8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K/A

Amendment No. 1

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.

EXPLANATORY NOTE

This Amendment No. 1 on Form 8-K/A (the “8-K/A”) amends and restates in its entirety the Current Report on Form 8-K for Teen Education Group, Inc. (the “Company”) dated and filed with the Securities and Exchange Commission on November 12, 2010 (the “Original 8-K”) to amend certain disclosures and to include updated financial information of Hongkong Charter International Group, Limited, which the Company recently acquired through a reverse merger transaction, for the quarter ended September 30, 2010 and the parent-only financial statements as a supplement to the unaudited condensed consolidated financial statements.

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 parts 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 sole shareholder of Hongkong Limited (the “Hongkong Limited Shareholder”). 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/A 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 Shareholder (the “Hongkong Limited Shares”). In exchange, we issued to the Hongkong Limited Shareholder, their designees or assigns, 2,250,000 shares 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 $350,000 in 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.

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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.

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 Shareholder, and the Hongkong Limited Shareholder transferred and contributed all of the Hongkong Limited Shares to us. In exchange, we issued the Exchange Shares to the Hongkong Limited Shareholder, 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 2,500,000 shares of common stock issued and outstanding, 2,250,000 of which are restricted and issued to the Hongkong Limited Shareholder, 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 based on the number of stores we own and the geographic areas where we have presence.  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.  In comparison, other large auto parts distributors in China own fewer stores and/or their stores are located in fewer provinces or municipalities.  For example, Shandong Youpei Auto Parts owns twenty-four stores of which eighteen are located in Shangdong Province.  Jiangsu Youpei Auto Parts owns seventeen stores of which sixteen are located in Jiangsu Province.  Putong Auto Service owns fifteen stores in thirteen different provinces and municipalities.  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)	Three month Period Ended September 30,							Fiscal Year Ended June 30,
	2010		2009		% Growth			2010		2009		% Growth
Revenue	$	2,762,293	$	1,029,888		168.2	%	$	4,782,754	$	1,282,918		272.8	%
Gross Profit		529,680		275,879		92.0	%		1,245,800		365,589		240.8	%
Net Income	$	24,228	$	15,650		54.8	%	$	38,514	$	79,890		(51.8	)%

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Corporate Organization

After the Share Exchange, we have approximately 80 shareholders 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.

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 250 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.

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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 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, the vehicle population 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.

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.

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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.

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:

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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

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.

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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, but their returns are 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 1% 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.

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.

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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, YBM Group Co., Ltd., accounted for 27.97% of our total purchase dollars and our top five suppliers combined accounted for approximately 73.56%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.

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.

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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

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	%

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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.

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.

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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 areas of 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 September 30, 2010 and June 30, 2010, the detail of property, plant and equipment was as follows:

	As of September 30, 2010			As of June 30, 2010
Office equipment	$	107,456		$	129,981
Furniture and fixture		79,710			44,414
Automobiles		280,068			217,148
Sub-total		467,234			391,543
Less: accumulated depreciation		(96,620	)		(81,263	)
Property, plant and equipment, net	$	370,614		$	310,280

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. (“YBM”), an affiliated company.  We are exclusively licensed to use the “VOMART” trademark without consideration pursuant to the Letter of Undertaking issued by YBM, dated July 30, 2010.  On September 1, 2010, YBM 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 has been accepted and is currently under review by the Trademark Office.  For details about our relationship with YBM, please refer to the Related Party Transactions section.

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:

Trademark	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 provides a brief description of the PRC laws or government regulations that materially influence our business and their expected impact on our business:

PRC Product Quality Law

On February 22, 1993, the Standing Committee of the National People's Congress passed Product Quality Law of the People's Republic of China, which was amended on July 8, 2000.  This Law is enacted with a view to strengthen the supervision and control over product quality, to define the liability for product quality, to protect the legitimate rights and interests of users and consumers. Manufacturers and distributors of products are subject to this Law.

We sell automotive replacement parts and accessories as a distributor instead of manufacturing products by ourselves. We offer a broad selection of national brand name and private label automotive aftermarket products for domestic and imported vehicles. No matter which kind of products we sell, as a seller, we are responsible for the quality of the products we distribute by all prudent manners and are responsible for repair, replacement or return and compensation for the damages done to end-users or consumers in accordance with PRC Product Quality Law.

It is harmful, as well as prohibited for us, to sell any products that are unqualified, counterfeit or expired.  If unqualified products were sold to customers, the seller might face damage claims from customer.  If relevant authority found that we did not comply with PRC Product Quality Law, we would be ordered to stop selling unqualified products and pay a fine. The gain as a result of our sale of unqualified products may be confiscated. Our business license may be revoked. If this kind of violation were very serious, it would be deemed a crime.

PRC Standardization Law

On December 29, 1988, the Standing Committee of the National People's Congress passed Standardization Law of the People's Republic of China  This Law stipulates the formulation and implementation of standards on industrial products with the purpose of promoting technical progress, proving product quality and increasing social and economic interest. Manufacturers of different automotive replacement parts and accessories are subject to PRC Standardization Law.

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When we purchase brand name as well as private label automotive replacement parts for distribution, we must ensure those products are in compliance with the relevant production standards under this law. If relevant authority found that the products we distribute do not conform to the applicable standards, we may be ordered to discontinue our sale of such products. The gains as a result of our sale of such products may be confiscated. We may also be fined by the relevant authorities.

PRC Trademark Law

On August 23, 1982, the Standing Committee of the National People's Congress passed Trademark Law of the People's Republic of China, which was amended on February 22, 1993 and on October 27, 2001.  This Law is enacted for the purposes of improving the administration of trademarks, protecting the exclusive right to use a trademark, and encouraging producers to guarantee the quality of their goods and maintain the reputation of their trademarks, with a view to protecting consumers' interests.

As an auto parts distributor, our business involves the registration, assignment and protection of the trademark. The trademark "VOMART" we are authorized to exclusively and freely use is owned by YBM Group China Co., Ltd. and is in the process of being transferred to us. We have also submitted the application for trademark "WOT" which is under review by the Trademark Office.

