8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported):November 12, 2010

TEEN EDUCATION GROUP, INC.

(Exact name of registrant as specified in its charter)

Delaware	333-147045	26-032648
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer  Identification No.)

 NO. 288 Maodian Road

Liantang Industrial Park, Qingpu District

Shanghai, PRC

(Address of principal executive offices)

+86 21-39252120

 (Registrant’s telephone number,

including area code)

6767 W. Tropicana Ave., Suite 207

Las Vegas, NV 89103

(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))

 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Current Report on Form 8-K contains forward looking statements that involve risks and uncertainties, principally in the sections entitled “Description of Business,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and those discussed in other documents we file with the U.S. Securities and Exchange Commission that are incorporated into this Current Report on Form 8-K by reference. All statements other than statements of historical fact contained in this Current Report on Form 8-K, including statements regarding future events, our future financial performance, business strategy, and plans and objectives of management for future operations, are forward-looking statements. We have attempted to identify forward-looking statements by terminology including “anticipates,” “believes,” “can,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “should,” or “will” or the negative of these terms or other comparable terminology. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short term and long term business operations, and financial needs. Although we do not make forward-looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks outlined under “Risk Factors” or elsewhere in this Current Report on Form 8-K, which may cause our or our industry’s actual results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time and it is not possible for us to predict all risk factors, nor can we address the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause our actual results to differ materially from those contained in any forward-looking statements.

You should not place undue reliance on any forward-looking statement, each of which applies only as of the date of this Current Report on Form 8-K. Before you invest in our common stock, you should be aware that the occurrence of the events described in the section entitled “Risk Factors” and elsewhere in this Current Report on Form 8-K could negatively affect our business, operating results, financial condition and stock price. Except as required by law, we undertake no obligation to update or revise publicly any of the forward-looking statements after the date of this Current Report on Form 8-K to conform our statements to actual results or changed expectations.

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Item 1.01 Entry into a Material Definitive Agreement.

As more fully described in Item 2.01 below, Teen Education Group, Inc. (“we,” “us,” “our,” “Teen Education” or the “Company”), a Delaware corporation, acquired an automotive distribution company in accordance with a share exchange agreement, dated November 12, 2010 (the “Exchange Agreement”), by and among the Company, Robert L. Wilson, the majority shareholder of the Company (the “Majority Shareholder”), Hongkong Charter International Group Limited, a Hongkong company (“Hongkong Limited”), and the shareholders of Hongkong Limited (the “Hongkong Limited Shareholders”). Hongkong Limited was incorporated in Hongkong on August 21, 2009 and owns 100% of the issued and outstanding capital stock of Shanghai Vomart Auto Parts Co., Ltd. (“Vomart”), which was incorporated as a People’s Republic of China (“PRC” or “China”) limited liability company on January 4, 2008, and became a wholly foreign owned enterprise under the laws of the PRC on May 12, 2010. A copy of the Exchange Agreement is included as Exhibit 2.1 to this Current Report on Form 8-K and is hereby incorporated by reference. All references to the Exchange Agreement and other exhibits to this Current Report on Form 8-K are qualified, in their entirety, by the text of such exhibits.

The closing of the transaction (the “Closing”) took place on November 12, 2010 (the “Closing Date”). On the Closing Date, pursuant to the terms of the Exchange Agreement, the Company acquired all of the outstanding shares of Hongkong Limited from the Hongkong Limited Shareholders (the “Hongkong Limited Shares”). In exchange, we issued to the Hongkong Limited Shareholders, their designees or assigns, 2,250,000shares of the Company’s common stock (the “Exchange Shares”).  The Exchange Shares represent 90% of the issued and outstanding shares of the Company’s common stock on a fully diluted basis as of and immediately after the Closing (the “Share Exchange”). In addition, Hongkong Limited agreed to pay $350,000in cash to the Majority Shareholder.

Pursuant to the terms of the Exchange Agreement, the Majority Shareholder canceled a total of 2,000,000 shares of the Company’s common stock, which represents 100% of his security interests in the Company.

Pursuant to the Exchange Agreement, Hongkong Limited became a wholly owned subsidiary of the Company. The sole director of the Company approved the Exchange Agreement and the transactions contemplated under the Exchange Agreement. The directors of Hongkong Limited approved the Exchange Agreement and the transactions contemplated under the Exchange Agreement.

As a further condition of the Share Exchange, on the Closing Date, Robert L. Wilson resigned as the sole director of the Company, effective on such date that is ten (10) calendar days after the Company mails an Information Statement to the Company’s shareholders prepared pursuant to Rule 14f-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), relating to the Exchange Agreement, and further, appointed Qun Hu to the Company’s board of directors (the “Board”). Mr. Wilson also resigned on the Closing Date as the sole officer of the Company, effective as of the Closing Date, and the following persons were appointed as officers of our Company: Mr. Zhoufeng Shen was appointed as the Company’s President and Chief Executive Officer and Ms. Xiaomei Wang was appointed as the Company’s Chief Financial Officer.

Item 2.01 Completion of Acquisition or Disposition of Assets.

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

FORM 10 DISCLOSURE

As disclosed throughout this Current Report on Form 8-K, on the Closing Date, the Company acquired Hongkong Limited in a reverse acquisition transaction. Item 2.01(f) of Form 8-K states that if the registrant was a shell company immediately before the reverse acquisition transaction disclosed under Item 2.01, then the registrant must disclose the information that would be required if the registrant were filing a general form for registration of securities on Form 10.

Since Teen Education Group, Inc. was a shell company immediately before the reverse acquisition transaction disclosed under Item 2.01, we are providing below the information that would be included in a Form 10 if we were to file a Form 10. Please note that the information provided below relates to the combined enterprises after the acquisition of Teen Education Group, Inc., except that information relating to periods prior to the date of the reverse acquisition only relate to Hongkong Limited and its consolidated subsidiaries unless otherwise specifically indicated.

Our Corporate History and Background

We were organized under the laws of the State of Delaware on April 16, 2007. From inception until the Closing Date, we were primarily engaged in the business of providing a financial literacy and money management educational program for teenagers on a fee for service offered basis.

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Acquisition of Hongkong Limited

On the Closing Date, we acquired Hongkong Limited, which is in the business of automotive parts distribution in the PRC.  On the Closing Date, pursuant to the terms of the Exchange Agreement, we acquired all of the Hongkong Limited Shares from the Hongkong Limited Shareholders, and the Hongkong Limited Shareholders transferred and contributed all of the Hongkong Limited Shares to us. In exchange, we issued the Exchange Shares to the Hongkong Limited Shareholders, their designees or assigns.

Pursuant to the terms of the Exchange Agreement, the Majority Shareholder canceled 2,000,000 shares of common stock of our Company, which constituted 100% of his security interests in the Company. Following the Share Exchange, there are 2,500,000shares of common stock issued and outstanding, 2,250,000 of which are restricted and issued to the Hongkong Limited Shareholders, their designees or assigns.

We have relocated our principal executive offices to NO. 288 Maodian Road, Liantang Industrial Park, Qingpu District, Shanghai, PRC, and our new telephone number is +86 21-39252120.

DESCRIPTION OF BUSINESS

Business Overview

We are one of the largest distributors of automotive replacement parts and accessories in the PRC. We began our operations in 2008 and currently own thirty-seven (37) stores in nine (9) provinces and municipalities, namely Jiangsu, Zhejiang, Hebei, Anhui, Fujian, Shanxi, Shanghai, Beijing, and Tianjin.  We distribute a broad selection of international brand name (such as Philips, Mahle, Denso, Bosch and Osr) and private label (such as Olande, Vanik, Mikef and Shengf) automotive replacement parts, such as, accessories and maintenance items for cars, minivans, vans, sport utility vehicles, light trucks, and heavy-duty trucks. Our typical products include batteries, brake pads, filters, storage batteries, and transmission fluid.

Historical Sales & Income Summary

(Amounts expressed in USD)	Fiscal Year Ended June 30,
	2010			2009			% Growth
Revenue		$	4,782,754		$	1,282,918		272.8	%
Gross Profit			1,245,800			365,589		240.8	%
Net Income		$	38,514		$	79,890		(51.8	)%

Corporate Organization

After the Share Exchange, we have approximately 80shareholders of our common stock.  Our organizational structure was developed to allow foreign capital infusion under the laws of the PRC and maintain an efficient tax structure, as well as maintain internal organizational efficiencies. Our organizational structure after the consummation of the Share Exchange is illustrated in the table below:

Business Strategy

Our indirect wholly-owned subsidiary, Vomart, was incorporated in the PRC on January 4, 2008, and become a wholly-owned foreign enterprise under the laws of the PRC on May 12, 2010.

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We are committed to providing customers with superior service, value, and quality automotive parts and products at conveniently located, well-designed, and unified stores. We intend to be one of China’s leading and largest national chain auto parts distributor within the next five (5)years by, among other things, providing a highly efficient distribution network integrating upstream suppliers and downstream end users, growing organically through aggressively marketing our existing stores (each of which we wholly own), opening new stores, and strategic acquisitions of regional vendors that meet our quality standards.  By 2015, we plan to expand our distribution network to cover two thirds (2/3) of China, covering 27 different provinces and municipalities. The total number of automotive vehicles in China continues to grow at a rapid pace, which directly relates to the need for an increase of aftermarket auto parts.

In order to boost the Company’s market share, we intend to:

· Achieve a national scale and penetrate the auto parts market by growing the number of wholly owned stores to over 390 stores and the number of franchise stores to 300 franchise stores within five years. As a terminal market distributor, our market strategy is to cover the market as fast as possible. Depending on the gross domestic product (“GDP”) and the market capacity of different areas, we plan to open 1-2 wholly-owned stores in the prefecture-level cities and 2-5 wholly-owned stores in the capital cities. At the same time, we will grow our market share by opening franchise stores in the county level cities and less developed areas;

· Build an efficient first-class distribution and logistics system that is effectively managed by constantly improving our Enterprise Resource Planning (as defined herein) software;

· Provide a broad selection of brand name replacement parts and a complete line of private-label products; and

· Build a national and well-known brand name in the China automotive replacement market through intensive marketing campaigns.

Therefore, our strategies are to capitalize on our competitive advantages, expand our current market penetration, and benefit from the anticipated rapid growth in China’s automotive replacement market.

Industry and Market Analysis

Fast Growing China Automotive Market

China has experienced rapid economic growth in the last 20 years and is currently the world’s second largest economy after the United States. In 2009, China achieved a GDP of USD $5.2 trillion. According to the China State Statistics Bureau, by 2013, China’s automotive market is expected to comprise over ten percent (10%) of global automotive sales.

Today, all of the world’s major automakers are present in China, including but not limited to, Ford, General Motors, Volkswagen, Toyota, Honda, and Daimler Chrysler. China’s automotive industry has shown double-digit growth in terms of percentage growth in recent years and such robust growth is expected to continue. There are several key drivers that fuel China’s future growth, such as government policy, higher disposable income of urban residents, infrastructure improvement, and rapid proliferation of car models.

China Automotive Replacement Market

The China automotive replacement market is experiencing significant growth alongside the rapid growth of China’s automotive market. Some of the key growth drivers include:

· Increase in Vehicle Population – According to the Xinhua News Agency, thevehiclepopulation grew to over 76.19 million vehicles as of the end of 2009, and is forecasted to rise to 200 million vehicles by 2020 at an average annual growth rate of approximately 20%;

· Increase in the Number of Cars that are Between Four and Seven Years Old – As a result of the large sales in the last decade, the vehicles in China are relatively new, but more and more vehicles are owned in the PRC between four and seven years. We expect to see more repairs and maintenance needed as vehicles grow older, leading to the generation of more replacement sales; and

· Breadth of Automotive Parts Needed – For a replacement market distributor/retailer to serve the largest possible market, it has to have the scale and the capacity to carry an extensive line of products. We see American, Japanese, Korean and other foreign original equipment manufacturers (OEMs) bring a great variety of vehicle technologies and car models into China. This complicates and challenges the young and immature China automotive replacement market. We are able to serve the largest possible market, and have the scale and capacity to carry an extensive line of products.

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Growth Strategy

We believe that we are positioned to be a leading national distributor of automotive replacement parts in China. We plan to first build store networks by opening wholly-owned stores in capital cities throughout China, such as Shanghai, Beijing, Hangzhou, Nanjing, Shijiazhuang, Hefei, and Fuzhou that will provide middle-to-high end brand name products as well as a wide selection of private label products.

We believe that automotive parts chain stores like us which have multiple locations have competitive advantages in customer service, product offerings, marketing, and distribution, as compared to independent retailers.  This allows us to address and effectively respond to the following trends:

· The need for the ability to provide a broad selection of brands and replacement/maintenance items;

· The phase out of the prevailing brand dealership as the primary distribution channel for automotive replacement parts; and

· The need for an automotive replacement parts chain operation to consolidate and regulate the market disorganization and fragmentation of the China automotive aftermarket.

Aggressively Open New Stores in New Markets

We intend to aggressively open new stores and acquire/consolidate with, regional distributors to achieve penetration in more geographic locations. As a result, we plan to open approximately 40 stores by the end of 2010 and 250 stores by 2014.

Our selection process begins by targeting provincial capitals/large markets for expansion of our store networks. Such current target markets include Shanghai City and Jinan City in Shandong Province, Guangzhou City in Guangdong Province, Chengdu City in Sichuan Province and Zhengzhou City in Henan Province. While we have faced, and expect to continue to face, aggressive competition in the more densely populated markets, we believe that we have competed effectively in certain developed coastal areas in China, such as Shanghai City, Zhejiang, and Jiangsu Provinces, and that we are well positioned to continue to compete effectively in such markets. Once we have a well-established presence in our selected capital cities (Hangzhou, Fuzhou, Shijiazhuang, and Hefei), we will start to penetrate into second tier cities such as Qingdao, Weifang, and Yantai in Shandong Province, and Shenzhen, Dongguan, and Foshan in Guangdong Province.

To date, we have been successful in locating suitable sites for the construction of new stores. We typically open new stores by constructing the store at a site we lease. Then, according to our Company’s inventory control (IC) system, we stock the new store with furniture and inventory and hire and train employees to complete the opening of our new stores.

We choose store sites that are strategically located in clusters within geographic areas that complement our distribution system in order to achieve economies of scale in management, advertising, and distribution costs. Other key factors we consider in the site selection process include:

· projected future profitability;

· cost of real estate;

· population density and growth patterns;

· administrative level of the city;

· transportation infrastructure;

· local GDP and “R ratio” (vehicle price/per capita GDP);

· demographics such as age and per capita income;

· vehicle counts and vehicle profiles;

· the number and type of existing automotive repair facilities;

· the number and type of customers (such as automotive repair facilities) to be served; and

· the number of other retail auto parts competitors within a pre-determined radius and the operational strength of such competitors.

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Same Store Sales Growth

We will constantly improve our service and product mix to achieve higher sales and profitability in our existing stores. We believe that superior customer service generates customer satisfaction, which ultimately generates increased sales. To increase our profitability, we will constantly seek to add more profitable private label products to our existing product lines.

Selectively Develop Franchise Stores

We believe that national chains operate more efficiently than smaller independent operators. When our brand image is well accepted by the market, we will selectively develop franchise stores in smaller cities to rapidly penetrate the market and strengthen our position as a leading automotive replacement parts distributor.

