Industry Development Policy” recommended that domestic steel producers increase the use of scrap steel in the production of steel.  The PRC also implemented a preferential tax policy that gives Armet Lianyungang an exemption from income tax in 2008 and 2009 followed by a 50% income tax exemption for 2010 through 2012.  In February 2006, The National Development and Reform Commission of PRC (“NDRC”), The Ministry of Science and Technology of PRC, and The Ministry of Environmental Protection of the PRC jointly issued the “Automotive Products Recycling Technology Policy”.  Under the terms of this policy, auto makers are charged with the responsibility to recover and recycle abandoned vehicles.  We believe that this newly promulgated law will increase the availability of raw materials necessary for scrap steel recycling.

As a result of continued worldwide growth in steel production and the other factors mentioned above, management estimates the steel industry within China will continue to utilize increasing amounts of scrap steel. In addition, we believe that the following factors create a favorable environment for growth in the scrap steel industry:

· The consolidation of small scrap steel producers drives the centralization of scrap steel purchase which requires larger and more efficient metal recycling equipment;

· A limited amount of scrap steel is recycled from construction, manufacturing and other industries today but with huge potential in the future;

· Soaring iron ore prices and demand for steel production drive up demand and price for scrap steel which makes scrap steel processing more profitable and attractive;

· High quality requirement from steel producers on scrap steel encourage steel recyclers to purchase high quality metal recycling machines; and

· Rapid growth in the auto industry will lead to additional supply of scrap steel.

Scrap Steel Recycling and Development of Recycling Facility

Scrap metal recycling operations encompass buying, processing and selling of ferrous and non-ferrous recycled metals. We are in the early phases of planning and constructing a scrap metal recycling facility in the Banqiao Industrial Zone of Lianyungang Economic Development Zone in Jiangsu Province on 32 acres of land.  The Banqiao Industrial Zone is located approximately 3 miles from Lianyungang Port, one of the ten largest deep water seaports in China, and one of the top 100 deep water ports in the world with annual cargo-handling capacity of approximately 120 million metric tons per year. Upon completion of construction and once operating at full capacity, the scrap metal recycling facility is expected to have a production capacity of 1 million metric tons of recycled scrap metal annually.

1 Steel Recycling Institute

2 Institute of Steel Scrap Recycling

3  Source: China steel yearbook, Scrape steel magazine, ISI database, BCG analysis

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Construction of the recycling facility and the purchase of land use rights for 32 acres is expected to cost approximately $16.3 million.  Construction of the recycling facility is expected to be completed in the second quarter of 2009.  When completed, the recycling facility is expected to include a scrap steel cutting production line, a large scrap steel cutting line, light thin waste/thin metal packing line and a preproduction facility that includes an automobile dismantling line, scrap steel grasping machines, a water transportation dock, strap transportation machines, factory, administrative and operations offices, material pile stock and load meters.  We plan to finance construction of this facility through a combination of net proceeds from an offering of our securities, cash flow and vendor and debt financing.  The recycling facility is expected to commence operations in the second quarter of 2009.

Products and Customers

Metal Ore Operations

Products.  Our metal ore business buys and sells the following metal ores:

· Iron Ore which is the raw material used to make pig iron, one of the main raw materials used to make steel. Approximately 98% of the mined iron ore is used to make steel;

· Chrome Ore which is used to reinforce steel and, in association with high carbon, gives resistance to wear and abrasion.  It is also used in heat-resisting steels and high duty cast irons;

· Nickel Ore which is a silvery-white metal that takes on a high polish. It belongs to the transition metals, and is hard and ductile. It occurs most usually in combination with sulfur and iron in pentlandite, with sulfur in millerite, with arsenic in the mineral nickeline, and with arsenic and sulfur in nickel glance;

· Copper Ore which is used as a heat conductor, an electrical conductor, as a building material, and as a constituent of various metal alloys;

· Manganese Ore which is a chemical element that is used industrially aspigments and as oxidation chemicals; and

· Steel Billet which is a section of steel used for rolling into bars, rods and sections.

Customers.  We sell our products to end-users such as steel producing mills, steelmakers, foundries and brokers who aggregate materials for other large users. Most of our customers purchase ore through negotiated spot sales contracts which establishes the quantity purchased for the month. The price we charge for ore depends upon market demand and transportation costs, as well as quality and grade of the scrap. In many cases, our selling price also includes the cost of transportation to the destination port of the end-user.  We sell processed and nonferrous ore to end-users such as specialty steelmakers, foundries, aluminum sheet and ingot manufacturers, copper refineries and smelters, brass and bronze ingot manufacturers, wire and cable producers, utilities and telephone networks.

In 2007 and 2006, respectively, the following customers accounted for over 10% of the revenue generated in our metal ore business:

Customer	2007	2006
Henan Jiyuan Iron and Steel (Group) Co., Ltd.	30%	0%
Henan Chaoyang Steel Co., Ltd.	33%	0%
China-Base Ningbo Foreign Trade Co., Ltd.	28%	50%

Scrap Metal Operations

We will not begin to sell our recycled scrap metal until the second quarter of 2009 when we expect to complete construction of a scrap metal recycling facility.  We plan to sell recycled scrap metal to our existing customers and others, in reusable forms that they require.

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Competition

Our metal ore operations compete with a number of metal ore providers and once operational, our scrap metal recycling business will compete with existing scrap steel manufactures who operate their own recycling facilities, new entrants into the scrap steel recycling business and existing operators.

Sources and Availability of Raw Materials

Iron Ore

We obtain ferrous and non-ferrous ore from a variety of sources including mining companies, brokers and other intermediaries.  In 2007 and 2006, respectively, the following suppliers accounted for over 10% of the purchases by Armco:

Suppliers		2007	2006
Sipex for Investment and Promotion of Exports Co., Ltd.	Libya	41%	0%
A3 Una Mining Corporation	Philippines	39%	0%
D.A.S.S Makine Insaat Madencilik Ltd.	Turkey	12%	0%
Fremery Resource Ltd.	Hong Kong	0%	16%
Swati International	India	0%	15%
Beston Holdings Group Ltd.	Hong Kong	0%	15%
Afrimin Freetrade Link Co., Ltd.	Nigeria	0%	14%
Mineracao Vila Nova Ltd.	Brazil	0%	10%

Metal Recycling

We will begin to purchase scrap metals from the following sources prior to commencement of operations at our proposed recycling plant when we complete construction of the facility:

· obsolete metal which is sourced from metal dealers, retail scrap metal dealers, auto wreckers, demolition firms, railroads and others who generate scrap steel or non-ferrous metals; and

· industrial generated materials which are sourced mainly from manufacturers who generate off cuts or by-products made from scrap steel, iron or non-ferrous metals, known as prompt or industrial metal.

In most cases, we may enter into long-term contracts with our suppliers of raw materials and our customers for the sale of our processed scrap metals. Among other things, the supply of these raw materials can be dependent on prevailing market conditions, including the buy and sell prices of ferrous and non-ferrous recycled metals. In periods of low prices, suppliers may elect to hold metal to wait for higher prices or intentionally slow their metal collection activities. In addition, a global slowdown of industrial production, or slowdowns, would reduce the supply of industrial grades of metal to the metal recycling industry, potentially reducing the amount of metals available for us to recycle.

Employees

As of June 27, 2008, we have 19 full-time employees, including 2 employees in the United States and 17 in the PRC.

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For our employees in the PRC, we are required to contribute a portion of their total salaries to the Chinese government’s social insurance funds, including medical insurance, unemployment insurance and job injuries insurance, and a housing assistance fund, in accordance with relevant regulations.   We expect the amount of our contribution to the government’s social insurance funds to increase in the future as we expand our workforce and operations.

GOVERNMENT REGULATION

Despite efforts to develop the legal system over the past several decades, including but not limited to legislation dealing with economic matters such as foreign investment, corporate organization and governance, commerce, taxation and trade, the PRC continues to lack a comprehensive system of laws. Further, the laws that do exist in the PRC are often vague, ambiguous and difficult to enforce, which could negatively affect our ability to do business in China and compete with other companies in our segments.

In September 2006, the Ministry of Commerce (“MOFCOM”) promulgated the Regulations on Foreign Investors' Mergers and Acquisitions of Domestic Enterprises (M&A Regulations) in an effort to better regulate foreign investment in China. The M&A Regulations were adopted in part as a needed codification of certain joint venture formation and operating practices, and also in response to the government's increasing concern about protecting domestic companies in perceived key industries and those associated with national security, as well as the outflow of well-known trademarks, including traditional Chinese brands.

As a U.S. based company doing business in China, we seek to comply with all PRC laws, rules and regulations and pronouncements, and endeavor to obtain all necessary approvals from applicable PRC regulatory agencies such as the MOFCOM, the State Assets Supervision and Administration Commission ("SASAC"), the State Administration for Taxation, the State Administration for Industry and Commerce, the China Securities Regulatory Commission ("CSRC"), and the State Administration of Foreign Exchange("SAFE").

Economic Reform Issues. Since 1979, the Chinese government has reformed its economic systems. Many reforms are unprecedented or experimental; therefore they are expected to be refined and improved. Other political, economic and social factors, such as political changes, changes in the rates of economic growth, unemployment, inflation, or the disparities in per capita wealth between regions within China, could lead to further readjustment of the reform measures. We cannot predict if this refining and readjustment process may negatively affect our operations in future periods, particularly in relation to future policies including but not limited to foreign investment, taxation, inflation and trade.

Currency. The value of the Renminbi (“RMB”), the main currency used in China, fluctuates and is affected by, among other things, changes in China’s political and economic conditions. The conversion of RMB into foreign currencies such as the U.S. dollar have been generally based on rates set by the People’s Bank of China, which are set daily based on the previous day’s interbank foreign exchange market rates and current exchange rates on the world financial markets.

Environment. We are currently subject to numerous Chinese provincial and local laws and regulations relating to the protection of the environment which are highly relevant to our metal ore business and the scrap steel recycling facility we intend to construct. These laws continue to evolve and are becoming increasingly stringent. The ultimate impact of complying with such laws and regulations is not always clearly known or determinable because regulations under some of these laws have not yet been promulgated or are undergoing revision.  In 2007 we did not spend any funds related to compliance with environmental regulations.

PROPERTIES

Our principal executive offices in the U.S. are located at One Waters Park Drive, Suite 98, San Mateo, CA 94403.  We occupy this location on an arrangement that may be terminated by us on 30 days notice.

Our fertilizer business’ principal executive office is located at 105 Pearl, Cokeville, WY 83114, and its mailing address is PO Box 430, Cokeville, WY 83114. This office is provided to us by our former Chief Executive Officer and president at no cost to us.  There is no written lease agreement.

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Our subsidiaries Henan Armco and Armet Lianyungang operate from offices located in Zhengzhou, within the Henan Province of China.  The office space consists of approximately 2,000 square feet and is leased from Mr. Yao our Chief Executive Officer pursuant to a lease that expires on December 31, 2008.  Future minimum lease payments under the lease are $16,451 through December 31, 2008.

Our subsidiary Armet Lianyungang operates from offices located in Lianyungang, of the Jiangsu province in China.  Armet Lianyungang leases approximately 3,000 square feet of office space at an annual cost of $10,000.  The lease expires in July 2009.    Upon completion of our planned scrap steel recycling facility, Armet Lianyungang will move its offices to this facility.

Armet Lianyungang has acquired land use rights for approximately 32 acres of land located in Lianyungang at a cost of approximately $2.25 million.  The land use rights allow for industrial production pursuant to a land use rights certificate we obtained in November 2007.  The land use rights expire in 2057.

RISK FACTORS

An investment in our securities involves a significant degree of risk.  You should not invest in our securities unless you can afford to lose your entire investment.  You should consider carefully the risk factors set forth in our Annual Report on Form 10-KSB for the fiscal year ended December 31, 2007, the following risk factors and other information in this Current Report before deciding to invest in our securities.  If any of the following risks and uncertainties develops into actual events, our business, financial condition or results of operations could be materially adversely affected and you could lose your entire investment in our company.

Risks Related To Our Business

WE MAY NOT BE ABLE TO OBTAIN SUFFICIENT CAPITAL TO FUND OUR PLANNED EXPANSION AND CONSTRUCTION OF A SCRAP STEEL RECYCLING FACILITY AND MAY BE FORCED TO LIMIT THE SCOPE OF OUR OPERATIONS.

If adequate additional financing is not available on reasonable terms, we may not be able to undertake the expansion of our metal ore business or the construction of the scrap steel recycling facility and purchase additional machinery and equipment for the operations of this facility and we would have to modify our business plans accordingly. There is no assurance that additional financing will be available to us.

In connection with our growth strategies, we may experience increased capital needs and accordingly, we may not have sufficient capital to fund our future operations without additional capital investments. Our capital needs will depend on numerous factors, including (i) our profitability; (ii) the actual versus planned cost to construct and equip the scrap steel recycling facility; (iii) the level of our investment in research and development; and (iv) the amount of our capital expenditures, including acquisitions. We cannot assure you that we will be able to obtain capital in the future to meet our needs.

If we cannot obtain additional funding, we may be required to: (i) substantially curtail our operations; (ii) limit our marketing efforts; (iii) abandon or delay construction of the scrap steel facility; and (iii) decrease or eliminate capital expenditures.  Such reductions could materially adversely affect our business and our ability to compete.

Even if we do find a source of additional capital, we may not be able to negotiate acceptable terms and conditions for obtaining the additional capital. Any future capital investments could dilute or otherwise materially and adversely affect the holdings or rights of our existing shareholders. In addition, new equity or convertible debt securities issued by us to obtain financing could have rights, preferences and privileges senior to our common stock. We cannot give you any assurance that any additional financing will be available to us, or if available, will be on terms favorable to us.

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OUR FUTURE OPERATING RESULTS MAY BE AFFECTED BY FLUCTUATIONS IN RAW MATERIAL PRICES. WE MAY NOT BE ABLE TO PASS ON COST INCREASES TO CUSTOMERS.

Our operating profits may be negatively affected by fluctuations in the price of metal ore. We are subject to short-term metal ore price volatility and may be forced to purchase metal ore at higher prices and may be unable to pass the cost increase of metal ore on to our customers. This may adversely affect gross margins and profitability. Although our sales agreements with our customers generally do not contain a provision that permits the parties to adjust the contract price of the metal ore upward or downward, we have, in most cases fixed price supply contracts for the metal ore we sell.

WE NEED TO MANAGE GROWTH IN OPERATIONS TO MAXIMIZE OUR POTENTIAL GROWTH AND ACHIEVE OUR EXPECTED REVENUES AND OUR FAILURE TO MANAGE GROWTH WILL CAUSE A DISRUPTION OF OUR OPERATIONS RESULTING IN THE FAILURE TO GENERATE REVENUE.

In order to maximize potential growth in our current and potential markets, we believe that we must expand our sales and marketing operations and enter into the scrap steel business by constructing a recycling facility. This expansion will place a significant strain on our management and our operational, accounting, and information systems. We expect that we will need to continue to improve our financial controls, operating procedures, and management information systems. We will also need to effectively recruit, train, motivate, and manage our employees. Our failure to manage our growth could disrupt our operations and ultimately prevent us from generating the revenues we expect.

WE CANNOT ASSURE YOU THAT OUR ORGANIC GROWTH STRATEGY WILL BE SUCCESSFUL WHICH MAY RESULT IN A NEGATIVE IMPACT ON OUR GROWTH, FINANCIAL CONDITION, RESULTS OF OPERATIONS AND CASH FLOW.

One of our strategies is to grow organically through increasing the distribution and sales of our metal ore products by penetrating existing markets in the PRC and entering new geographic markets in the PRC. However, many obstacles to entering such new markets exist, including, but not limited to, shipping and delivery costs, costs associated with marketing efforts and maintaining attractive foreign exchange ratios. We cannot, therefore, assure you that we will be able to successfully overcome such obstacles and establish our products in any additional markets. Our inability to implement this organic growth strategy successfully may have a negative impact on our growth, future financial condition, results of operations or cash flows.

WE CANNOT ASSURE THAT WE WILL SUCCESSFULLY COMPLETE CONSTRUCTION OF OUR PROPOSED SCRAP STEEL RECYCLING FACILITY, OR, EVEN IF CONSTRUCTED, THAT OUR PROPOSED RECYCLING FACILITY WILL CONTRIBUTE TO OUR OVERALL PROFITABILITY, WHICH MAY ADVERSELY AFFECT OUR RESULTS OF OPERATIONS AND THE MARKET PRICE FOR OUR SHARES.

We expect to increase our revenue by selling recycled scrap steel to be processed in our scrap steel recycling facility which we intended to build. However, we will require additional financing in order to construct the facility, and we have not entered into agreements for all aspects of construction necessary to complete construction of the facility. Moreover, the operation of a scrap steel recycling facility is equipment and labor intensive and depends on a ready source of raw unprocessed scrap steel.  Thus, even if constructed, we can provide no assurance that we can generate significant revenues from the operation of this facility, or that its operations will contribute to our overall profitability. Delays in construction and/or unanticipated equipment and/or labor and raw material costs and delays could have an adverse effect on our results of operations, in which event the market price for our shares may be adversely affected.

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WE CANNOT ASSURE YOU THAT OUR ACQUISITION GROWTH STRATEGY WILL BE SUCCESSFUL RESULTING IN OUR FAILURE TO MEET GROWTH AND REVENUE EXPECTATIONS.

In addition to our organic growth strategy, we may seek to grow through strategic acquisitions. We may pursue opportunities to acquire businesses in the PRC that are complementary or related in product lines and business structure to us. We may not be able to locate suitable acquisition candidates at prices that we consider appropriate or to finance acquisitions on terms that are satisfactory to us. If we do identify an appropriate acquisition candidate, we may not be able to negotiate successfully the terms of an acquisition, or, if the acquisition occurs, integrate the acquired business into our existing business. Acquisitions of businesses or other material operations may require debt financing or additional equity financing, resulting in leverage or dilution of ownership. Integration of acquired business operations could disrupt our business by diverting management away from day-to-day operations. The difficulties of integration may be increased by the necessity of coordinating geographically dispersed organizations, integrating personnel with disparate business backgrounds and combining different corporate cultures. We also may not be able to maintain key employees or customers of an acquired business or realize cost efficiencies or synergies or other benefits we anticipated when selecting our acquisition candidates. In addition, we may need to record write-downs from future impairments of intangible assets, which could reduce our future reported earnings. At times, acquisition candidates may have liabilities or adverse operating issues that we fail to discover through due diligence prior to the acquisition. In addition to the above, acquisitions in the PRC, including of state owned businesses, will be required to comply with laws of the PRC, to the extent applicable. There can be no assurance that any given proposed acquisition will be able to comply with PRC requirements, rules and/or regulations, or that we will successfully obtain governmental approvals which are necessary to consummate such acquisitions, to the extent required. If our acquisition strategy is unsuccessful, we will not grow our operations and revenues at the rate that we anticipate.

CERTAIN AGREEMENTS TO WHICH WE ARE A PARTY AND WHICH ARE MATERIAL TO OUR OPERATIONS LACK VARIOUS LEGAL PROTECTIONS WHICH ARE CUSTOMARILY CONTAINED IN SIMILAR CONTRACTS PREPARED IN THE UNITED STATES.

Our subsidiaries include companies organized under the laws of the PRC and all of their business and operations are conducted in China and Hong Kong. We are a party to certain contracts related to our operations in China and Hong Kong.  While these contracts contain the basic business terms of the agreements between the parties, these contracts do not contain certain clauses which are customarily contained in similar contracts prepared in the U.S., such as representations and warranties of the parties, confidentiality and non-compete clauses, provisions outlining events of defaults, and termination and jurisdictional clauses.  Because our contracts in China omit these customary clauses, notwithstanding the differences in Chinese and U.S. laws, we may not have the same legal protections as we would if the contracts contained these additional clauses.  We anticipate that our Chinese and Hong Kong subsidiaries will likely enter into contracts in the future which will likewise omit these customary legal protections.  While we have not been subject to any adverse consequences as a result of the omission of these customary clauses, and we consider the contracts to which we are a party to contain all the material terms of our business arrangements with the other party, future events may occur which lead to a dispute which could have been avoided if the contracts included customary clauses in conformity with U.S. standards.  Contractual disputes which may arise from this lack of legal protection could divert management's time from the operation of our business, require us to expend funds attempting to settle a possible dispute, limit the time our management would otherwise devote to the operation of our business, and have a material adverse effect on our business, financial condition and results of operations.

WE DEPEND ON OUR KEY MANAGEMENT PERSONNEL AND THE LOSS OF THEIR SERVICES COULD ADVERSELY AFFECT OUR BUSINESS.

We place substantial reliance upon the efforts and abilities of our executive officers, Yao Kexuan, our Chairman and Chief Executive Officer and Fengtao Wen, our Chief Financial Officer.  The loss of the services of any of our executive officers could have a material adverse effect on our business, operations, revenues or prospects.  We do not maintain key man life insurance on the lives of these individuals.

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WE MAY NEVER PAY ANY DIVIDENDS TO SHAREHOLDERS.

We have not declared any cash dividends on our common stock since we completed the purchase of Armco pursuant to the Share Purchase Agreement and our board of directors does not intend to declare or distribute dividends in the near future.  The declaration, payment and amount of any future dividends will be made at the discretion of the board of directors, and will depend upon, among other things, the results of our operations, cash flows and financial condition, operating and capital requirements, and other factors as the board of directors considers relevant.  There is no assurance that future dividends will be paid, and, if dividends are paid, there is no assurance with respect to the amount of any such dividend.

MANAGEMENT EXERCISES SIGNIFICANT CONTROL OVER MATTERS REQUIRING SHAREHOLDER APPROVAL WHICH MAY RESULT IN THE DELAY OR PREVENTION OF A CHANGE IN OUR CONTROL.

Mr. Kexuan Yao, our Chairman and Chief Executive Officer, would have voting power equal to approximately 69.7% of our voting securities if he exercises his right and fulfills the conditions to exercise the Earn In Shares and Mr. Cox redeems 7,694,000 shares of our common stock pursuant to the terms of the Share Purchase Agreement.  As a result, management through such stock ownership rights has the ability to exercise significant control over all matters requiring shareholder approval, including the election of directors and approval of significant corporate transactions.  This concentration of ownership in management may also have the effect of delaying or preventing a change in control of us that may be otherwise viewed as beneficial by shareholders other than management.

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. 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.

WE MAY NOT BE ABLE TO MEET THE ACCELERATED FILING AND INTERNAL CONTROL REPORTING REQUIREMENTS IMPOSED BY THE SECURITIES AND EXCHANGE COMMISSION RESULTING IN A POSSIBLE DECLINE IN THE PRICE OF OUR COMMON STOCK AND OUR INABILITY TO OBTAIN FUTURE FINANCING.

As directed by Section 404 of the Sarbanes-Oxley Act, the Securities and Exchange Commission adopted rules requiring each public company to include a report of management on the company's internal controls over financial reporting in its annual reports.  In addition, the independent registered public accounting firm auditing a company's financial statements must also attest to and report on management's assessment of the effectiveness of the company's internal controls over financial reporting as well as the operating effectiveness of the company's internal controls. While we will not be subject to these requirements for the fiscal years ended December 31, 2008 and December 31, 2009, we will be subject to these requirements beginning January 1, 2010.

While we expect to expend significant resources in developing the necessary documentation and testing procedures required by Section 404 of the Sarbanes-Oxley Act, there is a risk that we may not be able to comply timely with all of the requirements imposed by this rule.  In the event that we are unable to receive a positive attestation from our independent registered public accounting firm with respect to our internal controls, investors and others may lose confidence in the reliability of our financial statements and our stock price and ability to obtain equity or debt financing as needed could suffer.

In addition, in the event that our independent registered public accounting firm is unable to rely on our internal controls in connection with its audit of our financial statements, and in the further event that it is unable to devise alternative procedures in order to satisfy itself as to the material accuracy of our financial statements and related disclosures, it is possible that we would be unable to file our Annual Report on Form 10-K with the Securities and Exchange Commission, which could also adversely affect the market price of our common stock and our ability to secure additional financing as needed.

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WE MAY HAVE DIFFICULTY RAISING NECESSARY CAPITAL TO FUND OPERATIONS AS A RESULT OF MARKET PRICE VOLATILITY FOR OUR SHARES OF COMMON STOCK.

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 have experienced wide fluctuations that have not necessarily been related to the operations, performances, 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 financing to continue to develop and exploit existing and new products and services related to our industries and to expand into new markets.  The exploitation of our services may, therefore, be dependent upon our ability to obtain financing through debt and equity or other means.

Risks Related To Doing Business In China

A SUBSTANTIAL PORTION OF OUR ASSETS AND OPERATIONS ARE LOCATED IN THE PRC AND ARE SUBJECT TO CHANGES RESULTING FROM THE POLITICAL AND ECONOMIC POLICIES OF THE CHINESE GOVERNMENT.

Our business operations could be restricted by the political environment in the PRC.  The PRC has operated as a socialist state since 1949 and is controlled by the Communist Party of China.  In recent years, however, the government has introduced reforms aimed at creating a "socialist market economy" and policies have been implemented to allow business enterprises greater autonomy in their operations.  Changes in the political leadership of the PRC may have a significant effect on laws and policies related to the current economic reform programs, other policies affecting business and the general political, economic and social environment in the PRC, including the introduction of measures to control inflation, changes in the rate or method of taxation, the imposition of additional restrictions on currency conversion and remittances abroad, and foreign investment.  Moreover, economic reforms and growth in the PRC have been more successful in certain provinces than in others, and the continuation or increases of such disparities could affect the political or social stability of the PRC.

Although we believe that the economic reform and the macroeconomic measures adopted by the Chinese government have had a positive effect on the economic development of China, the future direction of these economic reforms is uncertain and the uncertainty may decrease the attractiveness of our company as an investment, which may in turn result in a decline in the trading price of our common stock.

WE CANNOT ASSURE YOU THAT THE CURRENT CHINESE POLICIES OF ECONOMIC REFORM WILL CONTINUE. BECAUSE OF THIS UNCERTAINTY, THERE ARE SIGNIFICANT ECONOMIC RISKS ASSOCIATED WITH DOING BUSINESS IN CHINA.

Although the majority of productive assets in China are owned by the Chinese government, in the past several years the government has implemented economic reform measures that emphasize decentralization and encourages private economic activity.  In keeping with these economic reform policies, the PRC has been openly promoting business development in order to bring more business into the PRC.  Because these economic reform measures may be inconsistent or ineffective, there are no assurances that:

· Chinese government will continue its pursuit of economic reform policies;

· economic policies, even if pursued, will be successful;

· policies will not be significantly altered from time to time; or

· operations in China will not become subject to the risk of nationalization.

We cannot assure you that we will be able to capitalize on these economic reforms, assuming the reforms continue.  Because our business model is dependent upon the continued economic reform and growth in China, any change in Chinese government policy could materially adversely affect our ability to continue to implement our business model. China's economy has experienced significant growth in the past decade, but such growth has been uneven across geographic and economic sectors and has recently been slowing.  Even if the Chinese government continues its policies of economic reform, there are no assurances that economic growth in that country will continue or that we will be able to take advantage of these opportunities in a fashion that will provide financial benefit to us.

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THE CHINESE GOVERNMENT EXERTS SUBSTANTIAL INFLUENCE OVER THE MANNER IN WHICH OUR CHINESE SUBSIDIARIES MUST CONDUCT OUR BUSINESS ACTIVITIES.

The PRC only recently has permitted provincial and local economic autonomy and private economic activities.  The government of the PRC has exercised and continues to exercise substantial control over virtually every sector of the Chinese economy through regulation and state ownership.  Accordingly, government actions in the future, including any decision not to continue to support recent economic reforms and to return to a more centrally planned economy or regional or local variations in the implementation of economic policies, could have a significant effect on economic conditions in the PRC or particular regions of the PRC, and could require us to divest ourselves of any interest we then hold in our Chinese subsidiaries.

FUTURE INFLATION IN CHINA MAY INHIBIT ECONOMIC ACTIVITY IN CHINA.

In recent years, the Chinese economy has experienced periods of rapid expansion and high rates of inflation.  During the past 10 years, the rate of inflation in China has been as high as 20.7% and as low as -2.2%.  These factors have led to the adoption by the PRC government, from time to time, of various corrective measures designed to restrict the availability of credit or regulate growth and contain inflation.  While inflation has been more moderate since 1995, high inflation in the future could cause the PRC government to impose controls on credit and/or prices, or to take other action, which could inhibit economic activity in China.  Any actions by the PRC government to regulate growth and contain inflation could have the effect of limiting our ability to grow our revenues in future periods.

ANY RECURRENCE OF SEVERE ACUTE RESPIRATORY SYNDROME, OR SARS, OR ANOTHER WIDESPREAD PUBLIC HEALTH PROBLEM, COULD INTERRUPT OUR OPERATIONS.

A renewed outbreak of SARS or another widespread public health problem in China could have a negative effect on our operations. Our operations may be impacted by a number of health-related factors, including the following:

• quarantines or closures of some of our offices which would severely disrupt our operations;

•  the sickness or death of our key management and employees; or

•  a general slowdown in the Chinese economy.

An occurrence of any of the foregoing events or other unforeseen consequences of public health problems could result in a loss of revenues in future periods and could impact our ability to conduct the operations of our Chinese subsidiaries as they are presently conducted.  If we were unable to continue the operations of our Chinese subsidiaries as they are now conducted, our revenues in future periods would decline and our ability to continue as a going concern could be in jeopardy.  If we were unable to continue as a going concern, you could lose your entire investment in our company.

RESTRICTIONS ON CURRENCY EXCHANGE MAY LIMIT OUR ABILITY TO RECEIVE AND USE OUR REVENUES EFFECTIVELY. WE MAY NOT HAVE READY ACCESS TO CASH ON DEPOSIT IN BANKS IN THE PRC.

Because a substantial portion of our revenues are in the form of Renminbi (RMB), the main currency used in China, any future restrictions on currency exchanges may limit our ability to use revenue generated in RMB to fund any future business activities outside China or to make dividend or other payments in U.S. Dollars.  Although the Chinese government introduced regulations in 1996 to allow greater convertibility of the RMB for current account transactions, significant restrictions still remain, including primarily the restriction that foreign-invested enterprises may only buy, sell or remit foreign currencies, after providing valid commercial documents, at those banks authorized to conduct foreign exchange business.  In addition, conversion of RMB for capital account items, including direct investment and loans, is subject to government approval in China, and companies are required to open and maintain separate foreign exchange accounts for capital account items.  We cannot be certain that we could have ready access to the cash should we wish to transfer it to bank accounts outside the PRC nor can we be certain that the Chinese regulatory authorities will not impose more stringent restrictions on the convertibility of the RMB, especially with respect to foreign exchange transactions.

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WE MAY BE UNABLE TO ENFORCE OUR RIGHTS DUE TO POLICIES REGARDING THE REGULATION OF FOREIGN INVESTMENTS IN CHINA.

The PRC's legal system is a civil law system based on written statutes in which decided legal cases have little value as precedent, unlike the common law system prevalent in the United States.  The PRC does not have a well-developed, consolidated body of laws governing foreign investment enterprises.  As a result, the administration of laws and regulations by government agencies may be subject to considerable discretion and variation, and may be subject to influence by external forces unrelated to the legal merits of a particular matter.  China's regulations and policies with respect to foreign investments are evolving.  Definitive regulations and policies with respect to such matters as the permissible percentage of foreign investment and permissible rates of equity returns have not yet been published.  Statements regarding these evolving policies have been conflicting and any such policies, as administered, are likely to be subject to broad interpretation and discretion and to be modified, perhaps on a case-by-case basis.  The uncertainties regarding such regulations and policies present risks which may affect our ability to achieve our stated business objectives.  If we are unable to enforce any legal rights we may have under our contracts or otherwise, our ability to compete with other companies in our industry could be limited which could result in a loss of revenue in future periods which could have a material adverse effect on our business, financial condition and results of operations.

RECENT REGULATIONS RELATING TO OFFSHORE INVESTMENT ACTIVITIES BY CHINESE RESIDENTS MAY INCREASE THE ADMINISTRATIVE BURDEN WE FACE AND CREATE REGULATORY UNCERTAINTIES THAT MAY LIMIT OR ADVERSELY EFFECT OUR ABILITY TO COMPLETE A BUSINESS COMBINATIONS WITH PRC COMPANIES.

Regulations were issued on November 1, 2005 (SAFE Circular 75), on September 2006 (2006 M&A Rules), and on May 29, 2007 (SAFE Implementation Notice 106), by the PRC State Administration of Foreign Exchange, or SAFE, that will require approvals from, and registrations with, PRC government authorities in connection with direct or indirect offshore investment activities by PRC residents and PRC corporate entities; however, there has been a recent announcement that such regulations may be partially reversed. The SAFE regulations retroactively require approval and registration of direct or indirect investments previously made by PRC residents in offshore companies. In the event that a PRC shareholder with a direct or indirect stake in an offshore parent company fails to obtain the required SAFE approval and make the required registration, the PRC subsidiaries of such offshore parent company may be prohibited from making distributions of profit to the offshore parent and from paying the offshore parent proceeds from any reduction in capital, share transfer or liquidation in respect of the PRC subsidiaries. Further, failure to comply with the various SAFE approval and registration requirements described above, as currently drafted, could result in liability under PRC law for foreign exchange evasion. The regulations discussed could also result in the relevant Chinese government authorities limiting or eliminating our ability to purchase and retain foreign currencies in the future, which could limit or eliminate our ability to pay dividends in the future. More recently, however, new regulations have been drafted that would partially reverse the policy that requires Chinese companies to obtain permission from SAFE to own overseas corporate entities.

As a result of the lack of implementing rules, the uncertainty as to when the new draft regulations will take effect, and uncertainty concerning the reconciliation of the new regulations with other approval requirements, it remains unclear how these existing regulations, and any future legislation concerning offshore or cross-border transactions, will be interpreted, amended and implemented by the relevant government authorities. We believe that our acquisition of Armco complies with the relevant rules. As a result of the foregoing, however, we cannot assure you that we or the former owners of Armco or owners of a target business we might acquire, as the case may be, will be able to complete the necessary approval, filings and registrations for a proposed business combination if such approval were required. This may restrict our ability to implement our business combination strategy and adversely affect our operations.

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FAILURE TO COMPLY WITH THE UNITED STATES FOREIGN CORRUPT PRACTICES ACT COULD SUBJECT US TO PENALTIES AND OTHER ADVERSE CONSEQUENCES.

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

WE MAY HAVE DIFFICULTY ESTABLISHING ADEQUATE MANAGEMENT, LEGAL AND FINANCIAL CONTROLS IN THE PRC.

PRC companies have in some cases, been resistant to the adoption of Western styles of management and financial reporting concepts and practices, which include sufficient corporate governance, internal controls and, computer, financial and other control systems.  In addition, we may have difficulty in hiring and retaining a sufficient number of qualified employees to work in the PRC.  As a result of these factors, we may experience difficulties 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 with future acquisitions.  Therefore, we may, in turn, experience difficulties in implementing and maintaining adequate internal controls. Any such deficiencies, weaknesses or lack of compliance could have a material adverse effect on our business, financial condition and results of operations.

Risks Related To Our Securities

OUR ARTICLES OF INCORPORATION PROVIDE FOR INDEMNIFICATION OF OFFICERS AND DIRECTORS AT OUR EXPENSE AND LIMIT THEIR LIABILITY WHICH MAY RESULT IN A MAJOR COST TO US AND HURT THE INTERESTS OF OUR SHAREHOLDERS BECAUSE CORPORATE RESOURCES MAY BE EXPENDED FOR THE BENEFIT OF OFFICERS AND/OR DIRECTORS.  

Our articles of incorporation and applicable Nevada law provide for the indemnification of our directors, officers, employees, and agents, under certain circumstances, against attorney's fees and other expenses incurred by them in any litigation to which they become a party arising from their association with or activities on our behalf. We will also bear the expenses of such litigation for any of our directors, officers, employees, or agents, upon such person's written promise to repay us if it is ultimately determined that any such person shall not have been entitled to indemnification. This indemnification policy could result in substantial expenditures by us which we will be unable to recoup.