We are in compliance with this Trademark Law.  If we commit any acts prohibited by the law, we may be ordered to make rectification within a certain time frame, subject to a fine and the registered trademark in question may be revoked by the Trademark Office of the PRC.

Regulation on the Administration of Commercial Franchises

On January 31, 2007, the State Council of PRC passed Regulation on the Administration of Commercial Franchises.  This regulation is formulated for the purpose of regulating commercial franchises, promoting the healthy and orderly development of the commercial franchise industry and maintaining the market order.

Since we operate business by establishing franchise chains, we are required by this Regulation to file our commercial franchises contract with governmental authority, ensure the product and service quality, disclose information to licensees and so on.

We are in compliance with this Regulation.  If we violate the provisions of this regulation, we may be subject to a fine.  If any of our earnings are deemed illegal, they may be confiscated by the relevant authorities.

PRC Law on Import and Export Commodity Inspection

On February 21, 1989 the Standing Committee of the National People's Congress passed the Law of the People's Republic of China on Import and Export Commodity Inspection, which was amended on April 28, 2002.  This Law is enacted with a view to strengthen the inspection and ensure the quality of import and export goods, and to protect the legitimate rights and interests of the parties involved in foreign trade. This law has a material influence on us since we are engaged in the business of imports and exports of auto parts, motorcycle accessories, machinery parts, instrument, meter, hardware and electrical products. We are in compliance with this law.  Any failure to comply with the law will subject us to a fine.  The goods in question may be confiscated and we may be subject to criminal investigations if the violation constitutes a crime.

Research and Development

We did not incur any research and development expenses as of September 30, 2010, 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.

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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.

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.

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.

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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 2011.

Our plans to expand our product lines and to improve and upgrade our internal control and management system will require capital expenditures in 2011. 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.

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.

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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. 

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.

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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.

IF WE FAIL TO MAINTAIN AN EFFECTIVE SYSTEM OF INTERNAL CONTROL OVER FINANCIAL REPORTING, WE MAY NOT BE ABLE TO ACCURATELY REPORT OUR FINANCIAL RESULTS.  AS A RESULT, CURRENT AND POTENTIAL INVESTORS COULD LOSE CONFIDENCE IN OUR FINANCIAL REPORTING, WHICH COULD HARM OUR BUSINESS AND HAVE AN ADVERSE EFFECT ON OUR STOCK PRICE.

Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, we are required to annually furnish a report by our management on our internal control over financial reporting. Such report must contain, among other matters, an assessment by our principal executive officer and our principal financial officer on the effectiveness of our internal control over financial reporting, including a statement as to whether or not our internal control over financial reporting is effective as of the end of our fiscal year. This assessment must include disclosure of any material weakness in our internal control over financial reporting identified by management.  Performing the system and process documentation and evaluation needed to comply with Section 404 is both costly and challenging. During the course of our testing we may identify deficiencies which we may not be able to remediate in time to meet the deadline imposed by the Sarbanes-Oxley Act of 2002 for compliance with the requirements of Section 404.  In addition, if we fail to maintain the adequacy of our internal controls, as such standards are modified, supplemented or amended from time to time, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal controls over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002, which may cause investors to lose confidence in our reported financial information and have a material adverse effect on the price of our common stock.

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.

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WE RELY ON YBM TO A LARGE EXTENT AS A MAJOR SUPPLIER, A GUARANTOR OF OUR BANK LOAN AND A PROVIDER OF CREDIT FACILITY.  IF YBM REDUCES THE AMOUNT OF BUSINESS IT DOES WITH US IN THE FUTURE, OUR REVENUES MAY BE AFFECTED.

YBM is one of our major suppliers.  For the three months ended September 30, 2010, and in fiscal years 2010 and 2009, our purchase from YBM amounted to $1,220,457, $540,031, $117,529 or approximately 27.97%, 5.5% and 4.2% respectively of our total purchase. Pursuant to the Exclusive Distribution Agreement we entered into with YBM on July 1, 2010, Vomart is the exclusive first tier distributor of certain of YBM’s products in China.  YBM provided for no consideration a guarantee for a short-term loan in the amount of $2.24 million (RMB 15,000,000) that we borrowed from China CITIC Bank. YBM also provided a three-year line of credit amounting to $7.46 million (RMB 50 million) to us on May 10, 2008.  This line of credit is unsecured, non-interest bearing and due upon demand.  As of September 30, 2010, the balance of borrowings from YBM was $3.31 million.  The unused line of credit as of September 30, 2010 was $4.15 million.  There can be no assurance that YBM will be willing or able to continue to maintain the same volume of business with us, or that it will not seek to modify or terminate the Exclusive Distribution Agreement, or it will continue to provide us with credit facilities or guarantees on similar highly favorable terms in the future.  If YBM reduces the amount of business it does with us in the future or curtails or ends its lending to us or the guarantee it has provided, our revenues may be materially adversely affected.  Please see Related Party Transactions section below for a more detailed description of our relationship with YBM.  To mitigate the adverse impact, we are attempting to broaden our relationships with other suppliers and sources of liquidity.

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 based on the number of stores we own and the geographic areas where we have presence, 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.

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.

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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.

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.

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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.

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 RMB 6.8 to $1.00 as of September 30, 2010. 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.

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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.

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.

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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.

UNDER THE ENTERPRISE INCOME TAX LAW, WE MAY BE CLASSIFIED AS A “RESIDENT ENTERPRISE” OF CHINA. SUCH CLASSIFICATION WILL LIKELY RESULT IN UNFAVORABLE TAX CONSEQUENCES TO US AND OUR NON-PRC SHAREHOLDERS.

On March 16, 2007, the National People’s Congress of China passed a new Enterprise Income Tax Law, or the new EIT Law, and the PRC State Council issued the implementation regulations for the EIT Law on December 6, 2007, both of which became effective on January 1, 2008.  Under the new EIT Law, enterprises are divided into resident enterprises and non-resident enterprises. Resident enterprises defined under the new EIT are generally subject to the uniform 25% enterprise income tax rate as to their worldwide income.  The term “resident enterprises” refers to enterprises that are set up in China in accordance with the law, or that are established outside of China with “de facto management bodies” within China. The implementing rules define the term “de facto management body” as “an establishment that exercises, in substance, overall management and control over the production, business, personnel, accounting, etc., of a Chinese enterprise.” Meanwhile, non-resident enterprises are generally subject to 10% enterprise income tax as to the portion of their income generated from inside China.