Store Network

Current Store Locations

Our business plan divides the China market into the six geographic regions listed below. Each geographic region is led by a regional (subsidiary) manager, who reports directly to our headquarters. Our regional managers currently oversee seven to ten stores. The following table describes the six sales regions:

Regions	Provinces and Municipalities Covered
East China	Fujian, Shanghai, Zhejiang, Jiangsu, Anhui, Shandong
North China	Hebei, Henan, Shanxi, Beijing, Tianjin, Shanxi
North-East China	Inner Mongolia, Jilin, Liaoning, Heilongjiang
North-West China	Ningxia, Xinjiang
South-West China	Sichuan, Yunnan, Guizhou, Chongqing, Chengdu
South China	Guangdong, Hubei, Hunan, Jiangxi

On average, our stores carry approximately 19,000 individual stock units and cover approximately 1039 square feet. As of September 30, 2010, we operate an aggregate of approximately 38,441 square feet in our 37 stores. Our stores are served primarily by the nearest regional distribution center, but they also have access to the larger selection of inventory available at the applicable master distribution store. Our East China master distribution center covers approximately 53,820 square feet. Two of our regional distribution centers, Nanjing and Hangzhou, cover approximately 2,150 square feet and 3,230 square feet, respectively.

The following table lists the geographic location of our 37 stores:

Regions	Provinces	No. of Stores	Store locations
East China	Shanghai	6	Qingpu, Putuo, Fengxian, Longhua, Pudong, Xuhuihuaji
	Zhejiang	9	Jintong, Yiwu, Jinhua, Jiaxing, Ningbo (2), Taizhou, Wenzhou, Shaoxing
	Anhui	2	Hefei and Wuhu
	Jiangsu	9	Nanjing Ningnan, Nanjing Xinyi, Nantong, Wuxi, Suzhou, Yangzhou, Kunshan, Xuzhou and Changzhou
	Fujian	1	Fuzhou
North China	Hebei	5	Shijiazhuang, Jiyuan, Shijiazhuang Donglian, Tangshan, Baoding Handan
	Beijing	1	Beijing
	Tianjin	2	Tianjin, Tanggu
	Shanxi	2	Taiyuan, Datong

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We use a uniform and consistent corporate visual image in terms of store layout and merchandise presentation. Merchandise is arranged to satisfy our “14 Rules for Merchandise Presentation” to provide easy customer access, maximum selling space, and to prominently display high-turnover products and accessories to customers. The “14 Rules for Merchandise Presentation” require (i) the products should be displayed in the right place where the customers can easily see them; (ii) we put as many products as we can on the storage racks; (iii) the products should be displayed in vertical centralized; (iv) we put heavy products downside and light products upside;(v) we make sure there are complete range of products displayed; (vi) the storage racks should be fully displayed (vii) the display should be designed dynamic and full of originality; (viii) key products should be given a prominent position on the display; (ix) make sure the products on the racks are easy to reach for the customer; (x) the display should be unified and integrated; (xi) the products should be displayed in a tidy and neat condition; (xii) first in first out (FIFO) rotation of display units; (xiii) the minimum reserve principle; and (xiv) the products stack base should be regular.

Store Automation

To manage store operations and enhance customer service, we use computers and Ufida Enterprise Resource Planning systems in all of our stores. Our system is linked with the computers located in each of our distribution centers and our headquarters. This system reduces a customer’s checkout time, facilitates customer management, and enhances services and customer loyalty. It also collects detailed sales information, which assists in store and financial management, internal communications, strategic planning, inventory control, and distribution efficiency.

Target Customers

We target two groups of customers: (i) second tier wholesalers and (ii) professional installers, such as repair shops, automobile cosmetics shops and 4S shops (automobile dealers) in China. Commercial sales are the foundation of our business because, in the past in China, private vehicle owners usually rely on professionals for repair and maintenance. The Do-It-Yourself (DIY) market, which is comprised of consumers who typically repair and maintain their vehicles themselves, is currently very limited. Therefore, we are focused on commercial sales at this time.

Second Tier Wholesalers

We define second tier wholesalers as automotive replacement parts wholesalers in the provinces, provincial capitals, and second tier cities. Provincial wholesalers sell in the large provinces, provincial capital wholesalers sell in the capital cities of the provinces, and second tier city wholesalers sell in large cities that are not as well known as first tier cities (such as Beijing and Shanghai and Shenzhen). The second tier wholesalers’ distribution network typically covers most of the small retailers and repair shops in the provinces, provincial cities, and second tier cities, as applicable. Their purchasing volume is large, buttheir returnsare low. As of September 30, 2010, we had 225 wholesaler customers.

Professional Installers

The demand of professional installer customers is typically smaller, but generally steady. Such professional installer customers purchase a variety of products and represent a majority of our customer list.  There are some professional installers responsible for a significant amount of our sales, but the loss of such professional installers won’t have a material adverse effect on our financial condition and results of operation because the gross profits from sales to professional installers only constitutes approximately 3% of our current gross profits.  We seek to develop long-term strategic relationships with these customers. The category of professional installer can be divided into three groups:

· Repair shops:Repair shops provide regular vehicle maintenance and repair services. Repair shops are sales terminals with small purchasing quantity, but high margin contribution. We consider repair shops as our priority customers. While domestic and foreign chain shops are emerging in China, we believe that this business type will become the dominant channel for vehicle owners to get services/parts upon expiration of their OEM warranty. According to Auto China, as of 2003, there were over 300,000 automotive service providers in China, of which approximately 220,000 were professional installer repair shops that are accredited to perform classified services. The remaining 80,000 did not have proper accreditation. We attract these repair shop customers with our full line of products, on time delivery, inventory management, and professional solutions;

· Cosmetics shops: Cosmetics shops provide simple regular vehicle maintenance services on the exterior of vehicles. Cosmetics shops are also sales terminals with small purchasing quantities, but high margin contribution; and

· 4S and OEM authorized shops:These professional installers are automobile dealers that provide related after-sale maintenance and repair services. 4S shops are considered sales terminals with uncertain purchasing quantity, but high margin contribution.  Many vehicle owners prefer these shops for major repairs and genuine parts.

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There are also small, independently owned repair garages that sometimes use substitute and counterfeit parts. These types of shops are not our priority customers. We believe in the long run, most of these repair shops will eventually be eliminated from the market.

Major Suppliers

We select brand name global and local automotive parts manufacturers as our suppliers. We will purchase collectively and directly from manufacturers so as to eliminate the middle layers of distributors/wholesalers and gain large order discounts, enabling us to offer more competitive prices.

There were approximately 2,000 auto parts manufacturers in China at the end of 2005. Among those are about 500 joint ventures/wholly-owned foreign enterprises, including such enterprises as Bosch, Delphi, Visteon, Denso, Siemens, and Halla.  These manufacturers seek reliable and competent distributors to market their brand name products and protect their intellectual property from the attacks of counterfeiters. These are our priority suppliers because they can help us reinforce our brand name and enhance our product image.

The approximately 1,500 local parts producers are relatively small and still in their early growth stage with respect to the replacement market, though a significant number of them are able to produce good quality parts.  Some of these smaller producers have supplied the foreign replacement market for years. We plan on leveraging our distribution/retail network and buyer’s bargaining power to source private label products from these manufacturers to increase our profit margins.

As of September 30, 2010, we had 52 suppliers. Our largest supplier, Philips (China) Co., Ltd., accounted for approximately 25%of our total purchase dollars and our top five suppliers combined accounted for approximately 65% of our total purchases. We have no long-term contractual purchase commitments with any of our suppliers and our supplier contracts usually have a term of one year. We believe that alternative supply sources exist, at similar cost, for most types of products sold. The following table sets forth the names of our major suppliers.

Brand	Products	Supplier Name
YBM	Filter	Shanghai YBM Filter Co. Ltd
Olande	Filter	Shanghai YBM Filter Co. Ltd
YBM	Belt	Jiangsu YBM Rubber Co. Ltd
Senlite	Belt	Jiangsu YBM Rubber Co. Ltd
MAHLE	Filter	Mahle Trade (Shanghai) Co. Ltd
PHILIPS	Light bulb	Philips (China) Co. Ltd
Narva	Light bulb	Philips (China) Co. Ltd
DENSO	Sparkplug	Beijing Zhongqi United Auto Parts Chain Co. Ltd
DENSO	Windshield wiper	Beijing Zhongqi United Auto Parts Chain Co. Ltd
ELF	Oil and Transmission Fluid	Elf Lubricant (Guangzhou) Co. Ltd
BOSCH	Windshield wiper	Bosch Trade (Shanghai) Co. Ltd
BOSCH	Sparkplug	Bosch Trade (Shanghai) Co. Ltd
BOSCH	Filter	Bosch Trade (Shanghai) Co. Ltd
BOSCH	Brake pads	Bosch Trade (Shanghai) Co. Ltd
OP	Belt	OP (China) Co. Ltd
7CF	Maintenance items	Shenzhen Rainbow Fine Chemicals Co. Ltd
Osram	Light bulb	Osram (China) Lighting Co. Ltd

Competitive Strengths

Under the current circumstances, we believe the following strengths allow us to compete effectively in the automotive aftermarket in China:

Fast decision-making and execution

Unlike some other chain retailers in the industry, which developed their network through acquiring the majority shares of independently-owned stores and thus have uncoordinated interests, we have only one direct parent and one indirect parent at the top of our capital structure and all of our stores are wholly owned, enabling us to make and execute decisions quickly. Moreover, our flat and lean organizational structure allows us to have efficient execution.

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Extensive industry experiences and resources

Key members of our senior management team have, on average, six (6) years of experience in the China automotive aftermarket industry. We have developed deep relationships and connections with local industry players and accumulated extensive local knowledge that will serve as critical building blocks for our success. As a result, we have a clear understanding of the local customers’ preferences and needs, and are able to cater our products to those local characteristics. Our supporting management and workforce are well trained and motivated.

Broad selection of brands represented

In less than one year, we entered into dealership contracts with eight brands: Philips, Bosch, Denso, Mahle, Osram, 7CF, Lihua, and Elf. We have confidence that with the strengths we possess in our brand name, store location, marketing assistance, product mix, inventory/logistics, and management, we will be able to attract more brands to our store. We believe that under existing market conditions, with dozens of car makes and models, our ability to carry a great variety of name brand products is a key component to acquiring customers and a crucial element to chain store success.

Products and Services

Products

We offer a broad selection of national brand name and private label automotive aftermarket products for domestic and imported vehicles. Our products include automotive replacement parts, maintenance items, and accessories. We mainly serve the professional installers and second tier wholesalers.

Our merchandise generally consists of nationally recognized and well-advertised brand names with big market influence products, such as Philips, Bosch, Denso, Mahle, Osram, 7CF, and Elf. In addition to our brand name products, our stores carry a variety of high-quality private label products. Because most of our private label products are produced by carefully selected manufacturers and meet or exceed original equipment manufacturer specifications, we believe that our private label products are generally of equal quality with comparable brand name products carried in our stores, but at equal or lower prices. These factors play key roles in influencing our customers’ purchasing behaviors. Currently, our private label products include, but are not limited to, brake pads, filters, transmission belts, and refrigerants.

Our products are grouped into two categories:

· Dealer products - Products sold under dealership agreement in defined regions; and

· OEM products - Private label proprietary name products.

The items below are examples of the typical products we keep in our stores:

— Batteries	— Filters
— Brake pads	— Windshield wipers
— Spark plugs	— Refrigerants
— Horns	— Bulbs
— Oil & transmission fluids	— Maintenance items

The following table sets forth our top 10 best selling products in 2010:

	Model	Product	Units sold
1	f8dcor	Bosch Sparkplug	226341
2	12499	Philips Light bulb	174442
3	w7dc	Bosch Sparkplug	161099
4	12498	Philips Light bulb	112537
5	ac247	7CF Cleaning agent	93660
6	12754	Philips Light bulb	76049
7	510038	YBM Filter	17930
8	512005	YBM Filter	15163
9	oc488	MahleFilter	12762
10	514002	YBM Filter	10044

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The following table sets forth the percentage sales by product types in 2010:

Products	Percent of sales
Brake systems		4	%
Filters		10	%
Transmission belts		2	%
Oil & transmission fluids		26	%
Spark plugs		12	%
Lighting		30	%
Windshield wipers		4	%
Storage battery cells		5	%
Maintenance items		7	%
Total		100	%

Product pricing is generally established to compete with the pricing policies of competitors in the same market area. We seek to optimize profitability while maintaining competitiveness. Most products that we sell are priced based on a combination of internal gross margin targets of 18% and the prices of our competitors. Additional savings are available to our customers through volume discounts and special promotional pricing. Consistent with our low price guarantee, each of our stores will match any verifiable price on any in-stock product of the same or comparable quality offered by our competitors.

Services

We are constantly working to understand our customers’ needs and wants in order to better serve them and build long-lasting, loyal relationships.

Warranty

We only distribute products to wholesalers/repair shops which provide services related thereto. Our parts suppliers are responsible for all warranties related to the parts.  Repair shops are responsible for their after sales services.

Customer Service

We seek to attract new professional installer customers and to retain existing customers by offering superior customer service, the key elements of which include:

· Superior in-store point of sale service from highly-motivated, professional, and technically proficient store personnel;

· Extensive selection and availability of products;

· Attractive stores in convenient locations; and

· Competitive pricing that is supported by a “good, better, best” product assortment designed to meet all of our customers’ quality and value preferences.

We believe that the satisfaction of professional installer customers is substantially dependent upon our ability to provide, in a timely fashion, the specific automotive products requested. We continuously refine the inventory levels and product mix carried in our stores based, in large part, on the sales movement tracked by (i) our IC system, (ii) market vehicle registration data and (iii) management’s assessment of the changes and trends in the marketplace.

Distribution and Logistics

We employ a policy of centralized procurement and de-centralized sales. By implementing this policy, we seek to assure product availability while lowering our inventory carrying costs and controlling our inventory. We use the Ufida ERP system (version U8.72) to manage our inventory and warehousing. By centralizing the procurement function, we gain strong bargaining power from our suppliers. Further, centralized procurement equips us with better credit terms and better services.

We currently operate three distribution centers (Hangzhou, Nanjing, Shijiazhuang) covering an aggregate of approximately 59,200 square feet. Our distribution centers are equipped with forklifts and hydraulic power trailers, which expedite the loading and unloading of our inventory. The distribution centers utilize technology to electronically receive orders from computers located in each of our stores. Each of our stores is connected through secured data transmission technology to our distribution centers and corporate headquarters.

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We have a three-tier warehousing and distribution system to optimize inventory and logistics management. Under this system, we have (i) master distribution centers, (ii) regional distribution centers, and (iii) store inventories.

The first tier, the master distribution center, is able to supply dealer products, distribution products, and OEM products. It accepts orders directly from stores and delivers the merchandise. The master distribution centers have two important functions: (i) retail sales to professional installers by stocking a complete line of parts for different vehicle models/makes to assure product availability and (ii) wholesales of dealer products by assuring prompt action to competition and market demand.

The second tier is the regional distribution center, such as our Nanjing regional distribution center and Hangzhou regional distribution center, which is further categorized into two subcategories: (i) the circulation distribution center and (ii) the supply distribution center. The circulation distribution center manages all dealer products while the supply distribution center is setup for transitional inventory.

The third tier is the store inventories, which assure the store’s daily operation and is only responsible for the store’s everyday sales. The store inventories are determined based on sales numbers. Currently, the number of inventory is determined by the average inventory level to sales ratio.  The average inventory level is determined by the (i) sum of the (A) storage during the early part of a month and (B) storage at the end of the month, divided by 2.