We have been advised that, in the opinion of the SEC, indemnification for liabilities arising under federal securities laws is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification for liabilities arising under federal securities laws, other than the payment by us of expenses incurred or paid by a director, officer or controlling person in the successful defense of any action, suit or proceeding, is asserted by a director, officer or controlling person in connection with the securities being registered, we will (unless in the opinion of our counsel, the matter has been settled by controlling precedent) submit to a court of appropriate jurisdiction, the question whether indemnification by us is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. The legal process relating to this matter if it were to occur is likely to be very costly and may result in us receiving negative publicity, eitherof which factors is likely to materially reduce the market and price for our shares, if such a market ever develops.    

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CURRENTLY, THERE IS NO PUBLIC MARKET FOR OUR SECURITIES, AND THERE CAN BE NO ASSURANCES THAT ANY PUBLIC MARKET WILL EVER DEVELOP OR THAT OUR COMMON STOCK WILL BE QUOTED FOR TRADING AND, EVEN IF QUOTED, IT IS LIKELY TO BE SUBJECT TO SIGNIFICANT PRICE FLUCTUATIONS.

We have a trading symbol for our common stock, COXD, which permits our shares to be quoted on the OTCBB. However, our stock has been thinly traded since approval of our quotation on the over-the-counter bulletin board by FINRA. Consequently, there can be no assurances as to whether:

§      any market for our shares will develop;

§      the prices at which our common stock will trade; or

§      the extent to which investor interest in us will lead to the development of an active, liquid trading market.  Active trading markets generally result in lower price volatility and more efficient execution of buy and sell orders for investors.

In addition, our common stock is unlikely to be followed by any market analysts, and there may be few institutions acting as market makers for our common stock. Either of these factors could adversely affect the liquidity and trading price of our common stock. Until our common stock is fully distributed and an orderly market develops in our common stock, if ever, the price at which it trades is likely to fluctuate significantly. Prices for our common stock will be determined in the marketplace and may be influenced by many factors, including the depth and liquidity of the market for shares of our common stock, developments affecting our business, including the impact of the factors referred to elsewhere in these risk factors, investor perception of us and general economic and market conditions.  No assurances can be given that an orderly or liquid market will ever develop for the shares of our common stock.

ANY MARKET THAT DEVELOPS IN SHARES OF OUR COMMON STOCK WILL BE SUBJECT TO THE PENNY STOCK REGULATIONS AND RESTRICTIONS WHICH WILL CREATE A LACK OF LIQUIDITY AND MAKE TRADING DIFFICULT OR IMPOSSIBLE.

The trading of our securities, if any, will be in the over-the-counter market which is commonly referred to as the OTCBB as maintained by FINRA. As a result, an investor may find it difficult to dispose of, or to obtain accurate quotations as to the price of our securities.

Rule 3a51-1 of the Securities Exchange Act of 1934 establishes the definition of a "penny stock," for purposes relevant to us, as any equity security that has a minimum bid price of less than $4.00 per share or with an exercise price of less than $4.00 per share, subject to a limited number of exceptions which are not available to us. It is likely that our shares will be considered to be penny stocks for the immediately foreseeable future. This classification severely and adversely affects any market liquidity for our common stock.

For any transaction involving a penny stock, unless exempt, the penny stock rules require that a broker or dealer approve a person's account for transactions in penny stocks and the broker or dealer receive from the investor a written agreement to the transaction setting forth the identity and quantity of the penny stock to be purchased.  In order to approve a person's account for transactions in penny stocks, the broker or dealer must obtain financial information and investment experience and objectives of the person and make a reasonable determination that the transactions in penny stocks are suitable for that person and that that person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

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

§      the basis on which the broker or dealer made the suitability determination, and

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

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

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Because of these regulations, broker-dealers may not wish to engage in the above-referenced necessary paperwork and disclosures and/or may encounter difficulties in their attempt to sell shares of our common stock, which may affect the ability of selling shareholders or other holders to sell their shares in any secondary market and have the effect of reducing the level of trading activity in any secondary market. These additional sales practice and disclosure requirements could impede the sale of our securities, if and when our securities become publicly traded. In addition, the liquidity for our securities may decrease, with a corresponding decrease in the price of our securities. Our shares, in all probability, will be subject to such penny stock rules for the foreseeable future and our shareholders will, in all likelihood, find it difficult to sell their securities.

THE MARKET FOR PENNY STOCKS HAS EXPERIENCED NUMEROUS FRAUDS AND ABUSES WHICH COULD ADVERSELY IMPACT INVESTORS IN OUR STOCK.

We believe that the market for penny stocks has suffered from patterns of fraud and abuse. Such patterns include:

§      Control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer;

§      Manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases;

§      “Boiler room" practices involving high pressure sales tactics and unrealistic price projections by inexperienced sales persons;

§      Excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and

§      Wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the inevitable collapse of those prices with consequent investor losses.

We believe that many of these abuses have occurred with respect to the promotion of low price stock companies that lacked experienced management, adequate financial resources, an adequate business plan and/or marketable and successful business or product.

OUR CONTROLLING STOCKHOLDERS MAY TAKE ACTIONS THAT CONFLICT WITH YOUR INTERESTS.

All of our officers and directors beneficially own approximately 69.7% of our common stock after giving effect to Mr. Cox's redemption of 7,694,000 shares of our common stock pursuant to the terms of the Share Purchase Agreement.  In this case, all of our officers and directors will be able to exercise control over all matters requiring stockholder approval, including the election of directors, amendment of our certificate of incorporation and approval of significant corporate transactions, and they will have significant control over our management and policies. The directors elected by these stockholders will be able to significantly influence decisions affecting our capital structure. This control may have the effect of delaying or preventing changes in control or changes in management, or limiting the ability of our other stockholders to approve transactions that they may deem to be in their best interest. For example, our controlling stockholders will be able to control the sale or other disposition of our operating businesses and subsidiaries to another entity.

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

The following discussion and analysis of the consolidated financial condition and results of operations should be read with our consolidated financial statements and related notes appearing elsewhere in this Current Report. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. The actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, but not limited to, those set forth under “Risk Factors” and elsewhere in this Current Report.

As used in this report, the term “Armco” refers to Armco & Metawise (HK), Ltd., a Hong Kong liability limited company formed in July 2001.   Armco is on a calendar year; as such the three months period ending March 31, is our first quarter.  The year ended December 31, 2007 is referred to as “2007”, the year ended December 31, 2006 is referred to as “2006”, and the coming year which will end December 31, 2008 is referred to as “2008”.

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Overview

China Armco Metals, Inc. and its subsidiaries (“we”, “us” or “our”) imports, sells and distributes metal ores and non-ferrous metals to the metal refinery industry.  Armco & Metawise (HK), Ltd. is a Hong Kong liability limited company formed in July 2001 (“Armco”).  Armco operates two wholly owned subsidiaries operating in China; Henan Armco & Metawise Trading Co., Ltd. (“Henan Armco”), and Armet (Lianyungang) Renewable Resources Co., Ltd. (“Armet Lianyungang”).  As well, we are a distributor of organic fertilizer products used to improve soil and growing conditions for the potato farmers of eastern Idaho.  The following discussion and analysis relates to Armco, our wholly owned subsidiary which we acquired on June 27, 2008 pursuant to the terms of the Share Purchase Agreement.

We import, sell and distribute metal ores and non-ferrous metals to the metal refinery industry within China.   We obtain raw materials from global suppliers in Brazil, India, South America, Oman, Turkey, Iran, Libya, Nigeria, Indonesia, and the Philippines.  We distribute these raw materials to the metal refinery industry within China including but not limited to iron ore, coal, chrome ore, nickel ore, copper ore, scrap steel, and manganese ore.

In January 2007, Armco formed Armet Lianyungang as a wholly owned subsidiary to develop and operate a scrap steel recycling facility.  Armet Lianyungang is constructing a scrap steel recycling facility in the Banqiao Industrial Zone of Lianyungang Economic Development Zone in Jiangsu province. Armet Lianyungang has acquired land use rights for approximately 32 acres of land located in Lianyungang at a cost of approximately $2.25 million.  The land use rights allow for industrial production pursuant to a land use rights certificate we obtained in November 2007.  The land use rights expire in 2057.

Upon completion of our metal recycling facility, we will seek to recycle automobiles, machinery, building materials, dismantled ships and various other scrap steel.  Armet Lianyungang will collect and purchase the waste raw materials from multiple channels, such as manufacturing facilities and scrap yards.  Armet Lianyungang will sell and distribute recycled scrap steel to the metal refinery industry utilizing the existing network of Armco and Henan Armco customers.  Armet Lianyungang expects to commence operations in the second quarter of 2009.

Effective June 27, 2008, Armco entered into an agreement to be acquired by us.  Following the close of the acquisition we changed our former corporate name Cox Distributing, Inc. to China Armco Metals, Inc.

In 2007, we experienced growth in revenues, income and assets.  This growth was attributable to increased demand and the rising cost of our products.  Through our subsidiaries we provide a range of raw materials to the metal refinery industry within China.

China is the largest developing country in the world, and the demand for steel has been growing steadily over the past decade as the country continues to experience an industrial revolution.  Management estimates domestic steel production should continue to witness significant growth as China continues to grow.  The steel industry is an important basic industry of the national economy of China, and plays a vital role in the recent industrialization efforts of the country.  As witnessed over the last decade, the production of steel has increased dramatically throughout the world, and particular in China.  According to the www.worldsteel.org, in 2007 worldwide crude steel production amounted to 1,344 million metric tons while China accounted for approximately 489 million metric tons.  In 2006, worldwide crude steel production amounted to 1,244 million metric tons with China accounting for 422 million metric tons.  Globally, this increase represents an approximate 8% increase from 2006 to 2007.   However steel production in China increased approximately 16% from 2006 to 2007.

Impact of the 2008 Beijing Olympics

Even though we are a Hong Kong company, substantially all of our subsidiaries and their operations are located in the PRC. We could be adversely impacted by various policies recently adopted by the PRC which seek to minimize pollution by limiting the operation of polluting agents in advance of the Beijing Olympics to be held during August 2008. While it is not clear if the recently adopted anti-pollution policies some of which go into effect commencing on June 1, 2008, will apply to any of our customers, the policies could cause an interruption in the production of steel. Presently we have not been notified of any potential interruption in operations as a result of these policies.

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We believe recycling operations will become strong growth drivers worldwide as natural resources continue to be depleted and the amount of unprocessed scrap steel becomes available as a result of increases in consumer demand for products made from steel that eventually are recycled.  We intend to invest to fund the construction of a scrap metal recycling facility beginning in the third quarter of 2008 if we are able to raise the capital needed to continue our construction.  Armet Lianyungang plans to construct a scrap metal recycling facility in the Banqiao Industrial Zone of Lianyungang Economic Development Zone in Jiangsu province. During 2006 and 2007, we have provided approximately $3 million of investment capital to this project. These funds are being utilized to establish the recycling facility.

During 2008 and beyond, we face a number of challenges in growing our business, such as the continuing integration of our PRC based subsidiaries. At March 31, 2008 we had $145,127 in cash and cash equivalents. While this amount is believed sufficient to meet our current obligations, we need to secure additional capital to provide funds to enable each of our subsidiaries to grow their businesses and operations. We continue to work with the management of our recent acquisitions to identify strategies to maximize their potential to the consolidated group.

Even though we are a U.S. company, all of our subsidiaries and their operations are located in the PRC and Hong Kong. As a result, we face certain risks associated with doing business in those countries. These risks include risks associated with the ongoing transition from PRC government business ownership to privatization, operating in a cash based economy, dealing with inconsistent government policies, unexpected changes in regulatory requirements, export restrictions, tariffs and other trade barriers, challenges in staffing and managing operations in a communist country, differences in technology standards, employment laws and business practices, longer payment cycles and problems in collecting accounts receivable, changes in currency exchange rates and currency exchange controls. We are unable to control the vast majority of these risks associated both with our operations and the country in which they are located and these risks could result in significant declines in our revenues and adversely affect our operations.

RESULTS OF OPERATIONS OF ARMCO AND ITS SUBSIDIARIES

The following discussion and analysis relates to Armco and its subsidiaries.

Comparison of the three months ended March 31, 2008 as compared to March 31, 2007

During the three months ended March 31, 2008 our revenues increased as compared to the first quarter of 2007, from approximately $3.3 million to approximately $9.8 million. This increase was attributable to the growing demand for our products and rising prices in China.  We expect our revenues will continue to grow, however this percentage growth rate, representing an approximate 191.8% annual rate, may not be sustainable.  During the three months ended March 31, 2007 chrome ore and nickel ore represented approximately 83% and 15% of our revenues respectively.  During the three months ended March 31, 2008 iron ore, steel and chrome ore represented approximately 61%, 38% and 1% of our revenues respectively.

Total Operating Expenses

For the three months ended March 31, 2008, operating expenses increased to approximately $227,500 from $177,700 for the three months ended March 31, 2007.  Our operating expenses are comprised of selling expenses as well as general and administrative expenses.  This increase is a result of increased revenue and additional costs related to our Armet Lianyungang subsidiary.  We intend to invest to fund the construction of a scrap steel recycling facility throughout 2008 and beyond.  Armet Lianyungang, our wholly owned subsidiary, intends to construct a scrap metal recycling facility in the Banqiao Industrial Zone of Lianyungang Economic Development Zone in Jiangsu province.  We have expanded operational staff to support our expanding operations.

The table below summarizes the consolidated operating results for the three months ended March 31, 2008 and 2007.

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	Consolidated For the Three Month ended March 31, 2008					Consolidated For the Three Month ended March 31, 2007
	(Unaudited)					(Unaudited)
	$ (in 000’s)		%			$ (in 000’s)			%
										-
Revenues	$	9,775		-		$	3,349
Cost of revenues		8,546		87.4	%		3,354			100.1	%
Gross profit		1,230		12.6	%		(4	)		(0.1	%)
Total operating expenses		227		2.3	%		177			5.3	%
Operating (loss) income	$	1,002		10.3	%	$	(182	)		(5.4	)%

Other Income (expense)

We employ foreign currency forward contracts to convert unforeseeable foreign currency exchange rates to fixed foreign currency exchange rates.  During the three months ended March 31, 2008 we recognized a loss of $12,930 on forward foreign currency contracts and other income of $7,100 as a result of an isolated event.

Income tax benefit (expense)

Income tax expense increased $258,653 during the first quarter of 2008 primarily as a result of the increase in taxable income generated on a consolidated basis during the period.  Armco is exempt from Hong Kong income taxes since none of its income was from Hong Kong sources for the years ended December 31, 2007 and 2006 and no provision for income taxes has been made for the relevant periods.   Armco’s statutory tax rate is 17.5% and is subject to Hong Kong SAR income taxes as of January 1, 2008 and forward.

 Net income (loss)

For the three months ended March 31, 2008 our net income increased to $1.0 million. This increase is attributed to the growing demand for our products in China and increases in the prices we charge for our products.

Foreign currency translation gain

The functional currency of our operating entities operating in the PRC is the Chinese yuan or Renminbi (“RMB”). The financial statements of our subsidiaries are translated to U.S. dollars using period end rates of exchange for assets and liabilities, and average rates of exchange (for the period) for revenues, costs, and expenses.  Net gains and losses resulting from foreign exchange transactions are included in the consolidated statements of operations.  As a result of these translations, which are a non-cash adjustment, we reported a foreign currency translation gain of $180,190 during the three months ended March 31, 2008 as compared to a loss of $53,791 for the comparable period in 2007. This non-cash gain had the effect of increasing our reported comprehensive income.

Comprehensive income

Comprehensive income of approximately $0.9 million is derived from the sum of our net income of approximately $1.0 million plus foreign currency translation gains of approximately $0.2 million, net of income tax of approximately $0.3 million.

For the year ended December 31, 2007 as compared to the year ended December 31, 2006

Gross revenues increased during 2007 as compared to 2006, from approximately $44.3 million to approximately $75.3 million, representing a 69.9% increase.  This increase was a result of the growing demand for our products in China and increases in the prices we charge for our products.  In 2007, steel production grew approximately 16% as compared to the same period in 2006.  As China continues to industrialize, we believe our revenues will continue to grow.  In 2007, iron ore, nickel ore and chrome ore represented approximately 50%, 29% and 21% of our revenues respectively.  In 2006 iron ore, copper ore and chrome ore represented approximately 64%, 16% and 25% of our revenues respectively.

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Total Operating Expenses

In 2007, we recognized an increase in our operating expenses.  During 2007 operating expenses increased to $1.0 million from $0.9 million in 2006, an increase of approximately 11%.  Our operating expenses are comprised of selling expenses as well as general and administrative expenses.  In 2007 our selling expenses increased $0.4 million.  This dramatic increase is a result of increased freight charges related to shipments of our imported products.  In 2007 our general and administrative expenses decreased $0.2 million.  This decrease is a result of collecting of doubtful accounts that were written off in 2006 of approximately $400,000.  We anticipate that our operating expenses will continue to increase as revenue grows.

	Consolidated				Consolidated
	For the Year ended				For the Year ended
	December 31, 2007				December 31, 2006
	$		%		$		%
	(in 000’s)				(in 000’s)
Revenues	$	75,279	—		$	44,318	—
Cost of revenues		68,819	91.4	%		42,678	96.3	%
Gross profit		6,461	8.6	%		1,639	3.7	%
Total operating expenses		1,016	1.3	%		894	2.1	%
Operating income	$	5,445	7.2	%	$	745	1.7	%

Other Income (expense)

In 2007 we recognized other expenses of $53,891 as compared to other income of $106,497 in 2006.  This was a result of the following:

- Interest expense of $17,556

- A loss of $12,079 on forward foreign currency contracts, and

- A $38,326 loss in obsolescent fixed assets, an isolated event.

Net income

Net income for 2007 increased to $5.4 million from $745,000 in 2006.  This increase is attributed to the increased demand for our products in China.

Foreign currency translation gain

The functional currency of our operating entities is the RMB.  The financial statements of our subsidiaries have been translated to U.S. dollars using period end rates of exchange for assets and liabilities, and average rates of exchange (for the period) for revenues, costs, and expenses.  Net gains and losses resulting from foreign exchange transactions are included in the consolidated statements of operations.  As a result of these translations/conversions, which are a non-cash adjustment, we reported a foreign currency gain of $67,026 in 2007 as compared to $9,632 in 2006.  This non-cash gain had the effect of increasing our reported comprehensive income.

Comprehensive income

Comprehensive income of $5.5 million is derived from the sum of our net income of $5.4 million plus foreign currency translation gains of $67,026.

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LIQUIDITY AND CAPITAL RESOURCES OF ARMCO AND ITS SUBSIDIARIES

At March 31, 2008 and December 31, 2007 we had cash and cash equivalents of $145,127 and $232,286, respectively.  We have historically met our liquidity requirements utilizing internally generated cash derived from our operations.

As described elsewhere herein, while we are not contractually committed to do so, we intend to provide additional working capital to construct a metal recycling facility.  We believe this facility will offer us another product line which we can sell utilizing the existing network of Armco and Henan Armco’s customers.  We will need to secure investment capital and/or bank and vendor financing to provide sufficient funds to this project.  There is no assurance, however, that we will be successful in obtaining the additional financing that we require or that such financing may not be on terms deemed to be desirable to our management.  In the event we are successful, there is no assurance that such investment will result in enhanced operating performance.  Unless we can obtain additional financing, we will be unable to complete construction of our planned scrap steel recycling project.  Any inability on our part to secure additional financing during 2008, as needed, will have a material adverse effect on our growth plans.

The following table provides certain selected balance sheet comparisons between the three months ended March 31, 2008 and 2007.

	March 31,		December 31,		Increase /
	2008		2007		(decrease)			%
	(Unaudited)
Cash	$	145,127	$	232,286		(87,159	)		-38	%
Pledged deposits		754,845		564,150		190,695			34	%
Accounts receivable, net		8,629,059		2,586,529		6,042,530			234	%
Inventories, net		2,985,726		2,434,908		550,818			23	%
Advances to stockholder		17,004		0		17,004		nm
Advance on purchases		2,980,996		1,846,113		1,134,883			61	%
Prepayments and other current assets		23,698		0		23,698		nm
Total current assets		15,536,455		7,663,986		7,872,469			103	%
Property and equipment, net		130,888		131,596		(708	)		-1	%
Land use rights, net		2,182,787		2,108,983		73,804			3	%
Total assets	$	17,850,130	$	9,904,565	$	7,945,565			80	%
Forward foreign currency exchange contracts and swap liabilities		308,744		308,744		0			0	%
Forward foreign currency exchange swap liabilities		25,009		12,079		12,930			107	%
Accounts payable		5,999,187		290,740		5,708,447		1963%
Advances from stockholder		0		921,444		(921,444	)		-100	%
Customer deposits		3,105,117		2,228,720		876,397			39	%
Taxes payable		1,048,261		8		1,048,253		nm
Accrued expenses and other current liabilities		1,361,876		1,058,697		303,179			29	%
Total current liabilities		11,848,194		4,820,432		7,027,762			146	%
Total liabilities	$	11,848,194	$	4,820,432	$	7,027,762			146	%

nm – not meaningful

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All of our cash reserves, approximately $232,286 or 100% at December 31, 2007, is in the form of RMB held in bank accounts at financial institutions located in the PRC.  Cash held in banks in the PRC is not insured.  The value of cash on deposit in China at December 31, 2007 has been translated based on the exchange rate as of December 31, 2007.  In 1996, the Chinese government introduced regulations which relaxed restrictions on the conversion of the RMB; however restrictions still remain, including but not limited to restrictions on foreign invested entities.  Foreign invested entities may only buy, sell or remit foreign currencies after providing valid commercial documents at only those banks authorized to conduct foreign exchanges.  Furthermore, the conversion of RMB for capital account items, including direct investments and loans, is subject to PRC government approval.  Chinese entities are required to establish and maintain separate foreign exchange accounts for capital account items.  We cannot be certain Chinese regulatory authorities will not impose more stringent restrictions on the convertibility of the RMB, especially with respect to foreign exchange transactions.  Accordingly, cash on deposit in banks in the PRC is not readily deployable by us for purposes outside of China.

Our current assets at March 31, 2008 increased $7.9 million, or approximately 103%, from December 31, 2007; this reflects increases in current asset items including accounts receivables, inventories, and advances on purchases.  Our current liabilities increased by approximately $7.0 million, or approximately 146%, at March 31, 2008 from December 31, 2007; this reflects increases in accounts payable, customer deposits, taxes payable and accrued expenses and other current liabilities.

Advances on purchases increased approximately $1.1 million as of March 31, 2008 over the year ended December 31, 2007. Advances on purchases consist of prepayments to vendors for merchandise, security and deposits.  This increase is directly attributed to the increase in sales.

Inventories increased approximately 23% at March 31, 2008 from the prior year end.  This occurred due to timing differences between our receipt of product and shipment to our customers.

Accounts receivable, accounts payable, taxes payable, customer deposits and accrued expenses and other current liabilities increased significantly in 2008 as a direct result of the  a significant sale transaction of approximately $6.0 million occurred at the end of March 31, 08 period.  Accounts payable and accrued expenses represent payables associated with the general operation of our business.  Customer deposits represent prepayments for products, which have not yet been shipped.

Statement of Cash Flows

For the three months ended March 31, 2008, our net decrease in cash totaled $87,159 and consisted of $986,333 provided by operating activities, $172,211 used in investing activities, $893,620 used in financing activities, and the effect of prevailing exchange rates on our cash position of $87,159.

Cash Provided by Operating Activities

For the three months ended March 31, 2008 cash provided by operations included an increase in accounts payables of approximately $5.7 million, we received advances from customers of $0.8 million, tax payable increased $1.0 million and accrued expenses and other current assets increased $0.3 million.  These increases in cash funds provided were more than offset by an increase in accounts receivables of $6.0 million, advance on purchases of $1.1 million and an increase in inventories of approximately $0.5 million.

Cash Used in Investing Activities

For the three months ended March 31, 2008, we purchased of $4,252 in property, plant and equipment during the period and made payments of $167,959 towards pledged deposits.

Cash Used in Financing Activities

For the three months ended March 31, 2008, we made payment of $893,620 to decrease due to Mr. Kexan Yao, our Chief Executive Officer.

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Off Balance Sheet Arrangements

Under SEC regulations, we are required to disclose our off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, such as changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. An off-balance sheet arrangement means a transaction, agreement or contractual arrangement to which any entity that is not consolidated with us is a party, under which we have:

- Any obligation under certain guarantee contracts;

- Any retained or contingent interest in assets transferred to an unconsolidated entity or similar arrangement that serves as credit, liquidity or market risk support to that entity for such assets;

- Any obligation under a contract that would be accounted for as a derivative instrument, except that it is both indexed to our stock and classified in stockholder’s equity in our statement of financial position; and

- Any obligation arising out of a material variable interest held by us in an unconsolidated entity that provides financing, liquidity, market risk or credit risk support to us, or engages in leasing, hedging or research and development services with us.

We do not have any off-balance sheet arrangements that we are required to disclose pursuant to these regulations. In the ordinary course of business, we enter into operating lease commitments, purchase commitments and other contractual obligations. These transactions are recognized in our financial statements in accordance with generally accepted accounting principles in the United States.

Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated 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 on-going basis, we evaluate our estimates based on historical experience and on various other assumptions 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. Actual results may differ from these estimates under different assumptions or conditions.  A summary of significant accounting policies is included in Note 2 to the unaudited consolidated financial statements included in this current report. Management believes that the application of these policies on a consistent basis enables us to provide useful and reliable financial information about our Company's operating results and financial condition.

Property, Plant and Equipment

We record property and equipment at cost. Depreciation and amortization are provided using the straight-line method over the estimated economic lives of the assets, which are from five to 40 years. Expenditures for major renewals and improvements which extend the useful lives of property and equipment are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred. We review the carrying value of long-lived assets for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets is measured by a comparison of its carrying amount to the undiscounted cash flows that the asset or asset group is expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the property, if any, exceeds its fair market value.

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Stock Based Compensation

In December 2004, the FASB issued SFAS No. 123(R), "Share-Based Payment", which replaces SFAS No. 123 and supersedes APB Opinion No. 25. Under SFAS No. 123(R), companies are required to measure the compensation costs of share based compensation arrangements based on the grant date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share based compensation arrangements include stock options, restricted share plans, performance based awards, share appreciation rights and employee share purchase plans. In March 2005 the SEC issued Staff Accounting Bulletin No. 107, or “SAB 107”. SAB 107 expresses views of the staff regarding the interaction between SFAS No. 123(R) and certain SEC rules and regulations and provides the staff's views regarding the valuation of share based payment arrangements for public companies. SFAS No. 123(R) permits public companies to adopt its requirements using one of two methods. On April 14, 2005, the SEC adopted a new rule amending the compliance dates for SFAS 123R. Companies may elect to apply this statement either prospectively, or on a modified version of retrospective application under which financial statements for prior periods are adjusted on a basis consistent with the pro forma disclosures required for those periods under SFAS 123. Effective January 1, 2006, we fully adopted the provisions of SFAS No. 123R and related interpretations as provided by SAB 107. As such, compensation cost is measured on the date of grant as the excess of the current market price of the underlying stock over the exercise price. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant.

Revenue Recognition

Revenue is recognized when earned. Our revenue recognition policies are in compliance with the Securities and Exchange Commission's Staff Accounting Bulletin ("SAB") No. 104 "Revenue Recognition".  Essentially, we recognize revenue when persuasive evidence of an arrangement exists, services have been rendered or product delivery has occurred, the sales price to the customer is fixed or determinable, and collectability is reasonably assured.

Recent Accounting Pronouncements

In December 2007, the FASB issued SFAS No. 141 (revised 2007), "Business Combinations" ("SFAS No. 141R"). SFAS No. 141R is a revision to SFAS No. 141 and includes substantial changes to the acquisition method used to account for business combinations (formerly the "purchase accounting" method), including broadening the definition of a business, as well as revisions to accounting methods for contingent consideration and other contingencies related to the acquired business, accounting for transaction costs, and accounting for adjustments to provisional amounts recorded in connection with acquisitions. SFAS No.141R retains the fundamental requirement of SFAS No. 141 that the acquisition method of accounting be used for all business combinations and for an acquirer to be identified for each business combination. SFAS No. 141R is effective for periods beginning on or after December 15, 2008, and will apply to all business combinations occurring after the effective date. The Company is currently evaluating the requirements of SFAS No. 141R.

In December 2007, the FASB also issued SFAS No. 160, "Non-controlling Interests in Consolidated Financial Statements - an amendment of Accounting Research Bulletin No. 51, Consolidated Financial Statements". This Statement amends ARB No. 51 to establish new standards that will govern the (1) accounting for and reporting of non-controlling interests in partially owned consolidated subsidiaries and (2) the loss of control of subsidiaries. Non-controlling interest will be reported as part of equity in the consolidated financial statements. Losses will be allocated to the non-controlling interest, and, if control is maintained, changes in ownership interests will be treated as equity transactions. Upon a loss of control, any gain or loss on the interest sold will be recognized in earnings. SFAS No. 160 is effective for periods beginning after December 15, 2008. The Company is currently evaluating the requirements of SFAS No. 160.

In March 2008, FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities”. The new standard is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position, financial performance, and cash flows. It is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. We are currently evaluating the impact of adopting SFAS No.161 on our consolidated financial statements.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL

OWNERS AND MANAGEMENT

The following table sets forth certain information as of June 27, 2008 with respect to the beneficial ownership of our Common Stock, the sole outstanding class of our voting securities, by (i) any person or group owning more than 5% of each class of voting securities, (ii) each director, (iii) each executive officer named in the Summary Compensation Table in the section entitled “Executive Compensation” below and (iv) all executive officers and directors as a group.

As of June 27, 2008, an aggregate of 10,000,000 shares of our Common Stock were outstanding.

In determining the percent of Common Stock owned by a person on June 27, 2008, we divided (a) the number of shares of Common Stock beneficially owned by such person, by (b) the sum of the total shares of Common Stock outstanding on June 27, 2008, plus the number of shares of Common Stock beneficially owned by such person which were not outstanding, but which could be acquired by the person within 60 days after June 27, 2008 upon exercise of stock options.

Name and Address of Beneficial Owners (1) (2)	Amount and Nature of Beneficial Ownership(3)	Amount and Nature of Beneficial Ownership(4)	Percent of Class(3)	Percent of Class(4)
Directors and Executive Officers
Kexuan Yao	2,650,000 (5)	2,650,000(5)	20.9%	53.5%
Weigang Zhao	0	0	0%	0%
Quan Chen	0	0	0%	0%
Fengtao Wen	0	0	0%	0%
Greater Than 5% Shareholders
Feng Gao	2,000,000(6)	4,650,000	31.7%	66.8%
Stephen E. Cox	7,700,200	6,200	50.84%	(7)
All officers and directors as a group (4 persons)	4,650,000	7,300,000	42.2%	76.0%

(1)   Pursuant to Rule 13d-3 under the Exchange Act, a person has beneficial ownership of any securities as to which such person, directly or indirectly, through any contract, arrangement, undertaking, relationship or otherwise has or shares voting power and/or investment power or as to which such person has the right to acquire such voting and/or investment power within 60 days.

(2)	Unless otherwise stated, each beneficial owner has sole power to vote and dispose of the shares and the address of such person is c/o the Company, at One Waters Park Drive, Suite 98, San Mateo, CA 94403.
(3)	Amounts are calculated before giving effect to the redemption of 7,694,000 shares of common stock held by Mr. Cox which he agreed to redeem pursuant to the Share Purchase Agreement.
(4)	Amounts are calculated after giving effect to the redemption of 7,694,000 shares of common stock held by Mr. Cox which he agreed to redeem pursuant to the Share Purchase Agreement.

(5)   The number of shares beneficially owned by Mr. Yao includes an option to purchase 2,650,000 shares of common stock from Ms. Gao at an exercise price of $0.001 per share expiring on June 27, 2013 but excludes an option to purchase an additional 2,650,000 shares at an exercise price of $0.001 per share expiring on June 27, 2013 which may not be exercised until fulfillment of certain conditions which are not ascertainable until we release our earnings for our fiscal year ending December 31, 2008.  See Item 1.01 Entry into a Material Definitive Agreement - Earn-In of Shares by Kexuan Yao. 

(6)

The number of shares beneficially owned by Ms. Gao excludes 2,650,000 shares which are subject to an option to purchase by Mr. Yao that may be exercised within 60 days and have been included in the number of shares beneficially owned by Mr. Yao pursuant to the terms of the Earn In Share option agreement (the “Earn In Shares”).  The 2,650,000 Earn In Shares are part of an option held by Ms. Yao to purchase 5,300,000 shares of common stock from us at an exercise price of $1.30 per share expiring on September 30, 2008 and an option to purchase 2,000,000 shares of common stock at an exercise price of $5.00 per share expiring on September 30, 2010.  See Item 1.01 Entry into a Material Definitive Agreement - Gao Stock Option.

(7)

Less than 1%.

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DIRECTORS AND EXECUTIVE OFFICERS

The Company’s Directors and Executive Officers

In connection with the change of control of the Company described in Item 5.01 of this Current Report on Form 8-K, we have appointed the following executive officers and directors for the Company. Each of our current executive officers and each of our directors (except for Mr. Chen) is a resident of the PRC. As a result, it may be difficult for investors to affect service of process within the United States upon them or to enforce court judgments obtained against them in the United States courts.

Directors and Executive Officers	Position/Title	Age
Kexuan Yao	Chairman and Chief Executive Officer	37
Fengtao Wen	Chief Financial Officer	34
Weigang Zhao	Vice General Manager of Armet Lianyungang and Director	30
Quan Chen	Director	41

All of our directors hold offices until the next annual meeting of the shareholders of the Company, and until their successors have been qualified after being elected or appointed. Officers serve at the discretion of the board of directors.  The following sets forth biographical information regarding the above Officers and Directors.

Kexuan Yao.  Mr.Yao has served as the Chairman and General Manager of Armco since its inception in 2001.  From 1996 to 2001, Mr. Yao served as the General Manager of the Tianjian Branch for Zhengzhou Gaoxin District Development Co., Ltd.  Mr. Yao received a bachelor’s degree from Henan University of Agriculture in 1996.

Fengtao Wen.  Mr. Wen has served as the accounting manager of Armco and Henan Armco since 2005 and is responsible for supervision of financial controls and management of these entities.  From 1996 to 2005 Mr. Wen worked in the accounting department of Zhengzhou Smithing Co., Ltd.  Mr. Wen graduated from the Economics Department of Zhengzhou University in 1996.

Weigang Zhao.  Mr. Zhao has served as the Vice General Manager of Armet Lianyungang since 2007.  From 2005 through 2006 Mr. Zhao served as a manager in the supply department at Henan Anyang Steel Co., Ltd.  From 2003 through 2004 Mr. Zhao served as the marketing manager at Sinotrans Henan Co., Ltd.  Mr. Zhao graduated with a bachelor’s degree in Economics from Henan College of Finance and Economics in 2002.

Quan Chen.  Mr. Chen was appointed as a member of our Board of Directors in connection with our purchase of the Armco shares.  Mr. Chen is an attorney licensed to practice law in the State of New York and has been practicing law for more than the past five years.  Mr. Chen has a bachelor’s of law degree from Peking University, Beijing China and a master of laws degree from the University of Virginia School of Law.

There are no family relationships among our directors or executive officers. To our knowledge, none of our directors and executive officers (including the directors and executive officers of our subsidiaries) has been involved in any of the following proceeding during the past five years:

1.	any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;
2.	any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
3.	being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or
4.	being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated.

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Audit Committee Financial Expert

Our board of directors currently acts as our audit committee. We currently do not have a member who qualifies as an “audit committee financial expert” as defined in Item 401(e) of Regulation S-B and is “independent” as the term is used in Item 7(d) (3) (iv) of Schedule 14A under the Securities Exchange Act. Our board of directors is in the process of searching for a suitable candidate for this position.

Audit Committee

We have not yet appointed an audit committee. At the present time, we believe that the members of board of directors are collectively capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting.