Vomart, or our WFOE is a limited liability company incorporated in China and therefore shall be subject to 25% enterprise income tax rate. As for this public company and our direct subsidiary Hongkong Limited, no official explanation has come to our attention that we can presently see if these two companies will be treated as those companies established outside of China with “de facto management bodies” within China. Since substantially all of our operational management is currently based in the PRC, it is unclear whether PRC tax authorities would treat us as a PRC resident enterprise. If the PRC tax authorities subsequently determine that this public company or our existing or future subsidiary outside china should be classified as a resident enterprise, then the organization’s global income will be subject to PRC income tax of 25%. Such classification will likely result in unfavorable tax consequences to us and our non-PRC stockholders.

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.

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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, either of which factors is likely to materially reduce the market and price for our shares, if such a market ever develops.

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 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.

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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.

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

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in Management’s Discussion and Analysis (“MD&A”), other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties, which may cause actual results to differ materially from the forward-looking statements. A detailed discussion of risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included in the section titled “Risk Factors.” We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.

The following discussion and analysis of financial condition and results of operations relates to the operations and financial condition reported in the consolidated financial statements of Hongkong Limited and its subsidiaries for the fiscal years ended June 30, 2010 and 2009 and for the three months ended September 30, 2010 and 2009 and should be read in conjunction with the consolidated financial statements and related notes, and the other financial information included in this 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 distribution of automotive replacement parts in China.

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Through Vomart and its subsidiaries, the Company is now engaged in the business of  distribution of automotive replacement parts in China.  The Company temporarily suspended to providing automotive maintenance services in August 2010.  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. We are one of the largest distributors of automotive replacement parts and accessories in the PRC based on the number of stores we own and the geographic areas where we have presence.  We currently own thirty-seven stores in six provinces and three municipalities, namely Jiangsu, Zhejiang, Hebei, Anhui, Fujian, Shanxi, Shanghai, Beijing, and Tianjin. In comparison, other large auto parts distributors in China own fewer stores and/or their stores are located in fewer provinces or municipalities.  For example, Shandong Youpei Auto Parts owns twenty-four stores of which eighteen are located in Shangdong Province. Jiangsu Youpei Auto Parts owns seventeen stores of which sixteen are located in Jiangsu Province. Putong Auto Service owns fifteen stores in thirteen different provinces and municipalities.

Results of Operations for the Three Months Ended September 30, 2010

The following table presents our summary statements of operations for the three months ended September 30, 2010 and 2009. Our historical results presented below are not necessarily indicative of the results for any future periods.

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HONGKONG CHARTER INTERNATIONAL GROUP LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	For the three monthts ended September 30,
	2010			2009
Revenues
Automotive supplies revenue	$	2,579,911		$	800,358
Automotive maintenance service		182,382			229,530
Total revenues		2,762,293			1,029,888
Cost of revenues
Cost of supplies		2,221,670			739,194
Cost of maintenance service		10,943			14,816
Total cost of revenues		2,232,613			754,010
Gross profit		529,680			275,879
Selling, general and administrative expenses		423,556			255,422
Operating income		106,124			20,456
Other (income) expenses
Interest income		(452	)		(17	)
Interest expenses		52,607			0
Foreign currency exchange gain		(8,560	)		0
Other expenses		3,961			2,057
Total other (income) expenses		47,556			2,040
Income before income taxes		58,568			18,416
Provision for income taxes		34,340			2,766
Net income	$	24,228		$	15,650
Other comprehensive income ( loss)
Foreign currency translation gain(loss)		11,447			113
Comprehensive income	$	35,675		$	15,763
Basic and diluted income per common share
Basic	$	24.23		$	15.65
Diluted	$	24.23		$	15.65
Weighted average common shares outstanding
Basic		1,000			1,000
Diluted		1,000			1,000

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Revenues:

Revenues increased by approximately $1.7 million or 168% to $2.7 million, as compared to $1 million for the three months ended September 30, 2009. Our sales growth was driven by expansion of stores. Since September 30, 2009, we had 22 new stores opened, leading to the increase in net sales from automotive supplies and maintenance service. Revenue from automotive supplies increased by $1.8 million or 222% to $2.6 million for the three months ended September 30, 2010 from $0.8 million for the same period of 2009, while revenue from maintenance service decreased from $0.23 million (representing 21% of total revenue) to $0.18 million (representing 7% of total revenues) for the three months ended September 30, 2010 from the same period of 2009. Such decrease in maintenance service revenue was because the Company strategically temporarily suspended the maintenance business in August 2010.

Cost of Sales and Gross Profit:

During the three months ended September 30, 2010, we had cost of sales of $2.2 million, as compared to $0.75 million for the same period of 2009, an increase of $1.48 million or 196% reflecting the increase in net sales.

We achieved gross profits of $0.53 million for the three months ended September 30, 2010, compared to $0.28 million for the same period of 2009, representing a 92% period to period increase. Our overall gross profit margin as a percentage of revenue decreased by 7.60% from 26.78% for the three months ended September 30, 2009  to 19.18% for the same period of 2010.  This decrease is mainly attributable to the costs associated with opening new stores and incurring increased operating costs during the three months ended September 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 that store’s gross profit margin contribution tends to improve.  It usually takes an average of 2 or 3 years of operation for a store to achieve the average mature operation, depending on the location.  We foresee our gross profit from new stores will continue to grow as new stores continue to mature.

Operating Expenses:

Our operating expenses, consisting of selling, general and administrative expenses, increased by approximately 66%, to $0.42 million for the three months ended September 30, 2010 from $0.25 million for the same period of the previous period. This 66% increase is mainly attributable to our fast expansions of 22 new stores in 7 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 three months ended September 30, 2010, we had a tax provision of $34,340 as compared to a tax provision of $2,766 for the same period of 2009.  This is an increase of $31,574 from period to period.  The increase in the income tax provision was because we had generated more taxable income for the three months ended September 30, 2010 than the previous period and we under estimated prior period tax.