Most of our merchandise flows from our distribution centers to our stores by third-party transportation companies. Currently, the distribution centers typically carry an inventory of 40%-50% of our average monthly sales. We believe that with our growing scale, we will be able to have more orders shipped directly from suppliers to our distribution centers to reduce the warehousing and transportation costs. Each of our stores and distribution centers have at least one van or truck for merchandise delivery to satisfy customer needs.

Sales and Marketing

Our sales team’s salary is performance based. We have formulated specific performance evaluation standards for each sales position.

Sales to the Professional Installer

We have 139 full-time sales managers and sales representatives strategically located across our primary market areasof Shanghai, Nanjing, Hangzhou, Shijiazhuang, Beijing, and Tianjin. Each sales representative is dedicated solely to selling to, keeping communication with, and supporting the professional installers. Marketing materials, such as brochures, flyers, catalogs, and complementary items are distributed on a continuous basis to professional installer customers. We attract customers mainly through competitive pricing, our full line of products, timely delivery, and good customer service. We also seek to develop mutually beneficial strategic relationships with repair shops, cosmetic shops, and 4S shops. One of our strategic alliances is with Automobile Repair Chain, which has 40 shops and has entered into joint collaborations with us on selected products.

Sales to Second Tier Wholesalers

Currently, approximately 235 second tier wholesalers purchase automotive replacement products from us. Our subsidiaries’managers are responsible for developing and managing wholesale customers in their region. These customers are typically parts wholesalers and maintenance item wholesalers in provincial capitals, as well as parts wholesalers in smaller cities. We develop relationships with wholesaler customers by providing them volume discounts, promotional assistance, marketing and sales support.

Marketing of Vomart Brand

We will launch marketing campaigns to promote the Vomart brand name to suppliers, customers, and the general public. In the first phase of our marketing strategy, we will support our marketing through print advertising, in-store promotional displays, promotional gifts, and other direct communications with the marketplace. The print advertising will consist of color circulars, flyers, brochures, and newspaper advertisements. In the second phase, we will advertise in selected industry journals, Internet websites, and trade shows to reinforce our image and name recognition. We will then analyze and measure the results of each marketing campaign and identify different customer segments and corresponding needs to enhance our future marketing success rate in attracting new customers.

Competition

The sale of automotive parts, accessories, and maintenance items is highly competitive in the China market. We operate mainly in the commercial sale (professional installers) markets of the automotive replacement industry. Our primary competitors are (i) regional retail chains of automotive parts stores, (ii) wholesale stores and stores that purchase large quantities of goods, but resell merchandise to merchants rather than to the end user customers (“jobbers”) and (iii) independent retailers. We believe that chains of automotive parts stores like us that have multiple locations in one or more markets have competitive advantages in the assortment of products, customer service, inventory selection, marketing, purchasing, and distribution as compared to independent retailers and “jobbers” that are not part of a chain. We are able to compete primarily through product selection and availability, quality and price, store location and store layout, name recognition, and customer service.

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For chain operators, we identified the following domestic competitors: Youpei Auto Parts, Putong Auto Service, Longfeng Auto Parts, and Andesen Auto Parts. We also identified several foreign competitors such as Lanba Auto Supermarket. We believe that compared with our foreign peers, we have a deeper understanding of the local market and flexibility/efficiency in our decision making.

Properties

As of June 30, 2010 and 2009, the detail of property, plant and equipments, respectively, is as follows:

	As of
	June 30, 2010			June 30, 2009
Office equipment	$	174,395		$	95,305
Automobiles		217,148			67,687
Sub-total		391,543			162,992
Less: accumulated depreciation		(81,263	)		(24,012	)
Property, plant and equipment, net	$	310,280		$	138,980

Depreciation expense for the years ended June 30, 2010 and 2009 was $56,692 and $21,506, respectively.

Intellectual Property

We regard our trademarks, trade secrets, patents, and similar intellectual property as critical factors to our success. We rely on patent, trademark, and trade secret law, as well as confidentiality and license agreements with certain of our employees, customers, and others to protect our proprietary rights.

We currently use the trademark “VOMART” which is owned by YBM Group China Co., Ltd.  We are exclusively licensed to use the “VOMART” trademark without consideration pursuant to YBM Group China Co., Ltd’s permit dated July 30, 2010. On September 1, 2010, YBM Group China Co., Ltd filed an application with the Trademark Office of the State Administration for Industry & Commerce of the PRC (“Trademark Office”) to transfer the trademark “VOMART” to us. Such transfer application is currently under review by the Trademark Office.

We have also submitted the application for trademark “WOT” and which is under review by the Trademark Office.

Set forth below is a detailed description of the trademarks we currently use:

Mark	Registration /Application No.	Class	Effective Date	Expiration Date	Owner/Applicant
	6454234	12	March 14, 2010	March 13, 2020	YBM Group China Co., Ltd.
	8248870	9	Registration Application Accepted on May 20, 2010		Hongkong Charter International Group Limited

Currently we do not own any patent or copyright since we concentrate on distribution of automotive replacement parts and accessories rather than manufacture of those.  The use of the patents or copyrights involved in our distribution business shall be in accordance with particular agreements with the owners of intellectual property rights in question, and relative laws and regulations.

Employees

As of September 30, 2010, we employed approximately 290 full-time employees who work at the store level, in distribution centers, and in support functions at our corporate office.

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We believe that capable management and well-trained employees are the most important success factors for our business. Each of our stores typically employs between five and six persons, including a store manager. A majority of our employees have prior automotive industry experience. In addition to on-the-job training, we provide formal training programs by providing rotations, weekly training sessions on products and technology, standardized training manuals, and specialized programs.

Store managers and sales representatives are incentivized through performance-based bonuses. In addition, our growth has provided opportunities for the promotion of qualified employees. We believe that these opportunities are important to attract, motivate, and retain high quality people. We have never experienced any material labor disruption. We believe we are efficient in retaining talented employees and team building.

Government Regulations

Below is a list of PRC governmental agencies which may have a jurisdiction over our business:

Agency	Functions
Stated Administration of Industry and Commerce (“SAIC”)	Maintaining market order and protecting the legitimate rights and interests of businesses and consumers by carrying out regulations in the fields of enterprise registration, competition, consumer protection, trademark protection and combating economic illegalities.
Ministry of Science and Technology (“MST”)	Lay out science and technology development plans and policies; draft relevant regulations and rules and guarantee implementation of regulations and rules
State Administration of Taxation (“SAT”)	Draft tax regulations and implementation rules and propose tax policies.
State Administration of Foreign Exchange (“SAFE”)	Make regulations and policies governing foreign exchange market activities and manage state foreign exchange reserves.

The PRC government imposes extensive regulations over the automotive industries. The following summarizes the principal PRC laws and regulations that are relevant to our business:

· PRC Product Quality Law;

· PRC Standardization Law;

· Plan on Adjusting and Revitalizing the Auto Industry;

· Policy on Development of Automotive Industry;

· PRC Trademark Law;

· PRC Unfair Competition Law;

· Measures for the Administration on Foreign Investment in Commercial Fields;

· Regulation on the Administration of Commercial Franchises;

· PRC Price Law;

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· Interim Provisions on Preventing the Acts of Price Monopoly;

· Provisions on the Administrative Punishment of Price-related Violations;

· PRC Law on Protection of Consumer Rights and Interests; and

· PRC Law on Import and Export Commodity Inspection.

Research and Development

We did not incur any research and development expenses as of June 30, 2010 and 2009, and do not anticipate incurring such expenses in the future.

RISK FACTORS

You should carefully consider the risks described below together with all of the other information included in this Current Report before making an investment decision with regard to our securities.  The statements contained in or incorporated herein that are forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. If any of the following risks actually occurs, our business, financial condition or results of operations could be harmed. In that case, you may lose all or part of your investment.

RISKS RELATING TO OUR BUSINESS

WE FACE RISKS RELATED TO GENERAL DOMESTIC AND GLOBAL ECONOMIC CONDITIONS AND TO THE RECENT CREDIT CRISIS.

We currently generate sufficient operating cash flows, which combined with access to the credit markets, provide us with significant discretionary funding capacity.

However, the current uncertainty arising out of domestic and global economic conditions, including the recent disruption in credit markets, poses a risk to the economies in which we operate that has affected demand for our products and services, and may affect our ability to manage normal relationships with our customers, suppliers, and creditors. If the current situation deteriorates significantly, our business could be materially negatively affected, including such areas as reduced demand for our products and services from a slow-down in the general economy, or supplier or customer disruptions resulting from tighter credit markets. In addition, terrorist activities may cause unpredictable or unfavorable economic conditions and could have a material adverse effect on the Company’s operating results and financial condition.

OUR SALES AND RESULTS OF OPERATIONS COULD DECLINE DUE TO MACRO-ECONOMIC AND OTHER FACTORS OUTSIDE OF OUR CONTROL, SUCH AS CHANGES IN CONSUMER CONFIDENCE AND DECLINES IN EMPLOYMENT LEVELS.

Changes in national and regional economic conditions, as well as local economic conditions where we conduct our operations and where prospective purchasers of our properties live, may result in more caution on the part of buyers and consequently fewer purchases. These economic uncertainties involve, among other things, conditions of supply and demand in local markets and changes in consumer confidence and income, employment levels, and government regulations. These risks and uncertainties could periodically have an adverse effect on consumer demand for and the pricing of our properties, which could cause our operating revenues to decline. In addition, builders are subject to various risks, many of them outside the control of the builder including competitive overbuilding, availability and cost of building lots, materials and labor, adverse weather conditions which can cause delays in construction schedules, cost overruns, changes in government regulations, and increases in real estate taxes and other local government fees. A reduction in the Company’s sales could in turn negatively affect the market price of its securities.

WE PLAN TO RAPIDLY GROW OUR BUSINESS AND MAY NOT BE ABLE TO MANAGE OUR GROWTH IF WE EXPAND TOO QUICKLY, WHICH COULD HURT OUR RELATIONSHIPS WITH OUR CURRENT AND FUTURE CUSTOMERS AND ULTIMATELY OUR BUSINESS, RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

We plan to open approximately 40 new stores in 2010 and 250 new stores by 2014 in order to, among other things, achieve market penetration in more geographic locations.  Our period of rapid growth will place a significant strain on our senior management team, especially at our headquarters, and our financial and other resources.  Our rapid growth may require us to incur additional expenses before experiencing an increase in revenue, which increase pressure on our management to ramp up sales as quickly as possible. Any expansion may expose us to increased competition, greater overhead, marketing and support costs and other risks associated with the expansion of a business. Our ability to manage rapid growth effectively will require us to continue to improve our operations, improve our financial and management information systems (e.g., account receivables, cash management, asset allocation, etc.) and to train, motivate and manage our employees.  Our current personnel, systems, procedures and controls will likely not adequately support future operations. In that event, we will need to expand our finance, administrative, and operations staff.  Difficulties in effectively managing issues presented by such a rapid expansion may result in a reduction in the quality of our services and our customer support may deteriorate. This could prompt our current customers to discontinue their relationships with us and hurt our business results.

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AS WE OPEN NEW STORES AND GROW IN SCALE, WE WILL NEED TO STOCK MORE INVENTORY TO PROVIDE PRODUCT AVAILABILITY WHILE AT THE SAME TIME ACHIEVING COST REDUCTION AND EFFICIENCY TO BE COMPETITIVE.  IF WE ARE UNABLE TO OVERCOME THE CHALLENGES, OUR BUSINESS WILL SUFFER.

The number of new stores that we plan to open will require us to significantly increase our inventory. We will have to adjust our systems in order to meet the challenges presented by the expansion impact on procurement, inventory and logistics.  We may not be able to do so to be profitable within our timeline or at all.  We may not be able to acquire the additional inventory needed to implement our business plan.  If we are unable to acquire auto parts or there is a significant delay in providing the parts, our customers may look to our competitors to provide such parts, which will decrease our market share and damage our reputation for our prompt service.

OUR GROWTH STRATEGY DEPENDS ON OUR ABILITY TO OPEN NEW STORES AND OPERATE THEM PROFITABLY.

A key element of our growth strategy is to open additional stores in locations that we believe will provide attractive returns. Our ability to open new stores on a timely and cost-effective basis is dependent on a number of factors, many of which are beyond our control, including our ability to: find quality locations; reach acceptable agreements regarding the lease or purchase of locations; comply with applicable zoning, land use and environmental regulations; raise or have available an adequate amount of money for construction and opening costs; timely hire, train and retain the skilled management and other employees necessary to meet staffing needs; and -efficiently manage the amount of time and money used to build and open each new store. If we succeed in opening new stores on a timely and cost-effective basis, we may nonetheless be unable to attract enough customers to new stores because potential customers may be unfamiliar with our stores or atmosphere. We cannot provide any assurance that our new stores will meet or exceed the performance of our existing stores or meet or exceed our performance targets. New stores may even operate at a loss, which could have a significant adverse effect on our overall operating results. Opening a new store in an existing market could reduce the revenue at our existing stores in that market. In addition, historically, new stores experience a drop in revenues after their first year of operation. Typically, this drop has been temporary and has been followed by increases in comparable store revenue in line with the rest of our comparable store base, but there can be no assurance that this will be the case in the future or that a new store will succeed in the long term.

WE RELY ON INFORMATION TECHNOLOGY IN CRITICAL AREAS OF OUR AUTO PARTS BUSINESS OPERATIONS, AND A DISRUPTION RELATING TO SUCH TECHNOLOGY COULD HARM OUR BUSINESS.

We use information technology systems for the management of our inventories, processing costs and customer sales. If the providers of these systems terminate their relationships with us, or if we decide to switch providers or to implement our own systems, we may suffer disruptions, which could have a material adverse effect on our results of operations and financial condition. In addition, we may underestimate the costs and expenses of switching providers or developing and implementing our own systems.

OUR PLANS TO EXPAND OUR PRODUCT LINES AND TO IMPROVE AND UPGRADE OUR INTERNAL CONTROL AND MANAGEMENT SYSTEM WILL REQUIRE CAPITAL EXPENDITURES IN 2010.

Our plans to expand our product lines and to improve and upgrade our internal control and management system will require capital expenditures in 2010. We may also need further funding for working capital, investments, potential acquisitions and other corporate requirements. We cannot assure you that cash generated from our operations will be sufficient to fund these development plans, or that our actual capital expenditures and investments will not significantly exceed our current planned amounts. If either of these conditions arises, we may have to seek external financing to satisfy our capital needs. Our ability to obtain external financing at reasonable costs is subject to a variety of uncertainties. Failure to obtain sufficient external funds for our development plans could adversely affect our business, financial condition and operating performance.

OUR PLANNED EXPANSION COULD BE DELAYED OR ADVERSELY AFFECTED BY, AMONG OTHER THINGS, DIFFICULTIES IN OBTAINING SUFFICIENT FINANCING, TECHNICAL DIFFICULTIES OR HUMAN OR OTHER RESOURCE CONSTRAINTS.

Our planned expansion could be delayed or adversely affected by, among other things, difficulties in obtaining sufficient financing, technical difficulties, or human or other resource constraints. Moreover, the costs involved in these projects may exceed those originally contemplated. Costs savings and other economic benefits expected from these projects may not materialize as a result of any such project delays, cost overruns or changes in market circumstances. Failure to obtain intended economic benefits from these projects could adversely affect our business, financial condition, and operating performances.

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

In order to maximize potential growth in our current and potential markets, we believe that we must expand our producing operations. 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 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 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 through increasing our product lines. However, there are many obstacles to successfully expanding our product lines. Therefore, we cannot 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.

IF WE NEED ADDITIONAL CAPITAL TO FUND OUR GROWING OPERATIONS, WE MAY NOT BE ABLE TO OBTAIN SUFFICIENT CAPITAL AND MAY BE FORCED TO LIMIT THE SCOPE OF OUR OPERATIONS.