EXECUTIVE COMPENSATION

The following table sets forth information concerning cash and non-cash compensation paid by the Company to its Chief Executive Officer and Secretary for each of the fiscal two years ended December 31, 2007 and December 31, 2006.

					Long Term Compensation
		Annual Compensation			Awards		Payouts
					Restricted	Securities
	Year			Other	Stock	Underlying	LTIP
Name and	Ended		Bonus	Annual	Award(s)	Options/	Payouts	All Other
Principal Position	Dec. 31	Salary ($)	($)	Compensation ($)	($)	SARs (#)	($)	Compensation ($)
Stephen E. Cox President	2007 2006	$105,286 $  71,678	- -	- -	- -	- -	- -	- -
Mary Ann Cox Secretary	2007 2006	- -	- -	- -	- -	- -	- -	- -

Mr. Cox resigned as an officer and director in connection with our purchase of the Armco Shares. Mr. Cox entered into an employment and management agreement to manage all aspects of our fertilizer business.  The agreement is for an indefinite term and may be terminated by us, with or without cause at any time.  Mr. Cox is entitled to compensation equal to all net revenues of the fertilizer distribution business.  Prior to the purchase of Armco Shares by us, Mr. Cox’s compensation has not been fixed or based on any percentage calculations. He has made all decisions determining the amount and timing of his compensation and has received the level of compensation each month that permitted us to meet our immediate obligations.

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The Company’s current executive officer, Kexuan Yao, holds the same position with Armco. Mr. Yao currently does not receive any compensation for serving as an executive officer of the Company, but is compensated by and through Armco. The following table sets forth information concerning cash and non-cash compensation paid by Armco to Mr. Yao and Mr. Wen for each of the fiscal two years ended December 31, 2007 and December 31, 2006. No executive officer of the Company, Armco or Armco received compensation in excess of $100,000 for any of those two years. 

Name and Principal Position	Year Ended	Salary ($)	Bonus ($)	Stock Awards	Non-Equity Incentive Plan Compensation (S)	Non-Qualified Deferred Compensation Earnings ($)	All Other Compensation ($)	Total ($)
Kexuan Yao, Chief Executive Officer	12/31/2007 12/30/2006	$  7,000 $  6,000	- -	- -	- -	- -	(1) (1)	$  7,000 $  6,000
Fengtao Wen, Chief Financial Officer	12/31/2007 12/30/2006	$10,000 $  9,000	- -	- -	- -	- -	(1) (1)	$10,000 $  9,000

(1) Does not include amounts a portion of their total salaries which we are required to contribute to the Chinese government’s social insurance funds, including medical insurance, unemployment insurance and job injuries insurance, and a housing assistance fund, in accordance with relevant regulations.

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

On January 1, 2006, we entered into a lease for our office space in the City of Zhengzhou, Henan Province from Mr. Yao, our Chief Executive Officer.  The office space consists of approximately 2,000 square feet pursuant to a lease that expires on December 31, 2008.  Lease payments under the lease for the fiscal year ending December 31, 2008 are $16,451.  For the year ended December 31, 2007 and 2006, rent expense relating to the lease amounted to $15,775 and $15,052, respectively.

The Company purchased certain products from Prime Armet Group Inc. (“Prime Armet”), an entity wholly-owned and controlled by Mr. Yao, our Chief Executive Officer.  For the years ended December 31, 2007 and 2006, total purchases from Prime Armet amounted to $496,951 and $2,465,601 representing 0.8% and 2.9% of our total purchases, respectively.

During the fiscal year ended December 31, 2008, Mr. Yao, our Chief Executive Officer advanced to the company $921,444 which was repaid to the company in full during the second quarter of 2008.  Amounts advanced by Mr. Yao were without interest and had no formal repayment terms.

LEGAL PROCEEDINGS

We know of no material, active, pending or threatened proceeding against us or Armco, nor are we involved as a plaintiff in any material proceeding or pending litigation.

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Our common stock, par value $0.001 per share ("Common Stock"), has a trading symbol (“COXD.OB”) but has been thinly traded on the Over-The-Counter Bulletin Board ("OTCBB").  Our Common Stock has been listed on the OTCBB since November 28, 2007.  The high and low sales price of our Common Stock for the three month period from April 1, 2008 to June 30, 2008 was $7.00 per share.  Prior to this period, there were no sales on the OTCBB.

As of June 27, 2008, there were 42 shareholders of our common stock.

Transfer Agent and Registrar

The Transfer Agent for our common stock is Action Stock Transfer Company, 7069 S. Highland Drive, Suite 300, Salt Lake City, UT 84121. Its telephone number is 801-274-1088.

Penny Stock Regulations

The SEC has adopted regulations which generally define "penny stock" to be an equity security that has a market price of less than $5.00 per share. Our Common Stock, when and if a trading market develops, may fall within the definition of penny stock and be subject to rules that impose additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and accredited investors (generally those with assets in excess of $1,000,000, or annual incomes exceeding $200,000 individually, or $300,000, together with their spouse).

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For transactions covered by these rules, the broker-dealer must make a special suitability determination for the purchase of such securities and have received the purchaser's prior written consent to the transaction. Additionally, for any transaction, other than exempt transactions, involving a penny stock, the rules require the delivery, prior to the transaction, of a risk disclosure document mandated by the Commission relating to the penny stock market. The broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities 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. Finally, monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. Consequently, the "penny stock" rules may restrict the ability of broker-dealers to sell our Common Stock and may affect the ability of investors to sell their Common Stock in the secondary market.

Dividend Policy

Any future determination as to the declaration and payment of dividends on shares of our Common Stock will be made at the discretion of our board of directors out of funds legally available for such purpose.  We are under no contractual obligations or restrictions to declare or pay dividends on our shares of Common Stock.  In addition, we currently have no plans to pay such dividends.  However, even if we wish to pay dividends, because our cash flow is dependent on dividend distributions from our affiliated entities in PRC, we may be restricted from distributing dividends to our holders of shares of our common stock in the future if at the time we are unable to obtain sufficient dividend distributions from and of Armco. Our board of directors currently intends to retain all earnings for use in the business for the foreseeable future.  See “Risk Factors.”

RECENT SALES OF UNREGISTERED SECURITIES

Please see Item 3.02 - “Unregistered Sales of Equity Securities,” of this Current Report.

DESCRIPTION OF SECURITIES

China Armco Metals, Inc. was incorporated as a Nevada corporation on April 6, 2007 to succeed an unincorporated business operating since January 1984.  As of June 26, 2008, our authorized capital stock consists of 74,000,000 shares of common stock, par value $0.001 per share, and 1,000,000 shares of preferred stock, par value $0.001 per share.  As of June 27, 2008 and immediately after Closing, an aggregate of 10,000,000 shares of Common Stock were outstanding, before giving effect to the cancellation of 7,694,000 shares held by Mr. Cox in connection with our purchase of the Armco Shares pursuant to the Share Purchase Agreement .  There are no shares of preferred stock outstanding.

Common Stock

Our certificate of incorporation authorizes the issuance of 74,000,000 shares of common stock.  There are 10,000,000 shares of our common stock with par value $0.001 per share issued and outstanding at June 27, 2008 which are held by 42 shareholders.  As of the date of this report we have 10,000,000 shares of common stock issued and outstanding before giving effect to the cancellation of 7,694,000 shares held by Mr. Cox in connection with our purchase of the Armco Shares pursuant to the Share Purchase Agreement.

The holders of our common stock:

· have equal ratable rights to dividends from funds legally available for payment of dividends when, as and if declared by the board of directors;

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

· do not have preemptive, subscription or conversion rights, or redemption or access to any sinking fund; and

· are entitled to one non-cumulative vote per share on all matters submitted to stockholders for a vote at any meeting of stockholders

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Preferred Stock

Our certificate of incorporation authorizes the issuance of 1,000,000 shares of preferred stock, par value $0.001 per share, with designations, rights and preferences determined from time to time by our board of directors. No shares of preferred stock have been designated, issued or are outstanding. Accordingly, our board of directors is empowered, without stockholder approval, to issue up to 1,000,000 shares of preferred stock with voting, liquidation, conversion, or other rights that could adversely affect the rights of the holders of the common stock. Although we have no present intention to issue any shares of preferred stock, there can be no assurance that we will not do so in the future.

Among other rights, our board of directors may determine, without further vote or action by our stockholders:

· the number of shares and the designation of the series;

· whether to pay dividends on the series and, if so, the dividend rate, whether dividends will be cumulative and, if so, from which date or dates, and the relative rights of priority of payment of dividends on shares of the series;

· whether the series will have voting rights in addition to the voting rights provided by law and, if so, the terms of the voting rights;

· whether the series will be convertible into or exchangeable for shares of any other class or series of stock and, if so, the terms and conditions of conversion or exchange;

· whether or not the shares of the series will be redeemable and, if so, the dates, terms and conditions of redemption and whether there will be a sinking fund for the redemption of that series and, if so, the terms and amount of the sinking fund; and

· the rights of the shares of the series in the event of our voluntary or involuntary liquidation, dissolution or winding up and the relative rights or priority, if any, of payment of shares of the series.

We presently do not have plans to issue any shares of preferred stock. However, preferred stock could be used to dilute a potential hostile acquirer.  Accordingly, any future issuance of preferred stock or any rights to purchase preferred shares may have the effect of making it more difficult for a third party to acquire control of us. This may delay, defer or prevent a change of control in China Armco Metals, Inc. or an unsolicited acquisition proposal. The issuance of preferred stock also could decrease the amount of earnings attributable to, and assets available for distribution to, the holders of our common stock and could adversely affect the rights and powers, including voting rights, of the holders of our common stock.

Authorized but Un-issued Capital Stock

Nevada law does not require stockholder approval for any issuance of authorized shares. However, the marketplace rules of the NASDAQ, which would apply only if our common stock were ever listed on the NASDAQ, require stockholder approval of certain issuances of common stock equal to or exceeding 20% of the then outstanding voting power or then outstanding number of shares of common stock, including in connection with a change of control of China Armco Metals, Inc. , the acquisition of the stock or assets of another company or the sale or issuance of common stock below the book or market value price of such stock. These additional shares may be used for a variety of corporate purposes, including future public offerings to raise additional capital or to facilitate corporate acquisitions.

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One of the effects of the existence of un-issued and unreserved common stock may be to enable our board of directors to issue shares to persons friendly to current management, which issuance could render more difficult or discourage an attempt to obtain control of our board by means of a merger, tender offer, proxy contest or otherwise, and thereby protect the continuity of our management and possibly deprive the stockholders of opportunities to sell their shares of our common stock at prices higher than prevailing market prices.

Shareholder Matters

As an issuer of "penny stock" the protection provided by the federal securities laws relating to forward looking statements does not apply to us if our shares are considered to be penny stocks.  Although the federal securities law provide a safe harbor for forward-looking statements made by a public company that files reports under the federal securities laws, this safe harbor is not available to issuers of penny stocks. As a result, we will not have the benefit of this safe harbor protection in the event of any claim that the material provided by us, including this prospectus, contained a material misstatement of fact or was misleading in any material respect because of our failure to include any statements necessary to make the statements not misleading.

As a Nevada corporation, we are subject to the Nevada Revised Statutes ("NRS" or "Nevada law"). Certain provisions of Nevada law create rights that might be deemed material to our shareholders. Other provisions might delay or make more difficult acquisitions of our stock or changes in our control or might also have the effect of preventing changes in our management or might make it more difficult to accomplish transactions that some of our shareholders may believe to be in their best interests.

INDEMNIFICATION OF DIRECTORS AND OFFICERS

Pursuant to our By-laws, the Company shall indemnify all directors, officers, employees, and agents to the fullest extent permitted by Nevada. The Corporation shall indemnify each present and future director, officer, employee or agent of the Corporation who becomes a party or is threatened to be made a party to any suit or proceeding, whether pending, completed or merely threatened, and whether said suit or proceeding is civil, criminal, administrative, investigative, or otherwise, except an action by or in the right of the Company, by reason of the fact that he is or was a director, officer, employee, or agent of the Company, or is or was serving at the request of the Company as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise, against expenses, including, but not limited to, attorneys' fees, judgments, fines, and amounts paid in settlement actually and reasonably incurred by him in connection with the action, suit, proceeding or settlement, provided such person acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interest of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.

Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to our directors or officers pursuant to the foregoing provisions, we have been informed that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in said Act and is, therefore, unenforceable.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Please see Item 9.01 - “Financial Statements and Exhibits” of this Current Report.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the U.S. Securities and Exchange Commission (the “SEC”), located on 100 F Street NE, Washington, D.C. 20549, Current Reports on Form 8-K, Quarterly Reports on form 10-QSB, Annual Reports on Form 10-KSB, and other reports, statements and information as required under the Securities Exchange Act of 1934, as amended.

The reports, statements and other information that we have filed with the SEC may be read and copied at the Commission's Public Reference Room at 100 F Street NE, Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330.

The SEC maintains a web site (HTTP://WWW.SEC.GOV.) that contains the registration statements, reports, proxy and information statements and other information regarding registrants that file electronically with the SEC such as us. You may access our SEC filings electronically at this SEC website. These SEC filings are also available to the public from commercial document retrieval services.

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Item 3.02 Unregistered Sales of Equity Securities.

Stock Option Grant in Acquisition of Armco

On June 27, 2008, we granted a stock option to Feng Gao pursuant to the Share Purchase Agreement entitling Ms. Gao to purchase a total of 5,300,000 shares of our Common Stock at a price of $1.30 per share which expires on September 30, 2008 and 2,000,000 shares of our Common Stock at $5.00 per share which expires on June 30, 2010 (the “Gao Option”). The option to purchase a total of 5,300,000 shares of our Common Stock at a price of $1.30 per share which expires on September 30, 2008.  The option to purchase a total of 2,000,000 shares of our Common Stock at $5.00 per share which expires on June 30, 2010. The Gao Option was issued in reliance on the exemption from registration provided by Section 4(2) of the Securities Act of 1933. No commissions were paid for the Gao Option. The grant of the Gao Option qualified for exemption under Section 4(2) of the Securities Act of 1933 since the award by us did not involve a public offering. Ms. Gao was a sophisticated investor and had access to information normally provided in a prospectus regarding us. The offering was not a "public offering" as defined in Section 4(2) due to the insubstantial number of persons involved in the deal, size of the offering, manner of the offering and number of shares offered. We did not undertake an offering in which we sold a high number of shares to a high number of investors. In addition, Ms. Gao had the necessary investment intent as required by Section 4(2) since she agreed to allow us to include a legend on any shares issued under the Gao Option stating that such shares are restricted pursuant to Rule 144 of the 1933 Securities Act. These restrictions ensure that these shares would not be immediately redistributed into the market and therefore not be part of a "public offering." Based on an analysis of the above factors, we have met the requirements to qualify for exemption under Section 4(2) of the Securities Act of 1933 for the above transaction.

On June 27, 2008, our former Chief Executive Officer and Chairman of the Board of Directors, entered into a consulting agreement with Capital One Resource Co., Ltd., a subsidiary of China Direct, Inc., to assist Mr. Cox in identifying, evaluating, structuring and providing advice in connection with our acquisition of Armco.  Mr. Cox paid Capital One Resources Co., Ltd. 496,000 shares of our Common Stock owned by Mr. Cox.

Item 5.01 Changes in Control of Registrant

On June 27, 2008, the Company consummated a share purchase agreement (the “Share Purchase Agreement”) with the Armco Shareholder. Under the Share Purchase Agreement, we paid Ms. Gao $6,890,000.00 by way of a purchase money promissory note and an option to purchase an aggregate of 7,300,000 shares (the “Control Shares”) of our Common Stock in exchange for 100% of the issued and outstanding shares of capital stock of Armco, all of which was held by Ms. Gao.

The shares of Common Stock issuable to Ms. Gao upon exercise of the Gao Option after giving effect to the cancellation of the 7,694,000 shares Mr. Cox agreed to redeem pursuant to the Share Purchase Agreement represent approximately 76.0% of our total outstanding Common Stock immediately after the consummation of the Share Purchase.

As a result of the consummation of the Share Purchase Agreement, Ms. Gao, the holder of an option to purchase 7,300,000 shares of our Common Stock acquired the right to control the Company and Armco became our wholly owned subsidiary. Included in the 7,300,000 shares of the Common Stock which are issuable by us pursuant to the Gao Option, are 5,300,000 shares of our Common Stock which may be acquired by Mr. Yao pursuant to an agreement between Mr. Yao and Ms. Gao as more fully described under Item 1.01 - “Entry into a Material Definitive Agreement - Earn-In of Shares by Kexuan Yao”.

Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.

In connection with the consummation of the Share Purchase, Stephen E. Cox tendered his resignation as our Chief Executive Officer, Chief Financial Officer, principal accounting officer and Chairman of the Board of Directors, and Mary Ann Cox tendered her resignation as our Secretary, Treasurer and Director.  Kexuan Yao (who is Armco’s founder and its Chief Executive Officer) was elected as a director of the Company, such election to be effective immediately; and (iii) Kexuan Yao appointed the following individuals to the following positions:

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Name	Position
Kexuan Yao	Chairman and Chief Executive
Fengtao Wen	Chief Financial Officer
Weigang Zhao	Vice General Manager and Director
Quan Chen	Director

The business background descriptions of the newly appointed directors are as follows:

There are no relationships between the officers or directors of the Company.

Item 9.01  Financial Statements and Exhibits.

(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED

The Unaudited Consolidated Financial Statements of Armco & Metawise (HK), Ltd. at March 31, 2008 and 2007 are filed as Exhibit 99.3 to this current report and are incorporated herein by reference.

The Audited Consolidated Financial Statements of Armco & Metawise (HK), Ltd. as of December 31, 2007 and 2006 are filed as Exhibit 99.2 to this current report and are incorporated herein by reference.

(b) PRO FORMA FINANCIAL INFORMATION.

The pro forma financial information required by this item will be filed by amendment to this Current Report on Form 8-K as soon as practicable, but no later than 71 days after the date this Current Report on Form 8-K is required to be filed.

(d) The following exhibits are filed with this Current Report:

3.1	Articles of Incorporation (1)
3.2	Amendment to Articles of Incorporation

3.2	Bylaws (1)
10.4	Share Purchase Agreement between Cox Distributing, Inc. and Armco & Metawise (HK), Ltd. dated June 27, 2008.
10.5	Stock Option Agreement between Cox Distributing, Inc. and Feng Gao dated June 27, 2008.
10.6	Call Option Agreement between Kexuan Yao and Feng Gao, dated June 27, 2008.
10.7	Exclusive Consulting Agreement between Armco & Metawise (HK) Ltd. and Henan Armco & Metawise Trading Co., Ltd. dated June 27, 2008.
10.8	Exclusive Consulting Agreement between Armco & Metawise (HK) Ltd. and Armet (Lianyungang) Scraps Co., Ltd. dated June 27, 2008.
10.9	Consulting Agreement between Stephen E. Cox (“Client”), and Capital Once Resource Co., Ltd. dated June 27, 2008
10.10	Services Agreement between Stephen D. Cox Supply and Cox Distributing, Inc. dated June 27, 2008.
21	Description of Subsidiaries of the Company.
99.1	Press Release dated June 30, 2008
99.2	Consolidated Financial Statements for the Years Ended December 31, 2007 and 2006
99.3	Consolidated Financial Statements for the Quarter Ended March 31, 2008 and 2007 (Unaudited)

(1) Incorporated by reference from our registration statement on Form SB-2 filed on August 27, 2007  (SEC File No. 333-145712).

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SIGNATURES

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

	CHINA ARMCO METALS, INC.
Dated: July 1, 2008	By:	/s/ Kexuan Yao
		Kexuan Yao
		CEO and Chairman of the Board

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EX-3.2

Exhibit 3.2

[SEAL]  ROSS MILLER Secretary of State 204 North Carson Street, Ste 1 Carson City, Nevada 89701-4299 (775) 684 5708 Website: secretaryofstate.biz

Certificate of Amendment

(PURSUANT TO NRS 78.385 AND 78.390)

USE BLACK INK ONLY – DO NOT HIGHLIGHT ABOVE SPACE IS FOR OFFICE USE ONLY

Certificate of Amendment to Articles of Incorporation

For Nevada Profit Corporations

(Pursuant to NRS 78.385 and 78.390 – After Issuance of Stock)

1. Name of corporation:

COX DISTRIBUTING, INC.

2. The articles have been amended as follows (provide article numbers, if available):

The name of the corporation is: China Armco Metals, Inc.

3. The vote by which the stockholders holding shares in the corporation entitling them to exercise at least a majority of the voting power, or such greater proportion of the voting power as may be required in the case of a vote by classes or series, or as may be required by the provisions of the* articles of incorporation have voted in favor of the amendment is:       81.96%

4. Effective date of filings (optional):

5. Officer Signature (Required):  /s/ Stephen E. Cox

*If any proposed amendment would alter or change any preference or any relative or other right given to any class or series of outstanding shares, then the amendment must be approved by the vote, in addition to the affirmative vote otherwise required, of the holders of shares representing a majority of the voting power of each class or series affected by the amendment regardless of limitations or restrictions on the voting power thereof.

IMPORTANT:  Failure to include any of the above information and submit the proper fees may cause this filing to be rejected.

This form must be accompanied by appropriate fees.

EX-10.4

Exhibit 10.4

SHARE PURCHASE AGREEMENT

by and among

COX DISTRIBUTING, INC.

a Nevada Corporation

and

ARMCO & METAWISE (H.K.) LIMITED

a Hong Kong Limited Liability Company;

and

the Shareholder of ARMCO & METAWISE (H.K.) LIMITED

Dated as of June 27, 2008

TABLE OF CONTENTS

		PAGE
ARTICLE I REPRESENTATIONS, COVENANTS, AND WARRANTIES OF ARMCO		1
Section 1.01	Incorporation	1
Section 1.02	Authorized Shares	2
Section 1.03	Subsidiaries and Predecessor Corporations	2
Section 1.04	Financial Statements	2
Section 1.05	Information	3
Section 1.06	Options or Warrants	3
Section 1.07	Absence of Certain Changes or Events	3
Section 1.08	Litigation and Proceedings	4
Section 1.09	Contracts	4
Section 1.10	No Conflict With Other Instruments	4
Section 1.11	Compliance With Laws and Regulations	5
Section 1.12	Approval of Agreement	5
Section 1.13	ARMCO Schedules	5
Section 1.14	Valid Obligation	5
ARTICLE II REPRESENTATIONS, COVENANTS, AND WARRANTIES OF COX		6
Section 2.01	Organization	6
Section 2.02	Capitalization	6
Section 2.03	Subsidiaries and Predecessor Corporations
Section 2.04	Financial Statements	6
Section 2.05	Information	7
Section 2.06	Options or Warrants	8
Section 2.07	Absence of Certain Changes or Events	8
Section 2.08	Litigation and Proceedings	9
Section 2.09	Contracts	9
Section 2.10	No Conflict With Other Instruments	10
Section 2.11	Compliance With Laws and Regulations	10
Section 2.12	Approval of Agreement	10
Section 2.13	Material Transactions or Affiliations	10
Section 2.14	Cox Schedules	10
Section 2.15	Bank Accounts; Power of Attorney	11
Section 2.16	Valid Obligation	11
Section 2.17	SEC Filings	11
Section 2.18	Over-the-Counter Bulletin Board Quotation	12
Section 2.19	Exchange Act Compliance	12
ARTICLE III PLAN OF EXCHANGE		13
Section 3.01	The Exchange	14
Section 3.02	Cancellation of Certain Shares of Cox Common Stock	14
Section 3.03	Closing	14
Section 3.04	Closing Events	14
Section 3.05	Termination	14

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ARTICLE IV SPECIAL COVENANTS		14
Section 4.01	Access to Properties and Records	14
Section 4.02	Delivery of Books and Records	15
Section 4.03	Third Party Consents and Certificates	15
Section 4.04	Cox Shareholders Approval	15
Section 4.05	Designation of Directors and Officer	15
Section 4.06	Actions Prior to Closing	15
Section 4.07	Indemnification	16
Section 4.08	The Acquisition of Cox Common Stock
Section 4.09	Sales of Securities Under Rule 144, If Applicable	17
Section 4.10	Payment of Liabilities	18
Section 4.11	Assistance with Post-Closing SEC Reports and Inquiries	18
ARTICLE V CONDITIONS PRECEDENT TO OBLIGATIONS OF COX		18
Section 5.01	Accuracy of Representations and Performance of Covenants	18
Section 5.02	Officer's Certificate	18
Section 5.03	Good Standing	18
Section 5.04	Approval by ARMCO Shareholder	19
Section 5.05	No Governmental Prohibition	19
Section 5.06	Consents	19
Section 5.07	Other Items	19
ARTICLE VI CONDITIONS PRECEDENT TO OBLIGATIONS OF ARMCO AND THE ARMCO SHAREHOLDERS		19
Section 6.01	Accuracy of Representations and Performance of Covenants	19
Section 6.02	Officer's Certificate	19
Section 6.03	Good Standing	20
Section 6.04	No Governmental Prohibition	20
Section 6.05	Approval by Cox Shareholders	20
Section 6.06	Consents	20
Section 6.07	Shareholder Report	20
Section 6.08	Other Items	20
ARTICLE VII MISCELLANEOUS		20
Section 7.01	Brokers	20
Section 7.02	Governing Law	21
Section 7.03	Notices	21
Section 7.05	Confidentiality	22
Section 7.06	Public Announcements and Filings	22
Section 7.07	Schedules; Knowledge	22
Section 7.08	Third Party Beneficiaries	22
Section 7.10	Entire Agreement	22
Section 7.11	Survival; Termination	23
Section 7.12	Counterparts	23
Section 7.13	Amendment or Waiver	23
Section 7.14	Best Efforts	23

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Exhibits

A.           Purchase Money Promissory Note

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STOCK PURCHASEAGREEMENT

THIS STOCK PURCHASEAGREEMENT (hereinafter referred to as this “Agreement”) is entered into as of this 27th day of June 2008, by and between COX DISTRIBUTING, INC., a Nevada corporation (hereinafter referred to as “COX”), with offices at 105 Pearl, Cokeville, Wyoming 83114 and ARMCO & METAWISE (H.K.) LIMITED, a Hong Kong limited liability company (hereinafter referred to as “ARMCO”) and Feng Gao (the “ARMCO Shareholder”), upon the following premises:

Premises

WHEREAS, COX is a publicly held corporation organized under the laws of the State of Nevada;

WHEREAS, ARMCO is a privately-held company organized under the laws of Hong Kong and owns 100% of the authorized capital interests in ARMET (LIANYUANGANG) SCRAPS CO., LTD., a company organized under the laws of the Peoples Republic of China, and HENAN ARMCO & METAWISE TRADING CO., LTD., a company organized under the laws of the Peoples Republic of China (“WOFE”);

WHEREAS, COX agrees to acquire 100% of the issued and outstanding shares of ARMCO from the ARMCO Shareholder for a purchase price of $6,890,000.00.  On the Closing Date, ARMCO will become a wholly-owned subsidiary of COX.

Agreement

NOW THEREFORE, on the stated premises and for and in consideration of the mutual covenants and agreements hereinafter set forth and the mutual benefits to the parties to be derived herefrom, and intending to be legally bound hereby, it is hereby agreed as follows:

ARTICLE I

REPRESENTATIONS, COVENANTS, AND WARRANTIES OF ARMCO

As an inducement to, and to obtain the reliance of COX, except as set forth in the ARMCO Schedules (as hereinafter defined), ARMCO represents and warrants as of the Closing Date (as hereinafter defined), as follows:

Section 1.01   Incorporation.  ARMCO is a company duly organized, validly existing, and in good standing under the laws of Hong Kong and has the corporate power and is duly authorized under all applicable laws, regulations, ordinances, and orders of public authorities to carry on its business in all material respects as it is now being conducted.  Included in the ARMCO Schedules is a complete and correct copy of the memorandum and articles of association of ARMCO as in effect on the date hereof.  The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated hereby will not, violate any provision of ARMCO’s memorandum and articles of association.  ARMCO has taken all actions required by law, its memorandum and articles of association, or otherwise to authorize the execution and delivery of this Agreement.  ARMCO has full power, authority, and legal capacity and has taken all action required by law, its memorandum and articles of association, and otherwise to consummate the transactions herein contemplated.

Section 1.02   Authorized Shares and Capital.  The authorized number of common shares with HK$1.00 par value of ARMCO is 30,000,000 with 10,000 shares issued and outstanding. The ARMCO Shareholder owns all of the shares of ARMCO representing a 100% interest in ARMCO. The issued and outstanding shares are validly issued, fully paid, and non-assessable and not issued in violation of the preemptive or other rights of any person.

Section 1.03   Subsidiaries and Predecessor Corporations.  Except as set forth in the ARMCO Schedules, ARMCO does not have any subsidiaries, and does not own, beneficially or of record, any shares of any other corporation.  For purposes hereinafter, the term “ARMCO” also includes those subsidiaries set forth on the ARMCO Schedules.

Section 1.04   Financial Statements.

(a)           Included in the ARMCO Schedules are (i) the audited balance sheets of ARMCO as of December 31, 2007 and December 31, 2006 and the related audited statements of operations, stockholders’ equity and cash flows for the fiscal years ended December 31, 2007 and December 31, 2006 together with the notes to such statements and the opinion of Li & Company, PC, independent certified public accountants, and (ii) the unaudited (reviewed) financial statements of ARMCO for the quarter ended March 31, 2008.

(b)           All such financial statements have been prepared in accordance with generally accepted accounting principles consistently applied throughout the periods involved. The ARMCO balance sheets are true and accurate and present fairly as of their respective dates the financial condition of ARMCO.  As of the date of such balance sheets, except as and to the extent reflected or reserved against therein, ARMCO had no liabilities or obligations (absolute or contingent) which should be reflected in the balance sheets or the notes thereto prepared in accordance with generally accepted accounting principles, and all assets reflected therein are properly reported and present fairly the value of the assets of ARMCO, in accordance with generally accepted accounting principles. The statements of operations, stockholders’ equity and cash flows reflect fairly the information required to be set forth therein by generally accepted accounting principles.

(c)           ARMCO has duly and punctually paid all Governmental fees and taxation which it has become liable to pay and has duly allowed for all taxation reasonably foreseeable and is under no liability to pay any penalty or interest in connection with any claim for governmental fees or taxation and ARMCO has made any and all proper declarations and returns for taxation purposes and all information contained in such declarations and returns is true and complete and full provision or reserves have been made in its financial statements for all Governmental fees and taxation.

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(d)           The books and records, financial and otherwise, of ARMCO are in all material aspects complete and correct and have been maintained in accordance with good business and accounting practices.

(e)           All of ARMCO’s assets are reflected on its financial statements, and, except as set forth in the ARMCO Schedules or the financial statements of ARMCO or the notes thereto, ARMCO has no material liabilities, direct or indirect, matured or unmatured, contingent or otherwise.

Section 1.05   Information.  The information concerning ARMCO set forth in this Agreement and in the ARMCO Schedules is complete and accurate in all material respects and does not contain any untrue statement of a material fact or omit to state a material fact required to make the statements made, in light of the circumstances under which they were made, not misleading.  In addition, ARMCO has fully disclosed in writing to COX (through this Agreement or the ARMCO Schedules) all information relating to matters involving ARMCO or its assets or its present or past operations or activities which (i) indicated or may indicate, in the aggregate, the existence of a greater than $50,000 liability, (ii) have led or may lead to a competitive disadvantage on the part of ARMCO or (iii) either alone or in aggregation with other information covered by this Section, otherwise have led or may lead to a material adverse effect on ARMCO, its assets, or its operations or activities as presently conducted or as contemplated to be conducted after the Closing Date, including, but not limited to, information relating to governmental, employee, environmental, litigation and securities matters and transactions with affiliates.

Section 1.06   Options or Warrants.  There are no existing options, warrants, calls, or commitments of any character relating to the authorized and unissued stock of ARMCO.

Section 1.07   Absence of Certain Changes or Events.  Since December 31, 2007 or such other date as provided for herein:

(a)           there has not been any material adverse change in the business, operations, properties, assets, or condition (financial or otherwise) of ARMCO;

(b)           ARMCO has not (i) amended its memorandum and articles of association since July 13, 2001; (ii) declared or made, or agreed to declare or make, any payment of dividends or distributions of any assets of any kind whatsoever to stockholders or purchased or redeemed, or agreed to purchase or redeem, any of its shares; (iii) made any material change in its method of management, operation or accounting, (iv) entered into any other material transaction other than sales in the ordinary course of its business; or (v) made any increase in or adoption of any profit sharing, bonus, deferred compensation, insurance, pension, retirement, or other employee benefit plan, payment, or arrangement made to, for, or with its officers, directors, or employees; and

(c)           ARMCO has not (i) granted or agreed to grant any options, warrants or other rights for its stocks, bonds or other corporate securities calling for the issuance thereof, (ii) borrowed or agreed to borrow any funds or incurred, or become subject to, any material obligation or liability (absolute or contingent) except as disclosed herein and except liabilities incurred in the ordinary course of business; (iii) sold or transferred, or agreed to sell or transfer, any of its assets, properties, or rights or canceled, or agreed to cancel, any debts or claims; or (iv) issued, delivered, or agreed to issue or deliver any stock, bonds or other corporate securities including debentures (whether authorized and unissued or held as treasury stock) except in connection with this Agreement.

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Section 1.08   Litigation and Proceedings. Except as disclosed on Schedule 1.08, there are no actions, suits, proceedings, or investigations pending or, to the knowledge of ARMCO after reasonable investigation, threatened by or against ARMCO or affecting ARMCO or its properties, at law or in equity, before any court or other governmental agency or instrumentality, domestic or foreign, or before any arbitrator of any kind.  ARMCO does not have any knowledge of any material default on its part with respect to any judgment, order, injunction, decree, award, rule, or regulation of any court, arbitrator, or governmental agency or instrumentality or of any circumstances which, after reasonable investigation, would result in the discovery of such a default.

Section 1.09   Contracts.

(a)           All “material” contracts, agreements, franchises, license agreements, debt instruments or other commitments to which  ARMCO is a party or by which it or any of its assets, products, technology, or properties are bound other than those incurred in the ordinary course of business are set forth on the ARMCO Schedules.  A “material” contract, agreement, franchise, license agreement, debt instrument or commitment is one which (i) will remain in effect for more than six (6) months after the date of this Agreement or (ii) involves aggregate obligations of at least fifty thousand dollars ($50,000);

(b)           All contracts, agreements, franchises, license agreements, and other commitments to which ARMCO is a party or by which its properties are bound and which are material to the operations of ARMCO taken as a whole are valid and enforceable by ARMCO in all respects, except as limited by bankruptcy and insolvency laws and by other laws affecting the rights of creditors generally; and

(c)           Except as included or described in the ARMCO Schedules or reflected in the most recent ARMCO balance sheet, ARMCO is not a party to any oral or written (i) contract for the employment of any officer or employee; (ii) profit sharing, bonus, deferred compensation, stock option, severance pay, pension benefit or retirement plan, (iii) agreement, contract, or indenture relating to the borrowing of money, (iv) guaranty of any obligation; (vi) collective bargaining agreement; or (vii) agreement with any present or former officer or director of ARMCO.

Section 1.10   No Conflict With Other Instruments.  The execution of this Agreement and the consummation of the transactions contemplated by this Agreement will not result in the breach of any term or provision of, constitute a default under, or terminate, accelerate or modify the terms of any indenture, mortgage, deed of trust, or other material agreement, or instrument to which ARMCO is a party or to which any of its assets, properties or operations are subject.

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Section 1.11   Compliance With Laws and Regulations.  To the best of its knowledge, ARMCO has complied with all applicable statutes and regulations of any federal, state, or other governmental entity or agency thereof, except to the extent that noncompliance would not materially and adversely affect the business, operations, properties, assets, or condition of ARMCO or except to the extent that noncompliance would not result in the occurrence of any material liability for ARMCO.  This compliance includes, but is not limited to, the filing of all reports to date with federal and state securities authorities.

Section 1.12   Approval of Agreement.  The Board of Directors of ARMCO has authorized the execution and delivery of this Agreement by ARMCO and has approved this Agreement and the transactions contemplated hereby, and will recommend to the ARMCO Shareholder that the Share Purchase be accepted.