Net Income 

Net income for the three months ended September 30, 2010 increased to $24,228 as compared to $15,650 for the three months ended September 30, 2009.

Liquidity and Capital Resources

Capital Resources and Needs

Generally, since inception of our business in January 2008, we have financed our business with cash flows from operations, borrowings from related and unrelated parties, and shareholders’ capital contributions.  Our principal liquidity requirements are for working capital and capital expenditures related to existing and new stores, and offices and distribution centers.  We generate cash primarily through the sale of automotive services, tires, parts and accessories.  Primary uses of cash are for spending in inventory purchase to match our store expansion and increased sales.

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	For the three months ended September 30,
	2010			2009
Cash provided by (used in):
Operating Activities	$	(535,994	)		(481,510	)
Investing Activities	$	1,255,416			(159,523	)
Financing Activities	$	(2,634,648	)		698,189

Our anticipated capital needs from 2011 to 2013 are as follows: we expect to incur (i) approximately RMB 10 million, 40 million and 40 million of costs in connection with the opening of 10, 40 and 40 new stores in 2011, 2012 and 2013 respectively; (ii) approximately RMB 1.5 million, 6 million and 6 million in connection with the hiring of additional personnel in 2011, 2012 and 2013 respectively; (iii) approximately RMB 450,000, 1.8 million and 1.8 million in rental cost in 2011, 2012 and 2013 respectively; and (iv) 1% of our annual sales income in the marketing and promotion of “Vomart” brand awareness.

Operating Activities

Cash used in operating activities totaled $0.54 million for the three months ended September 30, 2010 as compared to $0.48 million for the comparable earlier period. The increase in our cash used in operations was primarily due to the increased spending on inventory purchases to match our store expansion and increased sales. 

Investing

Cash provided by investing activities totaled $1.26 million for the three months ended September 30, 2010 as compared to $0.16 million cash used for the same period of 2009.  Cash provided for the three months ended September 30, 2010 was loan returned from non-related third parties.

Financing

Cash used by financing activities totaled $2.63 million for the three months ended September 30, 2010 as compared to $0.70 million cash provided for the same period in 2009.  The change was mainly due to repayments of related party loan in the current period.

Vomart entered into a Working Capital Loan Agreement with China Construction Bank, Shanghai Qingpu Sub-branch on May 31, 2010. The total amount of the loan is $1.49 million. The loan has a one year term from May 31, 2010 to May 30, 2011 at a fixed interest rate of 5.31% per year. The loan is guaranteed by a non-related third party. Please refer to Exhibit 10.1 and 10.2 for details of this Working Capital Loan Agreement and the Guarantee Contract.

On June 23, 2010, Vomart signed a loan contract with China CITIC Bank. The total amount of the loan is $2.24 million. The loan has one year term with a variable rate, which shall increase each quarter by a compound rate of 10% over the initial annual rate of 5.31%. The purpose of the loan is to fund our working capital. The loan is guaranteed by YBM, an affiliated company, without any consideration. Please refer to Exhibit 10.3 and 10.4 for details of this loan agreement with China CITIC Bank and the guarantee contract between YBM and China CITIC Bank.

On May 10, 2008, Vomart obtained a three-year line of credit from YBM amounting to $7.46 million (RMB 50 million). This line of credit is unsecured, non-interest bearing and due upon demand. As of September 30, 2010, the balance of borrowings from YBM was $3.31 million.  The unused line of credit as of September 30, 2010 was $4.15 million.  For details, please refer to Exhibit 10.5.  On May 1, 2009, Vomart entered into a loan agreement with Zhoufeng Shen to borrow RMB 352,823.80 ($51,653).  On May 1, 2009, Vomart entered into a loan agreement with Anming Yu to borrow RMB 477,220 ($69,864).  Both of these facilities are unsecured and non-interest bearing.  As of September 30, 2010, the Company had payable to Mr. Shen in the amount of $52,652.  The loan the Company borrowed from Mr. Yu has subsequently been repaid.  For details, please refer to Exhibit 10.6 and 10.7.

Our working capital is used for operational costs, the development of new stores and other capital expenditures necessary to maintain existing operations.  Our principal source of liquidity includes cash flows from operations and borrowings from related and unrelated parties.  To the extent that a deficiency exists, we plan to increase indebtedness for borrowed money. This will depend on the willingness of YBM and our partners to either make advances to us or guaranty our indebtedness to third party lenders.

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We continue to implement growth and expansion plan. We plan to open a total of ten new stores in 2011 in Jiangsu, Zhejiang and Shandong provinces.  The initial investment required for each store is estimated to be approximately RMB 1 million in connection with the acquisition of inventory and fixed assets.

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.

Accounts receivable

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

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.

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.

  

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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 three months ended September 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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Value added tax

The Company is subject to value added tax (“VAT”) at a 17% rate on the amount of goods sold or maintenance services provided. 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.

The VAT collected from sales is not revenue of the company, and is recorded as a liability on the balance sheet until such VAT is paid. The Company reports revenues net of PRC’s VATfor all periods presented in the consolidated statement of operations.

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.

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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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.

  

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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	)%

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.  Typically, the sales for those stores opened more than one year increased significantly compared with those opened less than one year.  For example, our Jiyuan store opened in October 2008, its sales income for the first year of opening was only RMB 833,603 (approximately $126.303) but for the second year of opening, the total sales jumped to RMB 1,790,687 (approximately $271,316), an increase of 61%.  Our Tangshan store opened in May 2010, the average monthly sales at the beginning of opening was only RMB 17,412 (approximately $2,638) but the most recent monthly sales in December 2010 already increased to RMB 78,658 (approximately $11,918), an increase of almost 351%. We believe that the sales for the mature stores will continue to grow as our marketing efforts increase and our reputation is built up.

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.

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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

Generally, since inception of our business in January 2008, we have financed our business with cash flows from operations, borrowings from related and unrelated parties, and shareholders’ capital contributions.  Our principal liquidity requirements are for working capital and capital expenditures related to existing and new stores, and offices and distribution centers.  We generate cash primarily through the sale of automotive services, tires, parts and accessories.  Primary uses of cash are for spending in inventory purchase to match our store expansion and increased sales.

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

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.