If adequate additional financing is not available on reasonable terms, we may have to modify our growth strategy 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 release of competitive products by our competition; and (iii) 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) limit our expansion; (ii) limit our marketing efforts; 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 terms and conditions for receiving the additional capital that are favorable to us. Any future capital investments could dilute or otherwise materially and adversely affect the holdings or rights of our existing shareholders.  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.

WE WILL NEED TO ENGAGE ADDITIONAL QUALIFIED EMPLOYEES, WHO MAY BE IN SHORT SUPPLY OR IN HIGH DEMAND.

Our future success also depends upon our continuing ability to attract and retain highly qualified personnel. Expansion of our business and operations will require additional managers and employees with industry experience, and our success will be highly dependent on our ability to attract and retain skilled management personnel and other employees. There can be no assurance that we will be able to attract or retain highly qualified personnel. Competition for skilled personnel in the automotive industry is significant. This competition may make it more difficult and expensive to attract, hire and retain qualified managers and employees.

THE LOSS OF THE SERVICES OF OUR KEY EMPLOYEES, PARTICULARLY THE SERVICES RENDERED BY QUN HU, OUR CHAIRMAN OF THE BOARD, ZHOUFENG SHEN, OUR PRESIDENT AND CHIEF EXECUTIVE OFFICER AND XIAOMEI WANG, OUR CHIEF FINANCIAL OFFICER, COULD HARM OUR BUSINESS.

Our success depends to a significant degree on the services rendered to us by our key employees.  If we fail to attract, train, and retain sufficient numbers of these qualified people, our prospects, business, financial condition and results of operations will be materially and adversely affected. In particular, we are heavily dependent on the continued services of Zhoufeng Shen, our President, Chief Executive Officer, Qun Hu, our Chairman of the Board, and Xiaomei Wang, our Chief Financial Officer. The loss of any key employees, including members of our senior management team and our inability to attract highly skilled personnel with sufficient experience in our industry could harm our business.

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OUR LIMITED OPERATING HISTORY MAY NOT SERVE AS AN ADEQUATE BASIS TO JUDGE OUR FUTURE PROSPECTS AND RESULTS OF OPERATIONS.

Our limited operating history in the automotive industry may not provide a meaningful basis for evaluating our business. Vomart entered into its current line of business in 2008. Although our revenues have grown since our inception, we cannot guaranty that we will maintain profitability or that we will not incur net losses in the future. We will continue to encounter risks and difficulties that companies at a similar stage of development frequently experience, including the potential failure to:

· obtain sufficient working capital to support our expansion;

· expand our product offerings and maintain the high quality of our products;

· manage our expanding operations and continue to fill customers’ orders on time;

· maintain adequate control of our expenses allowing us to realize anticipated income growth;

· implement our product sales and acquisition strategies and subsequently adapt and modify them as needed;

· successfully integrate any future acquisitions; and

· anticipate and adapt to changing conditions in the auto parts industry resulting from changes in government regulations, mergers and acquisitions involving our competitors, technological developments, and other significant competitive and market dynamics.

WE ENCOUNTER SUBSTANTIAL COMPETITION IN OUR BUSINESS AND ANY FAILURE TO COMPETE EFFECTIVELY COULD ADVERSELY AFFECT OUR RESULTS OF OPERATIONS.

As described in the products section, for every product we sell, we encounter strong competitors. We anticipate that our competitors will continue to expand and seek to obtain additional market share with competitive price and performance characteristics. Aggressive expansion of our competitors or the entrance of new competitors into our markets could have a material adverse effect on our business, results of operations, and financial condition.

If we are not successful in addressing any or all of the foregoing risks, our business may be materially and adversely affected.

OUR MANAGEMENT HAS NO EXPERIENCE IN MANAGING AND OPERATING A PUBLIC COMPANY. ANY FAILURE TO COMPLY OR ADEQUATELY COMPLY WITH FEDERAL SECURITIES LAWS, RULES OR REGULATIONS COULD SUBJECT US TO FINES OR REGULATORY ACTIONS, WHICH MAY MATERIALLY ADVERSELY AFFECT OUR BUSINESS, RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

Our current management has no experience managing and operating a public company and relies in many instances on the professional experience and advice of third parties including its attorneys and accountants. Failure to comply or adequately comply with any laws, rules, or regulations applicable to our business may result in fines or regulatory actions, which may materially adversely affect our business, results of operation, or financial condition and could result in delays in the development of an active and liquid trading market for our stock.

WE WILL INCUR SIGNIFICANT COSTS TO ENSURE COMPLIANCE WITH UNITED STATES CORPORATE GOVERNANCE AND ACCOUNTING REQUIREMENTS.

We will 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 United States 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, as amended by SEC Release No. 33-8934 on June 26, 2008, the U.S. 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.  Commencing with our annual report for the year ending June 30, 2011, we will be required to include a report of management on its internal control over financial reporting.  The internal control report must include a statement:

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

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

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

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.

THE TRANSACTION INVOLVES A REVERSE MERGER OF A FOREIGN COMPANY INTO A DOMESTIC SHELL COMPANY, SO THERE IS NO HISTORY OF COMPLIANCE WITH UNITED STATES SECURITIES LAWS AND ACCOUNTING RULES.

In order to be able to comply with United States securities laws, we prepared our financial statements for the first time under U.S. generally accepted accounting principles and recently had its initial audit of its financial statements in accordance with Public Company Accounting Oversight Board (United States). As the Company does not have a long term familiarity with U.S. generally accepted accounting principles, it may be more difficult for it to comply on a timely basis with SEC reporting requirements than a comparable domestic company.

RISKS RELATING TO OUR INDUSTRY

CHALLENGES BY ORIGINAL EQUIPMENT MANUFACTURERS (“OEMS”) TO THE VALIDITY OF THE AFTERMARKET AUTO PARTS INDUSTRY AND CLAIMS OF INTELLECTUAL PROPERTY INFRINGEMENT COULD ADVERSELY AFFECT OUR BUSINESS AND THE VIABILITY OF THE AFTERMARKET AUTO PARTS INDUSTRY.

Original equipment manufacturers have attempted to use claims of intellectual property infringement against manufacturers and distributors of aftermarket products to restrict or eliminate the sale of aftermarket products that are the subject of the claims. We may in the future receive communications alleging that certain products we sell infringe the patents, copyrights, trademarks and trade names or other intellectual property rights of OEMs or other third parties. To the extent that the OEMs are successful with intellectual property infringement claims, we could be restricted or prohibited from selling certain aftermarket products, which could have an adverse effect on our business. Infringement claims could also result in increased costs of doing business arising from increased legal expenses, adverse judgments or settlements or changes to our business practices required to settle such claims or satisfy any judgments. Litigation could result in interpretations of the law that require us to change our business practices or otherwise increase our costs and harm our business. We do not maintain insurance coverage to cover the types of claims that could be asserted. If a successful claim were brought against us, it could expose us to significant liability.

IF WE CANNOT PROFITABLY INCREASE OUR MARKET SHARE IN THE COMMERCIAL AUTO PARTS BUSINESS, OUR SALES GROWTH MAY BE LIMITED.

Although we are one of the largest sellers of auto parts in the commercial market, to increase commercial sales we must compete against independently owned parts stores, repair shops and auto dealers. Although we believe we compete effectively on the basis of customer service, merchandise quality, selection and availability, price and distribution locations, and the strength of our brand name, some automotive aftermarket jobbers have been in business for substantially longer periods of time than we have, have developed long-term customer relationships and have large available inventories. If we are unable to profitably develop new commercial customers, our sales growth may be limited.

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WE FACE INTENSE COMPETITION AND OPERATE IN AN INDUSTRY WITH LIMITED BARRIERS TO ENTRY, AND SOME OF OUR COMPETITORS MAY HAVE GREATER RESOURCES THAN US.

The auto parts industry is competitive and highly fragmented, with products distributed through multi-tiered and overlapping channels. Many of our current and potential competitors have longer operating histories, larger customer bases, greater brand recognition and significantly greater financial, marketing, technical, management and other resources than we do. In addition, some of our competitors have used and may continue to use aggressive pricing tactics and devote substantially more financial resources to marketing than we do. Increased competition from any supplier capable of maintaining high sales volumes and acquiring products at lower prices than us could significantly reduce our market share and adversely impact our financial results.

THE INABILITY FOR US, OUR CUSTOMERS AND/OR OUR SUPPLIERS TO OBTAIN AND MAINTAIN SUFFICIENT DEBT FINANCING, INCLUDING WORKING CAPITAL LINES, AND CREDIT INSURANCE MAY ADVERSELY AFFECT OUR, OUR CUSTOMERS’ AND OUR SUPPLIERS’ LIQUIDITY AND FINANCIAL CONDITION.

Our working capital requirements can vary significantly, depending in part on the level, variability and timing of our customers’ worldwide vehicle production and the payment terms with our customers and suppliers. Our liquidity could also be adversely impacted if our suppliers were to suspend normal trade credit terms and require payment in advance or payment on delivery. If our available cash flows from operations are not sufficient to fund our ongoing cash needs, we would be required to look to our cash balances and availability for borrowings under our credit facilities to satisfy those needs, as well as potential sources of additional capital, which may not be available on satisfactory terms and in adequate amounts, if at all. Capital markets conditions have made it difficult for companies to raise and maintain the liquidity necessary to operate. While we believe that we have sufficient liquidity to operate, there can be no assurance that we, our customers and our suppliers will continue to have such ability. This may increase the risk that we cannot produce our products or will have to pay higher prices for our inputs. These higher prices may not be recovered in our selling prices. If we were to experience liquidity issues, our suppliers may not be able to obtain credit insurance. Our failure to receive such terms from our suppliers could have a material adverse effect on our liquidity.

RISKS RELATING TO THE PEOPLE’S REPUBLIC OF CHINA

WE DERIVE ALL OF OUR REVENUES FROM SALES IN THE PRC AND ANY DOWNTURN IN THE CHINESE ECONOMY COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS AND FINANCIAL CONDITION.

All of our revenues are generated from sales in the PRC. We anticipate that revenues from sales of our products in the PRC will continue to represent the substantial portion of our total revenues in the near future.  Our success is influenced by a number of economic factors that affect disposable consumer income, such as employment levels, business conditions, interest rates, oil and gas prices and taxation rates. Adverse changes in these economic factors, among others, may restrict consumer spending, thereby negatively affecting our sales and profitability.

CERTAIN POLITICAL AND ECONOMIC CONSIDERATIONS RELATING TO THE PRC COULD ADVERSELY AFFECT OUR COMPANY.

The PRC is transitioning from a planned economy to a market economy. While the PRC government has pursued economic reforms since its adoption of the open-door policy in 1978, a large portion of the PRC economy is still operating under five-year plans and annual state plans. Through these plans and other economic measures, such as control on foreign exchange, taxation and restrictions on foreign participation in the domestic market of various industries, the PRC government exerts considerable direct and indirect influence on the economy. Many of the economic reforms carried out by the PRC government are unprecedented or experimental, and are expected to be refined and improved. Other political, economic and social factors can also lead to further readjustment of such reforms. This refining and readjustment process may not necessarily have a positive effect on our operations or future business development. Our operating results may be adversely affected by changes in the PRC’s economic and social conditions as well as by changes in the policies of the PRC government, such as changes in laws and regulations (or the official interpretation thereof), measures which may be introduced to control inflation, changes in the interest rate or method of taxation, and the imposition of restrictions on currency conversion in addition to those described below.

WE MAY NOT BE ABLE TO SUCCESSFULLY EXECUTE OUR STRATEGY OF EXPANDING INTO NEW GEOGRAPHICAL MARKETS IN CHINA, WHICH COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS AND RESULTS OF OPERATIONS.

We plan to continue to expand our business into new geographical areas in China. Since China is a large and diverse market, consumer trends and demands may vary significantly by region and our experience in the markets in which we currently operate may not be applicable in other parts of China. As a result, we may not be able to leverage our experience to expand into other parts of China. When we enter new markets, we may face intense competition from companies with greater experience or an established presence in the targeted geographical areas or from other companies with similar expansion targets. Therefore, we may not be able to grow our sales in the new cities we enter due intense competitive pressures and or the substantial costs involved.

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THE RECENT NATURE AND UNCERTAIN APPLICATION OF MANY PRC LAWS APPLICABLE TO US CREATE AN UNCERTAIN ENVIRONMENT FOR BUSINESS OPERATIONS AND COULD HAVE A NEGATIVE EFFECT ON US.

The PRC legal system is a civil law system. Unlike the common law system, the civil law system is based on written statutes in which decided legal cases have little value as precedents. In 1979, the PRC began to promulgate a comprehensive system of laws and has since introduced many laws and regulations to provide general guidance on economic and business practices in the PRC and to regulate foreign investment. Progress has been made in the promulgation of laws and regulations dealing with economic matters such as corporate organization and governance, foreign investment, commerce, taxation and trade. The promulgation of new laws, changes of existing laws and the abrogation of local regulations by national laws could have a negative impact on our business and business prospects.

OUR FAILURE TO COMPLY WITH INCREASINGLY STRINGENT ENVIRONMENTAL REGULATIONS AND RELATED LITIGATION COULD RESULT IN SIGNIFICANT PENALTIES, DAMAGES AND ADVERSE PUBLICITY FOR OUR BUSINESS.

In recent years, the government of China has become increasingly concerned with the degradation of China’s environment that has accompanied the country’s rapid economic growth.  In the future, we expect that our operations and properties will be subject to extensive and increasingly stringent laws and regulations pertaining to, among other things, the discharge of materials into the environment and the handling and disposition of wastes (including solid and hazardous wastes) or otherwise relating to protection of the environment. Failure to comply with any laws and regulations and future changes to them may result in significant consequences to us, including civil and criminal penalties, liability for damages and negative publicity.  We cannot assure you that additional environmental issues will not require currently unanticipated investigations, assessments or expenditures, or that requirements applicable to us will not be altered in ways that will require us to incur significant additional costs.

CURRENCY CONVERSION COULD ADVERSELY AFFECT OUR FINANCIAL CONDITION.

The PRC government imposes control over the conversion of Renminbi into foreign currencies. Under the current unified floating exchange rate system, the People’s Bank of China publishes an exchange rate, which we refer to as the PBOC exchange rate, based on the previous day’s dealings in the inter-bank foreign exchange market. Financial institutions authorized to deal in foreign currency may enter into foreign exchange transactions at exchange rates within an authorized range above or below the PBOC exchange rate according to market conditions.

Pursuant to the Foreign Exchange Control Regulations of the PRC issued by the State Council which came into effect on April 1, 1996, and the Regulations on the Administration of Foreign Exchange Settlement, Sale and Payment of the PRC which came into effect on July 1, 1996, regarding foreign exchange control, conversion of Renminbi into foreign exchange by Foreign Investment Enterprises, or FIE’s, for use on current account items, including the distribution of dividends and profits to foreign investors, is permissible. FIE’s are permitted to convert their after-tax dividends and profits to foreign exchange and remit such foreign exchange to their foreign exchange bank accounts in the PRC. Conversion of Renminbi into foreign currencies for capital account items, including direct investment, loans, and security investment, is still under certain restrictions. On January 14, 1997, the State Council amended the Foreign Exchange Control Regulations and added, among other things, an important provision, which provides that the PRC government shall not impose restrictions on recurring international payments and transfers under current account items.