Section 1.13   ARMCO Schedules.  ARMCO has delivered to COX the following schedules, which are collectively referred to as the “ARMCO Schedules” and which consist of separate schedules dated as of the date of execution of this Agreement, all certified by the chief executive officer of ARMCO as complete, true, and correct as of the date of this Agreement in all material respects:

(a)           a schedule containing complete and correct copies of the memorandum and articles of association of ARMCO in effect as of the date of this Agreement;

(b)           a schedule containing the financial statements of ARMCO identified in paragraph 1.04(a);

(c)           a schedule setting forth a description of any material adverse change in the business, operations, property, inventory, assets, or condition of ARMCO since December 31, 2007, required to be provided pursuant to section 1.07 hereof;

(d)           a schedule of any exceptions to the representations made herein; and

(e)           a schedule containing the other information requested above.

ARMCO shall cause the ARMCO Schedules and the instruments and data delivered to COX hereunder to be promptly updated after the date hereof up to and including the Closing Date.

Section 1.14   Valid Obligation.  This Agreement and all agreements and other documents executed by ARMCO in connection herewith constitute the valid and binding obligation of ARMCO, enforceable in accordance with its or their terms, except as may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and subject to the qualification that the availability of equitable remedies is subject to the discretion of the court before which any proceeding therefore may be brought.

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ARTICLE II

REPRESENTATIONS, COVENANTS, AND WARRANTIES OF COX

As an inducement to, and to obtain the reliance of ARMCO and the ARMCO Shareholder, except as set forth in the COX Schedules (as hereinafter defined), COX represents and warrants, as of the date hereof and as of the Closing Date, as follows:

Section 2.01   Organization.  COX is a corporation duly organized, validly existing, and in good standing under the laws of the State of Nevada and has the corporate power and is duly authorized under all applicable laws, regulations, ordinances, and orders of public authorities to carry on its business in all material respects as it is now being conducted.  Included in the COX Schedules are complete and correct copies of the certificate of incorporation and bylaws of COX as in effect on the date hereof. The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated hereby will not, violate any provision of COX’s certificate of incorporation or bylaws.  COX has taken all action required by law, its certificate of incorporation, its bylaws, or otherwise to authorize the execution and delivery of this Agreement, and COX has full power, authority, and legal right and has taken all action required by law, its certificate of incorporation, bylaws, or otherwise to consummate the transactions herein contemplated.

Section 2.02   Capitalization.  COX’s authorized capitalization consists of (a) 74,000,000 shares of common stock, par value $.001 per share (“COX Common Stock”), of which 10,000,000 shares are issued and outstanding, and (b) 1,000,000 shares of preferred stock, par value $.001 per share, none of which are issued and outstanding.  All issued and outstanding shares are legally issued, fully paid, and non-assessable and not issued in violation of the preemptive or other rights of any person.

Section 2.03   Subsidiaries and Predecessor Corporations.  COX does not have any predecessor corporation(s), no subsidiaries, and does not own, beneficially or of record, any shares of any other corporation.

Section 2.04   Financial Statements.

(a)           Included in the COX Schedules are (i) the audited balance sheets of COX as of December 31, 2006 and December 31, 2007 and the related audited statements of operations, stockholders’ equity and cash flows for December 31, 2007 together with the notes to such statements and the opinion of Li & Company, P.C. independent certified public accountants with respect thereto.

(b)           Included in the COX Schedules are: (i) unaudited (reviewed) balance sheets of March 31, 2008 and the related unaudited (reviewed) statements of operations, stockholders’ equity and cash flows for the quarters ended on such dates and all such financial statements have been reviewed by Li & Company, P.C.

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(c)           All such financial statements have been prepared in accordance with generally accepted accounting principles consistently applied throughout the periods involved. The COX balance sheets are true and accurate and present fairly as of their respective dates the financial condition of COX.  As of the date of such balance sheets, except as and to the extent reflected or reserved against therein, COX had no liabilities or obligations (absolute or contingent) which should be reflected in the balance sheets or the notes thereto prepared in accordance with generally accepted accounting principles, and all assets reflected therein are properly reported and present fairly the value of the assets of COX, in accordance with generally accepted accounting principles. The statements of operations, stockholders’ equity and cash flows reflect fairly the information required to be set forth therein by generally accepted accounting principles.

(d)           COX has no liabilities with respect to the payment of any federal, state, county, local or other taxes (including any deficiencies, interest or penalties), except for taxes accrued but not yet due and payable.

(e)           COX has timely filed all state, federal or local income and/or franchise tax returns required to be filed by it from inception to the date hereof.  Each of such income tax returns reflects the taxes due for the period covered thereby, except for amounts which, in the aggregate, are immaterial.  In addition, all such tax returns are correct and complete in all material respects.  All taxes of Cox which are (i) shown as due on such tax returns, (ii) otherwise due and payable or (iii) claimed or asserted by any taxing authority to be due, have been paid, except for those taxes being contested in good faith and for which adequate reserves have been established in the financial statements included in the Financial Statements in accordance with GAAP.  There are no liens for any taxes upon the assets of Cox, other than statutory liens for taxes not yet due and payable.  Cox does not know of any proposed or threatened tax claims or assessments.

(f)           The books and records, financial and otherwise, of COX are in all material aspects complete and correct and have been maintained in accordance with good business and accounting practices

(g)           All of COX’s assets are reflected on its financial statements, and, except as set forth in the COX Schedules or the financial statements of COX or the notes thereto, COX has no material liabilities, direct or indirect, matured or unmatured, contingent or otherwise.

Section 2.05   Information.  The information concerning COX set forth in this Agreement and the COX Schedules is complete and accurate in all material respects and does not contain any untrue statements of a material fact or omit to state a material fact required to make the statements made, in light of the circumstances under which they were made, not misleading.  In addition, COX has fully disclosed in writing to ARMCO (through this Agreement or the COX Schedules) all information relating to matters involving COX or its assets or its present or past operations or activities which (i) indicated or may indicate, in the aggregate, the existence of a greater than $1,000 liability , (ii) have led or may lead to a competitive disadvantage on the part of COX or (iii) either alone or in aggregation with other information covered by this Section, otherwise have led or may lead to a material adverse effect on COX, its assets, or its operations or activities as presently conducted or as contemplated to be conducted after the Closing Date, including, but not limited to, information relating to governmental, employee, environmental, litigation and securities matters and transactions with affiliates.

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Section 2.06   Options or Warrants.  There are no options, warrants, convertible securities, subscriptions, stock appreciation rights, phantom stock plans or stock equivalents or other rights, agreements, arrangements or commitments (contingent or otherwise) of any character issued or authorized by COX relating to the issued or unissued capital stock of COX (including, without limitation, rights the value of which is determined with reference to the capital stock or other securities of COX) or obligating COX to issue or sell any shares of capital stock of, or options, warrants, convertible securities, subscriptions or other equity interests in, COX.  There are no outstanding contractual obligations of COX to repurchase, redeem or otherwise acquire any shares of COX Common Stock of COX or to pay any dividend or make any other distribution in respect thereof or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any person.

Section 2.07   Absence of Certain Changes or Events.  Since the date of the most recent COX balance sheet included in the COX Schedules:

(a)           there has not been (i) any material adverse change in the business, operations, properties, assets or condition of COX or (ii) any damage, destruction or loss to COX (whether or not covered by insurance) materially and adversely affecting the business, operations, properties, assets or condition of COX;

(b)           COX has not (i) amended its certificate of incorporation or bylaws except as required by this Agreement; (ii) declared or made, or agreed to declare or make any payment of dividends or distributions of any assets of any kind whatsoever to stockholders or purchased or redeemed, or agreed to purchase or redeem, any of its capital stock; (iii) waived any rights of value which in the aggregate are outside of the ordinary course of business or material considering the business of COX; (iv) made any material change in its method of management, operation, or accounting; (v) entered into any transactions or agreements other than in the ordinary course of business; (vi) made any accrual or arrangement for or payment of bonuses or special compensation of any kind or any severance or  termination pay to any present or former officer or employee; (vii) increased the rate of compensation payable or to become payable by it to any of its officers or directors or any of its salaried employees whose monthly compensation exceed $1,000; or  (viii) made any increase in any profit sharing, bonus, deferred compensation, insurance, pension, retirement, or other employee benefit plan, payment, or arrangement, made to, for or with its officers, directors, or employees;

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(c)           COX has not (i) granted or agreed to grant any options, warrants, or other rights for its stock, bonds, or other corporate securities calling for the issuance thereof; (ii) borrowed or agreed to borrow any funds or incurred, or become subject to, any material obligation or liability (absolute or contingent) except liabilities incurred in the ordinary course of business; (iii) paid or agreed to pay any material obligations or liabilities (absolute or contingent) other than current liabilities reflected in or shown on the most recent COX balance sheet and current liabilities incurred since that date in the ordinary course of business and professional and other fees and expenses in connection with the preparation of this Agreement and the consummation of the transaction contemplated hereby; (iv) sold or transferred, or agreed to sell or transfer, any of its assets, properties, or rights (except assets, properties, or rights not used or useful in its business which, in the aggregate have a value of less than $1,000), or canceled, or agreed to cancel, any debts or claims (except debts or claims which in the aggregate are of a value less than $1,000); (v) made or permitted any amendment or termination of any contract, agreement, or license to which it is a party if such amendment or termination is material, considering the business of COX; or (vi) issued, delivered or agreed to issue or deliver, any stock, bonds or other corporate securities including debentures (whether authorized and unissued or held as treasury stock), except in connection with this Agreement; and

(d)           to its knowledge, COX has not become subject to any law or regulation which materially and adversely affects, or in the future, may adversely affect, the business, operations, properties, assets or condition of COX.

Section 2.08   Litigation and Proceedings.  There are no actions, suits, proceedings or investigations pending or, to the knowledge of COX after reasonable investigation, threatened by or against COX or affecting COX or its properties, at law or in equity, before any court or other governmental agency or instrumentality, domestic or foreign, or before any arbitrator of any kind except as disclosed in the COX Schedules.  COX has no knowledge of any default on its part with respect to any judgment, order, writ, injunction, decree, award, rule or regulation of any court, arbitrator, or governmental agency or instrumentality or any circumstance which after reasonable investigation would result in the discovery of such default.

Section 2.09   Contracts.

(a)           COX is not a party to, and its assets, products, technology and properties are not bound by, any leases, contract, franchise, license agreement, agreement, debt instrument, obligation, arrangement, understanding or other commitments whether such agreement is in writing or oral (“Contracts”).

(b)           COX is not a party to or bound by, and the properties of COX are not subject to any Contract, agreement, other commitment or instrument; any charter or other corporate restriction; or any judgment, order, writ, injunction, decree, or award; and

(c)           COX is not a party to any oral or written (i) contract for the employment of any officer or employee; (ii) profit sharing, bonus, deferred compensation, stock option, severance pay, pension benefit or retirement plan, (iii) agreement, contract, or indenture relating to the borrowing of money, (iv) guaranty of any obligation, (vi) collective bargaining agreement; or (vii) agreement with any present or former officer or director of COX.

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Section 2.10   No Conflict With Other Instruments.  The execution of this Agreement and the consummation of the transactions contemplated by this Agreement will not result in the breach of any term or provision of, constitute a default under, or terminate, accelerate or modify the terms of, any indenture, mortgage, deed of trust, or other material agreement or instrument to which COX is a party or to which any of its assets, properties or operations are subject.

Section 2.11   Compliance With Laws and Regulations.  COX has complied with all United States federal, state or local or any applicable foreign statute, law, rule, regulation, ordinance, code, order, judgment, decree or any other applicable requirement or rule of law (a “Law”) applicable to Cox and the operation of its business.  This compliance includes, but is not limited to, the filing of all reports to date with federal and state securities authorities.

Section 2.12   Approval of Agreement.  The Board of Directors of COX has authorized the execution and delivery of this Agreement by COX and has approved this Agreement and the transactions contemplated hereby.

Section 2.13   Material Transactions or Affiliations.  Except as disclosed herein and in the COX Schedules, there exists no contract, agreement or arrangement between COX and any predecessor and any person who was at the time of such contract, agreement or arrangement an officer, director, or person owning of record or known by COX to own beneficially, 5% or more of the issued and outstanding common stock of COX and which is to be performed in whole or in part after the date hereof or was entered into not more than three years prior to the date hereof.  Neither any officer, director, nor 5% Shareholders of COX has, or has had since inception of COX, any known interest, direct or indirect, in any such transaction with COX which was material to the business of COX.  COX has no commitment, whether written or oral, to lend any funds to, borrow any money from, or enter into any other transaction with, any such affiliated person.

Section 2.14   COX Schedules.  COX has delivered to ARMCO the following schedules, which are collectively referred to as the “COX Schedules” and which consist of separate schedules, which are dated the date of this Agreement, all certified by the chief executive officer of COX to be complete, true, and accurate in all material respects as of the date of this Agreement.

(a)           a schedule containing complete and accurate copies of the certificate of incorporation and bylaws of COX as in effect as of the date of this Agreement;

(b)           a schedule containing the financial statements of COX identified in paragraph 2.04(a) and (b);

(c)           a schedule setting forth a description of any material adverse change in the business, operations, property, inventory, assets, or condition of COX since December 31, 2007, required to be provided pursuant to section 2.07 hereof; and

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(d)           a schedule setting forth any other information, together with any required copies of documents, required to be disclosed in the COX Schedules by Sections 2.01 through 2.19 and 2.21.

COX shall cause the COX Schedules and the instruments and data delivered to ARMCO hereunder to be promptly updated after the date hereof up to and including the Closing Date.

Section 2.15   Bank Accounts; Power of Attorney.  Set forth in the COX Schedules is a true and complete list of (a) all accounts with banks, money market mutual funds or securities or other financial institutions maintained by COX within the past twelve (12) months, the account numbers thereof, and all persons authorized to sign or act on behalf of COX, (b) all safe deposit boxes and other similar custodial arrangements maintained by COX within the past twelve (12) months, (c) the check ledger for the last 12 months, and (d) the names of all persons holding powers of attorney from COX or who are otherwise authorized to act on behalf of COX with respect to any matter, other than its officers and directors, and a summary of the terms of such powers or authorizations.

Section 2.16   Valid Obligation.  This Agreement and all agreements and other documents executed by COX in connection herewith constitute the valid and binding obligation of COX, enforceable in accordance with its or their terms, except as may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and subject to the qualification that the availability of equitable remedies is subject to the discretion of the court before which any proceeding therefore may be brought.

Section 2.17   SEC Filings; Financial Statements. (a) COX has made available to ARMCO a correct and complete copy, or there has been available on EDGAR, copies of each report, registration statement and definitive proxy statement filed by COX with the SEC since its initial filing on August 27, 2007 (the “COX SEC Reports”), which are all the forms, reports and documents filed by COX with the SEC from August 27, 2007 to the date of this Agreement. As of their respective dates, the COX SEC Reports: (i) were prepared in accordance and complied in all material respects with the requirements of the Securities Act or the Exchange Act, as the case may be, and the rules and regulations of the SEC thereunder applicable to such COX SEC Reports, and (ii) did not at the time they were filed (and if amended or superseded by a filing prior to the date of this Agreement then on the date of such filing and as so amended or superseded) contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

(b)  Each set of financial statements (including, in each case, any related notes thereto) contained in the COX SEC Reports comply as to form in all material respects with the published rules and regulations of the SEC with respect thereto, were prepared in accordance with U.S. GAAP applied on a consistent basis throughout the periods involved (except as may be indicated in the notes thereto or, in the case of unaudited statements, do not contain footnotes as permitted by Form 10-QSB promulgated under the Exchange Act) and each fairly presents in all material respects the financial position of COX at the respective dates thereof and the results of its operations and cash flows for the periods indicated, except that the unaudited interim financial statements were or are subject to normal adjustments which were not or are not expected to have a Material Adverse Effect on Applied Spectrum taken as a whole.

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Section 2.18   Over-the-Counter Bulletin Board Quotation. COX Common Stock is quoted on the Over-the-Counter Electronic Bulletin Board (“OTC BB”). There is no action or proceeding pending or, to COX’s knowledge, threatened against COX by NASDAQ or The Financial Industry Regulatory Authority, Inc. ("FINRA") with respect to any intention by such entities to prohibit or terminate the quotation of COX Common Stock on the OTC BB.

Section 2.19   Exchange Act Compliance.  COX is in compliance with, and current in, all of the reporting, filing and other requirements under the Exchange Act, the shares of COX Common Stock have been registered under Section 12(g) of the Exchange Act, and COX is in compliance with all of the requirements under, and imposed by, Section 12(g) of the Exchange Act.

Section 2.20   Environmental Compliance and Disclosure.

(a)           COX possess, and are in compliance with, all permits, licenses and government authorizations and have filed all notices that are required under local, state and federal Laws and regulations relating to protection of the environment, pollution control, product registration and hazardous materials (“Environmental Laws”) applicable to COX and the operation of its business and COX is in compliance with all applicable limitations, restrictions, conditions, standards, prohibitions, requirements, obligations, schedules and timetables contained in those Laws or  contained in any Law, regulation, code, plan, order, decree, judgment, notice, permit or demand letter issued, entered, promulgated or approved thereunder.

(b)           COX has received notice of actual or threatened liability under the Federal Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) or any similar state or local statute or ordinance from any governmental agency or any third party, and there are no facts or circumstances which would form the basis for the assertion of any claim against COX under any Environmental Laws including, without limitation, CERCLA or any similar local, state or foreign Law with respect to any on-site or off-site location.

(c)           COX has entered into or agreed to, nor does COX contemplate entering into any consent decree or order, and is not subject to any judgment, decree or judicial or administrative order relating to compliance with, or the cleanup of hazardous materials under, any applicable Environmental Laws.

(d)           COX has received notice that it is subject to any claim, obligation, liability, loss, damage or expense of whatever kind or nature, contingent or otherwise, incurred or imposed or based upon any provision of any Environmental Law and arising out of any act or omission of COX, its employees, agents or representatives or arising out of the ownership, use, control or operation by COX of any facility, site, area or property (including, without limitation, any facility, site, area or property currently or previously owned or leased by COX) from which any hazardous materials were released into the environment (the term “release” meaning any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping or disposing into the environment, and the term “environment” meaning any surface or ground water, drinking water supply, soil, surface or subsurface strata or medium, or the ambient air).

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(e)           None of COX real property previously owned by COX contains any friable asbestos, regulated PCBs or underground storage tanks.

(f)           As used in this Agreement, the term “hazardous materials” means any waste, pollutant, hazardous substance, toxic, ignitable, reactive or corrosive substance, hazardous waste, special waste, industrial substance, by-product, process intermediate product or waste, petroleum or petroleum-derived substance or waste, chemical liquids or solids, liquid or gaseous products, or any constituent of any such substance or waste, the use, handling or disposal of which by COX is in any way governed by or subject to any applicable Law, rule or regulation of any Governmental Entity.

Section 2.21   Insurance Policies.  COX has not received notice of any pending or threatened cancellation (retroactive or otherwise) with respect to any of the insurance policies in force naming COX, any of its employees thereof as an insured or beneficiary or as a loss payable payee and COX is in compliance in all material respects with all conditions contained therein.  There are no pending claims against such insurance policies by COX as to which insurers are defending under reservation of rights or have denied liability, and there exists no claim under such insurance policies that has not been properly filed by COX.  Set forth on Schedule 2.21is a list of all of COX’s insurance policies.

Section 2.22    Employee Benefit Plans and Agreements.  Cox has no deferred compensation, pension, profit-sharing and retirement plans, or bonus, welfare, severance policies or programs or other “employee benefit plans” (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)), fringe benefit or stock option, stock ownership, stock appreciation, phantom stock or equity (or equity-based) plans, including individual contracts, severance agreements, employee agreements, consulting agreements with individuals, separation and change in control programs, agreements or arrangements, or employee retention agreements, providing the same or similar benefits, whether or not written, participated in or maintained by COX or with respect to which contributions are made or obligations assumed by COX in respect of COX (including health, life insurance and other benefit plans maintained for former employees or retirees).

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ARTICLE III

SHARE PURCHASE PRICE

Section 3.01    The Share Purchase.  On the terms and subject to the conditions set forth in this Agreement, on the Closing Date (as defined in Section 3.03), the ARMCO Shareholder shall sell, assign, transfer and deliver, free and clear of all liens, pledges, encumbrances, charges, restrictions or known claims of any kind, nature, or description, all of the shares of ARMCO held by such Shareholder; the objective of such purchase (the “Share Purchase”) being the acquisition by COX of not less than 100% of the issued and outstanding shares of ARMCO.  In exchange for the transfer of such securities by the ARMCO Shareholder, COX shall deliver to the ARMCO Shareholder, its affiliates or assigns, the purchase price of $6,890,000 (the “Purchase Price”) by delivering to the ARMCO Shareholder a promissory note in the form set forth in Exhibit “A” (the “Purchase Money Promissory Note”).   At the Closing Date, the ARMCO Shareholder shall, on surrender of his certificate or certificates representing his ARMCO shares to COX or its registrar or transfer agent, be entitled to receive the Purchase Money Promissory Note.

Upon consummation of the transaction contemplated herein, all of the issued and outstanding shares of ARMCO shall be held by COX.

Section 3.02    Cancellation of Certain Shares of COX Common Stock.  No later than 30 days after the Closing Date, Stephen E. Cox, will cancel a total number of 7,694,000 shares of COX Common Stock at the request of the Company.

Section 3.03    Closing.  The closing (“Closing”) of the transactions contemplated by this Agreement shall occur following the payment of the outstanding liabilities of COX, and upon delivery of the Purchase Money Promissory Note as described in Section 3.01 herein. The Closing shall take place at a mutually agreeable time and place and is anticipated to close by no later than June 30, 2008.

Section 3.04    Closing Events.  At the Closing, COX, ARMCO and the ARMCO Shareholder shall execute, acknowledge, and deliver (or shall ensure to be executed, acknowledged, and delivered), any and all certificates, opinions, financial statements, schedules, agreements, resolutions, rulings or other instruments required by this Agreement to be so delivered at or prior to the Closing, together with such other items as may be reasonably requested by the parties hereto and their respective legal counsel in order to effectuate or evidence the transactions contemplated hereby.

Section 3.05    Termination.  This Agreement may be terminated by the Board of Directors of ARMCO or COX only in the event that COX or ARMCO do not meet the conditions precedent set forth in Articles V and VI.  If this Agreement is terminated pursuant to this section, this Agreement shall be of no further force or effect, and no obligation, right or liability shall arise hereunder.

ARTICLE IV

SPECIAL COVENANTS

Section 4.01    Access to Properties and Records.  COX and  ARMCO will each afford to the officers and authorized representatives of the other full access to the properties, books and records of COX or ARMCO, as the case may be, in order that each may have a full opportunity to make such reasonable investigation as it shall desire to make of the affairs of the other, and each will furnish the other with such additional financial and operating data and other information as to the business and properties of COX or ARMCO, as the case may be, as the other shall from time to time reasonably request.  Without limiting the foregoing, as soon as practicable after the end of each fiscal quarter (and in any event through the last fiscal quarter prior to the Closing Date), each party shall provide the other with quarterly internally prepared and unaudited financial statements.

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Section 4.02    Delivery of Books and Records.  At the Closing, COX shall deliver to ARMCO, the originals of the corporate minute books, books of account, contracts, records, and all other books or documents of COX now in the possession of COX or its representatives.

Section 4.03    Third Party Consents and Certificates.  COX and ARMCO agree to cooperate with each other in order to obtain any required third party consents to this Agreement and the transactions herein contemplated.

Section 4.04    COX SEC Filings.  On or before the Closing Date, COX shall promptly file with the SEC necessary disclosure statements required by federal securities law.

Section 4.05    Designation of Directors and Officer.  Upon signing this Agreement, the following directors will take the position of Director with COX, Kexuan Yao, Weigang Zhao, Auan Chen and such other persons as may be designated by Mr. Yao, and the existing officers and directors of COX, Stephen E. Cox and Mary Ann Cox, after the signing of this Agreement, shall tender their resignations of all positions held with COX effective immediately.  In addition, upon the signing of this Agreement, COX shall immediately appoint as officers of COX the following persons: Kexuan Yaoas Chief Executive Officer and President, and Fengtao Wen as Chief Financial Officer.

Section 4.06    Actions Prior to Closing.

(a)           From and after March 31, 2008 until the Closing Date and except as set forth in the COX Schedules or ARMCO Schedules or as permitted or contemplated by this Agreement, COX (subject to paragraph (d) below) and ARMCO respectively, will each:

(i)           carry on its business in substantially the same manner as it has heretofore;

(ii)           maintain and keep its properties in states of good repair and condition as at present, except for depreciation due to ordinary wear and tear and damage due to casualty;

(iii)           maintain in full force and effect insurance comparable in amount and in scope of coverage to that now maintained by it;

(iv)           perform in all material respects all of its obligations under material contracts, leases, and instruments relating to or affecting its assets, properties, and business;

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(v)           use its best efforts to maintain and preserve its business organization intact, to retain its key employees, and to maintain its relationship with its material suppliers and customers; and

(vi)           fully comply with and perform in all material respects all obligations and duties imposed on it by all federal and state laws and all rules, regulations, and orders imposed by federal or state governmental authorities.

(b)           From and after March 31, 2008 until the Closing Date, neither COX nor ARMCO will:

(i)           make any changes in their memorandum of association, articles of association, articles or certificate of incorporation or bylaws except as contemplated by this Agreement including a name change;

(ii)           take any action described in Section 1.07 in the case of ARMCO or in Section 2.07, in the case of COX (all except as permitted therein or as disclosed in the applicable party’s schedules);

(iii)           enter into or amend any contract, agreement, or other instrument of any of the types described in such party’s schedules, except that a party may enter into or amend any contract, agreement, or other instrument in the ordinary course of business involving the sale of goods or services; or

(iv)           sell any assets or discontinue any operations, sell any shares of capital stock or conduct any similar transactions other than in the ordinary course of business.

Section 4.07    Indemnification.

(a)           ARMCO hereby agrees to indemnify COX and each of the officers, agents and directors of COX as of the date of execution of this Agreement against any loss, liability, claim, damage, or expense (including, but not limited to, any and all expense whatsoever reasonably incurred in investigating, preparing, or defending against any litigation, commenced or threatened, or any claim whatsoever) (“Loss”), to which it or they may become subject arising out of or based on any inaccuracy appearing in or misrepresentations made under Article I of this Agreement.  The indemnification provided for in this paragraph shall survive the Closing and consummation of the transactions contemplated hereby and termination of this Agreement for one year following the Closing.

(b)           The ARMCO Shareholder agree to indemnify COX and each of the officers, agents and directors of COX as of the date of execution of this Agreement against any Loss, to which it or they may become subject arising out of or based on any inaccuracy appearing in or misrepresentations made under Article 3.01 of this Agreement.  The indemnification provided for in this paragraph shall survive the Closing and consummation of the transactions contemplated hereby and termination of this Agreement for one year following the Closing.

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(c)           COX and Stephen Cox, jointly and severally, agree to indemnify and hold harmless ARMCO and each of the officers, agents, and directors of ARMCO and the ARMCO Shareholder as of the date of execution of this Agreement (the “ARMCO Indemnitees”) against any Liabilities incurred or suffered by the ARMCO Indemnitees.  For this purpose, “Liabilities” shall mean all suits, proceedings, claims, expenses, losses, costs, liabilities, judgments, deficiencies, assessments, actions, investigations, penalties, fines, settlements, interest and damages (including reasonable attorneys' fees and expenses), whether suit is  instituted or not and, if instituted, whether at any trial or appellate level, and whether raised by the parties hereto or a third party, incurred or suffered by the ARMCO Indemnitees or any of them arising from, in connection with or as a result of (a) any false or inaccurate representation or warranty made by or on behalf of COX in or pursuant to this Agreement; (b) any default or breach in the performance of any of the covenants or agreements made by COX in or pursuant to this Agreement; (c) the operation of COX’s business prior to the Closing; (d) any obligation or liability of COX which is not included in COX’s Financial Statements (e) any breach of the contracts prior to the Closing; and (f) any Liabilities arising out of the claims of creditors of COX or any party claiming by, through or under such creditor, including, but not limited to, any bankruptcy trustee or debtor-in-possession.  The indemnification provided for in this paragraph shall survive the Closing and consummation of the transactions contemplated hereby and termination of this Agreement for one year following the Closing.

Section 4.08    Sales of Securities Under Rule 144, If Applicable.

(a)           COX will use its best efforts to at all times satisfy the current public information requirements of Rule 144 promulgated under the Securities Act so that its shareholders can sell restricted securities that have been held for six months (or one year, as the case may be) or more or such other restricted period as required by Rule 144 as it is from time to time amended.

(b)           Upon being informed in writing by any person holding restricted stock of COX that such person intends to sell any shares under rule 144 promulgated under the Securities Act (including any rule adopted in substitution or replacement thereof), COX will certify in writing to such person that it is compliance with Rule 144 current public information requirement to enable such person to sell such person’s restricted stock under Rule 144, as may be applicable under the circumstances.

(c)           If any certificate representing any such restricted stock is presented to COX’s transfer agent for registration or transfer in connection with any sales theretofore made under Rule 144, provided such certificate is duly endorsed for transfer by the appropriate person(s) or accompanied by a separate stock power duly executed by the appropriate person(s) in each case with reasonable assurances that such endorsements are genuine and effective, and is accompanied by a legal opinion that such transfer has complied with the requirements of Rule 144, as the case may be, COX will promptly instruct its transfer agent to register such transfer and to issue one or more new certificates representing such shares to the transferee and, if appropriate under the provisions of Rule 144, as the case may be, free of any stop transfer order or restrictive legend.

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Section 4.09    Payment of Liabilities.  Prior to the Closing, COX shall have paid and discharged of all of COX’s liabilities, including all of COX’s accounts payable and any outstanding legal fees incurred prior to the Closing Date.

Section 4.10    Assistance with Post-Closing SEC Reports and Inquiries.Upon the reasonable request of ARMCO, after the Closing Date, Stephen E. Cox and Mary Ann Cox shall use their reasonable best efforts to provide such information available to it, including information, filings, reports, financial statements or other circumstances of COX occurring, reported or filed prior to the Closing, as may be necessary or required by COX for the preparation of the reports that COX is required to file after Closing with the SEC to remain in compliance and current with its reporting requirements under the Exchange Act, or filings required to address and resolve matters as may relate to the period prior to Closing and any SEC comments relating thereto or any SEC inquiry thereof.

ARTICLE V

CONDITIONS PRECEDENT TO OBLIGATIONS OF COX

The obligations of COX under this Agreement are subject to the satisfaction, at or before the Closing Date, of the following conditions:

Section 5.01    Accuracy of Representations and Performance of Covenants.  The representations and warranties made by ARMCO and ARMCO Shareholder in this Agreement were true when made and shall be true at the Closing Date with the same force and effect as if such representations and warranties were made at and as of the Closing Date (except for changes therein permitted by this Agreement).  ARMCO shall have performed or complied with all covenants and conditions required by this Agreement to be performed or complied with by ARMCO prior to or at the Closing.  COX shall be furnished with a certificate, signed by a duly authorized executive officer of ARMCO and dated the Closing Date, to the foregoing effect.

Section 5.02    Officer’s Certificate.  COX shall have been furnished with a certificate dated the Closing Date and signed by a duly authorized officer of ARMCO to the effect that no litigation, proceeding, investigation, or inquiry is pending, or to the best knowledge of ARMCO threatened, which might result in an action to enjoin or prevent the consummation of the transactions contemplated by this Agreement, or, to the extent not disclosed in the ARMCO Schedules, by or against ARMCO, which might result in any material adverse change in any of the assets, properties, business, or operations of ARMCO.

Section 5.03    Good Standing.  Dated within fifteen (15) days of the Closing Date, COX shall have received a certificate of good standing, certifying that ARMCO is in good standing as a company in Hong Kong.

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Section 5.04    Approval by ARMCOShareholder.  The Share Purchase shall have been approved by the holders of not less than fifty and one tenths percent (50.01%) of the shares, including voting power, of ARMCO, unless a lesser number is agreed to by COX.

Section 5.05    No Governmental Prohibition.  No order, statute, rule, regulation, executive order, injunction, stay, decree, judgment or restraining order shall have been enacted, entered, promulgated or enforced by any court or governmental or regulatory authority or instrumentality which prohibits the consummation of the transactions contemplated hereby.

Section 5.06    Consents.  All consents, approvals, waivers or amendments pursuant to all contracts, licenses, permits, trademarks and other intangibles in connection with the transactions contemplated herein, or for the continued operation of ARMCO after the Closing Date on the basis as presently operated shall have been obtained.

Section 5.07    Other Items.

(a)           COX shall have received a list containing the name, address, and number of shares held by the ARMCO Shareholder as of the date of Closing, certified by an executive officer of ARMCO as being true, complete and accurate; and

(b)           COX shall have received such further opinions, documents, certificates or instruments relating to the transactions contemplated hereby as COX may reasonably request.

ARTICLE VI

CONDITIONS PRECEDENT TO OBLIGATIONS OF ARMCO

AND THE ARMCO SHAREHOLDER

The obligations of ARMCO and the ARMCO Shareholder under this Agreement are subject to the satisfaction, at or before the Closing Date, of the following conditions:

Section 6.01    Accuracy of Representations and Performance of Covenants.  The representations and warranties made by COX in this Agreement were true when made and shall be true as of the Closing Date (except for changes therein permitted by this Agreement) with the same force and effect as if such representations and warranties were made at and as of the Closing Date.  Additionally, COX shall have performed and complied with all covenants and conditions required by this Agreement to be performed or complied with by COX.

Section 6.02    Officer’s Certificate.  ARMCO shall have been furnished with certificates dated the Closing Date and signed by duly authorized executive officers of COX, to the effect that no litigation, proceeding, investigation or inquiry is pending, or to the best knowledge of COX threatened, which might result in an action to enjoin or prevent the consummation of the transactions contemplated by this Agreement  or, to the extent not disclosed in the COX Schedules, by or against COX, which might result in any material adverse change in any of the assets, properties or operations of COX.

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Section 6.03    Good Standing.  ARMCO shall have received a certificate of good standing from the Secretary of State of Nevada or other appropriate office, dated as of a date within ten days prior to the Closing Date certifying that COX is in good standing as a corporation in the State of Nevada and has filed all tax returns required to have been filed by it to date and has paid all taxes reported as due thereon.

Section 6.04    No Governmental Prohibition.  No order, statute, rule, regulation, executive order, injunction, stay, decree, judgment or restraining order shall have been enacted, entered, promulgated or enforced by any court or governmental or regulatory authority or instrumentality which prohibits the consummation of the transactions contemplated hereby.

Section 6.05    Approval by COX Shareholders.  The Share Purchase shall have been approved by the holders of not less than fifty and one tenths percent (50.01%) of the shares, including voting power, of COX, unless a lesser number is agreed to by ARMCO.

Section 6.06    Consents.  All consents, approvals, waivers or amendments pursuant to all contracts, licenses, permits, trademarks and other intangibles in connection with the transactions contemplated herein, or for the continued operation of COX after the Closing Date on the basis as presently operated shall have been obtained.

Section 6.07    Shareholder Report.  ARMCO shall receive a shareholder’s report reflective of all COX shareholder’s which does not exceed 10,000,000 shares of COX common stock issued and outstanding as of the day prior to the Closing Date.

Section 6.08    Consulting Agreement.  Stephen Cox shall have entered into a Consulting Agreement with China Direct, Inc. or its subsidiaries in a form and on terms acceptable to China Direct, Inc. and ARMCO.

Section 6.09    Prior to the Closing, COX shall have paid and discharged of all of COX’s liabilities, including all of COX’s accounts payable and any outstanding legal fees incurred prior to the Closing Date as provided for in this Agreement.

Section 6.10     Other Items.  ARMCO shall have received further opinions, documents, certificates, or instruments relating to the transactions contemplated hereby as ARMCO may reasonably request.