Vomart entered into a Working Capital Loan Agreement with China Construction Bank, Shanghai Qingpu Sub-branch on May 31, 2010. The total amount of the loan is $1.49 million. The loan has a one year term from May 31, 2010 to May 30, 2011 at a fixed interest rate of 5.31% per year. The loan is guaranteed by a non-related third party. Please refer to Exhibit 10.1 and 10.2 for details of this Working Capital Loan Agreement and the Guarantee Contract.

On June 23, 2010, Vomart signed a loan contract with China CITIC Bank. The total amount of the loan is $2.24 million. The loan has one year term with a variable rate, which shall increase each quarter by a compound rate of 10% over the initial annual rate of 5.31%. The purpose of the loan is to fund our working capital. The loan is guaranteed by YBM, an affiliated company, without any consideration. Please refer to Exhibit 10.3 and 10.4 for details of this loan agreement with China CITIC Bank and the guarantee contract between YBM and China CITIC Bank.

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On May 10, 2008, Vomart obtained a three-year line of credit from YBM amounting to $7.46 million (RMB 50 million). This line of credit is unsecured, non-interest bearing and due upon demand. As of September 30, 2010, the balance of borrowings from YBM was $3.31 million.  The unused line of credit as of September 30, 2010 was $4.15 million.  For details, please refer to Exhibit 10.5.  On May 1, 2009, Vomart entered into a loan agreement with Zhoufeng Shen to borrow RMB 352,823.80 ($51,653).  On May 1, 2009, Vomart entered into a loan agreement with Anming Yu to borrow RMB 477,220 ($69,864).  Both of these facilities are unsecured and non-interest bearing.  As of September 30, 2010, the Company had payable to Mr. Shen in the amount of $52,652.  The loan the Company borrowed from Mr. Yu has subsequently been repaid.  For details, please refer to Exhibit 10.6 and 10.7.

Our working capital is used for operational costs, the development of new stores and other capital expenditures necessary to maintain existing operations.  Our principal source of liquidity includes cash flows from operations and borrowings from related and unrelated parties.  To the extent that a deficiency exists, we plan to increase indebtedness for borrowed money. This will depend on the willingness of YBM and our partners to either make advances to us or guaranty our indebtedness to third party lenders.

We continue to implement growth and expansion plan. We plan to open a total of ten new stores in 2011 in Jiangsu, Zhejiang and Shandong provinces.  The initial investment required for each store is estimated to be approximately RMB 1 million in connection with the acquisition of inventory and fixed assets.

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

The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted I the United States. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amount of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities, On an on-going basis, we evaluate our estimates based on historical experience and on various other assumptions that are believed to the reasonable under the circumstances, the results of which from the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

A summary of significant accounting policies is included in the front part of this section. Management believes that the application of these policies on a consistent basis enables us to provide useful and reliable financial information about our Company’s operating results and financial condition.

   

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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, the full Board of Directors undertakes tasks normally associated with an audit committee, such as analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting.  Mr. Hu, our Chairman of the Board of Directors, receives his bachelor’s degree from MBA Institute, in Paris, France in 2006 where he has taken the following financial or accounting related courses: Debt & Money Markets, Equity & Capital Market. In 2005, he studied at the University of Florida, in Gainesville, FL, USA where he has taken the following financial or accounting related courses: Financial Markets, Corporate Finance and Financial Accounting. In addition, we intend over time to appoint to our board of directors and to various committees to be established by our board such persons as are expected to meet the corporate governance requirements imposed by a national securities exchange.

Employment Agreements

Pursuant to a Labor Contract, dated October 21, 2010, Vomart employed Zhoufeng Shen as its Chief Executive Officer at an annual salary of RMB 96,000, or approximately $14,000. The term of employment will expire on January 1, 2013.  For details of this Labor Contract, please refer to Exhibit 10.10.

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 has, during the past ten years, (i) been convicted in a criminal proceeding or a named subject of a pending criminal proceeding, excluding traffic violations or other minor offenses; (ii) had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two years prior to that time; (iii) been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons engaged in any such activity; (iv) been found by a court of competent jurisdiction in a civil action or by the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated; (v) been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or (vi) been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

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.

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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.  The Code of Ethics is attached as Exhibit 14.1 to this 8-K/A and is publicly available on our website http://www.vomart.com/culture.asp.

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.

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.

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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 Compensa- tion ($)		Change in Pension Value and Nonquali- fied Deferred Compensa- tion Earnings ($)		All Other Compensa- tion ($)		Totals ($)
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 the Company’s President and Chief Executive Officer, Xiaomei Wang was appointed as Chief Financial Officer, effective immediately on the Closing Date.  Mr.Shen’s $9,050 salary payments in each of 2009 and 2010 was in connection with his acting as a supervisor on our Board of Supervisors from January 2008 to October 2010.  Mr. Anming Yu served as Vomart’s Chief Executive Officer from January 2008 until October 2010 during which time he did not receive any compensation from Vomart.

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.

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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/A.

(4)    These 1,300,000 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.  Qun Hu disclaims beneficial ownership of the rest of 950,000 shares which constitute 38% of our issued and outstanding common stock and were issued to his designees and assigns in connection with the Share Exchange.  The individuals owning these 950,000 shares include Mr. Hu’s relatives, employees of Vomart and people who provided services to Vomart in the past.

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.

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.

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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 80 shareholders 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.

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.

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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.

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.

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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.  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 LLP with 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 Shareholder, 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.

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.

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(ii) Our board of directors   participated 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 Shareholder, 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.

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(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, where he has taken the following financial or accounting related courses: Debt & Money Markets, Equity & Capital Market. In 2005, he studied at the University of Florida, in Gainesville, FL, USA, where he has taken the following financial or accounting related courses: Financial Markets, Corporate Finance and Financial Accounting. 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. Prior to that, he served as a supervisor on our Board of Supervisors from January 2008 to October 2010. From March 2001 to October 2007, he was the assistant to president in DELIXI Group Co., Ltd. From June 1996 to October 2000, he was a teacher at Wenzhou University. He got his EMBA from Fudan University in 2006 and Bachelor and Master’s degrees in Brand Advertising from China Academy of Arts.