Enterprises in the PRC (including FIE’s) which require foreign exchange for transactions relating to current account items, may, without approval of the State Administration of Foreign Exchange, or SAFE, effect payment from their foreign exchange account or convert and pay at the designated foreign exchange banks by providing valid receipts and proofs.

Convertibility of foreign exchange in respect of capital account items, such as direct investment and capital contribution, is still subject to certain restrictions, and prior approval from the SAFE or its relevant branches must be sought.

Furthermore, the Renminbi is not freely convertible into foreign currencies nor can it be freely remitted abroad. Under the PRC’s Foreign Exchange Control Regulations and the Administration of Settlement, Sales and Payment of Foreign Exchange Regulations, Foreign Invested Enterprises are permitted either to repatriate or distribute its profits or dividends in foreign currencies out of its foreign exchange accounts, or exchange Renminbi for foreign currencies through banks authorized to conduct foreign exchange business. The conversion of Renminbi into foreign exchange by Foreign Invested Enterprises for recurring items, including the distribution of dividends to foreign investors, is permissible. The conversion of Reminbi into foreign currencies for capital items, such as direct investment, loans and security investment, is subject, however, to more stringent controls.

Our operating company is a FIE to which the Foreign Exchange Control Regulations are applicable. Accordingly, we will have to maintain sufficient foreign exchange to pay dividends and/or satisfy other foreign exchange requirements.

 

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EXCHANGE RATE VOLATILITY COULD ADVERSELY AFFECT OUR FINANCIAL CONDITION.

Since 1994, the exchange rate for Renminbi against the United States dollar has remained relatively stable, most of the time in the region of approximately RMB8.28 to $1.00. However, in 2005, the Chinese government announced that it would begin pegging the exchange rate of the Chinese Renminbi against a number of currencies, rather than just the U.S. dollar and, the exchange rate for the Renminbi against the U.S. dollar became RMB8.02 to $1.00. If we decide to convert Chinese Renminbi into United States dollars for other business purposes and the United States dollar appreciates against this currency, the United States dollar equivalent of the Chinese Renminbi we convert would be reduced. There can be no assurance that future movements in the exchange rate of Renminbi and other currencies will not have an adverse effect on our financial condition.

 SUBSTANTIALLY ALL OF OUR BUSINESS, ASSETS AND OPERATIONS ARE LOCATED IN THE PRC.

Substantially all of our business, assets and operations are located in the PRC. The economy of PRC differs from the economies of most developed countries in many respects. The economy of PRC has been transitioning from a planned economy to a market-oriented economy. Although in recent years the PRC government has implemented measures emphasizing the utilization of market forces for economic reform, the reduction of state ownership of productive assets and the establishment of sound corporate governance in business enterprises, a substantial portion of productive assets in PRC is still owned by the PRC government. In addition, the PRC government continues to play a significant role in regulating industry by imposing industrial policies. It also exercises significant control over the PRC’s economic growth through the allocation of resources, controlling payment of foreign currency-denominated obligations, setting monetary policy and providing preferential treatment to particular industries or companies. Some of these measures benefit the overall economy of PRC, but may have a negative effect on us.

DUE TO VARIOUS RESTRICTIONS UNDER PRC LAWS ON THE DISTRIBUTION OF DIVIDENDS BY OUR PRC OPERATING COMPANIES, WE MAY NOT BE ABLE TO PAY DIVIDENDS TO OUR STOCKHOLDERS.

The Wholly-Foreign Owned Enterprise Law (1986), as amended and The Wholly-Foreign Owned Enterprise Law Implementing Rules (1990), as amended and the Company Law of the PRC (2006) contain the principal regulations governing dividend distributions by wholly foreign owned enterprises. Under these regulations, wholly foreign owned enterprises may pay dividends only out of their accumulated profits, if any, determined in accordance with PRC accounting standards and regulations. Additionally, such companies are required to set aside a certain amount of their accumulated profits each year, if any, to fund certain reserve funds. These reserves are not distributable as cash dividends except in the event of liquidation and cannot be used for working capital purposes. The PRC government also imposes controls on the conversion of RMB into foreign currencies and the remittance of currencies out of the PRC. We may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currency for the payment of dividends from the Company’s profits.

Furthermore, if our subsidiaries in China incur debt on their own in the future, the instruments governing the debt may restrict its ability to pay dividends or make other payments. If we or our subsidiaries are unable to receive all of the revenues from our operations through these contractual or dividend arrangements, we may be unable to pay dividends on our common stock.

SINCE OUR ASSETS ARE LOCATED IN THE PRC, ANY DIVIDENDS OF PROCEEDS FROM LIQUIDATION ARE SUBJECT TO THE APPROVAL OF THE RELEVANT CHINESE GOVERNMENT AGENCIES.

Our operating assets are located inside the PRC. Under the laws governing Foreign Invested Enterprises in the PRC, dividend distribution and liquidation are allowed but subject to special procedures under the relevant laws and rules. Any dividend payment will be subject to the decision of the board of directors and subject to foreign exchange rules governing such repatriation. Any liquidation is subject to the relevant government agency’s approval and supervision as well as the foreign exchange control. This may generate additional risk for our investors in case of dividend payment and liquidation.

IT MAY BE DIFFICULT TO AFFECT SERVICE OF PROCESS AND ENFORCEMENT OF LEGAL JUDGMENTS UPON OUR COMPANY AND OUR OFFICERS AND DIRECTORS BECAUSE THEY RESIDE OUTSIDE THE UNITED STATES.

As our operations are presently based in the PRC and our director and officer resides in the PRC, service of process on our company and such director and officer may be difficult to effect within the United States. Also, our main assets are located in the PRC and any judgment obtained in the United States against us may not be enforceable outside the United States.

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OUR BUSINESS AND RESULTS OF OPERATIONS MAY BE ADVERSELY AFFECTED BY A SEVERE AND PROLONGED GLOBAL ECONOMIC DOWNTURN AND THE CORRESPONDING SLOWDOWN OF THE CHINESE ECONOMY.

Recent global market and economic conditions have been unprecedented and challenging with recession in most major economies persisting in 2009 and significant market volatility in 2010. Continued concerns about the systemic impact of a potentially long-term and widespread recession, energy costs, geopolitical issues, and the availability and cost of credit have contributed to increased market volatility and diminished expectations for economic growth around the world. The difficult economic outlook has negatively affected business and consumer confidence and contributed to volatility of unprecedented levels. The Chinese economy also faces challenges. The stimulus plans and other measures implemented by the Chinese government may not work effectively or quickly enough to maintain economic growth in China or avert a severe economic downturn. Since we derive all of our revenues from our location-based solutions in China, any prolonged slowdown in the Chinese economy may have a negative impact on our business and results of operations. Our revenues depend on end-user spending, which in turn depend on the end-users’ level of disposable income, perceived future earnings and willingness to spend. As there are still substantial uncertainties in the current and future conditions in the global and Chinese economies, consumers may avoid purchasing new automobiles and reduce their spending on discretionary items. Moreover, to the extent we offer credit to any customer and such customer experiences financial difficulties due to the economic slowdown, we could have difficulty collecting payments from such customers. Further disruptions of the financial markets could also significantly restrict our ability to obtain financing in the capital markets or from financial institutions.

FUTURE INFLATION IN CHINA MAY INHIBIT OUR ABILITY TO CONDUCT BUSINESS IN CHINA.

In recent years, the Chinese economy has experienced periods of rapid expansion and highly fluctuating rates of inflation. During the past ten years, the rate of inflation in China has been as high as 5.9% and as low as -0.8%. These factors have led to the adoption by the Chinese government, from time to time, of various corrective measures designed to restrict the availability of credit or regulate growth and contain inflation. High inflation may in the future cause the Chinese government to impose controls on credit and/or prices, or to take other action, which could inhibit economic activity in China, and thereby harm the market for our products and our company.

IF WE FAIL TO ACCURATELY PROJECT MARKET DEMAND FOR OUR PRODUCTS, OUR BUSINESS EXPANSION PLAN COULD BE JEOPARDIZED AND OUR FINANCIAL CONDITION AND RESULTS OF OPERATIONS WILL SUFFER.

If actual customer orders are less than our projected market demand, we will likely suffer overcapacity problems and may have to leave capacity idle, which may reduce our overall profitability and hurt our financial condition and results of operations. We derive most of our sales revenue from sales of our products in China. The continued development of our business depends, in large part, on continued growth in the automotive industry, especially in China. Although China’s automotive industry has grown rapidly in the past, it may not continue to grow at the same growth rate in the future or at all. However, the developments in our industry are, to a large extent, outside of our control and any reduced demand for automotive parts products and services, any other downturn or other adverse changes in China’s automotive industry could severely harm our business.

RISKS RELATED TO OUR SECURITIES

IN ORDER TO RAISE SUFFICIENT FUNDS TO EXPAND OUR OPERATIONS, WE MAY HAVE TO ISSUE ADDITIONAL SECURITIES AT PRICES THAT MAY RESULT IN SUBSTANTIAL DILUTION TO OUR SHAREHOLDERS.

If we raise additional funds through the sale of equity or convertible debt, our current stockholders’ percentage ownership will be reduced. In addition, these transactions may dilute the value of our common shares outstanding. We may have to issue securities that may have rights, preferences and privileges senior to our common stock. We cannot provide assurance that we will be able to raise additional funds on terms acceptable to us, if at all. If future financing is not available or is not available on acceptable terms, we may not be able to fund our future needs, which would have a material adverse effect on our business plans, prospects, results of operations and financial condition.

OUR CERTIFICATE OF INCORPORATION PROVIDES FOR THE 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 STOCKHOLDERS BECAUSE CORPORATE RESOURCES MAY BE EXPENDED FOR THE BENEFIT OF OUR OFFICERS AND/OR DIRECTORS.

Our certificate of incorporation and applicable state 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, as amended, 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 ASSURANCE THAT ANY PUBLIC MARKET WILL EVER DEVELOP OR THAT OUR COMMON STOCK WILL BE QUOTED FOR TRADING.  FURTHER, EVEN IF QUOTED, OUR COMMON STOCK IS LIKELY TO BE SUBJECT TO SIGNIFICANT PRICE FLUCTUATIONS.

We have a trading symbol for our common stock, “TEDG,” which permits our shares to be quoted on the over-the-counter bulletin board (the “OTCBB”). However, our stock has been thinly traded since approval of our quotation on the OTCBB 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 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 securities can also be expected to be subject to volatility resulting from purely market forces over which we will have no control. If we need additional funding we will, most likely, seek such funding in the United States (although we may be able to obtain funding in the PRC) and the market fluctuations affect on our stock price could limit our ability to obtain equity financing.

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.

WE ARE NOT LIKELY TO PAY CASH DIVIDENDS IN THE FORESEEABLE FUTURE.

We currently intend to retain any future earnings for use in the operation and expansion of our business. Accordingly, we do not expect to pay any cash dividends in the foreseeable future, but will review this policy as circumstances dictate. Should we determine to pay dividends in the future, our ability to do so will depend upon the receipt of dividends or other payments from our PRC operating subsidiary may, from time to time, be subject to restrictions on its ability to make distributions to us, including restrictions on the conversion of RMB into U.S. dollars or other hard currency and other regulatory restrictions.

WE MAY BE SUBJECT TO THE PENNY STOCK RULES, WHICH WILL MAKE OUR SECURITIES MORE DIFFICULT TO SELL.

We may be subject in the future to the SEC’s “penny stock” rules if our securities sell below $5.00 per share. Penny stocks generally are equity securities with a price of less than $5.00. The penny stock rules require broker-dealers to deliver a standardized risk disclosure document prepared by the SEC, which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer must also provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson, and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information must be given to the customer orally or in writing prior to completing the transaction and must be given to the customer in writing before or with the customer’s confirmation.

In addition, the penny stock rules require that prior to a transaction, the broker dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. The penny stock rules are burdensome and may reduce purchases of any offerings and reduce the trading activity for our securities. As long as our securities are subject to the penny stock rules, the holders of such securities may find it more difficult to sell their securities.

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

All of our officers and directors beneficially own 52% of our common stock pursuant to the terms of the Exchange Agreement.  In this case, all of our officers and directors will be able to exercise control over all matters requiring shareholder 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 shareholders 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 shareholders to approve transactions that they may deem to be in their best interest. For example, our controlling shareholders 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.

Overview

The Company was incorporated under the laws of the State of Delaware on April 16, 2007, primarily engaged in the business of providing a financial literacy and money management educational program for teenagers on a fee for service offered basis.

On November 12, 2010, the Company entered into a share exchange agreement with Hongkong Charter International Group Limited, a company incorporated in the Hong Kong on August 21, 2009, which owns 100% of the issued and outstanding capital stock of Shanghai Vomart Auto Parts Co., Ltd.

Shanghai Vomart Auto Parts Co., Ltd. (“Vomart”) was incorporated in Shanghai, People’s Republic of China in January 2008, with registered capital in amount of RMB 1,000,000 (equivalent to US$144,697). Vomart established its wholly owned subsidiaries in Nanjing, Shijiazhuang, Ningbo, and Hangzhou in June 2008, August 2008, February 2009 and September 2009, respectively.  Currently, the Company owns thirty-seven (37) stores in nine (9) provinces and municipalities.  Vomart and its subsidiaries are engaged in providing automotive maintenance services and automotive parts distribution in China.

Through the subsidiaries of Vomart, the Company will now be engaged in the business in providing automotive maintenance services and automotive parts distribution in China.  The Company distributes a broad selection of international brand name and private label automotive replacement parts, such as, accessories and maintenance items for cars, minivans, vans, sport utility vehicles, light trucks, and heavy-duty trucks. The typical products include batteries, brake pads, filters, oils and transmission fluid. Vomart is deemed as one of the largest distributors of automotive replacement parts and accessories in China.

Results of Operations for the Years Ended June 30, 2010 and 2009

	Years Ended June 30,						$			%
	2010			2009			Change			Change
Revenues		4,782,754			1,282,918			3,499,836			272.8	%
Cost of Sales	$	(3,536,954	)		(917,329	)		(2,619,625	)		285.6	%
Gross Profit	$	1,245,800			365,589			880,211			240.8	%
Operating Expenses	$	1,184,267			235,637			948,629			402.6	%
Operating Income	$	61,533			129,952			(68,419	)		(52.6	)%
Income Before Income Tax	$	46,156			129,615			(83,459	)		(64.4	)%
Income Tax (Benefit) Provision	$	7,642			49,725			(42,083	)		(84.6	)%
Net Income	$	38,514			79,890			(41,376	)		(51.8	)%

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Revenues:

Revenues for the year ended June 30, 2010 increased by approximately $3,499,836 or 272.8% to $4,782,754 as compared to $1,282,918 for the year ended June 30, 2009. Our sales growth was driven by expansion of stores. During the year ended June 30, 2010, we had 26 new stores opened, leading to the increase in net sales from automotive supplies and maintenance service. Revenue from automotive supplies increased by $2,837,893 or 288.2% to $3,822,548 for the year ended June 30, 2010 from $984,654 for the same period of 2009, while revenue from maintenance service increased by $661,943 or 221.9% to $960,206 for the year ended June 30, 2010 from $298, 264 for the same period of 2009.

Cost of Sales and Gross Profit:

During the year ended June 30, 2010, we had cost of sales of $3,536,954, as compared to $917,329 for the same period of 2009, an increase of $2,619,625 or 285.6% reflecting the increase in net sales.