ARTICLE VII

MISCELLANEOUS

Section 7.01    Brokers.  COX and ARMCO agree that, except as set out on Schedule 7.01 attached hereto, there were no finders or brokers involved in bringing the parties together or who were instrumental in the negotiation, execution or consummation of this Agreement.  COX and ARMCO each agree to indemnify the other against any claim by any third person other than those described above for any commission, brokerage, or finder’s fee arising from the transactions contemplated hereby based on any alleged agreement or understanding between the indemnifying party and such third person, whether express or implied from the actions of the indemnifying party.

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Section 7.02    Governing Law.  This Agreement shall be governed by, enforced, and construed under and in accordance with the laws of the United States of America and, with respect to the matters of state law, with the laws of the State of Florida.  Venue for all matters shall be in Broward County, Florida, without giving effect to principles of conflicts of law thereunder.  Each of the parties (a) irrevocably consents and agrees that any legal or equitable action or proceedings arising under or in connection with this Agreement shall be brought exclusively in the federal courts of the United States. By execution and delivery of this Agreement, each party hereto irrevocably submits to and accepts, with respect to any such action or proceeding, generally and unconditionally, the jurisdiction of the aforesaid court, and irrevocably waives any and all rights such party may now or hereafter have to object to such jurisdiction.

Section 7.03    Notices.  Any notice or other communications required or permitted hereunder shall  be in writing and shall be sufficiently given if personally delivered to it or sent by telecopy, overnight courier or registered mail or certified mail, postage prepaid, addressed as follows:

If to ARMCO, to: Armco & Metawise (H.K.) Limited

Rm. 1404, China Resources

Building 26 Harbour Road

Wanchai, Hong Kong

With copies to: James Schneider, Esq.

Schneider, Weinberger & Beilly, LLP

2200 Corporate Blvd. N.W., Suite 210

Boca Raton, FL 33431

If to COX, to: Stephen E. Cox

COX Distributing Inc.

P.O. Box 430

Cokeville, Wyoming 83114

With copies to: Richard I. Anslow, Esq.

Anslow & Jaclin, LLP

195 Route 9 South, Suite 204

Manalapan, New Jersey 07726

or such other addresses as shall be furnished in writing by any party in the manner for giving notices hereunder, and any such notice or communication shall be deemed to have been given (i) upon receipt, if personally delivered, (ii) on the day after dispatch, if sent by overnight courier, (iii) upon dispatch, if transmitted by telecopy and receipt is confirmed by telephone and (iv) three (3) days after mailing, if sent by registered or certified mail.

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Section 7.04    Attorney’s Fees.  In the event that either party institutes any action or suit to enforce this Agreement or to secure relief from any default hereunder or breach hereof, the prevailing party shall be reimbursed by the losing party for all costs, including reasonable attorney’s fees, incurred in connection therewith and in enforcing or collecting any judgment rendered therein.

Section 7.05    Confidentiality.  Each party hereto agrees with the other that, unless and until the transactions contemplated by this Agreement have been consummated, it and its representatives will hold in strict confidence all data and information obtained with respect to another party or any subsidiary thereof from any representative, officer, director or employee, or from any books or records or from personal inspection, of such other party, and shall not use such data or information or disclose the same to others, except (i) to the extent such data or information is published, is a matter of public knowledge, or is required by law to be published; or (ii) to the extent that such data or information must be used or disclosed in order to consummate the transactions contemplated by this Agreement.  In the event of the termination of this Agreement, each party shall return to the other party all documents and other materials obtained by it or on its behalf and shall destroy all copies, digests, work papers, abstracts or other materials relating thereto, and each party will continue to comply with the confidentiality provisions set forth herein.

Section 7.06    Public Announcements and Filings.  Unless required by applicable law or regulatory authority, none of the parties will issue any report, statement or press release to the general public, to the trade, to the general trade or trade press, or to any third party (other than its advisors and representatives in connection with the transactions contemplated hereby) or file any document, relating to this Agreement and the transactions contemplated hereby, except as may be mutually agreed by the parties.  Copies of any such filings, public announcements or disclosures, including any announcements or disclosures mandated by law or regulatory authorities, shall be delivered to each party at least one (1) business day prior to the release thereof.

Section 7.07    Schedules; Knowledge.  Each party is presumed to have full knowledge of all information set forth in the other party’s schedules delivered pursuant to this Agreement.

Section 7.08    Third Party Beneficiaries.  This contract is strictly between COX and ARMCO, and, except as specifically provided, no director, officer, stockholder (other than the ARMCO Shareholder), employee, agent, independent contractor or any other person or entity shall be deemed to be a third party beneficiary of this Agreement.

Section 7.09    Expenses.  Subject to Section 7.04 above, whether or not the Share Purchase is consummated, each of COX and ARMCO will bear their own respective expenses, including legal, accounting and professional fees, incurred in connection with the Share Purchase or any of the other transactions contemplated hereby.

Section 7.10    Entire Agreement.  This Agreement represents the entire agreement between the parties relating to the subject matter thereof and supersedes all prior agreements, understandings and negotiations, written or oral, with respect to such subject matter.

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Section 7.11    Survival; Termination.  The representations, warranties, and covenants of the respective parties shall survive the Closing Date and the consummation of the transactions herein contemplated for a period of two years.

Section 7.12    Counterparts.  This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all of which taken together shall be but a single instrument.

Section 7.13    Amendment or Waiver.  Every right and remedy provided herein shall be cumulative with every other right and remedy, whether conferred herein, at law, or in equity, and may be enforced concurrently herewith, and no waiver by any party of the performance of any obligation by the other shall be construed as a waiver of the same or any other default then, theretofore, or thereafter occurring or existing.  At any time prior to the Closing Date, this Agreement may by amended by a writing signed by all parties hereto, with respect to any of the terms contained herein, and any term or condition of this Agreement may be waived or the time for performance may be extended by a writing signed by the party or parties for whose benefit the provision is intended.

Section 7.14    Best Efforts.  Subject to the terms and conditions herein provided, each party shall use its best efforts to perform or fulfill all conditions and obligations to be performed or fulfilled by it under this Agreement so that the transactions contemplated hereby shall be consummated as soon as practicable.  Each party also agrees that it shall use its best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective this Agreement and the transactions contemplated herein.

[Signature Pages Follow]

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IN WITNESS WHEREOF, the corporate parties hereto have caused this Agreement to be executed by their respective officers, hereunto duly authorized, as of the date first-above written.

COX DISTRIBUTING, INC.
By:	/s/ Stephen E. Cox
	Name: Stephen E. Cox
	Title:  President, CEO and Chairman

ARMCO & METAWISE (H.K.) LIMITED
By:	/s/ Kexuan Yao
	Name: Kexuan Yao
	Title:   Chairman of the Board and General Manager

ARMCO SHAREHOLDER
By:	/s/ Feng Gao
	Feng Gao

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EX-10.5

Exhibit 10.5

STOCK OPTION AGREEMENT

I. HOLDER.

NAME:                                           FENG GAO

ADDRESS:

Cox Distributing, Inc. (the “Company”) hereby grants to FENG GAO (the “Holder”), an option to purchase 5,300,000 shares of the unregistered Common Stock, $.001 par value per share of the Company (“Shares”)  at an exercise price of $1.30 per Share (the “$1.30 Options”) and 2,000,000 Shares at an exercise price of $5.00 per Share (the “$5.00 Options”) subject to the terms and conditions of this Option Agreement, as follows (the “$1.30 Options” and the “$5.00 Options” are collectively referred to herein as the “Option” and the Shares issuable upon exercise of the Option is hereinafter referred to as the “Option Shares”):

DATE OF GRANT:                                                                                     June 27, 2008

II.  AGREEMENT.

1.           Grant of Option. The $1.30 Options must be exercised prior to September 30, 2008 and the $5.00 Options must be exercised prior to June 30, 2010.

2.           Exercise of Option. This Option shall be immediately exercisable, in whole or in part, by the Holder during its term as set forth herein.  In addition, the Company may, upon at least five (5) days prior written notice, demand that the Holder of this Option purchase all or part of the Shares subject to the $1.30 Option that have not been exercised by the Holder at the exercise price for the $1.30 Options set forth in this Option.

3.           Method of Payment. Payment of the aggregate exercise price for the Shares subject to the Option shall be by cash.

4. Disposition of Options or Shares.

(a) The Holder of this Option and/or any transferee hereof or of the Option Shares by its acceptance hereof or thereof, hereby understands and agrees that neither this Option nor the Option Shares have been registered under either the Securities Act of 1933 or applicable state securities laws (the “State Acts”) and shall not be sold, pledged, hypothecated, donated or otherwise transferred (whether or not for consideration) except upon the issuance to the Company of a favorable opinion of counsel or submission to the Company of such evidence as may be reasonably satisfactory to counsel to the Company, in each such case, to the effect that any such transfer shall not be in violation of the Securities Act of 1933 and the State Acts. It shall be a condition to the transfer of this Option that any transferee hereof deliver to the Company its written agreement to accept and be bound by all of the representations, terms and conditions of this Option. This Option shall not be assignable except upon the express written consent of the Company.

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(b) The stock certificates of the Company that will evidence the Option Shares may be imprinted with a conspicuous legend in substantially the following form:

“The securities represented by this certificate have not been registered under either the Securities Act of 1933 or applicable state securities laws and shall not be sold, pledged, hypothecated, donated or otherwise transferred (whether or not for consideration) by the holder except upon the issuance to the Company of a favorable opinion of its counsel or submission to the Company of such other evidence as may be reasonably satisfactory to counsel to the Company, in each such case, to the effect that any such transfer shall not be in violation of the Securities Act of 1933 and applicable state securities laws.”

The Company has not agreed to register any of the Option Shares for distribution in accordance with the provisions of the Securities Act of 1933 or the State Acts. Except as otherwise set forth herein, the Company has not agreed to comply with any exemption from registration under the Securities Act of 1933 or the State Acts for the resale of such Shares. Hence, it is the understanding of the Holder that by virtue of the provisions of certain rules respecting “restricted securities” promulgated by the U.S. Securities and Exchange Commission, all or part of the Option Shares may be required to be held indefinitely, unless and until registered under the Securities Act of 1933 and the State Acts, or unless an exemption from such registration is available (in which case the Holder may still be limited as to the number of such Shares that may be sold).

5.           Term of Option.

This Option may be exercised only within the term set forth on the first page of this Option Agreement, and may be exercised during such term only in accordance with the terms of this Option.

6.           Notices. Any notice under this Agreement shall be in writing and shall be deemed to have been duly given when delivered personally or when deposited in the United States mail, registered, postage prepaid, and addressed, in the case of the Company, to the Company’s address listed herein, and, in the case of the Holder, to the Holder’s last permanent address as shown on the Company’s records, subject to the right of either party to designate some other address at any time hereafter in a notice satisfying the requirements of this Section.

7.           No Rights of Stockholders. Neither the Holder nor any personal representative (or beneficiary) shall be, or shall have any of the rights and privileges of, a stockholder of the Company with respect to any of the Option Shares, in whole or in part, prior to the date of exercise of the Option.

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8.           Entire Agreement; Governing Law. This Option Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Holder with respect to the subject matter hereof, and may not be modified adversely to the Holder's interest except by means of a writing signed by the Company and Holder. This Agreement is governed by the internal substantive laws of the state of New York.

HOLDER:	COX DISTRIBUTING, INC.
/s/ Feng Gao FENG GAO 25 Mcaker Ct, 110 San Mateo, CA 94403	By: /s/ Stephen E. Cox Name: Stephen E. Cox Title: Chief Executive Officer Address for notices: c/o Richard Anslow, Esq. Anslow & Jaclin, LLP 195 Route 9 South, Suite 204 Manalapan, New Jersey 07726

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EXHIBIT B TO STOCK OPTION AGREEMENT

EXERCISE NOTICE

COX DISTRIBUTING, INC.

1.           Exercise of Option. Effective as of ___________, ____, the undersigned ("Holder") hereby elects to exercise Holder's option to purchase ________ shares of the Common Stock, $.001 par value per share (the "Shares") pursuant to the (select one) __ $1.30 Options; or ___ $5.00 Options) of Cox Distributing, Inc. (the "Company") under and pursuant to the Stock Option Agreement dated June 27, 2008 (the "Option Agreement").

2.           Delivery of Payment. Purchaser herewith delivers to the Company the full purchase price of the Shares, as set forth in the Option Agreement.

3.           Governing Law. This Exercise Notice is governed by the internal substantive laws of the state of New York.

Submitted by:                                                                

HOLDER

________________________________

Signature

________________________________

Print Name

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EX-10.6

Exhibit 10.6

CALL OPTION AGREEMENT

This CALL OPTION AGREEMENT (this “Agreement”) is made and entered into as of June 27, 2008 (the “Effective Date”), between Kexuan Yao, a resident of the People’s Republic of China (“Purchaser”) and Feng Gao, a resident of San Mateo, California (“Seller”). Purchaser and Seller are also referred to herein together as the “Parties” and individually as a “Party”.

RECITALS

WHEREAS, pursuant to a Share Purchase Agreement, dated as of the date hereof, among Cox Distributing, Inc., a Nevada Corporation (the “Company”) and the shareholder of Armco & Metawise (HK) Limited, a Hong Kong Limited Liability Company (“Armco”) (the “Share Purchase Agreement”), the Company acquired 100% of the issued and outstanding capital stock of Armco; and

WHEREAS, Purchaser has agreed with Seller, as a condition to his continuing to provide services to Armet (Lianyungang) Scraps Co., Ltd. (“Armet”) and Henan Armco & Metawise Trading Co., Ltd. (“Henan Armco”), both of which are PRC companies that are wholly owned subsidiaries of Armco, as its Chairman and Chief Executive Officer, to enter into this Agreement (Armet and Henan Armco are collectively referred to hereinafter as the “Armco Subsidiaries”); and

WHEREAS, Seller has the right to purchase 5,300,000 shares of the Company’s $0.001 par value per share common stock (“Common Stock”) and therefore, has determined that it is in her best interest to, and will receive benefits from, Purchaser’s performance as CEO and Chairman of the Armco Subsidiaries and entered into the Share Purchase Agreement based on the possibility of such benefits; and

WHEREAS, Seller desires to grant to Purchaser an option to acquire 5,300,000 shares of the Company’s Common Stock owned by her (“Seller’s Shares”) pursuant to the terms and conditions set forth in this Agreement.

NOW, THEREFORE, the Parties, in consideration of the foregoing premises and the terms, covenants and conditions set forth below, and other good and valuable consideration, receipt of which is acknowledged, hereby agree as follows:

1.  DEFINITIONS; INTERPRETATION.

1.1. Terms Defined in this Agreement. The following terms when used in this Agreement shall have the following definitions:

“Bankruptcy Law” means any Law of any jurisdiction relating to bankruptcy, insolvency, corporate reorganization, company arrangement, civil rehabilitation, special liquidation, moratorium, readjustment of debt, appointment of a conservator, trustee or receiver, or similar debtor relief.

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“Business Day” means any day on which commercial banks are required to be open in the United States.

“Call Price” means, with respect to any exercise of the Call Right, $0.001 per share of the Seller’s Shares subject to any Call Exercise Notice.

“Conditions” means Conditions 1 through 4, as defined below, in the aggregate.

“Condition 1” means the entry by Purchaser and the Armco Subsidiaries into a binding employment agreement for a term of not less than three (3) years for Purchaser to serve as Armco Subsidiaries’ Chief Executive Officer and Chairman of its Board of Directors.

“Condition 2” means the United States Securities and Exchange Commission declaring a registration statement filed by the Company under the Securities Act of 1933 effective, or, investors who purchase Common Stock from the Company pursuant to a Securities Purchase Agreement to be entered into after the closing of the Share Purchase Agreement being able to sell their Common Stock under Rule 144, as then effective under the U.S. Securities Act of 1933, as amended.

“Condition 3” means Armco and its Subsidiaries achieving not less than $5,000,000 in pre-tax profits, as determined under United States Generally Accepted Accounting Principles consistently applied (“US GAAP”) for the calendar year ending December 31, 2008.

“Condition 4” means Armco and its Subsidiaries achieving not less than $75,000,000 in Gross Revenues, as determined under US GAAP for the calendar year ending December 31, 2008.

“Government Authority” means any: (a) nation, principality, state, commonwealth, province, territory, county, municipality, district or other jurisdiction of any nature; (b) federal, state, local, municipal, foreign or other government; (c) governmental or quasi governmental authority of any nature (including any governmental division, subdivision, department, agency, bureau, branch, office, commission, council, board, instrumentality, officer, official, representative, organization, unit, body or Person and any court or other tribunal); or (d) individual, Person or body exercising, or entitled to exercise, any executive, legislative, judicial, administrative, regulatory, police, military or taxing authority or power of any nature.

“Law” means any federal, state, local, municipal, foreign or other law, statute, legislation, constitution, principle of common law, resolution, ordinance, code, order, edict, decree, proclamation, treaty, convention, rule, regulation, permit, ruling, directive, pronouncement, requirement (licensing or otherwise), specification, determination, decision, opinion or interpretation that is, has been or may in the future be issued, enacted, adopted, passed, approved, promulgated, made, implemented or otherwise put into effect by or under the authority of any Government Authority.

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“Person” means any individual, firm, company, corporation, limited liability company, unincorporated association, partnership, trust, joint venture, governmental authority or other entity, and shall include any successor (by merger or otherwise) of such entity.

1.2. Interpretation.

(a) Certain Terms. The words “hereof,” “herein,” “hereunder” and similar words refer to this Agreement as a whole and not to any particular provision of this Agreement. The term “including” is not limited and means “including without limitation.”

(b) Section References; Titles and Subtitles. Unless otherwise noted, all references to Sections herein are to Sections of this Agreement. The titles, captions and headings of this Agreement are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.

(c) Reference to Entities, Agreements, Statutes. Unless otherwise expressly provided herein, (i) references to a Person include its successors and permitted assigns, (ii) references to agreements (including this Agreement) and other contractual instruments shall be deemed to include all subsequent amendments, restatements and other modifications thereto or supplements thereof and (iii) references to any statute or regulation are to be construed as including all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such statute or regulation.

2.  CALL RIGHT.

2.1. Call Right. Purchaser shall have, during the Exercise Period (as defined below), and when a Condition is met, the right and option to purchase from the Seller, and upon the exercise of such right and option the Seller shall have the obligation to sell to Purchaser, a portion of the Seller’s Shares identified in the Call Exercise Notice (the “Call Right”). Purchaser shall be permitted to purchase, and Seller shall be obligated to sell, the following numbers of Seller’s Shares upon the attainment of the following Conditions:

Condition        Number of Seller’s Shares as to which there is a Call Right

Condition 1     1,325,000

Condition 2     1,325,000

Condition 3     1,325,000

Condition 4     1,325,000

2.2. Call Period. The Call Right shall be exercisable by Purchaser, by delivering a Call Exercise Notice at any time during the period (the “Exercise Period”) commencing on the date hereof and ending at 6:30 p.m. (New York time) on the fifth anniversary date hereof (such date or the earlier expiration of the Call Right is referred to herein as the “Expiration Date”).

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2.3. Exercise Process. In order to exercise the Call Right during the Exercise Period, Purchaser shall deliver to the Seller, a written notice of such exercise substantially in the form attached hereto as Appendix A (a “Call Exercise Notice”) to such address or facsimile number set forth therein. The Call Exercise Notice shall indicate the number of Seller’s Shares as to which Purchaser is then exercising its Call Right and the aggregate Call Price. Provided the Call Exercise Notice is delivered in accordance with Section 7.4 to Seller on or prior to 6:30 p.m. (New York time) on a Business Day, the date of exercise (the “Exercise Date”) of the Call Right shall be the date of such delivery of such Call Exercise Notice. In the event the Call Exercise Notice is delivered after 6:30 p.m. (U.S. Pacific time) on any day or on a date which is not a Business Day, the Exercise Date shall be deemed to be the first Business Day after the date of such delivery of such Call Exercise Notice. The delivery of a Call Exercise Notice in accordance herewith shall constitute a binding obligation (a) on the part of Purchaser to purchase, and (b) on the part of Seller to sell, the Seller’s Shares subject to such Call Exercise Notice in accordance with the terms of this Agreement.

2.4. Call Price. If the Call Right is exercised pursuant to this Section 2, as payment for the Seller’s Shares being purchased by Purchaser pursuant to the Call Right, Purchaser shall pay the aggregate Call Price to the Seller (but no later than fifteen (15) Business Days of the Exercise Date).

3.  ENCUMBRANCES; TRANSFERS, SET-OFF AND WITHHOLDINGS.

3.1.  Encumbrances. Upon exercise of the Call Right, Seller’s Shares being purchased shall be sold, transferred and delivered to Purchaser free and clear of any claim, pledge, charge, lien, preemptive rights, restrictions on transfers (except as required by securities laws of the United States), proxies, voting agreements and any other encumbrance whatsoever.

3.2 Transfers. Prior to the Expiration Date, Seller shall continue to own, free and clear of any hypothecation, pledge, mortgage or other encumbrance, except pursuant to this Agreement and except for the benefit of the Purchaser, such amount of the Seller’s Shares as may be required from time to time to in order for Purchaser to exercise its Call Right in full.

3.3.  Set-off. Purchaser shall be absolutely entitled to receive all Seller’s Shares subject to the exercise of a Call Right, and for the purposes of this Agreement, Seller hereby waives, as against Purchaser, all rights of set-off or counterclaim that would or might otherwise be available to Seller.

3.4 Escrow of Seller’s Shares.

(a) Upon execution of this Agreement, Seller shall deliver to the Company, as Collateral Agent (the “Collateral Agent”), a certificate or certificates representing Seller’s Shares. The certificates representing the Seller’s Shares (together with duly executed stock powers in blank) shall be held by the Collateral Agent.

(b) Upon receipt of a Call Exercise Notice, the Collateral Agent shall promptly deliver the Seller’s Shares being purchased pursuant to such Call Exercise Notice in accordance with the instructions set forth therein. In the event that the Collateral Agent shall receive notice from the Parties that the Conditions have not been met, the Seller’s Shares shall be distributed in accordance with their instructions.

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4.  REPRESENTATIONS AND WARRANTIES.

4.1. Representations and Warranties by Seller. Seller represents and warrants to Purchaser, that:

(a)  Due Authorization. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereunder to be carried out by it have been duly authorized by all necessary action on the part of Seller. This Agreement, and all agreements and documents executed and delivered pursuant to this Agreement, constitute valid and binding obligations of Seller, enforceable against Seller in accordance with its terms, subject to applicable Bankruptcy Laws and other laws or equitable principles of general application affecting the rights of creditors generally.

(b)  No Conflicts. The execution or delivery of this Agreement by Seller nor the fulfillment or compliance by Seller with any of the terms hereof shall, with or without the giving of notice and/or the passage of time, (i) conflict with, or result in a breach of the terms, conditions or provisions of, or constitute a default under any contract or any judgment, decree or order to which Seller is subject or by which the Seller is bound, or (ii) require any consent, license, permit, authorization, approval or other action by any Person or Government Authority which has not yet been obtained or received. The execution, delivery and performance of this Agreement by Seller or compliance with the provisions hereof by the Seller does not, and shall not, violate any provision of any Law to which the Seller is subject or by which Seller is bound.

(c) No Actions. There are no lawsuits, actions (or to the best knowledge of Seller, investigations), claims or demands or other proceedings pending or, to the best of the knowledge of Seller, threatened against the Seller which, if resolved in a manner adverse to the Seller, would adversely affect the right or ability of the Seller to carry out Seller’s obligations set forth in this Agreement.

(d) Title. Seller owns the Seller’s Shares free and clear of any claim, pledge, charge, lien, preemptive rights, restrictions on transfers, proxies, voting agreements and any other encumbrance whatsoever, except as contemplated by this Agreement. The Seller has not entered into or is a party to any agreement that would cause the Seller to not own Seller’s Shares free an clean of any encumbrance, except as contemplated by this Agreement.

4.2 Representations and Warranties by Purchaser. Purchaser represents and warrants to the Sellers, that:

(a)  Due Authorization. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereunder to be carried out by it have been duly authorized by all necessary action on the part of Purchaser. This Agreement, and all agreements and documents executed and delivered pursuant to this Agreement, constitute valid and binding obligations of Purchaser, enforceable against Purchaser in accordance with its terms, subject to applicable Bankruptcy Laws and other laws or equitable principles of general application affecting the rights of creditors generally.

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(b)  No Conflicts. The execution or delivery of this Agreement by Purchaser nor the fulfillment or compliance by Purchaser with any of the terms hereof shall, with or without the giving of notice and/or the passage of time, (i) conflict with, or result in a breach of the terms, conditions or provisions of, or constitute a default under any contract or any judgment, decree or order to which Purchaser is subject or by which Purchaser is bound, or (ii) require any consent, license, permit, authorization, approval or other action by any Person or Government Authority which has not yet been obtained or received. The execution, delivery and performance of this Agreement by Purchaser or compliance with the provisions hereof by Purchaser does not, and shall not, violate any provision of any Law to which Purchaser is subject or by which Purchaser is bound.

(c) No Actions. There are no lawsuits, actions (or to the best knowledge of Purchaser, investigations), claims or demands or other proceedings pending or, to the best of the knowledge of Purchaser, threatened against Purchaser which, if resolved in a manner adverse to Purchaser, would adversely affect the right or ability of Purchaser to carry out Purchaser’s obligations set forth in this Agreement.

5. EVENTS OF DEFAULT AND TERMINATION

5.1 Events of Default. The occurrence at any time with respect to a Party (the “Defaulting Party”) of any of the following events shall constitute an event of default (an “Event of Default”) with respect to such party:

(a) Failure to Pay or Deliver. The failure by a Party to make, when due, any payment under this Agreement or deliver the Seller’s Shares in accordance with this Agreement, if such failure is not remedied on or before the third Business Day after notice of such failure is given to the Defaulting Party;

(b) Breach of Agreement. The failure by a Party to comply with or perform any agreement, covenant or obligation (other than a failure described in Section 5.1(a)) to be complied with or performed by such Party in accordance with this Agreement if such failure is not remedied on or before the tenth Business Day after notice of such failure is given to the Defaulting Party; or

(c) Bankruptcy. A Party (1) becomes insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due; (2) makes a general assignment, arrangement or composition with or for the benefit of its creditors; (3) institutes or has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any relief under any Bankruptcy Law, or a petition is presented for its winding-up or liquidation, and in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition (A) results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding-up or liquidation or (B) is not dismissed, discharged, stayed or restrained in each case within 30 days of the institution or presentation thereof; (4) has a secured party take possession of all or substantially all its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all its assets and such secured party maintains possession, or any such process is not dismissed, discharged, stayed or rescinded, in each case within 30 days thereafter; or (5) takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts.

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5.2 Termination and Remedies Upon Default. If at any time an Event of Default with respect to a Party has occurred and is continuing, the other party may terminate this Agreement and deem the Expiration Date to have occurred by giving written notice to the Defaulting Party specifying the relevant Event of Default.In no event shall the Party exercising its right under this Section be precluded by the exercise of such termination right from pursuing, subject to the terms of this Agreement and applicable law, any cause of action or other claim it may then or at any time thereafter have against the other Party in respect of any Event of Default by the other Party hereunder including the remedy of specific performance.

6.  INDEMNIFICATION.

6.1  Indemnity by the Seller.  The Seller agrees to indemnify and hold the Buyer harmless from all Buyer Indemnified Liabilities.  For this purpose, “Buyer Indemnified Liabilities” shall mean all suits, proceedings, claims, expenses, losses, costs, liabilities, judgments, deficiencies, assessments, actions, investigations, penalties, fines, settlements, interest and damages (including reasonable attorneys’ fees and expenses), whether suit is instituted or not and, if instituted, whether at any trial or appellate level, and whether raised by the parties hereto or a third party, incurred or suffered by the Buyer or any of them arising from, in connection with or as a result of any default or breach in the performance of any of the covenants or agreements made by the Seller in or pursuant to this Agreement.

6.2  Indemnity by the Buyer.  The Buyer agrees that it will indemnify and hold the Seller from all Seller Indemnified Liabilities.  For this purpose, “Seller Indemnified Liabilities” incurred by the Seller means all suits, proceedings, claims, expenses, losses, costs, liabilities, judgments, deficiencies, personal income taxes of Seller incurred by Seller in connection with the purchase of the Seller’s Shares from the Company and the sale of such shares to Purchaser under this Agreement, assessments, actions, investigations, penalties, fines, settlements, interest and damages (including reasonable attorneys’ fees and expenses), whether suit is instituted or not and, if instituted, whether at any trial or appellate level, and whether raised by the parties hereto or a third party, incurred or suffered by the Seller, arising from, in connection with or as a result of (a) Seller’s performance of its obligations under this Agreement and the Share Purchase Agreement; or (b) any default or breach in the performance of any of the covenants or agreements made by the Buyer in this Agreement.

6.3  Procedure for Indemnification.  In the event any Party makes any demand or claim under this Section 6, the indemnified party shall give written notice to the indemnifying party promptly upon becoming aware of any event giving rise to a claim for indemnification.  In such event, the indemnifying party shall assume full control of the defense thereof and hire counsel (which counsel shall be reasonably satisfactory to the indemnified party) to defend any such demand, claim or lawsuit (provided, however, that the failure to give such Notice shall not relieve the indemnifying party of its obligations hereunder unless such party is prejudiced by such failure).  The indemnified party shall be permitted to participate in such defense at its sole cost and expense.

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7.  MISCELLANEOUS.

7.1. Governing Law; Jurisdiction. This Agreement shall be construed according to, and the rights of the Parties shall be governed by, the laws of the State of Florida, without reference to any conflict of laws principle that would cause the application of the laws of any jurisdiction other than Florida. Each Party hereby irrevocably submits to the exclusive jurisdiction of the federal and state courts in Broward County, Florida, for the adjudication of any dispute hereunder or in connection herewith, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such court, that such, suit, action or proceeding is brought in an inconvenient forum, or that the venue of such suit, action or proceeding is improper.

7.2. Successors and Assigns. Each of the Parties shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of the other Party. The provisions hereof shall inure to the benefit of, and be binding upon, the successors and permitted assigns of the Parties.

7.3. Entire Agreement; Amendment. This Agreement constitutes the full and entire understanding and agreement between the Parties with regard to the subject matter hereof. Any term of this Agreement may be amended only with the written consent of each Party.

7.4. Notices and Other Communications. Any and all notices, requests, demands and other communications required or otherwise contemplated to be made under this Agreement shall be in writing and shall be provided by one or more of the following means and shall be deemed to have been duly given (a) if delivered personally, when received, (b) if transmitted by facsimile, on the date of transmission with receipt of a transmittal confirmation, or (c) if by an internationally recognized overnight courier service, one Business Day after deposit with such courier service. All such notices, requests, demands and other communications shall be addressed as follows:

To Purchaser at:

No. 1706, 17 Floor, No.1 Building

No.66 Jing San Road

Jin Shui District, Zheng Zhou City, China

Fax: 86-371-65861170

To Seller at:

Feng Gao

1101 Admiralty Ln

Foster City, CA 94404

Fax: (650) 212-7630

or to such other address or facsimile number as a party may have specified to the other parties in writing delivered in accordance with this Section 7.4.

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7.5. Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any Person hereunder, upon any breach or default under this Agreement, shall impair any such right, power or remedy nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any Person hereunder of any breach or default under this Agreement, or any waiver on the part of any Person of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing and signed by the waiving or consenting Person.

7.6. Severability. If any provision of this Agreement is found to be invalid or unenforceable, then such provision shall be construed, to the extent feasible, so as to render the provision enforceable and to provide for the consummation of the transactions contemplated hereby on substantially the same terms as originally set forth herein, and if no feasible interpretation would save such provision, it shall be severed from the remainder of this Agreement, which shall remain in full force and effect unless the severed provision is essential to the rights or benefits intended by the Parties. In such event, the Parties shall use best efforts to negotiate, in good faith, a substitute, valid and enforceable provision or agreement which most nearly affects the Parties’ intent in entering into this Agreement.

7.7 Construction. The language used in this Agreement will be deemed to be the language chosen by the Parties to express their mutual intent, and no rules of strict construction will be applied against any Party.

7.8. Further Assurances. The Parties shall perform such acts, execute and deliver such instruments and documents and do all other such things as may be reasonably necessary to effect the transactions contemplated hereby.

7.9. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. Execution and delivery of this Agreement by exchange of facsimile copies bearing the facsimile signature of a Party shall constitute a valid and binding execution and delivery of this Agreement by such Party.

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

Purchaser:   /s/ Kexuan Yao Kexuan Yao Seller:   /s/ Feng Gao Feng Gao

Acknowledged and agreed to:

Collateral Agent:

Cox Distributing, Inc., as Collateral Agent

By: /s/ Stephen E. Cox

Name: Stephen E. Cox

Title: Chief Executive Officer

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APPENDIX A

Form of Call Exercise Notice

[Date]

Feng Gao (“Seller”)

1101 Admiralty Ln

Foster City, CA 94404

Re: Call Option Agreement dated June __, 2008 (the “Call Option Agreement”), between Kexuan Yao (“Purchaser”) and Feng Gao (“Seller”).

Dear Ms. Gao:

In accordance with Section 2.3 of the Call Option Agreement, Purchaser hereby provides this notice of exercise of the Call Right in the manner specified below:

(a) The Purchaser hereby exercises its Call Rights with respect to Seller’s Shares pursuant to the Call Option Agreement.

(b) The Purchaser intends that payment of the Call Exercise Price shall be made as a Cash Exercise and shall pay the sum of $____________ to the Seller.

(c) Pursuant to this exercise, the Seller shall deliver to _______________ Seller’s Shares in accordance with the instructions attached hereto.

Dated: _______________, ______

_________________________________________

Kexuan Yao

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EX-10.7

Exhibit 10.7

EXCLUSIVE CONSULTING AGREEMENT

This Exclusive Consulting Agreement (the "Agreement") is entered into as of June 27, 2008, between ARMCO & METAWISE (H.K.) LIMITED, a Hong Kong limited liability company with its principal office located at Room 1407, China Resources Building, 26 Harbour Road, Wanchai, Hong Kong  (hereinafter referred to as “ARMCO”) and HENAN ARMCO & METAWISE TRADING CO., LTD., a limited liability company organized under the laws of the Peoples Republic of China  with its principal office located at No. 1706, 17 Floor, No.1 Building No.66 Jing San Road, Jin Shui District, Zheng Zhou City, China (“HENAN”):

WHEREAS, ARMCO is engaged in the sale and distribution of metal ores and non-ferrous metals and provides business consulting services;

WHEREAS, HENAN is developing and constructing a steel recycling facility in the Banqiao Industrial Zone of Lianyungang Economic Development Zone in the Jiangsu Province of China (the “Business”);

WHEREAS, HENAN is a wholly owned subsidiary of ARMCO; and

WHEREAS, ARMCO desires to be the provider of business consulting and related services to HENAN, and HENAN hereby agrees to accept such business consulting and services;

NOW THEREFORE, the parties agree as follows:

1.    BUSINESS CONSULTING AND SERVICES; EXCLUSIVITY

1.1   During the term of this Agreement, ARMCO agrees to, as the exclusive business consulting services provider of HENAN and provide the business consulting services to HENAN set forth on Schedule A (the “Services”).

1.2   HENAN hereby agrees to accept the Services and ARMCO’s appointment as the exclusive business consulting services provider of HENAN. HENAN further agrees that, during the term of this Agreement, it shall not utilize any third party to provide such business consulting services without the prior written consent of ARMCO.

2.    CONSULTING FEES

2.1  During the term of this Agreement, HENAN shall pay to ARMCO a consulting fee (“Fee”) for the Services in an amount equal to 100% of HENAN’s cash flows from operating activities (“Operating Cash Flow”). The Fee shall be paid quarterly by HENAN to ARMCO within 10 days following the end of each fiscal quarter based on the Operating Cash Flow for such quarter as estimated by ARMCO and HENAN in good faith (“Estimated Quarterly Amount”).