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 Business with 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

Pursuant to a Labor Contract, dated October 21, 2010, Vomart employed Zhoufeng Shen as its Chief Executive Officer at an annual salary of RMB 96,000, or approximately $14,000. The term of employment will expire on January 1, 2013.  For details of this Labor Contract, please refer to Exhibit 10.10.

(e) Related Party Transactions

Vomart has a multi-faceted relationship with YBM, an affiliated company that is engaged in the manufacturing and selling of automotive replacement parts and accessories.

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Officer and Common Control Relationship

Mr. Anming Yu, who is the father-in-law of Qun Hu, our Chairman of the Board, served as Vomart’s Chief Executive Officer and director from January 2008 until October 2010. Mr. Yu currently owns 60.32% of the issued and outstanding shares of YBM, one of our major suppliers.  Mr. Yu’s spouse and daughter who is the spouse of Mr. Hu each owns 25.23% and 14.45% of the issued and outstanding shares of YBM.

Transfers of Shares Among Related Parties

When Vomart was incorporated on January 4, 2008, YBM, Mr. Anming Yu and Mr. Zhoufeng Shen owned 51%, 29% and 20% of the issued and outstanding shares of Vomart respectively.  On August 10, 2009, YBM transferred its 51% shares to Mr. Yu in exchange for RMB 510,000.  On November 23, 2009, Mr. Yu and Mr. Shen transferred the 80% and 20% of the Vomart shares each of them owned to Hongkong Limited whose former sole shareholder before the Share Exchange is Mr. Hu, our Chairman of the Board, in exchange for $140,618.13 and $35,154.53 respectively.

Intellectual Property

Vomart currently is authorized by YBM to exclusively and freely use the “VOMART” trademark, which is owned by YBM.  YBM’s application to transfer the “VOMART” trademark to Vomart has been accepted and is currently under review by the Trademark Office.

Major Supplier

YBM is one of our major suppliers.  For the three months ended September 30, 2010, and in fiscal years 2010 and 2009, our purchase from YBM amounted to $1,220,457, $540,031, $117,529 or approximately 27.97%, 5.5% and 4.2% respectively of our total purchase.

We entered into an Exclusive Distribution Agreement (the “Agreement”) with YBM which is valid from July 1, 2010 until June 30, 2011. Pursuant to the Agreement, Vomart is the exclusive first tier distributor of YBM products.  For details of this Agreement, please refer to Exhibit 10.8.

We have also entered into certain non-exclusive distribution agreements with YBM pursuant to which we are authorized to sell certain YBM products in our stores in specified provinces or municipalities.

Management believes the transactions referenced above were on terms at least as favorable to us as we could have obtained from unaffiliated parties.

Indebtedness to Related Parties

We have borrowed interest-free and unsecured loans from YBM, Mr. Anming Yu, our former CEO and Mr. Zhoufeng Shen, our current CEO. These related party loans are due upon demand and are used by the Company as operating capital.

For the three months ended September 30, 2010, the fiscal years ended June 30, 2010 and June 30, 2009, the loans that we borrowed from Mr. Shen amounted to $52,652, $52,028 and $51,653 respectively.  For the three months ended September 30, 2010, we loaned Mr. Yu $26,120.  For the fiscal years ended June 30, 2010 and June 30, 2009, the loans that we borrowed from Mr. Yu amounted to $72,525 and $69,864 respectively.

YBM, one of our major suppliers, provided a three-year line of credit amounting to $7.46 million (RMB 50 million) to us on May 10, 2008.  This line of credit is unsecured, non-interest bearing and due upon demand.  As of September 30, 2010, the balance of borrowings from YBM was $3.31 million.  The unused line of credit as of September 30, 2010 was $4.15 million.  For details, please refer to Exhibit 10.5.

Guarantee

YBM, one of our major suppliers, provided guarantee for a short-term loan in the amount of $2.24 million (RMB 15,000,000) that we borrowed from China CITIC Bank. The purpose of the loan is to fund our working capital. The loan has a one year term from June 23, 2010 until June 23, 2011.

This guarantee was provided for no consideration. There can be no assurance that YBM will be willing or able to continue to provide similar

guarantees on this basis with respect to future borrowings.

In the Maximum Amount Guarantee Contract between YBM and China CITIC Bank, dated June 5, 2010, it is provided for the following: if the

borrower does not repay its loan, the bank may seek the principal and interest of the loan from the guarantor; the guarantee period is two years from the date the guaranteed loan is due; the bank must give written notice to the guarantor when it transfers its right to the loan to a third party; the guarantor indemnifies the bank for actual damages or losses because of any misrepresentations made by the guarantor and if the guarantor causes the contract to become invalid.  For details about this guarantee, please refer to Exhibit 10.4.

48

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.

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 Unaudited Condensed Consolidated Financial Statements of Hongkong Limited as of September 30, 2010 and 2009 are filed as Exhibit 99.1 to this Current Report and are incorporated herein by reference.

The Unaudited Consolidated Financial Statements of Hongkong Limited (parent only) as of September 30, 2010 are filed as Exhibit 99.2 to this Current Report and are incorporated herein by reference.