We achieved gross profits of $1,245,800 for the year ended June 30, 2010, compared to $365,589 for the same period of the previous year, representing a 240.8 % period to period increase. Our overall gross profit margin as a percentage of revenue decreased by 2.45% from 28.5% for the year ended June 30, 2009  to 26.05% for the same period of 2010, mainly due to most new stores at immature stage which incurred increasing operating costs during the year ended June 30, 2010.  Based on our experience, as a new store increases its customer base, fixed costs are typically spread out over an increasing revenue base and its contribution tends to improve.  It usually takes average 2 or 3 years of operation for a store to achieve the average mature operation, depending on the locations.  We foresee our gross profit from new stores will continue to grow as these new stores continue to mature.

Operating Expenses:

Our operating expenses, consisting of selling, general and administrative expenses, increased by approximately $402.6%, to $1,184,267, for the year ended June 30, 2010 from $235,637 for the same period of the previous year. This 402.6 % increase is mainly attributable to our fast expansions of 26 new stores in 9 provinces and municipalities, which resulted in significant increase in pre-opening expenses, payroll and traveling expenses, store and office leasing expenses, depreciation expenses, transportation expenses and other expenses relating to our growth in sales.  The overall increase in our operating expenses was in proportion to our increase in sales.

Income Tax (Benefit) Provision:

For the year ended June 30, 2010, we had tax provision of $7,642, as compared to tax provision of $49,725 for the same period of 2009.  This is a decrease of $42,083 or 84.6 % from period to period.  The decrease in the income tax provision was largely because we had generated less taxable income for the year ended June 30, 2010 than the previous year.

Net Income

Net income for the year ended June 30, 2010 decreased by approximately $41,376 or 51.8% to $38,514 as compared to $79,890 for the year ended June 30, 2009. The decrease in net income was mainly attributable to our significant increase in our operating expenses resulting from fast expansion of stores despite the significant increase in our revenue and gross profit.

Liquidity and Capital Resources

Capital Resources and Needs

Our cash requirements arise principally from the purchase of inventory, capital expenditures related to existing and new stores, offices and distribution centers, debt service and contractual obligations. Cash flows realized through the sales of automotive services, tires, parts and accessories are our primary source of liquidity.

	For The Years Ended June 30,
	2010			2009
Cash provided by (used in):
Operating Activities	$	(2,750,512	)		(2,284,386	)
Investing Activities	$	(1,544,038	)		(137,818	)
Financing Activities	$	6,964,896			2,419,555

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Operating Activities

Cash used in operating activities totaled $2,750,512 for the year ended June 30, 2010 as compared to $2,284,386 used in the same period of the previous year. The increase in our cash used in operations was primarily due to the increase spending in inventory purchase to match our store expansion and increased sales.

Investing

Cash used in investing activities totaled $1,544,038 for the year ended June 30, 2010 as compared to $137,818 in the same period of the previous year.  This increase was mainly due to our loans to outside parties and purchase of fixed assets in matching our store expansion.

Financing

Cash provided by financing activities totaled $6,964,896 for the year ended June 30, 2010 as compared to $2,419,555 in the same period of the previous year.   The increase was mainly because we initiated a short-term loans for working capital purpose during the year ended June 30, 2010 and also received proceeds from related parties to meet our cash requirements.

Our working capital is used for operational costs, the development of new stores and other capital expenditures necessary to maintain existing operations.  Along with the fast expansions, we have satisfied our working capital needs through cash from operations and various short-term borrowing arrangements.

We continue to implement growth and expansion plan and expect to fund our operations and new store openings with current operating cash flow, cash flow from organic growth and short-term bank loans as well as the proceeds from stockholders.  We may also seek additional financing in the form of debt, equity or convertible security offerings to fund our growth if we open more stores than we plan.

Off-Balance Sheet Arrangements

We do not have off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as “special purpose entities.”

Critical Accounting Policies

While our significant accounting policies are more fully described in Note 2 to our financial statements, we believe that the following accounting policies are the most critical to aid you in fully understanding and evaluating this “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Principle of Consolidation

The accompanying consolidated financial statements include the financial statements of the Company and its wholly-owned subsidiary, Shanghai Vomart and Shanghai Vomart’s four wholly-owned subsidiaries. All significant inter-company transactions and balances between the Company and its subsidiaries are eliminated upon consolidation.

Use of estimates

In preparing the financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting year. Significant estimates, required by management, include the recoverability of long-lived assets, the valuation of inventories, allowances for doubtful accounts and useful lives for property and equipment. Actual results could differ from those estimates.

Cash and cash equivalents

Cash equivalents include all short-term, highly liquid investments with an initial maturity of three months or less when purchased. All credit and debit card transactions that settle in less than seven days are also classified as cash and cash equivalents.

The Company maintains bank accounts in the PRC. Total cash as of June 30, 2010 and 2009 amounted to US$ 2,786,069 and US$96,883, respectively, of which no deposits are covered by insurance. The Company has not experienced any losses in such accounts and management believes it is not exposed to any risks on its cash in bank accounts.

Accounts Receivable

Accounts receivables are recorded at net realizable value consisting of the carrying amount less an allowance for uncollectible amounts, as needed.

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The Company uses the aging method to estimate the valuation allowance for anticipated uncollectible receivable balances. Under the aging method, bad debt percentages determined by management based on historical experience as well as current economic climate are applied to customers’ balances categorized by the number of months the underlying invoices have remained outstanding. The valuation allowance balance is adjusted to the amount computed as a result of the aging method. When facts subsequently become available to indicate that the allowance provided requires an adjustment, then the adjustment will be classified as a change in estimate. There were allowances of $36,038 and $0 for uncollectible amounts for the years ended June 30, 2010 and 2009, respectively.

Inventories

Inventory is mainly composed of automotive parts and supplies. Inventories are stated at the lower of cost or market, as determined on a weighted average basis, or market. If inventory costs exceed expected market value due to obsolescence or quantities in excess of expected demand, the Company will record reserves for the difference between the cost and the market value. These reserves are recorded based on estimates and reflected in cost of sales. Inventory allowance for the years ended June 30, 2010 and 2009 were $ 0 and $9,882, respectively.

Advances to vendors

Advances to vendors consist of balances paid to the Company’s suppliers but the service or goods have not been provided or received.  Advances to vendors are reviewed periodically to determine whether the carrying value has become impaired. The Company considers the assets to be impaired if the realization of the services and materials become doubtful.  There was no allowance as of June 30, 2010 and 2009.

Property and equipment

Property and equipment are recorded at cost less accumulated depreciation and any impairment losses.  The cost of an asset comprises of its purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended use.  Expenditure incurred after the fixed assets have been put into operation, such as repairs and maintenance and overhaul costs are expenses when incurred.

Any gain or loss on disposal or retirement of a fixed asset is recognized as the difference between the net sales proceeds and the carrying amount of the relevant asset. When property and equipment are retired or otherwise disposed of, the asset and accumulated depreciation are removed from the accounts and the resulting profit or loss is recognized.

Depreciation is computed using the straight-line method over the estimated useful lives of the assets.  Estimated useful lives of the assets are as follows:

Office equipment	3 years
Furniture and fixture	5 years
Automobiles	7 years

Impairment of long-lived assets

Long-lived assets, which include property, plant and equipment and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the assets. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the assets.  Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. No impairment loss is recorded for the years ended June 30, 2010 and 2009.

Revenue recognition

The Company recognizes revenue when the following fundamental criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered, (iii) the price to the customer is fixed or determinable and (iv) collection of the resulting receivable is reasonably assured.  Revenue is not recognized until title and risk of loss is transferred to the customer, which occurs upon delivery of goods, and objective evidence exists that customer acceptance provisions have been met.  Deposits or advance payments from customers prior to delivery of goods and passage of title of goods are recorded as advance from customers.

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Cost of Sales

Costs of sales include costs of the automotive parts sold and used, as well as inbound freight costs. Write-down of inventory to lower of cost or market is also recorded in cost of sales.

Selling, general and administrative expenses

Selling, general and administrative expenses consist primarily of salaries and commissions for sales representatives, salaries for administrative staffs, rent expenses, depreciation expense and employee benefits for administrative staffs.

Income taxes 

The Company accounts for income tax under the provisions of Accounting Standards Codification (“ASC”) 740,”Accounting for Income Taxes”, 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 income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, whenever necessary, against net deferred tax assets when it is more likely than not that some portion or all of the deferred tax asset will not be realized.

Value added tax

The Company is subject to value added tax (“VAT”) for selling of auto parts products. The applicable VAT rate is 17% for products sold in the PRC. The amount of VAT liability is determined by applying the applicable tax rate to the invoiced amount of goods sold (output VAT) less VAT paid on purchases made with the relevant supporting invoices (input VAT). Under the commercial practice of the PRC, the Company paid VAT based on tax invoices issued. The tax invoices may be issued subsequent to the date on which revenue is recognized, and there may be a considerable delay between the date on which the revenue is recognized and the date on which the tax invoice is issued.

Foreign currency translation

The Company maintains books and records in its functional currency of the Renminbi (“RMB”), being the primary currency of the economic environment in which its operations are conducted.

For financial reporting purposes, RMB has been translated into United States dollars (“USD”) as the reporting currency. Assets and liabilities are translated at the exchange rate in effect at the balance sheet date. Revenues and expenses are translated at the average rate of exchange prevailing during the reporting period. Translation adjustments arising from the use of different exchange rates from period to period are included as a component of shareholders’ equity as “Accumulated other comprehensive income”. Gains and losses resulting from foreign currency translations are included in accumulated other comprehensive income.  There is no significant fluctuation in exchange rate for the conversion of RMB to USD after the balance sheet date.

Comprehensive income

Statement of Financial Accounting Standards (“FAS”) No. 130, “Reporting Comprehensive Income”, which was subsequently codified within ASC 220, “Comprehensive Income”, requires disclosure of all components of comprehensive income and loss on an annual and interim basis. Comprehensive income and loss is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. Accumulated other comprehensive income arose from the changes in foreign currency exchange rates.

Statement of Cash Flows

In accordance with SFAS 95, “Statement of Cash Flows,” which was subsequently codified within ASC 230, “Statement of Cash Flows”, cash flows from the Company’s operations is calculated based upon the local currencies. As a result, amounts related to assets and liabilities reported on the statements of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheets.

Fair Value of Financial Instruments

The Company adopted the provisions of ASC 820, “Fair Value Measurements and Disclosures”. The Company’s financial instruments include cash and cash equivalents, accounts receivable, advances to suppliers, other receivables, accounts payable, accrued expenses, and other loans payable. Management has estimated that the carrying amounts approximate their fair value due to the short-term nature.

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Earnings per share

The Company computes earnings per share (“EPS’) in accordance with SFAS 128, “Earnings per Share”, which was subsequently codified within ASC 260, “Earning Per Share”.  ASC 260 requires companies with complex capital structures to present basic and diluted EPS.  Basic EPS is measured as net income divided by the weighted average common shares outstanding for the period.  Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential common shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later, using the treasury stock method.  Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS.

Concentration of credit risk

Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of accounts receivable and other receivables.  The Company does not require collateral or other security to support these receivables.  The Company conducts periodic reviews of its clients’ financial condition and customer payment practices to minimize collection risk on accounts receivable.

Recent accounting pronouncements

In January 2010, Financial Accounting Standards Board (“FASB”) issued Auditing standards update (“ASU”) No. 2010-06 – Improving Disclosures about Fair Value Measurements. This update provides amendments to Subtopic 820-10 that requires new disclosure as follows: 1) Transfers in and out of Levels 1 and 2. A reporting entity should disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and describe the reasons for the transfers. 2) Activity in Level 3 fair value measurements. In the reconciliation for fair value measurements using significant unobservable inputs (Level 3), a reporting entity should present separately information about purchases, sales, issuances, and settlements (that is, on a gross basis rather than as one net number). This update provides amendments to Subtopic 820-10 that clarifies existing disclosures as follows: 1) Level of disaggregation. A reporting entity should provide fair value measurement disclosures for each class of assets and liabilities. A class is often a subset of assets or liabilities within a line item in the statement of financial position. A reporting entity needs to use judgment in determining the appropriate classes of assets and liabilities. 2) Disclosures about inputs and valuation techniques. A reporting entity should provide disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements. Those disclosures are required for fair value measurements that fall in either Level 2 or Level 3. The new disclosures and clarifications of existing disclosures are effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. These disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. The Company is currently evaluating the impact of this ASU, however, the Company does not expect the adoption of this ASU to have a material impact on its consolidated financial statements.

In February 2010, FASB issued ASU No. 2010-9 –Amendments to Certain Recognition and Disclosure Requirements. This update addresses certain implementation issues related to an entity’s requirement to perform and disclose subsequent-events procedures, removes the requirement that public companies disclose the date of their financial statements in both issued and revised financial statements. According to the FASB, the revised statements include those that have been changed to correct an error or conform to a retrospective application of U.S. GAAP. The amendment is effective for interim and annual reporting periods in fiscal year ending after June 15, 2010. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements.

MANAGEMENT

Appointment of New Directors and Officers

On the Closing Date, Mr. Robert L. Wilson, the Company’s President, Chief Executive Officer, Treasurer, Chief Financial Officer and Secretary, resigned from all of his positions and Mr. Zhoufeng Shen was appointed as our President and Chief Executive Officer and Ms. Xiaomei Wang was appointed as our Chief Financial Officer, effective immediately on the Closing Date. Further, on the Closing Date, Mr. Wilson, the Company’s sole director, resigned from his director position, effective on the date that is ten (10) calendar days after our Company mails an Information Statement to the Company’s shareholders prepared pursuant to Rule 14f-1 under the Exchange Act, relating to the Exchange Agreement, and Mr. Hu was appointed as our Chairman of the Board.

The following table sets forth the names, ages and positions of our new Chairman of the Board, President and Chief Executive Officer, and Chief Financial Officer. Our shareholders elect our directors on an annual basis.  Each director holds his or her office until he or she resigns or is removed by our Board, and his or her successor is elected and qualified.  Our officers are appointed by our Board and serve at the pleasure of our Board.

NAME	AGE	POSITION
Zhoufeng Shen	38	President, Chief Executive Officer
Xiaomei Wang	53	Chief Financial Officer
Qun Hu	26	Chairman of the Board of Directors

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A brief biography of each officer and director is more fully described in Item 5.02(c).  The information therein is hereby incorporated in this section by reference.

Audit Committee Financial Expert

Our Board 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-K and is “independent,” as the term is used in Item 7(d)(3)(iv) of Schedule 14A under the Exchange Act. Our Board 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 the Board are collectively capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting.

Employment Agreements

Wedo not haveemployment agreement with any of our executive officers and directors.

Family Relationships

There are no family relationships between any of our directors or executive officers and any other directors or executive officers.

Involvement in Certain Legal Proceedings

To the best of our knowledge, none of our directors or executive officers have been convicted in a criminal proceeding, excluding traffic violations or similar misdemeanors, or has been a party to any judicial or administrative proceeding during the past five years that resulted in a judgment, decree or final order enjoining that person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws, except for matters that were dismissed without sanction or settlement. Except as set forth in our discussion below in “Certain Relationships and Related Transactions,” none of our directors, director nominees or executive officers has been involved in any transactions with our Company or any of our directors, executive officers, affiliates or associates which are required to be disclosed pursuant to the rules and regulations of the U.S. Securities and Exchange Commission.

CODE OF ETHICS

We have adopted a code of ethics that applies to our officers, directors and employees, including our Chief Executive Officer and Chief Financial Officer and other senior executives.