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2.2  Notwithstanding anything to the contrary contained in this Agreement, for each fiscal year of HENAN, (i) in the event that 100% of HENAN’s Net Income (as defined below) for the fiscal year is less than the Fee for such fiscal year, the Fee shall be adjusted such that it shall be equal to 100% of HENAN’s Net Income for such fiscal year, and (ii) in the event that 100% of HENAN’s Net Income is greater than the Fee for such fiscal year, the Fee shall be increased such that it shall be equal to 100% of HENAN’s Net Income for such fiscal year.

2.3  For the purposes of this Agreement, the determination and calculation of Operating Cash Flow and Net Income shall be made in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) as reflected on HENAN’s U.S. GAAP financial statements, which have been reviewed or audited by ARMCO’s independent accountant, before giving effect to the Fee paid or payable under this Agreement.  Any disputes with respect to the determination or calculation of the Fee, Net Income or Operating Cash Flow shall be resolved by ARMCO’s independent accountant, and such determination shall be final.

3.     REPRESENTATIONS, WARRANTIES AND COVENANTS

3.1    ARMCO HEREBY REPRESENTS AND WARRANTS AS FOLLOWS:

3.1.1  ARMCO is a limited liability company duly registered and validly existing under the laws of Honk Kong and is authorized to engage in the business of consulting services.

3.1.2 ARMCO has full right, power, authority and capacity and all consents and approvals of any other third party and government necessary to execute and perform this Agreement, which shall not be against any enforceable and effective laws or contracts.

3.1.3  Once this Agreement has been duly executed by both parties, it will constitute a legal, valid and binding agreement of ARMCO and is enforceable against it in accordance with its terms upon its execution.

3.2    HENAN HEREBY REPRESENTS AND WARRANTS AS FOLLOWS:

3.2.1 HENAN is a limited liability company duly registered and validly existing under the laws of the PRC and is authorized to engage in the Business.

3.2.2 HENAN has full right, power, authority and capacity and all consents and approvals of any other third party and government necessary to execute and perform this Agreement, which shall not be against any enforceable and effective laws or contracts.

3.2.3 Once this Agreement has been duly executed by both parties, it will constitute a legal, valid and binding agreement of HENAN and is enforceable against it in accordance with its terms upon its execution.

3.3 HENAN COVENANTS

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3.3.1  HENAN hereby pledges all of its accounts receivable and assets to ARMCO as security for the payment of  HENAN’s obligations under this Agreement and payment for the Services. Upon the request of ARMCO at any time and from time to time, HENAN will execute such further pledge and/or guarantee contracts in favor of ARMCO and will take any and all actions necessary to register such pledge and/or guarantee  contracts with the appropriate PRC government authorities as may be required.

3.3.2  HENAN hereby agrees that HENAN shall not conduct any transaction which may materially affect its assets, obligations, rights or the Business unless it obtains a prior written consent from ARMCO, including without limitation the following actions:

(a)  To borrow money from any third party or assume any debt;

(b)  To sell to any third party or acquire from any third party any assets or rights, including without limitations, any plant, equipment, real property or personal property, or any intellectual property rights;

(c)  To provide any guaranty for any third party obligations;

(d)  To assign to any third party any agreements related to the Business;

(e)  To engage in any other business consulting agreements with any third party or to engage in any other business activities other than the Business; and

(f)  To pledge any of its assets or intellectual property rights to any third party as a security interest.

3.3.3   HENAN hereby agrees to accept the operational guidance set by ARMCO on, including but not limited to, business and marketing strategies, business planning, business operational guidance, the appointment and dismissal of HENAN’s directors and officers (as provided for herein), the hiring and firing of HENAN’s employees, HENAN’s daily operation of the Business, and its financial and budgeting system.

3.3.4   HENAN shall appoint personnel recommended by ARMCO as the directors of HENAN, and HENAN shall appoint those candidates recommended by ARMCO as HENAN's General Manager, Chief Financial Officer, and other high level managerial positions.

4.    CONFIDENTIALITY

4.1 HENAN agrees to use all reasonable means to protect and maintain the confidentiality of ARMCO's confidential data and information acknowledged or received by HENAN by accepting the exclusive consulting and services from ARMCO (collectively the “Confidential Information"). HENAN shall not disclose or transfer any Confidential Information to any third party without ARMCO's prior written consent. Upon termination or expiration of this Agreement, HENAN shall, at ARMCO's option, deliver any and all documents, information or software containing any of such Confidential Information to ARMCO or destroy it or delete all of such Confidential Information from any memory devices, and cease to use them.

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           4.2 Section 4.1 shall survive after any amendment, expiration or termination of this Agreement.

5.    INDEMNITY

HENAN shall indemnify and hold harmless ARMCO from and against any loss, damage, obligation and cost arising out of any litigation, claim or other legal procedure against ARMCO resulting from the operation of the Business and the consulting and services provided by HENAN under this Agreement.

6.    EFFECTIVE DATE AND TERM

6.1 This Agreement shall be executed and come into effect as of the date first set forth above. The term of this Agreement is ten (10) years, unless earlier terminated as set forth in this Agreement.

6.2 This Agreement shall be automatically renewed for additional ten (10) year periods upon the expiration of the initial term hereof or any renewal term, unless this Agreement has been previously terminated as provided herein.

7.    TERMINATION

7.1 Early Termination.  During the initial term of this Agreement or any renewal term, HENAN shall not have the right to terminate this Agreement. Notwithstanding the above stipulation, ARMCO shall have the right to terminate this Agreement at any time upon thirty days’ prior written notice to HENAN.

7.2 Survival. Sections 4 and 5 shall survive after the termination or expiration of this Agreement.

8.    SETTLEMENT OF DISPUTES

The parties shall strive to settle any dispute arising from the interpretation or performance in connection with this Agreement through friendly negotiation. In case no settlement can be reached through negotiation, except as provided in Section 2.3, each party can submit such matter to China International Economic and Trade Arbitration Commission (the "CIETAC"). The arbitration shall follow the current rules of CIETAC, and the arbitration proceedings shall be conducted in English and shall take place in Hong Kong. The arbitration award shall be final and binding upon the parties and shall be enforceable in accordance with its terms.

9.    FORCE MAJEURE

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9.1 Force Majeure, which includes acts of governments, acts of nature, fire, explosion, typhoon, flood, earthquake, tide, lightning, war, means any event that is beyond the party's reasonable control and cannot be prevented with reasonable care. However, any shortage of credit, capital or finance shall not be regarded as an event of Force Majeure. The affected party who is claiming to be not liable to its failure of fulfilling this Agreement by Force Majeure shall inform the other party, without delay, of the approaches of the performance of this Agreement by the affected party.

9.2 In the event that the affected party is delayed in or prevented from performing its obligations under this Agreement by Force Majeure, only within the scope of such delay or prevention, the affected party will not be responsible for any damage by reason of such a failure or delay of performance. The affected party shall take appropriate means to minimize or remove the effects of Force Majeure and attempt to resume performance of the obligations delayed or prevented by the event of Force Majeure. After the event of Force Majeure is removed, both parties agree to resume performance of this Agreement with their best efforts.

10.    NOTICES

Notices or other communications required to be given by any party pursuant to this Agreement shall be written in English and shall be deemed to be duly given when it is delivered personally or sent by registered mail or postage prepaid mail or by a recognized courier service or by facsimile transmission to the address of the relevant party or parties set forth below:

ARMCO & METAWISE (H.K.) LIMITED Room 1407, China Resources Building 26 Harbour Road Wanchai, Hong Kong Fax: ____________________________ HENAN ARMCO & METAWISE TRADING CO., LTD. No. 1706, 17 Floor, No.1 Building No.66 Jing San Road Jin Shui District, Zheng Zhou City, China Fax: _______________________________

11.    NO ASSIGNMENT OR SUBLICENSE BY THE LICENSEE

HENAN may not assign their rights or obligations under this Agreement to any third party without the prior written consent of the other party.  ARMCO and may assign its rights to this Agreement without the prior written consent of HENAN.

12.    SEVERABILITY

Any provision of this Agreement that is invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability, without affecting in any way the remaining provisions hereof in such jurisdiction or rendering that any other provision of this Agreement invalid or unenforceable in any other jurisdiction.

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13.    AMENDMENT AND SUPPLEMENT

Any amendment and supplement of this Agreement shall come into force only after a written agreement in the English language is signed by both parties. The amendment and supplement duly executed by both parties shall be part of this Agreement and shall have the same legal effect as this Agreement.

14.    GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the PRC laws.

15.    LANGUAGE

This Agreement is executed in English only, and the executed English language Agreement shall prevail in all cases. This Agreement may be executed in counterparts, each of which shall constitute one and the same agreement, and by facsimile or electronic signature.

IN WITNESS THEREOF, the parties hereto have caused this Agreement to be duly executed on their behalf by a duly authorized representative as of the date first set forth above.

ARMCO & METAWISE (H.K.) LIMITED   By: /s/ Kexuan Yao Name: Kexuan Yao Title: Chairman of the Board and General Manager HENAN (LIANYUANGANG) SCRAPS CO., LTD.   By: /s/ Kexuan Yao Name: Kexuan Yao Title: Chairman of the Board and General Manager

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SCHEDULE A

DESCRIPTION OF BUSINESS CONSULTING AND SERVICES

1.   Providing business consulting on the Business of HENAN;

 2.   Providing business consulting on management, marketing, and business planning aspects of HENAN’s Business;

3.   Training of managerial personnel;

4.   Providing performance guarantees of contracts, agreements and transactions executed by HENAN related to its Business pursuant to written guarantee contracts separately entered into between ARMCO with the other parties to HENAN’s contracts, agreements and transactions as may be required from time to time by such parties (“HENAN’s Obligations”); and

5.   Providing other business consultation and services that HENAN may reasonably request.

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EX-10.8

Exhibit 10.8

EXCLUSIVE CONSULTING AGREEMENT

This Exclusive Consulting Agreement (the "Agreement") is entered into as of June 27, 2008, between ARMCO & METAWISE (H.K.) LIMITED, a Hong Kong limited liability company with its principal office located at Room 1407, China Resources Building, 26 Harbour Road, Wanchai, Hong Kong  (hereinafter referred to as “ARMCO”) and ARMET (LIANYUANGANG) SCRAPS CO., LTD., a limited liability company organized under the laws of the Peoples Republic of China  with its principal office located at Room 605, No. 213 Chaoyang Xiangyang Road, Development Zone, Lianyungang (“ARMET”):

WHEREAS, ARMCO is engaged in the sale and distribution of metal ores and non-ferrous metals and provides business consulting services;

WHEREAS, ARMET is developing and constructing a steel recycling facility in the Banqiao Industrial Zone of Lianyungang Economic Development Zone in the Jiangsu Province of China (the “Business”);

WHEREAS, ARMET is a wholly owned subsidiary of HENAN ARMCO & METAWISE TRADING CO., LTD., a company organized under the laws of the Peoples Republic of China (“Henan Armco”), which is a wholly owned subsidiary of ARMCO; and

WHEREAS, ARMCO desires to be the provider of business consulting and related services to ARMET, and ARMET hereby agrees to accept such business consulting and services;

NOW THEREFORE, the parties agree as follows:

1.    BUSINESS CONSULTING AND SERVICES; EXCLUSIVITY

1.1   During the term of this Agreement, ARMCO agrees to, as the exclusive business consulting services provider of ARMET and provide the business consulting services to ARMET set forth on Schedule A (the “Services”).

1.2   ARMET hereby agrees to accept the Services and ARMCO’s appointment as the exclusive business consulting services provider of ARMET. ARMET further agrees that, during the term of this Agreement, it shall not utilize any third party to provide such business consulting services without the prior written consent of ARMCO.

2.    CONSULTING FEES

2.1  During the term of this Agreement, ARMET shall pay to ARMCO a consulting fee (“Fee”) for the Services in an amount equal to 100% of ARMET’s cash flows from operating activities (“Operating Cash Flow”). The Fee shall be paid quarterly by ARMET to ARMCO within 10 days following the end of each fiscal quarter based on the Operating Cash Flow for such quarter as estimated by ARMCO and ARMET in good faith (“Estimated Quarterly Amount”).

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2.2  Notwithstanding anything to the contrary contained in this Agreement, for each fiscal year of ARMET, (i) in the event that 100% of ARMENT’s Net Income (as defined below) for the fiscal year is less than the Fee for such fiscal year, the Fee shall be adjusted such that it shall be equal to 100% of ARMET’s Net Income for such fiscal year, and (ii) in the event that 100% of ARMET’s Net Income is greater than the Fee for such fiscal year, the Fee shall be increased such that it shall be equal to 100% of ARMET’s Net Income for such fiscal year.

2.3  For the purposes of this Agreement, the determination and calculation of Operating Cash Flow and Net Income shall be made in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) as reflected on ARMET’s U.S. GAAP financial statements, which have been reviewed or audited by ARMCO’s independent accountant, before giving effect to the Fee paid or payable under this Agreement.  Any disputes with respect to the determination or calculation of the Fee, Net Income or Operating Cash Flow shall be resolved by ARMCO’s independent accountant, and such determination shall be final.

3.     REPRESENTATIONS, WARRANTIES AND COVENANTS

3.1    ARMCO HEREBY REPRESENTS AND WARRANTS AS FOLLOWS:

3.1.1  ARMCO is a limited liability company duly registered and validly existing under the laws of Honk Kong and is authorized to engage in the business of consulting services.

3.1.2 ARMCO has full right, power, authority and capacity and all consents and approvals of any other third party and government necessary to execute and perform this Agreement, which shall not be against any enforceable and effective laws or contracts.

3.1.3  Once this Agreement has been duly executed by both parties, it will constitute a legal, valid and binding agreement of ARMCO and is enforceable against it in accordance with its terms upon its execution.

3.2    ARMET HEREBY REPRESENTS AND WARRANTS AS FOLLOWS:

3.2.1 ARMET is a limited liability company duly registered and validly existing under the laws of the PRC and is authorized to engage in the Business.

3.2.2 ARMET has full right, power, authority and capacity and all consents and approvals of any other third party and government necessary to execute and perform this Agreement, which shall not be against any enforceable and effective laws or contracts.

3.2.3 Once this Agreement has been duly executed by both parties, it will constitute a legal, valid and binding agreement of ARMET and is enforceable against it in accordance with its terms upon its execution.

3.3 ARMET COVENANTS

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3.3.1  ARMET hereby pledges all of its accounts receivable and assets to ARMCO as security for the payment of  ARMET’s obligations under this Agreement and payment for the Services. Upon the request of ARMCO at any time and from time to time, ARMET will execute such further pledge and/or guarantee contracts in favor of ARMCO and will take any and all actions necessary to register such pledge and/or guarantee  contracts with the appropriate PRC government authorities as may be required.

3.3.2  ARMET hereby agrees that ARMET shall not conduct any transaction which may materially affect its assets, obligations, rights or the Business unless it obtains a prior written consent from ARMCO, including without limitation the following actions:

(a)  To borrow money from any third party or assume any debt;

(b)  To sell to any third party or acquire from any third party any assets or rights, including without limitations, any plant, equipment, real property or personal property, or any intellectual property rights;

(c)  To provide any guaranty for any third party obligations;

(d)  To assign to any third party any agreements related to the Business;

(e)  To engage in any other business consulting agreements with any third party or to engage in any other business activities other than the Business; and

(f)  To pledge any of its assets or intellectual property rights to any third party as a security interest.

3.3.3   ARMET hereby agrees to accept the operational guidance set by ARMCO on, including but not limited to, business and marketing strategies, business planning, business operational guidance, the appointment and dismissal of ARMET’s directors and officers (as provided for herein), the hiring and firing of ARMET’s employees, ARMET’s daily operation of the Business, and its financial and budgeting system.

3.3.4   ARMET shall appoint personnel recommended by ARMCO as the directors of ARMET, and ARMET shall appoint those candidates recommended by ARMCO as ARMET's General Manager, Chief Financial Officer, and other high level managerial positions.

4.    CONFIDENTIALITY

4.1 ARMET agrees to use all reasonable means to protect and maintain the confidentiality of ARMCO's confidential data and information acknowledged or received by ARMET by accepting the exclusive consulting and services from ARMCO (collectively the “Confidential Information"). ARMET shall not disclose or transfer any Confidential Information to any third party without ARMCO's prior written consent. Upon termination or expiration of this Agreement, ARMET shall, at ARMCO's option, deliver any and all documents, information or software containing any of such Confidential Information to ARMCO or destroy it or delete all of such Confidential Information from any memory devices, and cease to use them.

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           4.2 Section 4.1 shall survive after any amendment, expiration or termination of this Agreement.

5.    INDEMNITY

ARMET shall indemnify and hold harmless ARMCO from and against any loss, damage, obligation and cost arising out of any litigation, claim or other legal procedure against ARMCO resulting from the operation of the Business and the consulting and services provided by ARMET under this Agreement.

6.    EFFECTIVE DATE AND TERM

6.1 This Agreement shall be executed and come into effect as of the date first set forth above. The term of this Agreement is ten (10) years, unless earlier terminated as set forth in this Agreement.

6.2 This Agreement shall be automatically renewed for additional ten (10) year periods upon the expiration of the initial term hereof or any renewal term, unless this Agreement has been previously terminated as provided herein.

7.    TERMINATION

7.1 Early Termination.  During the initial term of this Agreement or any renewal term, ARMET shall not have the right to terminate this Agreement. Notwithstanding the above stipulation, ARMCO shall have the right to terminate this Agreement at any time upon thirty days’ prior written notice to ARMET.

7.2 Survival. Sections 4 and 5 shall survive after the termination or expiration of this Agreement.

8.    SETTLEMENT OF DISPUTES

The parties shall strive to settle any dispute arising from the interpretation or performance in connection with this Agreement through friendly negotiation. In case no settlement can be reached through negotiation, except as provided in Section 2.3, each party can submit such matter to China International Economic and Trade Arbitration Commission (the "CIETAC"). The arbitration shall follow the current rules of CIETAC, and the arbitration proceedings shall be conducted in English and shall take place in Hong Kong. The arbitration award shall be final and binding upon the parties and shall be enforceable in accordance with its terms.

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9.    FORCE MAJEURE

9.1 Force Majeure, which includes acts of governments, acts of nature, fire, explosion, typhoon, flood, earthquake, tide, lightning, war, means any event that is beyond the party's reasonable control and cannot be prevented with reasonable care. However, any shortage of credit, capital or finance shall not be regarded as an event of Force Majeure. The affected party who is claiming to be not liable to its failure of fulfilling this Agreement by Force Majeure shall inform the other party, without delay, of the approaches of the performance of this Agreement by the affected party.

9.2 In the event that the affected party is delayed in or prevented from performing its obligations under this Agreement by Force Majeure, only within the scope of such delay or prevention, the affected party will not be responsible for any damage by reason of such a failure or delay of performance. The affected party shall take appropriate means to minimize or remove the effects of Force Majeure and attempt to resume performance of the obligations delayed or prevented by the event of Force Majeure. After the event of Force Majeure is removed, both parties agree to resume performance of this Agreement with their best efforts.

10.    NOTICES

Notices or other communications required to be given by any party pursuant to this Agreement shall be written in English and shall be deemed to be duly given when it is delivered personally or sent by registered mail or postage prepaid mail or by a recognized courier service or by facsimile transmission to the address of the relevant party or parties set forth below:

ARMCO & METAWISE (H.K.) LIMITED Room 1407, China Resources Building 26 Harbour Road Wanchai, Hong Kong Fax: ____________________________ ARMET (LIANYUANGANG) SCRAPS CO., LTD. Room 605, No. 213 Chaoyang Xiangyang Road Development Zone, Lianyungang Fax: _______________________________

11.    NO ASSIGNMENT OR SUBLICENSE BY THE LICENSEE

ARMET may not assign their rights or obligations under this Agreement to any third party without the prior written consent of the other party.  ARMCO and may assign its rights to this Agreement without the prior written consent of ARMET.

12.    SEVERABILITY

Any provision of this Agreement that is invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability, without affecting in any way the remaining provisions hereof in such jurisdiction or rendering that any other provision of this Agreement invalid or unenforceable in any other jurisdiction.

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13.    AMENDMENT AND SUPPLEMENT

Any amendment and supplement of this Agreement shall come into force only after a written agreement in the English language is signed by both parties. The amendment and supplement duly executed by both parties shall be part of this Agreement and shall have the same legal effect as this Agreement.

14.    GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the PRC laws.

15.    LANGUAGE

This Agreement is executed in English only, and the executed English language Agreement shall prevail in all cases. This Agreement may be executed in counterparts, each of which shall constitute one and the same agreement, and by facsimile or electronic signature.

IN WITNESS THEREOF, the parties hereto have caused this Agreement to be duly executed on their behalf by a duly authorized representative as of the date first set forth above.

ARMCO & METAWISE (H.K.) LIMITED   By: /s/ Kexuan Yao Name: Kexuan Yao Title: Chairman of the Board and General Manager ARMET (LIANYUANGANG) SCRAPS CO., LTD.   By: /s/ Kexuan Yao Name: Kexuan Yao Title: Chairman of the Board and General Manager

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SCHEDULE A

DESCRIPTION OF BUSINESS CONSULTING AND SERVICES

1.   Providing business consulting on the Business of ARMET;

 2.   Providing business consulting on management, marketing, and business planning aspects of ARMET’s Business;

3.   Training of managerial personnel;

4.   Providing performance guarantees of contracts, agreements and transactions executed by ARMET related to its Business pursuant to written guarantee contracts separately entered into between ARMCO with the other parties to ARMET’s contracts, agreements and transactions as may be required from time to time by such parties (“ARMET’s Obligations”); and

5.   Providing other business consultation and services that ARMET may reasonably request.

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EX-10.9

Exhibit 10.9

CONSULTING AGREEMENT

This Consulting Agreement (“Agreement”) is made as of this 27th day of June, 2008 by and between Stephen E. Cox (“Client”), and Capital Once Resource Co., Ltd., a Brunei company (“Consultant”).  Client and Consultant may collectively be referred to as the “Parties”.

W I T N E S S E T H:

WHEREAS, Client desires to engage the services of Consultant to provide Client with the services as more fully set forth in this Agreement; and

WHEREAS, Consultant is desirous of performing such services on behalf of Client.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this Agreement, the parties hereto agree as follows:

1.  Consulting Services.  Upon the terms and subject to the conditions contained in this Agreement, Consultant hereby agrees that it shall, during the term of this Agreement, undertake the performance of the following services (the “Services”):

a. Familiarize itself, to the extent appropriate and feasible, with the business, operations, properties, financial condition, management and prospects of Cox Distributing, Inc. (“Cox Distributing”);

b. Identify, evaluate, structure and provide advice in connection with potential mergers and acquisitions, divestitures, spin-offs, joint ventures and other corporate transactions and in particular the possible acquisition of Armco & Metawise (H.K.) Limited, a Hong Kong company (“Armco”) by Cox Distributing (the “Armco Acquisition”); and

c. Provide such other services upon which the Parties may mutually agree.

2. Term. This Agreement shall terminate upon the earlier of the closing of the Armco Acquisition or 60 days after the date hereof.

3. Consulting Fees. Client shall pay Consultant for providing the Services by transferring to Consultant 496,000 shares of Cox Distributing’s Common Stock, $0.001 par value (the “Shares”) upon the signing of this Agreement by the Parties (the “Consulting Fees”).  The Consulting Fees shall be deemed fully earned by Consultant upon the closing of the Armco Acquisition.

4.  Warranties.  Consultant warrants that the Services to be provided under this Agreement shall be performed by qualified personnel in a professional manner employing reasonable commercial efforts.  This warranty shall be valid for a period of thirty (30) days from the performance of the Services.  Except as specifically provided in this Section 4, Consultant disclaims any and all other warranties with respect to the services provided hereunder, including without limitation any implied warranty of merchantability or fitness for a particular purpose. Consultant does not warrant the results of any services. In addition, Client acknowledges and agrees that Consultant is not engaged in the practice of law or the provision of legal services, and that Client alone is completely and independently responsible for compliance with all state, federal and international laws applicable to Client and the operation of its business.  Consultant’s entire liability to Client (or any other person or entity) for any loss or damages resulting from any breach of this Agreement, claims, demands or actions arising out of or relating to the Services, whether in contract, tort (including negligence) or otherwise, shall not exceed the sum of $5,000.  In no event will Consultant or its affiliates be liable for any damages caused by the Client's action or inaction, or for any indirect, incidental, consequential, special, punitive or exemplary damages or lost profits, including, but not limited to, damages for loss of business profits, business interruption, loss of business information, data, goodwill or other pecuniary loss arising from Consultant’s failure to provide the Services even if Consultant has been advised of the possibility of such damages.

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5. Indemnification.  Client agrees to indemnify and hold the Consultant and its subsidiaries and their respective officers, directors, employees and agents and (collectively, the “Consultant Indemnitees”) harmless from all Consultant Indemnified Liabilities.  For this purpose, “Consultant Indemnified Liabilities” shall mean all suits, proceedings, claims, expenses, losses, costs, liabilities, judgments, deficiencies, assessments, actions, investigations, penalties, fines, settlements, interest and damages (including reasonable attorneys’ fees and expenses), whether suit is instituted or not and, if instituted, whether at any trial or appellate level, and whether raised by the parties hereto or a third party, incurred or suffered by the Consultant Indemnitees or any of them arising from, in connection with or as a result of Consultant’s performance of the Services set forth in this Agreement.

6. Termination. Either Party may terminate this Agreement upon thirty (30) days prior written notice to the other Party, but such termination shall not affect the Consulting Fees paid by Client to Consultant pursuant to Section 3 of this Agreement.  All Consulting Fees provided under this Agreement are deemed fully earned by Consultant upon the earlier of: (a) the date provided for elsewhere in this Agreement; or (b) the date of termination.  In the event of a termination of this Agreement, Client shall not be entitled to any refund of any Consulting Fees paid to Consultant under this Agreement. From and after termination of this Agreement, the Parties shall continue to be bound by such provisions of this Agreement as by their nature survive such events, including, without limitation, Sections 5 and 11.

7.  Assignment and Subcontractors. This Agreement shall be assignable by Consultant. Client acknowledges that from time to time, Consultant may enlist a subcontractor to perform some of the Services provided to Customer. In the event services to be performed as outlined in this Agreement are subcontracted to a third party, the third party shall accept responsibility for the performance of such activities. Consultant will cease to bear any responsibility related to the performance of subcontracted services; however the Consultant will act as liaison between the subcontractor and Client, to monitor the performance of services to be provided by any third party.

8.  Modifications.  This Agreement can only be modified by a written agreement duly signed by persons authorized to sign agreements on behalf of Client and Consultant, and variance from or addition to the terms and conditions of this Agreement or other written notification will be of no effect.  The failure of any Party to enforce any right it is granted herein, or to require the performance by the other Party hereto of any provision of this Agreement, or the waiver by any Party of any breach of this Agreement, shall not prevent a subsequent exercise or enforcement of such provisions or be deemed a waiver of any subsequent breach of this Agreement.

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9.  Entire Understanding.  This Agreement represents the entire understanding and agreement between the Parties with respect to the subject matter hereof, and merges all prior discussions between them and supersedes and replaces any and every other agreement or understanding which may have existed between the Parties to the extent that any such agreement or understanding relates to providing services to Client. To the extent, if any, that the terms and conditions of Client’s orders or other correspondence are inconsistent with this Agreement, this Agreement shall control.

10.  Force Majeure.  No delay, failure or default in performance of any obligation by either Party, excepting all obligations to make payments hereunder, shall constitute a breach of this Agreement to the extent caused by, in whole or in part, the other Party (and within the other party’s reasonable control) or an act of God, war, civil disturbance, terrorist act, court order, labor dispute, or other cause beyond its reasonable control, and such nonperformance will not be a default under this Agreement.

11.  Laws, Severability, Venue, Waivers.  The validity of this Agreement and the rights, obligations and relations of the Parties hereunder shall be construed and determined under and in accordance with the laws of the State of Florida, without regard to conflicts of law principles thereunder provided, however, that if any provision of this Agreement is determined by a court of competent jurisdiction to be in violation of any applicable law or otherwise invalid or unenforceable, such provision shall to such extent as it shall be determined to be illegal, invalid or unenforceable under such law be deemed null and void, but this Agreement shall otherwise remain in full force.  Suit to enforce any provision of this Agreement, or any right, remedy or other matter arising therefrom, will be brought exclusively in the state or federal courts located in Broward County, Florida.  Client agrees and consents to venue in Broward County, Florida and to the in personam jurisdiction of these courts and hereby irrevocably waives any right to a trial by jury.

12.  Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed, shall constitute an original copy hereof, but all of which together shall consider but one and the same document.

13.  Other Activities. Nothing contained herein shall prevent Consultant from acquiring or participating in a transaction of any kind with any other entity proposed by Consultant to be acquired by Client. Such transaction may be acquired at a price and upon terms and conditions more or less favorable than those offered to Client.

14.  Disclaimer. Consultant acknowledges that it has and will during the term of this Agreement, rely upon information provided by Client in connection with the performance of the Services and in accepting the Client’s securities as full or partial payment of the Consulting Fees under this Agreement.

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15.  Notices. All notices to be given hereunder shall be in writing, with fax notices being an acceptable substitute for mail and/or and delivery to:

Consultant:	Client:
Capital Once Resource Co., Ltd. 431 Fairway Drive Deerfield Beach, Florida 33441 Fax: (954) 363-7320 Attn. General Counsel	Stephen E. Cox 105 Pearl Cokeville, Wyoming 83114 Fax: _______________________

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

Client:       /s/ Stephen E. Cox Stephen E. Cox Consultant:   Capital Onc Resource Co., Ltd.   By: /s/ Xiaowen Zhuang Name: Xiaowen Zhuang Title: General Manager

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EX-10.10

Exhibit 10.10

SERVICES AGREEMENT

THIS SERVICES AGREEMENT (the "Agreement") is made and entered into as of June 27, 2008 (the "Effective Date") by and between Stephen D. Cox Supply ("Mr. Cox") and Cox Distributing, Inc., a Nevada corporation ("Cox Distributing").

BACKGROUND

Mr. Cox and Cox Distributing wish to establish an "arms length" agreement for the provision of services to be provided to Cox Distributing by Mr. Cox.

Cox Distributing is in the business of distributing organic fertilizer products in eastern Idaho (the “Fertilizer Distribution Business”).

Cox Distributing has requested Mr. Cox to provide certain services related to the operation of the Fertilizer Distribution Business and Mr. Cox desires to provide such services to Cox Distributing during the Term (as defined hereinafter).

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants contained in this Agreement and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows:

1.    Services.   During the term of this Agreement, Mr. Cox shall be entitled to the use of Cox Distributing's present facilities, equipment, information systems and files in order for Mr. Cox to provide the following services as it relates to the Fertilizer Distribution Business (the “Services”):

a.    Payroll.   All necessary payroll services, including the preparation and filing of Form W-2 for each employee of the Fertilizer Distribution Business.  Cox Distributing shall establish a bank account with funds sufficient to make payments for all amounts paid out to the employees of the Fertilizer Distribution Business pursuant to this Section 1(a) and such account shall be funded by Cox Distributing from the revenues generated by the Fertilizer Distribution Business.   Mr. Cox shall make all information relating to the payment of such employee payroll available to Cox Distributing upon reasonable request therefore.

b.  Accounting Services.   Mr. Cox agrees to provide Cox Distributing with accounting and financial assistance in closing the Fertilizer Distribution Business's books consistent with the fiscal close periods and procedures established by Cox Distributing.   Mr. Cox shall also assist Cox Distributing in maintaining financial statements for the Fertilizer Distribution Business, including preparation by Mr. Cox of balance sheets, profit and loss statements and a general ledger, preparing tax returns and whatever additional accounting and financial services as may reasonably be requested by Cox Distributing relating to the Fertilizer Distribution Business.

c.  Sales and Customer Service.  Mr. Cox shall provide all sales and customer service support for the Fertilizer Distribution Business including, without limitation, obtaining orders for sales and marketing of products offered by Cox Distributing and the supply of such products in connection with the operation of the Fertilizer Distribution Business answering customer inquiries, referring return information and requests to the appropriate personnel and such other functions as may be reasonably requested by Cox Distributing.

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d.  Collection of Accounts Receivable.  Mr. Cox shall collect accounts receivable of Cox Distributing in a commercially reasonable manner.  Mr. Cox shall pay over to Cox Distributing all such Accounts Receivable as specified in Section 1 (e) hereof.  Mr. Cox will make available to Cox Distributing reports setting forth the amount of Accounts Receivable collected, the persons from whom such Accounts Receivable have been collected and, if specified by the payor, the invoice number and date to which such Accounts Receivable are to be applied.  Mr. Cox further agrees to make all information relating to the collection of the Accounts Receivable available to Cox Distributing upon reasonable request therefore.

e.  Collection Procedures.  Mr. Cox will collect all payments on invoices rendered by Cox Distributing.  Mr. Cox shall post all funds received to the corresponding invoice and make any appropriate deduction or adjustment in accordance with the procedures set forth by Cox Distributing.  Mr. Cox shall remit to Cox Distributing all cash collected on invoices, to the extent they are Accounts Receivable of the Fertilizer Distribution Business.

f.  Payment of Trade Payables.  Mr. Cox shall fund bank accounts from the revenues of the Fertilizer Distribution Business the proceeds of which shall be used for the payment of Cox Distributing's obligations relative to the Fertilizer Distribution Business such as payroll checks and checks for payment of accounts payable.

g.  Email.  Mr. Cox acknowledges and agrees that he shall be obligated to maintain at his own cost and expense, an email system relative to the operation of the Fertilizer Distribution Business.

h.  Computer Systems.  Mr. Cox acknowledges and agrees that he will maintain and operate the computer and information systems currently being utilized by Cox Distributing for sales and inventory reporting and tracking, accounts receivable and general ledger accounting (the “Computer Systems”).  Cox Distributing shall be permitted access to and use of the Computer Systems in order to permit Cox Distributing and/or Mr. Cox on behalf of Cox Distributing to close Cox Distributing's books, to record sales transactions, collect accounts receivables, process customer orders, process purchase orders, maintain inventory and to maintain Cox Distributing's general ledger.

i.  Data and Communication Services.  Mr. Cox shall provide all communication services, including, but not limited to, maintenance of the data communication lines and system, telephone system and other like services required for the Fertilizer Distribution Business.

j.  Employee Benefits.  Mr. Cox will be responsible for the administration of all existing health and welfare benefit plans offered to Cox Distributing employees, if any.

2.  Payments.  In addition to any specific reimbursement or other obligation of Cox Distributing set forth herein, during the term hereof, Cox Distributing shall pay to Mr. Cox an amount equal to all net revenues of the Fertilizer Distribution Business after payment of all expenses associated with the operation of such business including a reserve for payment of future expenses related to the operation of the business.

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3.  Term.  Mr. Cox understands and acknowledges that the term of this Agreement is (i) on an “at-will” basis, (ii) is for an unspecified duration, and (iii) may be terminated at any time, with or without cause, and with or without notice, at Cox Distributing’s option.  In the event of the termination or expiration of this Agreement, the following provisions shall apply:

a.   Mr. Cox shall cease performing Services and shall submit an invoice for any amounts which may be due Mr. Cox under this Agreement as of the date of termination if there are any funds available from Fertilizer Distribution Business’ operations; and

b.   Mr. Cox shall deliver to Cox Distributing all information related to the operation of Fertilizer Distribution Business in Mr. Cox’s possession or under Mr. Cox’s control.