The audited consolidated financial statements of Hongkong Limited as of June 30, 2010 and 2009 are filed as Exhibit 99.3 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, 2010 and 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 99.4 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)
10.1	English Translation of Working Capital Loan Agreement between Shanghai Vomart Auto Parts Co., Ltd. and China Construction Bank, Shanghai Qingpu Sub-branch, dated May 31, 2010.
10.2	English Translation of Guarantee Contract between Shanghai Xin Liantang Economic Development Co., Ltd. and China Construction Bank, Shanghai Qingpu Sub-branch, dated May 31, 2010.
10.3	English Translation of Loan Agreement between Shanghai Vomart Auto Parts Co., Ltd. and China CITIC Bank, dated June 23, 2010.
10.4	English Translation of Maximum Amount Guarantee Contract between YBM Group China Co., Ltd. and China CITIC Bank, dated June 5, 2010.
10.5	English Translation of Working Capital Loan Agreement between Shanghai Vomart Auto Parts Co., Ltd. and YBM Group China Co., Ltd., dated May 10, 2008.
10.6	English Translation of Loan Agreement between Shanghai Vomart Auto Parts Co., Ltd. and Zhoufeng Shen, dated May 1, 2009.
10.7	English Translation of Loan Agreement between Shanghai Vomart Auto Parts Co., Ltd. and Anming Yu, dated May 1, 2009.
10.8	English Translation of the Exclusive Distribution Agreement between Shanghai Vomart Auto Parts Co., Ltd. and YBM Group China Co., Ltd., dated July 1, 2010.
10.9	English Translation of the Letter of Undertaking issued by YBM Group China Co., Ltd., dated July 30, 2010.
10.10	English Translation of Labor Contract between Shanghai Vomart Auto Parts Co., Ltd. and Zhoufeng Shen, dated October 21, 2010.
14.1	Code of Ethics
16.1	Letter from Kyle L. Tingle, CPA, LLC, dated November 12, 2010 *
99.1	The Unaudited Condensed Consolidated Financial Statements of Hongkong Charter International Group Limited as of September 30, 2010 and 2009*
99.2	The Unaudited Financial Statements of Hongkong Charter International Group Limited (parent only) as of September 30, 2010*
99.3	The Audited Consolidated Financial Statements of Hongkong Charter International Group Limited as of June 30, 2010 and 2009*
99.4	The Unaudited Pro Forma Financial Information of Teen Education Group, Inc.*

* Filed herewith

(1) Incorporated herein by reference to a Registration Statement on Form SB-2 filed on October 31, 2007.

49

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: January 24, 2011	By:	/s/ Zhoufeng Shen
		Zhoufeng Shen Chief Executive Officer

50

EX-10.1

Contract No: 9381349102010027

Type of loan:  Working Capital Loan

Borrower (Party A): Shanghai Vomart Auto Parts Co., Ltd.

Address: Room B014, No. 7 Liantang Town Road, Qingpu District, Postal Code: 201716

Legal Representative (Person in charge):  YU Anming

Fax:                      Tel: 59815555

Lender (Party B): China Construction Bank Corporation, Shanghai Qingpu Sub-branch

Address: No. 550, East Chengzhong Road, Qingpu District, Post Code: 201700

Person in Charge: SHEN  Yongqing

Fax: 59727777          Tel: 59725555

Party A applies for loan to Party B, Party B agrees to provide loan to Party A. In accordance with related laws and regulations, Party A and Party B, through consultations, have entered this contract (“Contract”) as follows.

Article I Loan amount

Party A borrows RMB ten million ( in words) from Party B

Article II  Usage of the loan

Party A shall use the loan for working capital turnover, Party A shall not change usage of the loan without written consent of Party B.

Article III. Term of Loan

The Term of Loan in this contract is 12 months, that is: from May 31, 2010 to May 30, 2011.

When the commencing date in this loan under this contract is inconsistent with the date of loan redeposit voucher (receipt of loans, the same below), it shall be subject to the actual loan date written in loan redeposit voucher when first lending is done, the due date set forth in the first paragraph of this article shall be adjusted accordingly.

Loan redeposit voucher is an integral part of this contract and it shall have equal legal force and effect as this contract.

Article IV Loan interest rate, penalty rates of interest, interest accrual and interest settlement.

I  Loan interest rate

Loan interest rate under this contract is annual interest rate in the following second one:

(I) Fixed rate, this column is blank, this interest rate remains the same within term of loan;

(II) Fixed interest rate, i.e. benchmark interest rate of the value date is upward (“upward” or “downward”) 1%, this interest rate remains the same within the term of loan;

(III) Floating interest rate, i.e. benchmark interest rate of the value date, this column is blank (choose “upward” or “downward”) %. From the value date to the date of principal and interest totally paid off under this contract this column is blank, each month floating interest rate shall be adjusted one time according to current benchmark interest rate of adjustment date and up/down ratio. The adjustment date of interest rate is the corresponding day of the value date in the current month, if there is no corresponding day, the last day of this month shall be the adjustment day of interest rate.

II. Penalty interest rate

(I) If Party A does not use loan in accordance with the usage of loan stipulated in the Contract, penalty interest rate shall be upward by 100% of loan interest rate, if loan interest rate is adjusted according to the item (III) in the above Section 1 of this article, penalty interest rate shall be adjusted in accordance with the adjusted loan interest rate and the above proportion of floating rate.

(II) The penalty interest rate of overdue loan under this contract shall be upward by 50% of loan interest rate, if loan interest rate is adjusted according to the item (III) in the above Section 1 of this article, penalty interest rate shall be adjusted in accordance with the adjusted loan interest rate and the above proportion of floating rate.

(III) For the overdue loan and the embezzled loan by Party A, penalty interest rate or compound interest shall be imposed subject to the severity.

III. The value date in this article is the date that the first issued loan is re-deposited to the account designated by Party A under this contract.

When the first loan is issued under this contract, benchmark interest rate is the loan interest rate with the same period and same level as announced by the People's Bank of China on the day of value date; after that, when loan interest rate is adjusted with the foregoing covenant, benchmark interest rate is the loan interest rate with the same period and level as announced by the People's Bank of China on the adjustment day; if the People's Bank of China no longer announces loan interest rate with the same period and level, benchmark interest rate is loan interest rate acknowledged by inter-banks or loan interest rate with the same period and level, except for otherwise agreed by both parties.

IV. Loan interest is accounted from the date that the loan re-deposited to the account designated by Party A. Loan interest accrual is calculated per day, daily interest rate = annual interest rate /360. If Party A can not pay the interest according to interest settlement date stipulated in this contract, the compound interest shall be charged from next day.

V. Interest settlement

(I) For loan with fixed interest rate, interest shall be calculated on interest settlement date by the stipulated interest rate. For loan with floating interest rate, interest shall be calculated by the interest rate confirmed on current period of each float period; for loan with many floating interesting rates within a single settlement interest date, interest in each floating period shall be calculated first, the interest in this interest settlement date shall be accounted by interest in expiration date of interest plus the total interest within each floating period.