EXECUTIVE COMPENSATION

Summary Compensation Table

The following summary compensation table sets forth all compensation awarded to, earned by, or paid by us to the named executive officer during the years ended December 31, 2009 and 2008 in all capacities for the accounts of our executives, including our Chief Executive Officer and Chief Financial Officer:

Name and Principal Position	Year	Salary ($)	Bonus ($)		Stock Awards ($)		Option Awards ($)		Non-Equity Incentive Plan Compensa- tion ($)		Change in Pension Value and Nonquali- fied Deferred Compensa- tion Earnings ($)		All Other Compensa -tion ($)		Totals ($)
Robert L. Wilson President, CEO, CFO, Treasurer, Secretary and Sole Director (1)	2009	0		0		0		0		0		0		0		0
	2008	0		0		0		0		0		0		0		0

(1) On the Closing Date, Robert L. Wilson tendered his resignation from all officer positions held in the Company, effective immediately, and from his position as sole director, effective on the date that is ten (10) calendar days after our Company mails an Information Statement prepared pursuant to Rule 14f-1 under the Exchange Act, relating to the Exchange Agreement.

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Outstanding Equity awards at Fiscal Year End

There are no outstanding equity awards as of the date hereof.

Director Compensation

Our directors will not receive a fee for attending each board of directors meeting or meeting of a committee of the board of directors. All directors will be reimbursed for their reasonable out-of-pocket expenses incurred in connection with attending board of director and committee meetings.

Option Grants

We do not maintain any equity incentive or stock option plan.  Accordingly, we did not grant options to purchase any equity interests to any employees or officers, and no stock options are issued or outstanding to any officers.  We do, however, anticipate adopting a non-qualified stock option plan where we will be granting our officers options to purchase our common stock pursuant to the terms of their employment agreements.  However, no such plan has been finalized or adopted as of the date of this Current Report.

Vomart Executive Compensation Summary

The table below sets forth the positions and compensation for each officer and director of Vomart for the years ended June 30, 2010 and 2009.

Name and Principal Position	Year	Salary ($)	Bonus ($)	Stock Awards ($)	Option Awards ($)	Non-Equity Incentive Plan Compensation ($)	Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)	All Other Compensation ($)	Totals ($)
Qun Hu, Chairman of the Board (1)	2010	0	0	0	0	0	0	0	0
	2009	0	0	0	0	0	0	0	0
Zhoufeng Shen, President, Chief Executive Officer (2)	2010	9,050	0	0	0	0	0	0	9,050
	2009	9,050	0	0	0	0	0	0	9,050
Xiaomei Wang, Chief Financial Officer (2)	2010	0	0	0	0	0	0	0	0
	2009	0	0	0	0	0	0	0	0

(1) In connection with the Closing of the Share Exchange, Qun Hu was appointed the Company’s Chairman of the Board, effective on the date that is ten (10) calendar days after our Company mails an Information Statement to the Company’s shareholders prepared pursuant to Rule 14f-1 under the Exchange Act.

(2) In connection with the Closing of the Share Exchange, Mr. Zhoufeng Shen was appointed as the President and Chief Executive Officer, Xiaomei Wang was appointed as Chief Financial Officer, effective immediately on the Closing Date.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

AND RELATED STOCKHOLDER MATTERS.

Pre-Share Exchange

The following table sets forth certain information regarding the ownership of our common stock prior to the Closing Date by: (i) each person who is known to us to be the beneficial owner of more than five percent (5%) of our outstanding common stock; (ii) each executive officer and director; and (iii) all our current executive officers and directors of as a group. Except as otherwise indicated in the footnotes, each person listed has sole voting power with respect to the shares shown as beneficially owned.

Immediately prior to the Closing Date, we had 2,250,000 shares of our common stock outstanding.

Title of Class	Name and Address	Amount and Nature of Ownership	Percentage of Class
Common Stock, par value $0.001 per share	Robert L. Wilson 70707 Frank Sinatra Drive, Unit 59 Rancho Mirage, CA 90067	2,000,000	89%
Common Stock, par value $0.001 per share	All officers and directors as a group (one person)	2,000,000	89%

Post-Share Exchange

The following table sets forth certain information regarding the ownership of our common stock after the Closing Date by: (i) each person who is known to us to be the beneficial owner of more than five percent (5%) of our outstanding common stock; (ii) each executive officer and director; and (iii) all our current executive officers and directors of as a group. Except as otherwise indicated in the footnotes, each person listed has sole voting power with respect to the shares shown as beneficially owned.

Title of Class	Name and Address (2)	Amount and Nature of Ownership (1)	Percentage of Class (3)
Common Stock, par value $0.001 per share	Zhoufeng Shen	0	0%
Common Stock, par value $0.001 per share	Xiaomei Wang	0	0%
Common Stock, par value $0.001 per share	Qun Hu (4)	1,300,000	52%
Common Stock, par value $0.001 per share	All officers and directors as a group (three persons)	1,300,000	52%

(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, the address of such person is c/o the Company, at NO. 288 Maodian Road, Liantang Industrial Park, Qingpu District Shanghai, PRC.

(3)   Based on 2,500,000 shares of common stock issued and outstanding as of the date of this Current Report on Form 8-K.

(4)   These 1,300,00 shares of the Company’s common stock are owned directly by Delight Pride Limited, a British Virgin Islands Company (“Delight Pride”).  Qun Hu is the director and sole shareholder of Delight Pride and as such, maintains sole dispositive power and discretion as to the voting and investment decisions of Delight Pride.

DESCRIPTION OF SECURITIES

Our Company is authorized to issue 100,000,000 shares of common stock, par value $0.001 per share, and 5,000,000 shares of preferred stock, par value $0.001 per share. As of the date hereof, 2,500,000 shares of common stock and no shares of preferred stock were issued and outstanding.

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Common Stock

Subject to preferences that may apply to shares of preferred stock outstanding at the time, the holders of outstanding shares of our common stock are entitled to receive dividends out of assets legally available therefore at times and in amounts as our board of directors may determine. Each stockholder is entitled to one vote for each share of common stock held on all matters submitted to a vote of the stockholders. Cumulative voting is not provided for in our amended certificate of incorporation, which means that the majority of the shares voted can elect all of the directors then standing for election. Our common stock is not entitled to preemptive rights and is not subject to conversion or redemption. Upon the occurrence of a liquidation, dissolution or winding-up, the holders of shares of our common stock are entitled to share ratably in all assets remaining after payment of liabilities and satisfaction of preferential rights of any outstanding preferred stock. There are no sinking fund provisions applicable to the common stock. The outstanding shares of common stock are fully paid and non-assessable.

Preferred Stock

Our board of directors is empowered to designate and issue from time to time, without need of shareholder approval, one or more classes or series of preferred stock and to fix and determine the relative rights, preferences, designations, qualifications, privileges, options, conversion rights, limitations and other special or relative rights of each such class or series so authorized. Such action could adversely affect the voting power and other rights of the holders of our Company’s capital shares or could have the effect of discouraging or making difficult any attempt by a person or group to obtain control of the Company.

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Our common stock, par value $0.001 per share, has a trading symbol TEDG, but has been thinly traded on the Over-The-Counter Bulletin Board (“OTCBB”). Our common stock had been deleted from the OTCBB effective March 26, 2010, due to our failure to comply with Rule 15c2-11. Our common stock was re-listed on the OTCBB on June 16, 2010.

The market price of our common stock is subject to significant fluctuations in response to variations in our quarterly operating results, general trends in the market and other factors, over many of which we have little or no control. In addition, broad market fluctuations, as well as general economic, business and political conditions, may adversely affect the market for our common stock, regardless of our actual or projected performance.

Holders

As of the date hereof, 2,500,000 shares of our common stock are issued and outstanding. Currently, there are approximately 80shareholders of our common stock.

Transfer Agent and Registrar

The Transfer Agent for our common stock is Pacific Stock Transfer Company. Pacific Stock’s telephone number is (702) 361-3033.

Penny Stock Regulations

The Penny Stock Act of 1990 requires specific disclosure to be made available in connection with trades in the stock of companies defined as “penny stocks”. The Securities and Exchange Commission (SEC) has adopted regulations that generally define a penny stock to be any equity security that has a market price of less than $5.00 per share, subject to certain exceptions. If an exception is unavailable, the regulations require the delivery by broker-dealers, prior to any transaction involving a penny stock, of a disclosure schedule explaining the penny stock market.

The penny stock rules require that a broker-dealer approve a person’s account for transactions in penny stocks and the broker-dealer receives 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.

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.

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 common stock. In addition, the liquidity for our common stock may decrease, with a corresponding decrease in the price of our common stock. Our common stock, 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 common stock.

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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.  We have never paid any dividends and 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 the 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 our subsidiary Vomart. Our board of directors currently intends to retain all earnings for use in the business for the foreseeable future.  See “Risk Factors.”

Equity Compensation Plan Information

None.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Policies and Procedures for Review, Approval or Ratification of Transactions with Related Persons

As we increase the size of our board of directors and gain independent directors, we expect to prepare and adopt a written related-person transactions policy that sets forth our policies and procedures regarding the identification, review, consideration and approval or ratification of “related-persons transactions.” For purposes of our policy only, a “related-person transaction” will be a transaction, arrangement or relationship (or any series of similar transactions, arrangements or relationships) in which we and any “related person” are participants involving an amount that exceeds $120,000. Transactions involving compensation for services provided to us as an employee, director, consultant or similar capacity by a related person will not be covered by this policy. A related person will be any executive officer, director or a holder of more than five percent of our ordinary shares, including any of their immediate family members and any entity owned or controlled by such persons.

We anticipate that, where a transaction has been identified as a related-person transaction, the policy will require management to present information regarding the proposed related-person transaction to our audit committee (or, where approval by our audit committee would be inappropriate, to another independent body of our board of directors) for consideration and approval or ratification. Management’s presentation will be expected to include a description of, among other things, the material facts, the direct and indirect interests of the related persons, the benefits of the transaction to us and whether any alternative transactions are available.

To identify related-person transactions in advance, we are expected to rely on information supplied by our executive officers, directors, and certain significant shareholders. In considering related-person transactions, our board of directors will take into account the relevant available facts and circumstances including, but not limited to:

· the risks, costs and benefits to us;

· the effect on a director’s independence in the event the related person is a director, immediate family member of a director or an entity with which a director is affiliated;

· the terms of the transaction;

· the availability of other sources for comparable services or products; and

· the terms available to or from, as the case may be, unrelated third parties or to or from our employees generally.

We also expect that the policy will require any interested director to excuse himself or herself from deliberations and approval of the transaction in which the interested director is involved.

Promoters and Certain Control Persons

We did not have any promoters at any time during the past five fiscal years.

Director Independence

We currently do not have any independent directors, as the term “independent” is defined by the rules of the Nasdaq Stock Market.

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LEGAL PROCEEDINGS

Currently there are no legal proceedings pending or threatened against us. However, from time to time, we may become involved in various lawsuits and legal proceedings that arise in the ordinary course of business.  Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.

INDEMNIFICATION OF OFFICERS AND DIRECTORS

Section 145 of the Delaware General Corporation Law authorizes a court to award, or a corporation’s board of directors to grant, indemnity to directors and officers in terms sufficiently broad to permit such indemnification under certain circumstances for liabilities (including reimbursement for expenses incurred) arising under the Securities Act.

Our certificate of incorporation provides that we shall indemnify our directors to the full extent permitted by the provisions of Section 102(b)(7) and Section 145 of the Delaware General Corporation Law (the “DGCL”), as the same may be amended and supplemented. Section 102(b)(7) of the DGCL, relating to indemnification, is hereby incorporated herein by reference. Notwithstanding the above, our certificate of incorporation provides that a director shall be liable to the extent provided by applicable law, (i) for breach of the director’s duty of loyalty to us; (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) pursuant to Section 174 of the DGCL, or (iv) for any transaction from which the director derived an improper personal benefit.

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

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

CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS

Kyle L. Tingle, CPA, LLC served as our independent auditor in connection with the audits of our financial statements for the fiscal years ended December 31, 2009 and 2008.  In connection with the Share Exchange, our board of directors recommended and approved the appointment of Friedman LLP as the independent auditor for the Company.

During the fiscal years ended December 31, 2009 and 2008 and through the date hereof, neither us nor anyone acting on our behalf consulted Friedman LLPwith respect to (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on our financial statements, and neither a written report was provided to us or oral advice was provided that Friedman LLP concluded was an important factor considered by us in reaching a decision as to the accounting, auditing or financial reporting issue; or (ii) any matter that was the subject of a disagreement or reportable events set forth in Item 304(a)(1)(v) of Regulation S-K.

For a more detailed discussion of our change in auditor, please refer to Item 4.01 below.

Item 3.02 Unregistered Sales of Equity Securities.

Pursuant to the Exchange Agreement, on the Closing Date, we issued the Exchange Shares to the Hongkong Limited Shareholders, their designees or assigns, in exchange for the Hongkong Limited Shares.  Such securities were not registered under the Securities Act.  These securities qualified for exemption under Section 4(2) of the Securities Act since the issuance securities by us did not involve a public offering. 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 securities offered. We did not undertake an offering in which we sold a high number of securities to a high number of investors. In addition, these shareholders had the necessary investment intent as required by Section 4(2) since they agreed to and received share certificates bearing a legend stating that such securities are restricted pursuant to Rule 144 of the Securities Act. This restriction ensures that these securities 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 for this transaction.

36

Item 4.01 Changes in Registrant’s Certifying Accountant.

(a) Dismissal of Previous Independent Registered Public Accounting Firm.

(i) On November 12, 2010, we dismissed Kyle L. Tingle, CPA, LLC (“KLT”) as our independent registered public accounting firm. Our board of directors approved such resignation on November 12, 2010.

(ii) Our board of directorsparticipated in and approved the decision to change our independent registered public accounting firm.

(iii) KLT’s reports on our financial statements for the years ended December 31, 2009 and 2008 did not contain an adverse opinion or a disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles.

(iv) In connection with the audit and review of our financial statements through November 12, 2010, there were no disagreements on any matter of accounting principles or practices, financial statement disclosures or auditing scope or procedures, which disagreements if not resolved to their satisfaction would have caused them to make reference in connection with KLT’s opinion to the subject matter of the disagreement.

(v) In connection with our audited financial statements for the years ended December 31, 2009 and 2008, there have been no reportable events with our Company as set forth in Item 304(a)(1)(v) of Regulation S-K.

(vi) We provided Gately with a copy of this Current Report on Form 8-K and requested that KLT furnished it with a letter addressed to the SEC stating whether or not they agree with the above statements. We have received the requested letter from KLT, and a copy of such letter is filed as Exhibit 16.1 to this Current Report Form 8-K.

(b) Engagement of New Independent Registered Public Accounting Firm.

(i) On November 12, 2010, our board of directors appointed Friedman LLP (“Friedman”) as our new independent registered public accounting firm. The decision to engage Friedman was approved by our board of directors on November 12, 2010.

(ii) Prior to November 12, 2010, we did not consult with Friedman regarding (1) the application of accounting principles to a specified transactions, (2) the type of audit opinion that might be rendered on our financial statements, (3) written or oral advice provided by Friedman that would be an important factor considered by our Company in reaching a decision as to an accounting, auditing or financial reporting issues or (4) any matter that was the subject of a disagreement between our Company and our predecessor auditor as described in Item 304(a)(1)(iv) or a reportable event as described in Item 304(a)(1)(v) of Regulation S-K.

Item 5.01 Changes in Control of Registrant.

Reference is made to the disclosure set forth under Item 1.01 of this report, which disclosure is incorporated herein by reference.

As a result of the closing of the reverse acquisition with Hongkong Limited, the former sole shareholder of Hongkong Limited beneficially owns 52% of our total outstanding common shares.