4.  Miscellaneous.

a.  Assignment.  Neither party shall assign any of its rights or delegate any of its obligations under this Agreement, without the express prior written consent of the other party.

b.  Amendments.  This Agreement may be amended, modified, or superseded, and any of the terms hereof may be waived, only by written instrument executed by the parties hereto or in the case of a waiver, by the party waiving compliance.  The failure of any party at any time to require performance of any provision hereof shall in no manner affect the right at a later time to enforce the same.  No waiver by any party of any term continued in this Agreement shall be deemed or construed as a further or continuing waiver of any such breach in any subsequent instance or a waiver of any such breach in any subsequent instance or a waiver of any breach of any other terms contained in this Agreement.

c.  Independent Contractors.   In performing the Services, nothing in this Agreement shall be construed to create the relationship of employer-employee, principal-agent or master-servant, either expressed or implied. Further, the relationship between the Parties is that of contract, Mr. Cox being an independent contractor, free from interference or control by Cox Distributing in the performance of the services set forth herein, subject only to the terms of this Agreement. Neither Cox Distributing nor Mr. Cox has the authority to bind or incur any obligation for the other, and each agrees that Mr. Cox will not hold itself out to any third party as having, or act toward any third party in any manner which would suggest that they have, any such authority.

d.  Ownership of Information.  Mr. Cox and Cox Distributing agree that all files, computer programs, tapes, records, materials, data, papers, reports, and other information relating to the services which were obtained as a result of its performance of its obligations under this Agreement are vested in and owned by Cox Distributing.  Mr. Cox agrees to return to Cox Distributing all such property owned by Cox Distributing and which is in Mr. Cox’s possession upon termination of this Agreement or at any earlier time immediately upon the request of Cox Distributing.  This clause will survive the termination of this Agreement.

e.  Headings.  Headings in this Agreement are for convenience only and shall not be deemed to have any substantive effect.

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f.  Counterparts.  This Agreement may be executed on separate counterparts, each of which will be deemed an original, which counterparts may be delivered to the other party hereto by facsimile transmission, and all of which taken together will constitute one and the same instrument.

f.  Severability.  If any term, covenant, condition or provision of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions hereof shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby.

g.  Governing Law.  This Agreement shall be governed by, and construed and interpreted in accordance with the laws of the State of Florida, without regard to choice of law principles thereof.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

Stephen D. Cox

By: ­­­­­­­­­­­­­­­/s/ Stephen D. Cox

Name:  Stephen D. Cox

Cox Distributing, Inc.

By: ­­­­­­­­­­­­­­­/s/ Stephen D. Cox

Name:  Stephen D. Cox

Title: Chief Executive Officer

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EX-21

Exhibit 21

CHINA ARMCO METALS, INC.

Subsidiaries of the Company

	Name	Country of Incorporation	Date Created
1	Armco & Metawise (HK) Limited	Hong Kong	July 13, 2001
2	Armet (Lianyungang) Renewable Resources, Co., Ltd. (a/k/a Armet (Lianyungang) Scraps Co., Ltd.)	China	January 9, 2007
3	Henan Armco & Metawise Trading Co., Ltd.	China	June 6, 2002

EX-99.1

Exhibit 99.1

NEWS RELEASE

For Immediate Release

Cox Distributing Acquires 100% of Armco & Metawise (HK) Ltd., a Hong Kong Based Metals Importer/Distributor and Scrap Metal Recycling Company and Changes Name to China Armco Metals, Inc.

Cokeville, WY, June 30, 2008-- Cox Distributing, Inc. (“Cox Distributing”) (OTC Bulletin Board: COXD), a distributer of organic fertilizer products, announced the company has acquired 100 percent of Armco & Metawise (HK) Ltd (“Armco”), a privately held company based in Hong Kong and  China on June 27, 2008.  Armco imports, sells and distributes metal ores, and non-ferrous metal and is planning to expand its operations into the scrap metal recycling business.  After closing on the acquisition of Armco, Cox Distributing changed its name to China Armco Metals, Inc.

Cox Distributing acquired Armco through a share purchase agreement in which the Company paid Feng Gao, the sole shareholder of Armco $6,890,000 by delivery of a promissory note.  In addition, Cox Distributing issued Ms. Gao stock options to purchase 5,300,000 shares of Cox Distributing common stock at a price of $1.30 per share and 2,000,000 shares at $5.00 per share.

Kexuan Yao, founder and Chief Executive Officer of Armco, was appointed as Chairman of the Board of Directors of Cox Distributing and named its Chief Executive Officer.  Pursuant to an agreement, Mr. Yao will have the ability to acquire from Feng Gao 5,300,000 shares of Cox Distributing in equal quarters upon reaching certain milestones including: entering into an employment agreement with Cox Distributing, effectiveness of a registration statement relating to Cox Distributing’s securities and Armco achieving a minimum of $75 million in revenue and at least $5 million in net income generated from Armco for the year ending December 31, 2008 on a GAAP audited basis.

Additionally, Stephen E. Cox tendered his resignation as Chief Executive Officer, Chief Financial Officer, principal accounting officer and Chairman of the Board of Directors of Cox Distributing and has agreed to have 7,694,000 shares of Common Stock he owns cancelled in the next 30 days.  Mary Ann Cox tendered her resignation as Secretary, Treasurer and Director.  Fengtao Wen was named Chief Financial Officer, Weigang Zhao was named Vice General Manager of Armco’s wholly owned subsidiary, Armet (LianYunGang) Renewable Resources Co., Ltd. and was elected as a Director along with Quan Chen.

Cox Distributing and Armco intend to expand Armco’s import activity worldwide as well as construct a steel recycling facility initially capable of recycling 1 million metric tons of scrap metal annually.

Commenting on the acquisition, Kexuan Yao, CEO of Cox Distributing, Inc. stated “We are excited to enter this new stage in the company’s history.  On behalf of the new team and board at Cox Distributing, I would like to assure our shareholders that we will work diligently to transform our company into a world class organization.  We believe Armco will experience tremendous growth on a number of fronts in its operations and are committed to the scrap metal recycling industry in China which we believe will experience tremendous growth in the coming years.  With this acquisition, the future for China Armco Metals has never looked brighter and we are confident our new team will turn that bright future into a reality.”

About China Armco Metals, Inc.

China Armco Metals, Inc. formerly known as Cox Distributing, Inc. (OTCBB:COXD) is engaged in China in the sale and distribution of metal ores and non-ferrous metals to the metal refinery industry in China.  Armco intends to enter into the steel recycling industry by constructing a steel recycling facility initially capable of recycling 1 million tons of steel scrap annually.  Through its U.S. based operations, the company is a distributor of organic fertilizer products used to improve soil and growing conditions for the potato farmers of eastern Idaho. These products, which are bio-based rather than petroleum-based, add nutrients to the soil and serve as fungicides so as to increase the size and quality of crops.

Safe Harbor Statement

In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, Cox Distributing, Inc., is hereby providing cautionary statements identifying important factors that could cause our actual results to differ materially from those projected in forward-looking statements (as defined in such act). Any statements that are not historical facts and that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, indicated through the use of words or phrases such as "will likely result," "are expected to," "will continue," "is anticipated," "estimated," "intends," "plans," "believes" and "projects") may be forward-looking and may involve estimates and uncertainties which could cause actual results to differ materially from those expressed in the forward-looking statements. These statements include, but are not limited to, our guidance and expectations regarding revenues, net income and earnings.  In addition, any such statements are qualified in their entirety by reference to, and are accompanied by, the following key factors that have a direct bearing on our results of operations:

· our future operating results,

· our business prospects,

· our contractual arrangements and relationships with third parties,

· the dependence of our future success on the general economy,

· the adequacy of our cash resources and working capital,

· our ability to close on the acquisition of Armco in a cost effective manner that enhances our financial condition,

· our need for additional financing to construct the steel recycling facility we intend to build which we may not be able to obtain on acceptable terms, the dilutive effect additional capital raising efforts in future periods may have on our current shareholders and the increased interest expense in future periods related to additional debt financing, and

· our ability to effectively integrate the acquisition of Armco and our inability to fully realize any anticipated benefits of this acquisition.

We caution that the factors described herein could cause actual results to differ materially from those expressed in any forward-looking statements we make and that investors should not place undue reliance on any such forward-looking statements. Further, any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. New factors emerge from time to time, and it is not possible for us to predict all of such factors. Further, we cannot assess the impact of each such factor on our results of operations or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. This press release is qualified in its entirety by the cautionary statements and risk factor disclosure contained in our Securities and Exchange Commission filings, including our Annual Report on Form 10-KSB for the year ended December 31, 2007.

# # #

EX-99.2

Exhibit 99.2

ARMCO & METAWISE (HK) LIMITED AND SUBSIDIARIES

DECEMBER 31, 2007 AND 2006

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Contents	Page(s)
Report of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets	F-3
Consolidated Statements of Operations and Comprehensive Income	F-4
Consolidated Statement of Stockholder’s Equity	F-5
Consolidated Statements of Cash Flows	F-6
Notes to the Consolidated Financial Statements	F-7 to F-21
Schedule:
Schedule II Valuation and Qualifying Accounts for the years ended December 31, 2007 and 2006	F-21

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

Armco & Metawise (HK) Limited

Hong Kong, China

We have audited the accompanying consolidated balance sheets of Armco & Metawise (HK) Limited and Subsidiaries (collectively “Armco” or the “Company”) as of December 31, 2007 and 2006, and the related consolidated statements of operations and comprehensive income, stockholder’s equity and cash flows for the years then ended.  These consolidated 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 audits 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 purposes 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 amount and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2007 and 2006, and the related consolidated statements of operations and comprehensive income, stockholders’ equity and cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

/s/Li & Company, PC

Li & Company, PC

Skillman, New Jersey

June 27, 2008

F-2

 ARMCO & METAWISE (HK) LIMITED AND SUBSIDIARIES

 CONSOLIDATED BALANCE SHEETS

	December 31, 2007		December 31, 2006
ASSETS
CURRENT ASSETS:
Cash	$	232,286	$	137,798
Pledged deposits		564,150		305,000
Accounts receivable		2,586,529		1,206,125
Inventories		2,434,908		522,076
Advances to stockholder		-		396,447
Advance on purchases		1,846,113		1,823,688
Prepayments and other current assets		-		415,413
Total Current Assets		7,663,986		4,806,547
PROPERTY AND EQUIPMENT, net		131,596		51,564
LAND USE RIGHT, net		2,108,983		-
Total Assets	$	9,904,565	$	4,858,111
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES:
Forward foreign currency exchange contracts	$	308,744	$	-
Forward foreign currency exchange swap liabilities		12,079		-
Accounts payable		290,740		284,168
Advances from stockholder		921,444		-
Customer deposits		2,228,720		3,446,671
Taxes payable		8		37,821
Accured expenses and other current liabilities		1,058,697		4,135
Total Current Liabilities		4,820,432		3,772,795
STOCKHOLDER'S EQUITY:
Common stock, $0.1288 par value, 30,000,000 shares authorized,
10,000 shares issued and outstanding		1,288		1,288
Additional paid-in capital		371,738		371,738
Retained earnings		4,634,449		702,658
Accumulated other comprehensive income:
Foreign currency translation gain		76,658		9,632
Total Stockholder's Equity		5,084,133		1,085,316
Total Liabilities and Stockholder's Equity	$	9,904,565	$	4,858,111

See accompanying notes to the Consolidated Financial Statements.

F-3

 ARMCO & METAWISE (HK) LIMITED AND SUBSIDIARIES

 CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

	For the Year Ended
	December 31, 2007			December 31, 2006
NET REVENUES	$	75,278,853		$	44,317,654
COST OF GOODS SOLD		68,817,654			42,678,352
GROSS PROFIT		6,461,199			1,639,302
OPERATING EXPENSES:
Selling expenses		449,048			87,779
General and administrative expenses		567,081			806,545
Total operating expenses		1,016,129			894,324
INCOME FROM OPERATIONS		5,445,070			744,978
OTHER (INCOME) EXPENSE:
Interest expense		17,556			-
Import and export agency income		(14,070	)		(18,907	)
Loss on forward foreign currency contracts		12,079			-
Other (income) expense		38,326			(87,590	)
Total other (income) expense		53,891			(106,497	)
INCOME BEFORE INCOME TAXES		5,391,179			851,475
INCOME TAXES		-			-
NET INCOME		5,391,179			851,475
OTHER COMPREHENSIVE INCOME:
Foreign currency translation gain		67,026			9,632
COMPREHENSIVE INCOME	$	5,458,205		$	861,107

 See accompanying notes to the Consolidated Financial Statements.

F-4

ARMCO & METAWISE (HK) LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY

For the Year Ended December 31, 2007

										Accumulated
										Other
										Comprehensive
										Income
	Common Stock,									Foreign
	$0.1288 Par Value				Additional		Retained			Currency		Total
	Number of				Paid-in		Earnings			Translation		Stockholder's
	Shares		Amount		Capital		(Deficit)			Gain		Equity
Balance, January 1, 2006		10,000	$	1,288	$	371,738	$	(148,817	)	$	-	$	224,209
Comprehensive income
Net income								851,475					851,475
Foreign currency translation gain											9,632		9,632
Total comprehensive income													861,107
Balance, December 31, 2006		10,000		1,288		371,738		702,658			9,632		1,085,316
Comprehensive income
Net income								5,391,179					5,391,179
Foreign currency translation gain											67,026		67,026
Total comprehensive income													5,458,205
Dividends								(1,459,388	)				(1,459,388	)
Balance, December 31, 2007		10,000	$	1,288	$	371,738	$	4,634,449		$	76,658	$	5,084,133

See accompanying notes to the Consolidated Financial Statements.

F-6

 ARMCO & METAWISE (HK) LIMITED AND SUBSIDIARIES

 CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the Year Ended
	December 31, 2007			December 31, 2006
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	5,391,179		$	851,474
Adjustments to reconcile net income to net cash provided by
operating activities
Amortization expense		46,370			19,152
Advances to chairman, CEO and sole stockholder treated as dividends		(1,459,388	)		-
Loss from disposal of property and equipment		12,803			6,720
Changes in operating assets and liabilities:
Accounts receivable		(4,615,480	)		(1,130,046	)
Inventories		(1,876,367	)		441,416
Advance on purchases		36,270			560,387
Prepayments and other current assets		3,868,042			(340,097	)
Forward foreign exchange contracts swap		12,079			-
Accounts payable		4,954			(906,443	)
Customer deposits		(1,360,542	)		551,338
Taxes payable		(152,360	)		19,546
Accrued expenses and other current liabilities		999,880			3,896
NET CASH PROVIDED BY OPERATING ACTIVITIES		907,440			77,343
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from release of pledged deposits		305,000			-
Payment made towards pledged deposits		(564,150	)		(305,000	)
Purchases of property and equipment		(125,168	)		-
Purchase of land use right		(2,119,417	)		-
NET CASH USED IN INVESTING ACTIVITIES		(2,503,735	)		(305,000	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from forward foreign exchanage contracts		308,744			-
Amounts received from (paid to) related parties		1,181,743			(316,129	)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES		1,490,487			(316,129	)
EFFECT OF EXCHANGE RATE CHANGES ON CASH		200,296			(8,512	)
NET CHANGE IN CASH		94,488			(552,298	)
Cash at beginning of year		137,798			690,096
Cash at end of year	$	232,286		$	137,798
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
Interest paid	$	17,556		$	-
Taxes paid	$	-		$	-
NON CASH FINANCING AND INVESTING ACTIVITIES:
Advances to its chairman, CEO and sole stockholder treated as dividends	$	1,459,388		$	-

See accompanying notes to the Consolidated Financial Statements.

F-7

ARMCO & METAWISE (HK) LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2007 AND 2006

NOTE 1 – ORGANIZATION AND OPERATIONS

Armco & Metawise (HK) Limited ( “Armco” or the “Company”) was incorporated on July 13, 2001 under the laws of the Hong Kong Special Administrative Region (“HK SAR”) of the People’s Republic of China (“PRC”).  Armco engages in the import, sale and distribution of ferrous and non-ferrous ores and metal.

On January 9, 2007, Armco formed Armet (LianYunGang) Renewable Resources Co, Ltd. (“Armet”), as a wholly-owned foreign enterprise (“WOFE”) subsidiary in the PRC.  Armet engages in the recycling of scrap metal.

Henan Armco and Metawise Trading Co., Ltd. (“Henan Armco”) was incorporated on June 6, 2002 in the PRC.  Henan Armco engages in the import, export and distribution of ferrous and non-ferrous ores and metals.

Merger of Henan Armco and Metawise Trading Co., Ltd. (“Henan Armco”) with Armet, Companies under Common Control

On December 28, 2007, Armco by and through its wholly owned subsidiary, Armet, entered into a Share Transfer Agreement with Henan Armco, a company under common control with the Company.  The acquisition of Henan Armco has been recorded on the purchase method of accounting at historical amounts as Armet and Henan Armco were under common control since June 2002.  The consolidated financial statements have been presented as if the acquisition of Henan Armco had occurred on January 1, 2005.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

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

This basis of accounting differs in certain material respects from that used for the preparation of the books of account of the Company prepared in accordance with the accounting principles and the relevant financial regulations applicable to enterprises with limited liabilities established in the People’s Republic of China (“PRC GAAP”), the accounting standards used in the place of their domicile.  The accompanying consolidated financial statements reflect all necessary adjustments not recorded in the books of account of the Company to present them in conformity with U.S. GAAP.

The consolidated financial statements include all the accounts of Armco and Henan Armco as of December 31, 2007 and 2006 and for the years then ended.  Armet is included as of December 31, 2007 and for the period from January 9, 2007 (inception) through December 31, 2007.  All inter-company balances and transactions have been eliminated.

Use of estimates

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

F-8

ARMCO & METAWISE (HK) LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2007 AND 2006

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Cash equivalents

The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents.

Pledged deposits

Pledged deposits consists of (1) amounts held for outstanding letters of credit maturing in future periods and (2) deposits held for outstanding forward foreign currency hedging contracts maturing in future periods.

Trade accounts receivable

Trade accounts receivable are recorded at the invoiced amount, net of an allowance for doubtful accounts.  The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. The Company determines the allowance based on historical write-off experience, customer specific facts and economic conditions. Bad debt expense is included in general and administrative expenses, if any.

Outstanding account balances are reviewed individually for collectibility.  Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.  The Company does not have any off-balance-sheet credit exposure to its customers.

Inventories

The Company values inventories, consisting of purchased products, at the lower of cost or market.  Cost is determined on the First-in and First-out method.  The Company regularly reviews its inventories on hand and, when necessary, records a provision for excess or obsolete inventories based primarily on current selling price and sales prices of confirmed backlog orders.  The Company determined that there was no inventory obsolescence as of December 31, 2007 or 2006.

Property and equipment

Property and equipment are recorded at cost.  Expenditures for major additions and betterments are capitalized.  Maintenance and repairs are charged to operations as incurred.  Depreciation of property and equipment is computed by the straight-line method (after taking into account their respective estimated residual values) over the assets estimated useful lives ranging from five (5) years to ten (10) years.  Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in operations.  Leasehold improvements, if any, are amortized on a straight-line basis over the lease period or the estimated useful life, whichever is shorter.  Upon becoming fully amortized, the related cost and accumulated amortization are removed from the accounts.

Land use right

Land use right represents the cost to obtain the right to use land in the PRC.  Land use right is carried at cost and amortized on a straight-line basis over the life of the right of 50 years.  Upon becoming fully amortized, the related cost and accumulated amortization are removed from the accounts.

F-9

ARMCO & METAWISE (HK) LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2007 AND 2006

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Impairment of long-lived assets

The Company follows Statement of Financial Accounting Standards No. 144 “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS No. 144”) for its long-lived assets. The Company’s long-lived assets, which include property, plant and equipment, and land use right are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets.  Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable.  If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.  The Company determined that there were no impairments of long-lived assets as of December 31, 2007 or 2006.

Customer deposits

Customer deposits, included in accrued expenses and other current liabilities, primarily represent amounts received from customers for future delivery of products, all of which were fully or partially refundable depending upon the terms and conditions of the sales agreement.

Derivatives

The Company accounts for derivatives in accordance with Statement of Financial Accounting Standards No. 133 “Accounting for Derivative Instruments and Hedging Activities” (“SFAS No. 133”) and the related interpretations. SFAS No. 133, as amended, requires companies to recognize all derivative instruments as either assets or liabilities in the balance sheet at fair value. The accounting for changes in the fair value of a derivative instrument depends on: (i) whether the derivative has been designated and qualifies as part of a hedging relationship, and (ii) the type of hedging relationship.  For those derivative instruments that are designated and qualify as hedging instruments, a company must designate the hedging instrument based upon the exposure being hedged as either a fair value hedge, cash flow hedge or hedge of a net investment in a foreign operation.

The Company employs foreign currency forward contracts to convert unforeseeable foreign currency exchange rate to fixed foreign currency exchange rate.  The Company does not use derivatives for speculation or trading purposes.  Changes in the fair value of derivatives are recorded each period in current earnings or through other comprehensive income, depending on whether a derivative is designated as part of a hedge transaction and the type of hedge transaction. The ineffective portion of all hedges is recognized in current earnings.  The Company has sales and purchase commitments denominated in foreign currencies.  Foreign currency forward contracts are used to hedge against the risk of change in the fair value of these commitments attributable to fluctuations in exchange rates (“Fair Value Hedges”).  Changes in the fair value of the derivative instrument are generally offset in the income statement by changes in the fair value of the item being hedged.

F-10

ARMCO & METAWISE (HK) LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2007 AND 2006

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Fair value of financial instruments

The Company follows Statement of Financial Accounting Standards No. 107 “Disclosures about Fair Value of Financial Instruments” (“SFAS No. 107”) for its financial instruments.  The fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties.  The carrying amounts of financial assets and liabilities, such as cash, accounts receivable, prepayments and other current assets, accounts payable, accrued expenses and other current liabilities, approximate their fair values because of the short maturity of these instruments.

Revenue recognition

The Company follows the guidance of the United States Securities and Exchange Commission’s Staff Accounting Bulletin (“SAB”) No. 101 “Revenue Recognition” (“SAB No. 101”), as amended by SAB No. 104 (“SAB No. 104”) for revenue recognition.  The Company records revenue when persuasive evidence of an arrangement exists, service has been rendered, the sales price to the customer is fixed or determinable, and collectability is reasonably assured.  In addition to the aforementioned general policy, the following are the specific revenue recognition policies for each major category of revenue:

(i) Import, export and distribution of ferrous and non-ferrous ores and metals:  The Company derives its revenues from sales contracts with customers with revenues being generated upon the shipment of goods.  Persuasive evidence of an arrangement is demonstrated via invoice, product delivery is evidenced by warehouse shipping log as well as a signed bill of lading from the trucking or rail company and title transfers upon shipment, based on free on board (“FOB”) warehouse terms; the sales price to the customer is fixed upon acceptance of the purchase order and there is no separate sales rebate, discount, or volume incentive.  When the Company recognizes revenue, no provisions are made for returns because, historically, there have been very few sales returns and adjustments that have impacted the ultimate collection of revenues.

(ii) Import and export agent services:  Revenue from import and export agent services is recognized as the services are provided.  The import and export agent services are considered provided when the goods to be imported or exported by the customer are delivered to the designated port specified by the service contract.  The Company follows the Financial Accounting Standards Board Emerging Issues Task Force Issue No. 99-19 “Reporting Revenue Gross as a Principal versus Net as an Agent” for revenue recognition to report revenue net for its import and export agent services since the Company (1) takes title to the products with full payment for the goods and related cost from the customer, (2) has no risks and rewards of ownership, such as the risk of loss for collection, delivery, or returns, and (3) acts as an agent or broker (including performing services, in substance, as an agent or broker) with compensation on a commission or fee basis on any of its outsourcing projects.

Shipping and handling costs

The Company accounts for shipping and handling fees in accordance with the Financial Accounting Standards Board Emerging Issues Task Force Issue No. 00-10 “Accounting for Shipping and Handling Fees and Costs” (“EITF Issue No. 00-10”).  While amounts charged to customers for shipping products are included in revenues, the related costs are classified in cost of goods sold as incurred.

F-11

ARMCO & METAWISE (HK) LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2007 AND 2006

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Income taxes

The Company follows Statement of Financial Accounting Standards No. 109 “Accounting for Income Taxes” (“SFAS No. 109”), which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns.  Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.  Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized.  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.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Consolidated Statements of Operations and Comprehensive Income in the period that includes the enactment date.

Foreign currency translation

Transactions and balances originally denominated in U.S. dollars are presented at their original amounts.  Transactions and balances in other currencies are converted into U.S. dollars in accordance with Statement of Financial Accounting Standards No. 52 “Foreign Currency Translation” (“SFAS No. 52”) and are included in determining net income or loss.

The financial records of the Company are maintained in their local currency, the Renminbi (“RMB”), which is the functional currency.  Assets and liabilities are translated from the local currency into the reporting currency, U.S. dollars, at the exchange rate prevailing at the balance sheet date. Revenues and expenses are translated at weighted average exchange rates for the period to approximate translation at the exchange rates prevailing at the dates those elements are recognized in the combined and consolidated financial statements.  Foreign currencytranslation gain (loss) resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining accumulated other comprehensive income in the combined and consolidated statement of stockholders’ equity.

RMB is not a fully convertible currency.  All foreign exchange transactions involving RMB must take place either through the People’s Bank of China (the “PBOC”) or other institutions authorized to buy and sell foreign exchange.  The exchange rate adopted for the foreign exchange transactions are the rates of exchange quoted by the PBOC, which are determined largely by supply and demand. Translation of amounts from RMB into United States dollars (“US$”) has been made at the following exchange rates for the respective years:

December 31, 2007
Balance sheet	RMB 7.2946 to US$1.00
Statement of operations and comprehensive income	RMB 7.6072 to US$1.00
December 31, 2006
Balance sheet	RMB 7.8041 to US$1.00
Statement of operations and comprehensive income	RMB 7.9723 to US$1.00
December 31, 2005
Balance sheet	RMB 8.0702 to US$1.00

Commencing July 21, 2005, China adopted a managed floating exchange rate regime based on market demand and supply with reference to a basket of currencies.  The exchange rate of the US dollar against the RMB was adjusted from approximately RMB 8.28 per US dollar to approximately RMB 8.11 per US dollar on July 21, 2005.  Since then, the PBOC administers and regulates the exchange rate of the US dollar against the RMB taking into account demand and supply of RMB, as well as domestic and foreign economic and financial conditions.

F-12

ARMCO & METAWISE (HK) LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2007 AND 2006

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Foreign currency translation (Continued)

Net gains and losses resulting from foreign exchange transactions, if any, are included in the Consolidated Statements of Operations and Comprehensive Income.  The foreign currency translation gain at December 31, 2007 and 2006 was $67,026 and $9,632 and effect of exchange rate changes on cash flows for years then ended were $200,296 and ($8,513), respectively.

Comprehensive income

The Company has adopted Statement of Financial Accounting Standards No. 130 “Reporting Comprehensive Income” (“SFAS No. 130”).  This statement establishes rules for the reporting of comprehensive income and its components.  Comprehensive income, for the Company, consists of net income and foreign currency translation adjustments and is presented in the Consolidated Statements of Operations and Comprehensive Income and Stockholders’ Equity.

Commitments and contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

Recently issued accounting pronouncements

On June 5, 2003, the United States Securities and Exchange Commission (“SEC”) adopted final rules under Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”), as amended by SEC Release No. 33-8889 on February 1, 2008.  Commencing with its annual report for the year ending December 31, 2008, the Company will be required to include a report of management on its internal control over financial reporting. The internal control report must include a statement of:

· management’s responsibility for establishing and maintaining adequate internal control over its financial reporting;

· management’s assessment of the effectiveness of its internal control over financial reporting as of its year end; and

· the framework used by management to evaluate the effectiveness of the Company’s internal control over financial reporting.

Furthermore, in the following year, it is required to file the auditor’s attestation report separately on the Company’s internal control over financial reporting on whether it believes that the Company has maintained, in all material respects, effective internal control over financial reporting.

On September 15, 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Statement No. 157 “Fair Value Measurements” (“SFAS No. 157”).  SFAS No. 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements.  SFAS No. 157 is effective as of the beginning of the first fiscal year beginning after November 15, 2007.  The Company does not anticipate that the adoption of this statement will have a material effect on the Company’s financial condition and results of operations.

On February 15, 2007, the FASB issued FASB Statement No. 159 “The Fair Value Option for Financial Assets and Financial Liabilities: Including an amendment of FASB Statement No. 115” (“SFAS No. 159”).  SFAS No. 159 permits all entities to elect to measure many financial instruments and certain other items at fair value with changes in fair value reported in earnings.  SFAS No. 159 is effective as of the beginning of the first fiscal year that begins after November 15, 2007, with earlier adoption permitted.  The Company does not anticipate that the adoption of this statement will have a material effect on the Company’s financial condition and results of operations.

In June 2007, the Emerging Issues Task Force of the FASB issued EITF Issue No. 07-3 “Accounting forNonrefundable Advance Payments for Goods or Services to be Used in Future Research and DevelopmentActivities” (“EITF Issue No. 07-3”) which is effective for fiscal years beginning after December 15, 2007.  EITF Issue No. 07-3 requires that nonrefundable advance payments for future research and development activities be deferred and capitalized.  Such amounts will be recognized as an expense as the goods are delivered or the related services are performed.  The Company does not expect the adoption of EITF Issue No. 07-3 to have a material impact on the financial results of the Company.

F-13

ARMCO & METAWISE (HK) LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2007 AND 2006

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Recently issued accounting pronouncements (Continued)

In December 2007, the FASB issued FASB Statement No. 141 (Revised 2007) “Business Combinations” (“SFAS No. 141(R)”), which requires the Company to record fair value estimates of contingent consideration and certain other potential liabilities during the original purchase price allocation, expense acquisition costs as incurred and does not permit certain restructuring activities previously allowed under Emerging Issues Task Force Issue No. 95-3 to be recorded as a component of purchase accounting. SFAS No. 141(R) applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008, except for the presentation and disclosure requirements, which shall be applied retrospectively for all periods presented. The Company will adopt this standard at the beginning of the Company’s year ending December 31, 2008 for all prospective business acquisitions. The Company has not determined the effect that the adoption of SFAS No. 141(R) will have on the financial results of the Company.

In December 2007, the FASB issued FASB Statement No. 160“Noncontrolling Interests in Consolidated Financial Statements - - an amendment of ARB No. 51” (“SFAS No. 160”), which causes noncontrolling interests in subsidiaries to be included in the equity section of the balance sheet. SFAS No. 160 applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008, except for the presentation and disclosure requirements, which shall be applied retrospectively for all periods presented. The Company will adopt this standard at the beginning of the Company’s year ending December 31, 2008 for all prospective business acquisitions. The Company has not determined the effect that the adoption of SFAS No. 160 will have on the financial results of the Company.

In March 2008, the FASB issued FASB Statement No. 161 “Disclosures about Derivative Instruments and Hedging Activities an amendment of FASB Statement No. 133” (“SFAS No. 161”), which changes the disclosure requirements for derivative instruments and hedging activities. Pursuant to SFAS No.161, Entities are required to provide enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. SFAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008 with early application encouraged. SFAS No. 161 encourages but does not require disclosures for earlier periods presented for comparative purposes at initial adoption. In years after initial adoption, this Statement requires comparative disclosures only for periods subsequent to initial adoption. The Company will adopt this standard at the beginning of the Company’s year ending December 31, 2008. The Company does not expect the adoption of SFAS No. 161 to have a material impact on the financial results of the Company.

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements.

F-14

ARMCO & METAWISE (HK) LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2007 AND 2006

NOTE 3 – PLEDGED DEPOSITS

Pledged deposits at December 31, 2007 and 2006 consisted of the following:

Pledged deposits for:

	December 31, 2007			December 31, 2006
Letters of credit	$	242,671	(2)	$	305,000	(1)
Foreign currency forward contracts		321,479	(3)		-
	$	564,150		$	305,000

(1) Deposit released to pay related letter of credit on January 8, 2007.

(2) See Note 11 (i).

(3) See Note 11 (ii).

NOTE 4 – INVENTORIES

Inventories at December 31, 2007 and 2006 consisted of the following:

	December 31, 2007		December 31, 2006
Goods purchased	$	2,434,908	$	522,076
	$	2,434,908	$	522,076

NOTE 5 – PROPERTY AND EQUIPMENT

Property and equipment, stated at cost, less accumulated depreciation at December 31, 2007 and 2006 consisted of the following:

	Estimated Useful Life (Years)	December 31, 2007			December 31, 2006
Leasehold improvements	20	$	10,133		$	12,693
Vehicles	5		164,549			65,831
Office equipment	5-8		35,508			36,098
			211,190			114,622
Less accumulated depreciation			(79,594	)		(63,058	)
		$	131,596		$	51,564

(a)           Depreciation and amortization expense

Depreciation and amortization expense for the year ended December 31, 2007 and 2006 was $34,459 and $18,971, respectively.

F-15

ARMCO & METAWISE (HK) LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2007 AND 2006

NOTE 6 – LAND USE RIGHT

Land use right at cost at December 31, 2007 and 2006, consisted of the following:

	December 31, 2007			December 31, 2006
Land use right	$	2,119,417		$	-
Accumulated amortization		(10,434	)		(-	)
	$	2,108,983		$	-

Amortization expense

Amortization expense for the year ended December 31, 2007 and 2006 was $10,434 and $0, respectively.  Amortization expense for the next five years is approximately $43,040 per year.

NOTE 7 – FINANCIAL INSTRUMENTS

The Company utilized forward foreign currency exchange contracts with a financial institution, resulting in a fixed foreign currency exchange rate of US$1.00 to RMB 7.3750.  These forward foreign currency exchange contracts will expire through August 2, 2008.

The forward foreign currency exchange contracts and related swap liabilities at December 31, 2007 and 2006 consisted of the following:

	December 31, 2007		December 31, 2006
Forward foreign currency exchange contracts	$	308,744	$	-
Forward foreign currency exchange swap liabilities		12,079		-
	$	320,823	$	-

NOTE 8 – STOCKHOLDER’S EQUITY

Dividends

On December 31, 2007, the Company declared that advances of $1,459,388 to its chairman, chief executive office and sole stockholder would be treated as dividends.

F-16

ARMCO & METAWISE (HK) LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2007 AND 2006

NOTE 9 – RELATED PARTY TRANSACTIONS

(i) Operating lease from Company chairman, chief executive officer and sole stockholder

On January 1, 2006, the Company entered into a non-cancellable operating lease for its office space in the City of Zhengzhou, Henan Province from its Chairman, CEO and sole stockholder, expiring December 31, 2008.  Future minimum lease payments required under the non-cancelable operating lease are only for the remaining calendar year ending December 31, 2008, and are $16,451.  For the year ended December 31, 2007 and 2006, rent expense relating to the operating lease amounted to $15,775 and $15,052, respectively.

(ii) Purchases from a related party

The Company purchased certain products from Prime Armet Group Inc. (“Prime”), an entity wholly-owned and controlled by the Company’s Chairman and CEO.  For the years ended December 31, 2007 and 2006, total purchases from Prime amounted to $496,951 and $2,465,601 representing 0.8% and 2.9% of total purchases of the Company, respectively.

(iii) Advances to (from) chairman, chief executive officer and sole stockholder

Advances to (from) its chairman, chief executive officer and sole stockholder at December 31, 2007 and 2006, consisted of the following:

	December 31, 2007			December 31, 2006
Advances to (from) chairman, chief executive officer and sole stockholder	$	(921,444	)	$	396,447
	$	(921,444	)	$	396,447

The advances bear no interest and have no formal repayment terms.

NOTE 10 – INCOME TAXES

Armco is subject to Hong Kong SAR income taxes.   Henan and Armet, the Company’s PRC subsidiaries are subject to PRC income taxes, file income tax returns under the Income Tax Law of the People’s Republic of China concerning Foreign Investment Enterprises and Foreign Enterprises and local income tax laws (the “PRC Income Tax Law”) accordingly.   Henan and Armet derives substantially all of their income (loss) before income taxes and related tax expenses are from PRC sources.

Hong Kong SAR income tax

Armco is exempt from Hong Kong income taxes since none of its income was from Hong Kong sources for the years ended December 31, 2007 and 2006 and no provision for income taxes has been made for the relevant periods.   Armco’s statutory tax rate is 17.5% and is subject to HK SAR income taxes as of January 1, 2008 and forward.

PRC Tax

Henan is registered and operates in Zhengzhou, Henan, PRC.  No provision for income taxes has been made as Henan had net operating loss (“NOL”) for the year ended December 31, 2007 and 2006.  Henan’s statutory tax rate for relevant periods is 33% prior to December 31, 2007 and 25% as of January 1, 2008 and forward.

F-17

Armet is registered and operates in the LianYunGang Economic and Technology Development Zone, Jiangsu, PRC, and is recognized as a “Manufacturing Enterprise Located in Special Economic Zone”. In accordance with the relevant income tax laws, the profits of Armet, if any, are fully exempted from income tax for 2008 and 2009, followed by a 50% exemption for 2010 through 2012 (“tax holiday”).  Armet is a development stage company as defined by Statement of Financial Accounting Standards No. 7 “Accounting and Reporting by Development Stage Enterprises” (“SFAS No. 7”).  Armet’s statutory tax rate for relevant periods is 15% prior to December 31, 2007 and 25% as of January 1, 2008 and forward.

(i) Income taxes in the combined and consolidated statements of operations and comprehensive income

A reconciliation of the Chinese statutory income tax rate and the effective income tax rate as a percentage of income before income taxes is as follows:

	For the Year Ended
	December 31, 2007			December 31, 2006
Chinese statutory income tax rate		33.0	%		33.0	%
Increase (reduction) in income taxes resulting from:
Net operating loss (“NOL”) carry-forwards		(33.0	)		(33.0	)
Tax holiday		-			-
Effective income tax rate		0.0	%		0.0	%

At December 31, 2007, the Company has available for income tax purposes net operating loss (“NOL”) carry-forwards of $1,489,403 that may be used to offset future taxable income through the year ending December 31, 2012.  No tax benefit has been reported with respect to these net operating loss carry-forwards in the accompanying financial statements since the Company believes that the realization of its net deferred tax assets of approximately $248,250 was not considered more likely than not and accordingly, the potential tax benefits of the net loss carry-forwards are fully offset by a valuation allowance of $372,351.

Deferred tax assets consist primarily of the tax effect of NOL carry-forwards.  The Company has provided a full valuation allowance on the deferred tax assets because of the uncertainty regarding its realizability.  The valuation allowance increased approximately $53,372 and $218,000 for the years ended December 31, 2007 and 2006, respectively.

Components of deferred tax assets as of December 31, 2007 and 2006 are as follows:

	December 31, 2007			December 31, 2006
Net deferred tax assets – Non-current:
Expected income tax benefit from NOL carry-forwards	$	491,503			438,131
Cumulative effect of statutory reduction of enacted income tax rate effective January 1, 2008		(119,152	)		-
Expected income tax benefit from NOL carry-forwards, net of cumulative effect of statutory reduction of enacted income tax rate		372,351			438,131
Less valuation allowance		(372,351	)		(438,131	)
Deferred tax assets, net of valuation allowance	$	-		$	-

F-18

ARMCO & METAWISE (HK) LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2007 AND 2006

NOTE 11 – COMMITMENTS AND CONTINGENCIES

(i) Letters of credit

The Company issues letters of credit in connection with the importation of ferrous and non-ferrous ores. Letters of credit at December 31, 2007 and 2006 consisted of the following:

	December 31, 2007		December 31, 2006
Armco
Letter of credit issued by a financial institution on behalf of the Company on July 3, 2006 with 10% credit amount tolerance, as amended, payable to an unrelated vendor, due January 31, 2007 and paid on March 2, 2007.	$	-	$	1,520,750
Letter of credit issued by a financial institution on behalf of the Company on October 15, 2007 with 5% credit amount tolerance, as amended, payable to an unrelated vendor, due January 20, 2008 and paid on February 14, 2008.	$	1,911,000	$	-
Henan Armco
Letter of credit issued by a financial institution on behalf of the Company in the amount of €402,000 on November 22, 2007, payable to an unrelated vendor, collateralized by the pledged deposits of $185,711 (see Note 3), which was cancelled on April 21, 2008 with the pledged deposits returned on May 13, 2008.		587,161		-
Letter of credit issued by a financial institution on behalf of the Company on November 27, 2007, payable to an unrelated vendor, collateralized by the pledged deposits of $56,960 (see Note 3) due September 9, 2008.		140,000		-
	$	2,638,161	$	1,520,750

F-19

ARMCO & METAWISE (HK) LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2007 AND 2006

NOTE 11 – COMMITMENTS AND CONTINGENCIES (Continued)

(ii) Foreign currency forward contracts

The Company employs foreign currency forward contracts to convert unforeseeable foreign currency exchange rates to fixed foreign currency exchange rates. Foreign currency forward contracts at December 31, 2007 and 2006 consisted of the following:

	December 31, 2007		December 31, 2006
Foreign currency forward contract, signed with a financial institution on August 1, 2007, collateralized by the pledged deposits of $130,274 (see Note 3) due August 1, 2008.	$	128,854	$	-
Foreign currency forward contract, signed with a financial institution on August 2, 2007, collateralized by the pledged deposits of $181,873 (see Note 3) due August 2, 2008.		179,890		-
	$	308,744	$	-

(iii) Uncommitted trade credit facilities

The Company entered into uncommitted trade credit facilities with a financial institution, subsequently amended, for $10,000,000 (“Uncommitted trade credit facilities”), maturing November 30, 2008.  Uncommitted trade credit facilities were guaranteed by the Company’s stockholder, chairman, president and Chief Exchange Officer.  There were no balances outstanding at December 31, 2007 or 2006.

(iv) Entry of import service agreement

On April 11, 2007, Armet entered into an import service agreement with an unrelated third party importer expiring through January 1, 2010, which will import two (2) million metric tones per year recyclable metal production equipment valued at $430,000 and earn 2% of the total value imported for its import services.  There was no production equipment imported as of December 31, 2007.

NOTE 12 – CONCENTRATIONS AND CREDIT RISK

(i) Customers and Credit Concentrations

Three (3) unrelated customers accounted for approximately 29.4%, 27.5% and 26.8% of total sales for the year ended December 31, 2007 and one (1) different unrelated customer accounted for approximately 56.6% of total sales for the year ended December 31, 2006, respectively.

(ii) Vendor Concentrations

Four (4) unrelated vendors accounted for 37.2%, 37.0%, 11.0% and 10.8% of total purchases for the year ended December 31, 2007, respectively.  Four (4) different unrelated vendors accounted for 14.4%, 13.4%, 13.2%, and 12.6% of total purchases for the year ended December 31, 2006, respectively.

F-20

ARMCO & METAWISE (HK) LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2007 AND 2006

NOTE 12 – CONCENTRATIONS AND CREDIT RISK (Continued)

(iii) Credit Risk

Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash and cash equivalents.  As of December 31, 2007, substantially all of the Company’s cash and cash equivalents were held by major financial institutions located in the PRC, none of which are insured.  However, the Company has not experienced losses on these accounts and management believes that the Company is not exposed to significant risks on such accounts.

(iv) Foreign currency risk

The Company is exposed to fluctuations in foreign currencies for transactions denominated in currencies other than RMB, the functional currencies due to the fact the majority of the Company’s purchasing activities are transacted in foreign currencies.  The Company had foreign currency hedges in place at December 31, 2007 to reduce such exposure.  The estimated loss in fair value on foreign currency hedges outstanding as of December 31, 2007 was $12,079.

NOTE 13 - FOREIGN OPERATIONS

(i) Operations

Substantially all of the Company’s operations are carried out and all of its assets are located in the PRC.  Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environments in the PRC.  The Company’s business may be influenced by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency fluctuation and remittances and methods of taxation, among other things.

(ii) Dividends and Reserves

Under the laws of the PRC, net income after taxation can only be distributed as dividends after appropriation has been made for the following: (i) cumulative prior years’ losses, if any; (ii) allocations to the “Statutory Surplus Reserve” of at least 10% of net income after tax, as determined under PRC accounting rules and regulations, until the fund amounts to 50% of the Company’s registered capital; (iii) allocations of 5-10% of income after tax, as determined under PRC accounting rules and regulations, to the Company’s “Statutory Common Welfare Fund”, which is established for the purpose of providing employee facilities and other collective benefits to employees in PRC; and (iv) allocations to any discretionary surplus reserve, if approved by stockholders.

As of December 31, 2007, the Company had no Statutory Surplus Reserve and the Statutory Common Welfare Fund established and segregated in retained earnings.

NOTE 14 – SUBSEQUENT EVENT

Entry of Construction Contract

On January 20, 2008, Armet entered into a construction contract with an unrelated third party construction company to construct production plant valued at RMB6.2 million (equivalent to $884,199 at March 31, 2008).

F-21

ARMCO & METAWISE (HK) LIMITED AND SUBSIDIARIES

Schedule II Valuation and Qualifying Accounts for the years ended December 31, 2007 and 2006

	Balance at		Add		Deduct			Add		Balance  at
	beginning of		Charge to		bad debt			translation		end of
	period		Income		written off			adjustment		period
For the Year Ended December 31, 2006:
Allowance for doubtful accounts	$	-	$	-	$	(-	)	$	-	$	-
For the Year Ended December 31, 2007:
Allowance for doubtful accounts	$	-	$	-	$	(-	)	$	-	$	-

F-22

EX-99.3

Exhibit 99.3

ARMCO & METAWISE (HK) LIMITED AND SUBSIDIARIES

MARCH 31, 2008 AND 2007

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Contents	Page(s)
Consolidated Balance Sheets at March 31, 2008 (Unaudited) and December 31, 2007	F-2
Consolidated Statements of Operations and Comprehensive Income (Loss) for the three Month Period Ended March 31, 2008 and 2007(Unaudited)	F-3
Consolidated Statement of Stockholder’s Equity (Deficit) (Unaudited)	F-4
Consolidated Statements of Cash Flows for the Three Month Period Ended March 31, 2008 and 2007 (Unaudited)	F-5
Notes to the Interim Consolidated Financial Statements (Unaudited)	F-6 to F-14
Schedule:
Schedule II Valuation and Qualifying Accounts for the interim periods ended March 31, 2008 and 2007 (Unaudited)	F-14

 ARMCO & METAWISE (HK) LIMITED AND SUBSIDIARIES

 CONSOLIDATED BALANCE SHEETS

	March 31, 2008		December 31, 2007
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash	$	145,127	$	232,286
Pledged deposits		754,845		564,150
Accounts receivable		8,629,059		2,586,529
Inventories		2,985,726		2,434,908
Advances to stockholder		17,004		-
Advance on purchases		2,980,996		1,846,113
Prepayments and other current assets		23,698		-
Total Current Assets		15,536,455		7,663,986
PROPERTY AND EQUIPMENT, net		130,888		131,596
LAND USE RIGHT, net		2,182,787		2,108,983
Total Assets	$	17,850,130	$	9,904,565
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES:
Forward foreign currency exchange contracts	$	308,744	$	308,744
Forward foreign currency exchange swap liabilities		25,009		12,079
Accounts payable		5,999,187		290,740
Advances to stockholder		-		921,444
Customer deposits		3,105,117		2,228,720
Taxes payable		1,048,261		8
Accured expenses and other current liabilities		1,361,876		1,058,697
Total Current Liabilities		11,848,194		4,820,432
STOCKHOLDER'S EQUITY:
Common stock, $0.1288 par value, 30,000,000 shares authorized,
10,000 shares issued and outstanding		1,288		1,288
Additional paid-in capital		371,738		371,738
Retained earnings		5,372,062		4,634,449
Accumulated other comprehensive income:
Foreign currency translation gain		256,848		76,658
Total Stockholder's Equity		6,001,936		5,084,133
Total Liabilities and Stockholder's Equity	$	17,850,130	$	9,904,565

See accompanying notes to the Consolidated Financial Statements.

F-2

 ARMCO & METAWISE (HK) LIMITED AND SUBSIDIARIES

 CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

 (UNAUDITED)

	For the Three Month Period Ended
	March 31, 2008			March 31, 2007
NET REVENUES	$	9,775,337		$	3,349,681
COST OF GOODS SOLD		8,545,719			3,354,017
GROSS PROFIT (LOSS)		1,229,618			(4,336	)
OPERATING EXPENSES:
Selling expenses		10,614			117,126
General and administrative expenses		216,908			60,612
Total operating expenses		227,522			177,738
INCOME (LOSS) FROM OPERATIONS		1,002,096			(182,074	)
OTHER (INCOME) EXPENSE:
Loss on forward foreign currency contracts		12,930			-
Other (income) expense		(7,100	)		104,985
Total other (income) expense		5,830			104,985
INCOME (LOSS) BEFORE INCOME TAXES		996,266			(287,059	)
INCOME TAXES		258,653			-
NET INCOME (LOSS)		737,613			(287,059	)
OTHER COMPREHENSIVE INCOME (LOSS):
Foreign currency translation gain (loss)		180,190			(53,791	)
COMPREHENSIVE INCOME (LOSS)	$	917,803		$	(340,850	)

 See accompanying notes to the Consolidated Financial Statements.

F-3

ARMCO & METAWISE (HK) LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY

For the Three Month Period Ended March 31, 2008

 (UNAUDITED)

										Accumulated
										Other
										Comprehensive
										Income
	Common Stock,									Foreign
	$0.1288 Par Value				Additional					Currency		Total
	Number of				Paid-in		Retained			Translation		Stockholder's
	Shares		Amount		Capital		Earnings			Gain		Equity
Balance, December 31, 2006		10,000	$	1,288	$	371,738	$	702,658		$	9,632	$	1,085,316
Comprehensive income
Net income								5,391,179					5,391,179
Foreign currency translation gain											67,026		67,026
Total comprehensive income													5,458,205
Dividends								(1,459,388	)				(1,459,388	)
Balance, December 31, 2007		10,000	$	1,288	$	371,738	$	4,634,449		$	76,658	$	5,084,133
							$	-
Comprehensive income
Net income								737,613					737,613
Foreign currency translation gain											180,190		180,190
Total comprehensive income													917,803
Balance, March 31, 2008		10,000	$	1,288	$	371,738	$	5,372,062		$	256,848	$	6,001,936

See accompanying notes to the Consolidated Financial Statements.

F-4

 ARMCO & METAWISE (HK) LIMITED AND SUBSIDIARIES

 CONSOLIDATED STATEMENTS OF CASH FLOWS

 (UNAUDITED)

	For the Three Month Period Ended
	March 31, 2008			March 31, 2007
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	737,613		$	(287,059	)
Adjustments to reconcile net income (loss) to net cash provided by
operating activities
Amortization expense		21,214			4,928
Loss from disposal of property and equipment		243			11,860
Changes in operating assets and liabilities:
Bank acceptance notes receivable
Accounts receivable		(6,038,250	)		604,632
Inventories		(452,686	)		(3,439,429	)
Advance on purchases		(1,060,482	)		1,436,100
Prepayments and other current assets		(44,584	)		238,282
Forward foreign exchange contracts swap		12,930			-
Accounts payable		5,698,390			1,667,802
Customer deposits		786,574			2,019,300
Taxes payable		1,008,088			(448,630	)
Accrued expenses and other current liabilities		317,283			382,829
NET CASH PROVIDED BY OPERATING ACTIVITIES		986,333			2,190,615
CASH FLOWS FROM INVESTING ACTIVITIES:
Payment made towards pledged deposits		(167,959	)		(154,250	)
Purchases of property and equipment		(4,252	)		(84,849	)
NET CASH USED IN INVESTING ACTIVITIES		(172,211	)		(239,099	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Amounts received from (paid to) related parties		(893,620	)		(271,583	)
NET CASH USED IN FINANCING ACTIVITIES		(893,620	)		(271,583	)
EFFECT OF EXCHANGE RATE CHANGES ON CASH		(7,661	)		266
NET CHANGE IN CASH		(87,159	)		1,680,199
Cash at beginning of year		232,286			137,798
Cash at end of year	$	145,127		$	1,817,997
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
Interest paid	$	3,449		$	-
Taxes paid	$	-		$	-

See accompanying notes to the Consolidated Financial Statements.

F-5

ARMCO & METAWISE (HK) LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2008 AND 2007

(UNAUDITED)

NOTE 1 – ORGANIZATION AND OPERATIONS

Armco & Metawise (HK) Limited ( “Armco” or the “Company”) was incorporated on July 13, 2001 under the laws of the Hong Kong Special Administrative Region (“HK SAR”) of the People’s Republic of China (“PRC”).  Armco engages in the import, sale and distribution of ferrous and non-ferrous ores and metal.

On January 9, 2007, Armco formed Armet (LianYunGang) Renewable Resources Co, Ltd. (“Armet”), as a wholly-owned foreign enterprise (“WOFE”) subsidiary in the PRC.  Armet engages in the recycling of scrap metal.

Henan Armco and Metawise Trading Co., Ltd. (“Henan Armco”) was incorporated on June 6, 2002 in the PRC.  Henan Armco engages in the import, export and distribution of ferrous and non-ferrous ores and metals.

Merger of Henan Armco and Metawise Trading Co., Ltd. (“Henan Armco”) with Armet, Companies under Common Control

On December 28, 2007, Armco by and through its wholly owned subsidiary, Armet, entered into a Share Transfer Agreement with Henan Armco, a company under common control with the Company.  The acquisition of Henan Armco has been recorded on the purchase method of accounting at historical amounts as Armet and Henan Armco were under common control since June 2002.  The consolidated financial statements have been presented as if the acquisition of Henan Armco had occurred on January 1, 2005.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The accompanying unaudited consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (“SEC”) to Form 10-Q and Article 10 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods have been included.  These interim consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company for the year ended December 31, 2007 and notes thereto contained in the Company’s Current Report on Form 8-K as filed with the SEC on June 30, 2008.  Interim results are not necessarily indicative of the results for the full year.

The consolidated financial statements include all the accounts of Armco and Henan Armco as of March 31, 2008 and 2007 and for the interim periods then ended.  Armet is included as of March 31, 2008 and for the interim periods ended March 31, 2008 and the period from January 9, 2007 (inception) through March 31, 2007.  All inter-company balances and transactions have been eliminated.

Use of estimates

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

F-6

ARMCO & METAWISE (HK) LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2008 AND 2007

(UNAUDITED)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Cash equivalents

The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents.

Pledged deposits

Pledged deposits consists of (1) amounts held for outstanding letters of credit maturing in future periods and (2) deposits held for outstanding forward foreign currency hedging contracts maturing in future periods.

Trade accounts receivable

Trade accounts receivable are recorded at the invoiced amount, net of an allowance for doubtful accounts.  The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. The Company determines the allowance based on historical write-off experience, customer specific facts and economic conditions. Bad debt expense is included in general and administrative expenses, if any.

Outstanding account balances are reviewed individually for collectibility.  Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.  The Company does not have any off-balance-sheet credit exposure to its customers.

Inventories

The Company values inventories, consisting of purchased products to be sold, at the lower of cost or market.  Cost is determined on the First-in and First-out method.  The Company regularly reviews its inventories on hand and, when necessary, records a provision for excess or obsolete inventories based primarily on current selling price and sales prices of confirmed backlog orders.  The Company determined that there was no inventory obsolescence as of March 31, 2008 and 2007.

Property and equipment

Property and equipment are recorded at cost.  Expenditures for major additions and betterments are capitalized.  Maintenance and repairs are charged to operations as incurred.  Depreciation of property and equipment is computed by the straight-line method (after taking into account their respective estimated residual values) over the assets estimated useful lives ranging from five (5) years to ten (10) years.  Upon sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in operations.  Leasehold improvements, if any, are amortized on a straight-line basis over the lease period or the estimated useful life, whichever is shorter.  Upon becoming fully amortized, the related cost and accumulated amortization are removed from the accounts.

Land use right

Land use right represents the cost to obtain the right to use land in the PRC.  Land use right is carried at cost and amortized on a straight-line basis over the life of the right of 50 years.  Upon becoming fully amortized, the related cost and accumulated amortization are removed from the accounts.

F-7

ARMCO & METAWISE (HK) LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2008 AND 2007

(UNAUDITED)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Impairment of long-lived assets

The Company follows Statement of Financial Accounting Standards No. 144 “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS No. 144”) for its long-lived assets. The Company’s long-lived assets, which include property, plant and equipment, and land use right are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets.  Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable.  If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.  The Company determined that there were no impairments of long-lived assets as of March 31, 2008 or 2007.

Customer deposits

Customer deposits, included in accrued expenses and other current liabilities, primarily represent amounts received from customers for future delivery of products, all of which were fully or partially refundable depending upon the terms and conditions of the sales agreement.

Derivatives

The Company accounts for derivatives in accordance with Statement of Financial Accounting Standards No. 133 “Accounting for Derivative Instruments and Hedging Activities” (“SFAS No. 133”) and the related interpretations. SFAS No. 133, as amended, requires companies to recognize all derivative instruments as either assets or liabilities in the balance sheet at fair value. The accounting for changes in the fair value of a derivative instrument depends on: (i) whether the derivative has been designated and qualifies as part of a hedging relationship, and (ii) the type of hedging relationship.  For those derivative instruments that are designated and qualify as hedging instruments, a company must designate the hedging instrument based upon the exposure being hedged as either a fair value hedge, cash flow hedge or hedge of a net investment in a foreign operation.

The Company employs foreign currency forward contracts to convert unforeseeable foreign currency exchange rate to fixed foreign currency exchange rate.  The Company does not use derivatives for speculation or trading purposes.  Changes in the fair value of derivatives are recorded each period in current earnings or through other comprehensive income, depending on whether a derivative is designated as part of a hedge transaction and the type of hedge transaction. The ineffective portion of all hedges is recognized in current earnings.  The Company has sales and purchase commitments denominated in foreign currencies.  Foreign currency forward contracts are used to hedge against the risk of change in the fair value of these commitments attributable to fluctuations in exchange rates (“Fair Value Hedges”).  Changes in the fair value of the derivative instrument are generally offset in the income statement by changes in the fair value of the item being hedged.

F-8

ARMCO & METAWISE (HK) LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2008 AND 2007

(UNAUDITED)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Fair value of financial instruments

The Company follows Statement of Financial Accounting Standards No. 107 “Disclosures about Fair Value of Financial Instruments” (“SFAS No. 107”) for its financial instruments.  The fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties.  The carrying amounts of financial assets and liabilities, such as cash, accounts receivable, prepayments and other current assets, accounts payable, accrued expenses and other current liabilities, approximate their fair values because of the short maturity of these instruments.

Revenue recognition

The Company follows the guidance of the United States Securities and Exchange Commission’s Staff Accounting Bulletin (“SAB”) No. 101 “Revenue Recognition” (“SAB No. 101”), as amended by SAB No. 104 (“SAB No. 104”) for revenue recognition.  The Company records revenue when persuasive evidence of an arrangement exists, service has been rendered, the sales price to the customer is fixed or determinable, and collectability is reasonably assured.  In addition to the aforementioned general policy, the following are the specific revenue recognition policies for each major category of revenue:

(i) Import, export and distribution of ferrous and non-ferrous ores and metals:  The Company derives its revenues from sales contracts with customers with revenues being generated upon the shipment of goods.  Persuasive evidence of an arrangement is demonstrated via invoice, product delivery is evidenced by warehouse shipping log as well as a signed bill of lading from the trucking or rail company and title transfers upon shipment, based on free on board (“FOB”) warehouse terms; the sales price to the customer is fixed upon acceptance of the purchase order and there is no separate sales rebate, discount, or volume incentive.  When the Company recognizes revenue, no provisions are made for returns because, historically, there have been very few sales returns and adjustments that have impacted the ultimate collection of revenues.

(ii) Import and export agent services:  Revenue from import and export agent services is recognized as the services are provided.  The import and export agent services are considered provided when the goods to be imported or exported by the customer are delivered to the designated port specified by the service contract.  The Company follows the Financial Accounting Standards Board Emerging Issues Task Force Issue No. 99-19 “Reporting Revenue Gross as a Principal versus Net as an Agent” for revenue recognition to report revenue net for its import and export agent services since the Company (1) takes title to the products with full payment for the goods and related cost from the customer, (2) has no risks and rewards of ownership, such as the risk of loss for collection, delivery, or returns, and (3) acts as an agent or broker (including performing services, in substance, as an agent or broker) with compensation on a commission or fee basis on any of its outsourcing projects.

Shipping and handling costs

The Company accounts for shipping and handling fees in accordance with the Financial Accounting Standards Board Emerging Issues Task Force Issue No. 00-10 “Accounting for Shipping and Handling Fees and Costs” (“EITF Issue No. 00-10”).  While amounts charged to customers for shipping products are included in revenues, the related costs are classified in cost of goods sold as incurred.

F-9

ARMCO & METAWISE (HK) LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2008 AND 2007

(UNAUDITED)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Income taxes

The Company follows Statement of Financial Accounting Standards No. 109 “Accounting for Income Taxes” (“SFAS No. 109”), which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns.  Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.  Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized.  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.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Consolidated Statements of Operations and Comprehensive Income in the period that includes the enactment date.

Foreign currency translation

Transactions and balances originally denominated in U.S. dollars are presented at their original amounts.  Transactions and balances in other currencies are converted into U.S. dollars in accordance with Statement of Financial Accounting Standards No. 52 “Foreign Currency Translation” (“SFAS No. 52”) and are included in determining net income or loss.

The financial records of the Company are maintained in their local currency, the Renminbi (“RMB”), which is the functional currency.  Assets and liabilities are translated from the local currency into the reporting currency, U.S. dollars, at the exchange rate prevailing at the balance sheet date. Revenues and expenses are translated at weighted average exchange rates for the period to approximate translation at the exchange rates prevailing at the dates those elements are recognized in the combined and consolidated financial statements.  Foreign currencytranslation gain (loss) resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining accumulated other comprehensive income in the combined and consolidated statement of stockholders’ equity.

RMB is not a fully convertible currency.  All foreign exchange transactions involving RMB must take place either through the People’s Bank of China (the “PBOC”) or other institutions authorized to buy and sell foreign exchange.  The exchange rate adopted for the foreign exchange transactions are the rates of exchange quoted by the PBOC, which are determined largely by supply and demand. Translation of amounts from RMB into United States dollars (“US$”) has been made at the following exchange rates for the respective years:

March 31, 2008
Balance sheet	RMB 7.0120 to US$1.00
Statement of operations and comprehensive income	RMB 7.1590 to US$1.00
March 31, 2007
Balance sheet	RMB 7.7232 to US$1.00
Statement of operations and comprehensive income	RMB 7.7582 to US$1.00
December 31, 2006
Balance sheet	RMB 7.8041 to US$1.00

Commencing July 21, 2005, China adopted a managed floating exchange rate regime based on market demand and supply with reference to a basket of currencies.  The exchange rate of the US dollar against the RMB was adjusted from approximately RMB 8.28 per US dollar to approximately RMB 8.11 per US dollar on July 21, 2005.  Since then, the PBOC administers and regulates the exchange rate of the US dollar against the RMB taking into account demand and supply of RMB, as well as domestic and foreign economic and financial conditions.

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ARMCO & METAWISE (HK) LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2008 AND 2007

(UNAUDITED)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Foreign currency translation (Continued)

Net gains and losses resulting from foreign exchange transactions, if any, are included in the Consolidated Statements of Operations and Comprehensive Income (Loss).  The foreign currency translation gain (loss) at March 31, 2008 and 2007 was $180,190 and ($53,791) and the effect of the exchange rate changes on cash flows for the interim periods then ended were ($7,661) and $266, respectively.

Comprehensive income(loss)

The Company has adopted Statement of Financial Accounting Standards No. 130 “Reporting Comprehensive Income” (“SFAS No. 130”).  This statement establishes rules for the reporting of comprehensive income (loss) and its components.  Comprehensive income (loss), for the Company, consists of net income (loss) and foreign currency translation adjustments and is presented in the Consolidated Statements of Operations and Comprehensive Income (Loss) and Stockholders’ Equity.

Commitments and contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

Recently issued accounting pronouncements

On June 5, 2003, the United States Securities and Exchange Commission (“SEC”) adopted final rules under Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”), as amended by SEC Release No. 33-8889 on February 1, 2008.  Commencing with its annual report for the year ending December 31, 2008, the Company will be required to include a report of management on its internal control over financial reporting. The internal control report must include a statement of:

· management’s responsibility for establishing and maintaining adequate internal control over its financial reporting;

· management’s assessment of the effectiveness of its internal control over financial reporting as of its year end; and

· the framework used by management to evaluate the effectiveness of the Company’s internal control over financial reporting.

Furthermore, in the following year, it is required to file the auditor’s attestation report separately on the Company’s internal control over financial reporting on whether it believes that the Company has maintained, in all material respects, effective internal control over financial reporting.

On September 15, 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Statement No. 157 “Fair Value Measurements” (“SFAS No. 157”).  SFAS No. 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements.  SFAS No. 157 is effective as of the beginning of the first fiscal year beginning after November 15, 2007.  The Company does not anticipate that the adoption of this statement will have a material effect on the Company’s financial condition and results of operations.

On February 15, 2007, the FASB issued FASB Statement No. 159 “The Fair Value Option for Financial Assets and Financial Liabilities: Including an amendment of FASB Statement No. 115” (“SFAS No. 159”).  SFAS No. 159 permits all entities to elect to measure many financial instruments and certain other items at fair value with changes in fair value reported in earnings.  SFAS No. 159 is effective as of the beginning of the first fiscal year that begins after November 15, 2007, with earlier adoption permitted.  The Company does not anticipate that the adoption of this statement will have a material effect on the Company’s financial condition and results of operations.

In June 2007, the Emerging Issues Task Force of the FASB issued EITF Issue No. 07-3 “Accounting forNonrefundable Advance Payments for Goods or Services to be Used in Future Research and DevelopmentActivities” (“EITF Issue No. 07-3”) which is effective for fiscal years beginning after December 15, 2007.  EITF Issue No. 07-3 requires that nonrefundable advance payments for future research and development activities be deferred and capitalized.  Such amounts will be recognized as an expense as the goods are delivered or the related services are performed.  The Company does not expect the adoption of EITF Issue No. 07-3 to have a material impact on the financial results of the Company.

F-11

ARMCO & METAWISE (HK) LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2008 AND 2007

(UNAUDITED)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Recently issued accounting pronouncements (Continued)

In December 2007, the FASB issued FASB Statement No. 141 (Revised 2007)“Business Combinations” (“SFAS No. 141(R)”), which requires the Company to record fair value estimates of contingent consideration and certain other potential liabilities during the original purchase price allocation, expense acquisition costs as incurred and does not permit certain restructuring activities previously allowed under Emerging Issues Task Force Issue No. 95-3 to be recorded as a component of purchase accounting. SFAS No. 141(R) applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008, except for the presentation and disclosure requirements, which shall be applied retrospectively for all periods presented. The Company will adopt this standard at the beginning of the Company’s year ending December 31, 2008 for all prospective business acquisitions. The Company has not determined the effect that the adoption of SFAS No. 141(R) will have on the financial results of the Company.

In December 2007, the FASB issued FASB Statement No. 160“Noncontrolling Interests in Consolidated Financial Statements - an amendment of ARB No. 51” (“SFAS No. 160”), which causes noncontrolling interests in subsidiaries to be included in the equity section of the balance sheet. SFAS No. 160 applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008, except for the presentation and disclosure requirements, which shall be applied retrospectively for all periods presented. The Company will adopt this standard at the beginning of the Company’s year ending December 31, 2008 for all prospective business acquisitions. The Company has not determined the effect that the adoption of SFAS No. 160 will have on the financial results of the Company.

In March 2008, the FASB issued FASB Statement No. 161 “Disclosures about Derivative Instruments and Hedging Activities an amendment of FASB Statement No. 133” (“SFAS No. 161”), which changes the disclosure requirements for derivative instruments and hedging activities. Pursuant to SFAS No.161, Entities are required to provide enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. SFAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008 with early application encouraged. SFAS No. 161 encourages but does not require disclosures for earlier periods presented for comparative purposes at initial adoption. In years after initial adoption, this Statement requires comparative disclosures only for periods subsequent to initial adoption. The Company will adopt this standard at the beginning of the Company’s year ending December 31, 2008. The Company does not expect the adoption of SFAS No. 161 to have a material impact on the financial results of the Company.

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements.

NOTE 3 – INVENTORIES

Inventories at March 31, 2008 and December 31, 2007 consisted of the following:

	March 31, 2008		December 31, 2007
Goods purchased	$	4,272,281	$	2,434,908
	$	4,272,281	$	2,434,908

F-12

ARMCO & METAWISE (HK) LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2008 AND 2007

(UNAUDITED)

NOTE 4 – FINANCIAL INSTRUMENTS

The Company utilized forward foreign currency exchange contracts with a financial institution, resulting in a fixed foreign currency exchange rate of US$1.00 to RMB 7.3750.  These forward foreign currency exchange contracts will expire through August 2, 2008.

The forward foreign currency exchange contracts and related swap liabilities at March 31, 2008 and December 31, 2007 consisted of the following:

	March 31, 2008		December 31, 2007
Forward foreign currency exchange contracts	$	308,744	$	308,744
Forward foreign currency exchange swap liabilities		25,009		12,079
	$	333,753	$	320,823

NOTE 5 – RELATED PARTY TRANSACTIONS

Advances to (from) chairman, chief executive officer and sole stockholder

Advances to (from) chairman, chief executive officer and sole stockholder at March 31, 2008 and December 31, 2007, consisted of the following:

	March 31, 2008		December 31, 2007
Advances to (from) chairman, chief executive officer and sole stockholder	$	17,004	$	(921,444	)
	$	17,004	$	(921,444	)

The advances bear no interest and have no formal repayment terms.

NOTE 6 – CONCENTRATIONS AND CREDIT RISK

(i) Customers and Credit Concentrations

One (1) unrelated customer accounted for approximately 96.9% of total sales for the interim period ended March 31, 2008 and two (2) different unrelated customers accounted for approximately 74.4% and 25.2% of total sales for the interim period ended March 31, 2008, respectively.

(ii) Vendor Concentrations

One (1) unrelated vendor accounted for 85.0% of total purchases for the interim period ended March 31, 2008.  The Company did not make any material purchases for the interim period ended March 31, 2007.

(iii) Credit Risk

Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash and cash equivalents.  As of March 31, 2008, substantially all of the Company’s cash and cash equivalents were held by major financial institutions located in the PRC, none of which are insured.  However, the Company has not experienced losses on these accounts and management believes that the Company is not exposed to significant risks on such accounts.

F-13

ARMCO & METAWISE (HK) LIMITED AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2008 AND 2007

(UNAUDITED)

NOTE 6 – CONCENTRATIONS AND CREDIT RISK (Continued)

(iv) Foreign currency risk

The Company is exposed to fluctuations in foreign currencies for transactions denominated in currencies other than RMB, the functional currencies due to the fact the majority of the Company’s purchasing activities are transacted in foreign currencies.  The Company had foreign currency hedges in place at March 31, 2008 to reduce such exposure.  The estimated loss in fair value on foreign currency hedges outstanding as of March 31, 2008 was $25,009.

NOTE 7 - FOREIGN OPERATIONS

(i) Operations

Substantially all of the Company’s operations are carried out and all of its assets are located in the PRC.  Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environments in the PRC.  The Company’s business may be influenced by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency fluctuation and remittances and methods of taxation, among other things.

(ii) Dividends and Reserves

Under the laws of the PRC, net income after taxation can only be distributed as dividends after appropriation has been made for the following: (i) cumulative prior years’ losses, if any; (ii) allocations to the “Statutory Surplus Reserve” of at least 10% of net income after tax, as determined under PRC accounting rules and regulations, until the fund amounts to 50% of the Company’s registered capital; (iii) allocations of 5-10% of income after tax, as determined under PRC accounting rules and regulations, to the Company’s “Statutory Common Welfare Fund”, which is established for the purpose of providing employee facilities and other collective benefits to employees in PRC; and (iv) allocations to any discretionary surplus reserve, if approved by stockholders.

As of March 31, 2008, the Company had no Statutory Surplus Reserve and the Statutory Common Welfare Fund established and segregated in retained earnings.

F-14

ARMCO & METAWISE (HK) LIMITED AND SUBSIDIARIES

Schedule II Valuation and Qualifying Accounts for the interim periods ended March 31, 2008 and 2007

	Balance at		Add		Deduct			Add		Balance  at
	beginning of		Charge to		bad debt			translation		end of
	period		Income		written off			adjustment		period
For the Interim Period Ended March 31, 2007:
Allowance for doubtful accounts	$	-	$	-	$	(-	)	$	-	$	-
For the Interim Period Ended March 31, 2008:
Allowance for doubtful accounts	$	-	$	-	$	(-	)	$	-	$	-

F-15