Accounting Treatment; Change of Control

The Share Exchange is being accounted for as a “reverse merger” since the former stockholders of Hongkong Limited own a majority of the outstanding shares of our common stock immediately following the Share Exchange. No arrangements or understandings exist among present or former controlling stockholders with respect to the election of members of our board of directors and, to our knowledge, no other arrangements exist that might result in a change of control in the future. As a result of the issuance of 2,250,000 shares of our common stock to the Hongkong Limited Shareholders, their designees or assigns, and a change in the majority of our directors, a change in control occurred on the date of the consummation of the Share Exchange. As of the time immediately following the Closing, we continued to be a “small business issuer,” as defined under the Exchange Act.

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

(a)  Resignation of Directors and Officers

At the Closing, Robert L. Wilson resigned as the sole member of the Board, effective on the date that is ten (10) calendar days after we mail an Information Statement to the Company’s shareholders prepared pursuant to Rule 14f-1 under the Exchange Act, relating to the Exchange Agreement.  Mr. Wilson also resigned as our President, Chief Executive Officer, Treasurer, Chief Financial Officer and Secretary, effective immediately. There were no disagreements between Mr. Wilson and the Company.

37

(b)  Appointment of Directors and Officers

At the Closing, the following persons were appointed as our new directors and officers:

NAME	AGE	POSITION
Zhoufeng Shen	38	President, Chief Executive Officer
Xiaomei Wang	53	Chief Financial Officer
Qun Hu	26	Chairman of the board of directors

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

Qun Hu, age 26, Chairman of the Board of Directors

Mr. Hu has been our Chairman of the Board since the Closing Date of the Share Exchange. Mr. Hu was the Chairman of the Board of Directors of Hongkong Charter International Group Limited since its inception in August 2009. From July 2007 to July 2009, Mr.Hu was the general manager of Leiguan Auto Parts Co. Ltd. From January 2007 to July 2007, he served as sales manager of Leiguan Auto Parts Co., Ltd. From January 2006 to July 2006, he served in VEF Sarl as Sales Associate in Paris, France. From May 2005 to August 2005, Mr. Hu worked for Barney’s as Sales Associate in London, United Kingdom. From May 2004 to August 2004, he worked in KMIG as Import Manager Assistant in Brussels, Belgium. Mr. Hu received his bachelor’s degree from MBA Institute, in Paris, France in 2006. In 2005, he studied at the University of Florida, in Gainesville, FL, USA.  Mr. Hu is fluent in English, Chinese, French, and Spanish.

Zhoufeng Shen, age 38, President, Chief Executive Officer

Zhoufeng Shen has been our Chief Executive Officer since the Closing Date of the Share Exchange.  Mr. Shen served as Vomart’s Chief Executive Officer from October 2010 to the Closing Date. From March 2001 to October 2007, he was President Assistant in DELIXI Group Co., Ltd. From June 1996 to October, 2000, he was a teacher at Wenzhou University. He got his master’s and bachelor’s degree in Brand Planning from China Academy of Art University.

Xiaomei Wang, age 53, Chief Financial Officer

Ms. Xiaomei Wang has been our Chief Financial Officer since the Closing Date of the Share Exchange.  Ms. Wang served as Vomart’s Finance Manager from April 2010 to the Closing Date.  From September 2008 to March 2010, Ms. Wang worked as the Chief Finance Manager in the public company Zhaohua Technology Co., Ltd. From November 1996 to December 2005, she was the Chief Finance Manager for Xinjiang Huijia Department Store. From April 1977 to October 1996, Ms. Wang was Chief Accountant and Finance Manager of Xinjiang Auto Factory Co., Ltd.  Ms. Wang graduated from Capital University of Economics and Businesswith a major in corporate management, and is a Certified Public Accountant licensed in the People’s Republic of China, the IFMA (International Financial Management Association), and the CTP (Certified Tax Planners).

(c) Family Relationships

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

(d) Employment Agreements of the Executive Officers

We currently do not haveemployment agreements with any of our executive officers.

(e) Related Party Transactions

There are no related party transactions reportable under Item 5.02 of Form 8-K and Item 404(a) of Regulation S-K.

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

On November 12, 2010, pursuant to the Exchange Agreement, the Board adopted a resolution by unanimous written consent changing our name to “Vomart International Auto Parts, Inc.” to better reflect our business plan.

On November 12, 2010, pursuant to the Exchange Agreement, the Board adopted a resolution by unanimous written consent changing our fiscal year end from December 31 to June 30. This change was made to be consistent with the fiscal year of Vomart, which is now our wholly owned subsidiary and the operating company.

38

Item 5.06 Change in Shell Company Status.

As explained more fully in Item 1.01 and 2.01 above, we were a “shell company” (as such term is defined in Rule 12b-2 under the Exchange Act) immediately before the Closing of the Share Exchange.  As a result of the Share Exchange, Vomart became our wholly owned subsidiary and became our main operational business.  Consequently, we believe that the Share Exchange has caused us to cease being a shell company.  For information about the Share Exchange, please see the information set forth above under Item 1.01 and 2.01 of this Current Report on Form 8-K, which such information is incorporated herein by reference.

Item 9.01 Financial Statement and Exhibits.

(a) Financial Statements of Business Acquired.

The audited consolidated financial statements of Hongkong Limited as of June 30, 2010 and 2009 are filed as Exhibit 99.1 to this Current Report and are incorporated herein by reference.

(b) Pro Forma Financial Information.

The unaudited pro forma consolidated balance sheet as at June 30, 2010and the unaudited pro forma consolidated statement of operations for the year ended December 31, 2009 and for the six months ended June 30, 2010 concerning the acquisition of the business operations of Hongkong Limited are filed as Exhibit 99.2 to this Current Report and are incorporated herein by reference.

(c)  Shell Company Transactions.

Reference is made to Items 9.01(a) and 9.01(b) and the exhibits referred to therein which are incorporated herein by reference.

(d)  Exhibits.

Exhibit No.	Description
2.1	Share Exchange Agreement by and between the Company and Hongkong Charter International Group Limited dated November 12, 2010 *
3.1	Certificate of Incorporation (1)
3.2	By Laws (1)
16.1	Letter from Kyle L. Tingle, CPA, LLC, dated November 12, 2010 *
99.1	The Audited Consolidated Financial Statements of Hongkong Charter International Group Limited as of June 30, 2010 and 2009*
99.2	The Unaudited Pro Forma Financial Information of Teen Education Group, Inc.*

* Filed herewith

(1) Incorporated herein by reference to the Form S-1 Registration Statement filed on October 28, 2008.

39

SIGNATURES

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

	TEEN EDUCATION GROUP, INC.
Dated: November 12, 2010	By:	/s/ Zhoufeng Shen
		Zhoufeng Shen Chief Executive Officer

40

EX-2.1

  
    Unassociated Document
    
    
    
    
    
    

EX-16.1

PERSONAL FINANCIAL PLANNING,

BUSINESS SERVICES & TAX PLANNING

November 12, 2010

Securities and Exchange Commission

450 Fifth Street, N.W.

Washington, D.C. 20549

Commissioners:

We have read the statements made by Teen Education Group, Inc. which was provided to us on November 12, 2010, which we understand will be filed with the Commission, pursuant to Item 4.01 of Form 8-K, as part of the Company’s Form 8-K report dated November 12, 2010. We agree with the statements concerning our Firm in such Form 8-K. At this time, there are no accounting disagreements on the financial statements prepared by this firm and filed with the Securities and Exchange Commission

Sincerely,

Kyle L. Tingle, CPA, LLC

3145 E. Warm Springs Road · Suite 450 · Las Vegas, Nevada 89120 · PHONE: (702) 450-2200 · FAX: (702) 436-4218

E-MAIL: ktingle@kyletinglecpa.com

EX-99.1

HONGKONG CHARTER INTERNATIONAL GROUP LIMITED

CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2010 AND 2009

HONGKONG CHARTER INTERNATIONAL GROUP LIMITED

INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	1
CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2010 AND 2009	2
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED JUNE 30, 2010 AND 2009	3
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY FOR THE YEARS ENDED JUNE 30, 2010 AND 2009	4
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED JUNE 30, 2010 AND 2009	5
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	6-15

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of

Hongkong Charter International Group Limited and Subsidiaries

We have audited the accompanying consolidated balance sheets of Hongkong Charter International Group Limited and Subsidiaries (“the Company”) as of June 30, 2010 and 2009, and the related consolidated statements of operations, changes in stockholders' equity and cash flows for each of the years in the two-year period ended June 30, 2010. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated 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 purpose of expressing an opinion on the effectiveness of the company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, 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 June 30, 2010 and 2009, and the results of its operations and its cash flows for each of the years in the two-year period ended June 30, 2010 in conformity with accounting principles generally accepted in the United States of America.

/s/Friedman LLP

Marlton, New Jersey

November 5, 2010

1

HONGKONG CHARTER INTERNATIONAL GROUP LIMITED

CONSOLIDATED BALANCE SHEETS

( IN US DOLLARS)

	As of June 30,
	2010			2009
ASSETS
Current assets:
Cash and cash equivalents	$	2,786,069		$	96,883
Accounts receivable, net		1,148,177			462,196
Inventory		3,676,681			1,312,007
Other receivables, net		171,341			30,203
Value added tax recoverable		237,292			87,189
Advance to vendors		1,037,363			675,643
Prepaid expenses		52,037			40,959
Loan to outside parties		1,327,159			-
Total current assets		10,436,119			2,705,080
Property and equipment, net		310,280			138,980
Total assets	$	10,746,399		$	2,844,060
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term loan	$	3,686,554		$	-
Accounts payable		748,310			10,078
Advance from customers		103,978			14,892
Accrued expenses and other liabilities		10,462			11,721
Taxes payable		59,578			54,285
Due to related parties		5,936,768			2,592,278
Total current liabilities		10,545,650			2,683,254
Stockholders' equity
Commom Stock, $0.129 par value, 10,000 shares authorized, 1,000 shares issued and outstanding at June 30, 2010 and 2009		129			129
Additional paid in capital		144,568			144,568
Retained earnings		56,876			18,362
Accumulated other comprehensive loss		(824	)		(2,253	)
Total stockholders' equity		200,749			160,806
Total Liabilities and Stockholders' Equity	$	10,746,399		$	2,844,060

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

2

HONGKONG CHARTER INTERNATIONAL GROUP LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS

(IN US DOLLARS)

	For the years ended June 30,
	2010			2009
Revenues
Automotive supplies sales	$	3,822,548		$	984,654
Automotive maintenance service		960,206			298,264
Total revenues		4,782,754			1,282,918
Cost of revenues
Cost of supplies sales		3,474,974			907,699
Cost of maintenance service		61,980			9,630
Total cost of revenues		3,536,954			917,329
Gross profit		1,245,800			365,589
Selling, general and administrative expenses		1,184,267			235,637
Operating income		61,533			129,952
Other income (expenses)
Interest income		99			179
Interest expenses		(4,582	)		-
Other expenses		(10,894	)		(516	)
Total other income (expenses)		(15,377	)		(337	)
Income before income taxes		46,156			129,615
Provision for income taxes		(7,642	)		(49,725	)
Net income	$	38,514		$	79,890
Other comprehensive income ( loss)
Foreign currency translation gain(loss)		1,429			(438	)
Comprehensive income	$	39,943		$	79,452
Basic and diluted income per common share
Basic	$	38.51		$	79.89
Diluted	$	38.51		$	79.89
Weighted average common shares outstanding
Basic		1,000			1,000
Diluted		1,000			1,000

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

3

HONGKONG CHARTER INTERNATIONAL GROUP LIMITED

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

FOR THE YEARS ENDED JUNE 30, 2010 AND 2009

(IN US DOLLARS)

	Common Stock				Additional Paid in		Retained			Accumulated Other
	Shares		Amount		Capital		Earnings			Comprehensive Loss			Total
Balance at June 30, 2008		1,000	$	129	$	27,100	$	(61,527	)	$	(1,815	)	$	(36,114	)
Capital contribution						117,468								117,468
Net income for the year								79,890						79,890
Foreign currency translation adjustments											(438	)		(438	)
Balance at June 30, 2009		1,000		129		144,568		18,362			(2,253	)		160,806
Net income for the year								38,514						38,514
Foreign currency translation adjustments											1,429			1,429
Balance at June 30, 2010		1,000	$	129	$	144,568	$	56,876		$	(824	)	$	200,749

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

4

HONGKONG CHARTER INTERNATIONAL GROUP LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN US DOLLARS)

	For the years ended June 30,
	2010			2009
Cash flows from operating activities
Net income	$	38,514		$	79,890
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation		56,692			21,506
Allowance for doubtful accounts		40,797			-
Inventory allowance		(9,886	)		9,874
Changes in assets and liabilities:
(Increase) decrease in -
Account receivables		(714,086	)		(438,110	)
Inventory		(2,329,362	)		(1,243,208	)
Other receivables		(143,670	)		(27,547	)
Value added tax recoverable		(148,461	)		(74,034	)
Prepaid expenses		(10,707	)		(19,061	)
Advance to vendors		(354,402	)		(674,562	)
Security deposit		(1,025	)		(1,464	)
Increase (decrease) in -
Accounts payable		733,178			10,070
Accrued expenses and other liabilities		(1,335	)		3,347
Customer advance		88,377			14,881
Tax payable		4,865			54,032
Net cash (used in) operating activities		(2,750,512	)		(2,284,386	)
Cash flows from investing activities
Loans to outside parties		(1,318,206	)		-
Acquisition of intangible assets		(30,282	)		-
Purchase of fixed assets		(195,550	)		(137,818	)
Net cash used in investing activities		(1,544,038	)		(137,818	)
Cash flows from financing activities
Capital contribution		-			117,468
Proceeds from short-term loan		3,661,684			-
Proceeds from related parties		3,303,212			2,302,087
Net cash provided by financing activities		6,964,896			2,419,555
Effect of exchange rate changes on cash and cash equivalents		18,840			(25	)
Net increase (decrease) in cash and cash equivalents		2,689,186			(2,674	)
Cash and cash equivalents, beginning of year		96,883			99,557
Cash and cash equivalents, end of year	$	2,786,069		$	96,883
Supplemental disclosures of cash flow information:
Interest paid	$	4,582		$	-
Income taxes paid	$	8,083		$	3,517

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

5

HONGKONG CHARTER INTERNATIONAL GROUP LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1.  ORGANIZATION AND BASIS OF PRESENTATION

Hongkong Charter International Group Limited, (“Hongkong Limited” or the “Company”), was incorporated in Hong Kong on August 21, 2009 and owns 100% of the issued and outstanding capital stock of Shanghai Vomart Auto Parts Co., Ltd. (“Shanghai Vomart”). Shanghai Vomart was incorporated in Shanghai, People’s Republic of China (“PRC”) in January 2008 with registered capital in amount of RMB 1,000,000 (equivalent to US$144,697). In 2008 and 2009, the Company established four wholly-owned subsidiaries: Shanghai Vomart Nanjing Branch, Ningbo Branch, Hangzhou Branch and Shijiazhuag Branch.  Currently, the Company owns thirty-seven (37) stores in nine (9) provinces and municipalities. Shanghai Vomart and its subsidiaries are engaged in providing automotive maintenance services and automotive parts distribution in China. The Company distributes a broad selection of international brand name (such as Philips, Mahle, Denso, Bosch and Osram) as well as private label automotive replacement parts, such as accessories and maintenance items for cars, minivans, vans, sport utility vehicles, light trucks, and heavy-duty trucks. The typical products include batteries, brake pads, filters, oils and transmission fluid.

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

EX-99.2

  
    Unassociated Document