(II) Interest of loan under this contract shall be settled by the following first method;

1., the date of monthly settlement is fixed to be 20th of each month;

2. the date of quarterly settlement is fixed to be 20th of the end month of each quarter;

3. Other methods  this column is blank.

Article V  Issue and usage of loans

I. Preconditions of issuing loans

Unless the following preconditions constantly are satisfied,  Party B has the obligation to issue loans except abandoning totally or partly by Party B,

1. Party A has completed the related approval, registration, delivery, insurance and other statutory procedures under this contract;

2. For the guaranteed loan, guarantees, which meet the requirements of Party B in this contract, has come into effect continuously;

3. Party A has opened accounts for withdrawing and repaying in accordance with Party B’s requirements;

4.  Party A does not violate the terms stipulated in the Contract or does not have any act possibly jeopardizing the creditor’s rights of Party B stipulated in this contract;

5. Laws, regulations or relevant authorities do not forbid or limit Party B issuing loan under this contract;

6. Other conditions:

The following is blank

II. Loan use scheme

Loan use scheme is confirmed in accordance with the following first method:

(I) Loan use scheme is as follows:

1. May 31, 2010	Amount 10,000,000.00;
2. Date	Amount the following is blank
3. Date	Amount the following is blank
4. Date	Amount  the following is blank
5. Date	Amount  the following is blank
6. Date	Amount  the following is blank

(II) This column is blank

III. Party A shall use loan in accordance with the loan use scheme stipulated in the paragraph II and Party A shall not withdraw capital ahead of schedule, delay or cancel withdrawing unless approved by Party B.

IV. If Party A uses loan in several times, the mature date of loan shall be agreed in Article 3 of this contract.

Article VI. Repayment

I. Repayment principle

Party A shall repay loan in accordance with the following principles under this contract:

Party B has the right to use Party A’s repayment to repay the costs that are undertaken by Party A but prepaid by Party B, and the cost for Party B to realize creditor’s rights, as stipulated in this contract. The remaining funds shall be repaid interest first and then principal, and interest shall be paid off with principal. However, for loans in which principal or interest is overdue for more than 90 days, or loans in accordance with laws or regulations, Party A shall repay the principal first and then interest, after repaying the above costs.

II. Payment of interest

Party A shall pay the due interest on the interest settlement date. The first paying interest date is the first interest settlement date after loan is issued. Interest shall be paid off with principal at last payment.

III. Principal repayment plan

Principal repayment plan shall be settled according to the first method below;

(I) Principal repayment plan is as follows:

1. May 31, 2011	Amount 10,000,000;
2. Date	Amount  the following is blank
3. Date	Amount  the following is blank
4. Date	Amount  the following is blank
5. Date	Amount  the following is blank
6. Date	Amount  the following is blank

(II) This column is blank

IV. Repayment method

Party A shall prepare sufficient amount payable on the Party B’s account prior to the repayment date as stipulated in this contract and transfer fund to repay loans (Party B also has the right to transfer fund from this account to pay loans), or transfer fund from other accounts to repay loans prior to the repayment date as stipulated in this contract.

V. Prepayment

When Party A repays the principal in advance, Party A shall propose a written application to Party B 30 work days in advance. Upon approval by Party B, Party A can repay partial or the full principal in advance.

If Party A repays principal in advance, interest shall be calculated according to actual loan-using days and loan interest rate as stipulated in this contract.

If Party B agrees Party A to repay the loan in advance, Party B has the right to charge compensation according to the first standard below:

1. Compensation amount = the prepaid principal amount × pre-repayment months × 1%. If less than one month, it shall be accounted as one month.

2. This column is blank

If Party A repays the loan in installments, and partial principal is repaid in advance, Party A shall repay the amount of loan in accordance with reverse repayment plan. Upon repaying partial amount of loan in advance, the remaining amount of loan shall still be executed by the loan interest rate as stipulated in this contract.

Article VII Rights and obligations of Party A

I. Party A’s rights

(I) right to require Party B to issue the loan according to this contract;

(II) right to use the loan according to this contract;

(III) right to extend term of loan upon satisfying the requirement of Party B;

(IV) right to require Party B to keep business secret related to its financial data, production and management provided by Party A, excluding other situations formulated by laws and regulations, required by corresponding authorities or stipulated by both parties;

(V) right to reject such behaviors as solicit bribe by Party B and its staff. Party A has right to report to the department concerned for the above behaviors or behaviors that Party B breaches the state’s laws and regulations with respect to credit rate, service charge, etc..

II. Party A’s obligations

(1) Party A shall withdraw the capital, and repay the loan principal and interest in full amount, and shall bear various costs as stipulated in this contract;

(II) Party A shall provide documents related to its financial accounting, production and operations required by Party B, including but not limited to, providing balance sheet as of the end of last quarter within the first 20 work days in the first month of the following quarter, profit and loss statement as of the end of last quarter (statement of revenues and expenditures for public institution), and cash flow statement at the end of the fiscal year. Party A shall be responsible for the authenticity, validity and effectiveness of the supplied materials without providing false information or concealing important operations of financial facts.

(III) In the event that Party A changes its business registration items, such as name, legal representative (person-in-charge), address, business scope, registered capital or articles of association (enterprise), Party A shall notify Party B in writing within 30 work days along with relevant materials.

(IV) Party A shall use loans as stipulated in this contract without unauthorized diversion of fund or engaging in illegal or rule-breaking trading; Party A shall coordinate with Party B to inspect and supervise its production and operation, financial activities and loan usage under this contract; Party A shall not surreptitiously withdraw funds, transform capitals or use affiliated transaction to evade debts to Party B; Party A shall not use false contract entered with related parties to cash in bank funds or credit, pledged to the bank debt using receivable notes without actual trade.

(V) If Party A conducts manufacturing and engineering construction with the loan under this contract, it shall comply with provisions in state’s environmental protection regulations.

(VI) Prior to paying off Party B’s loan principal and interest, unless approved by Party B, Party A shall not provide guarantee for third party with asserts accumulated by the loan under this contract.

(VII) If Party A is a group of clients, Party A shall timely report related transaction over 10% of Party A’s net asset to Party B, including: a. relationship among the parties; b. items and nature of the transaction; c. transaction amount or corresponding ratio; d. pricing policy (including transaction without amount or only nominal amounts);

(VIII) If the loan issued under this contract is for fixed asset or project. Party A shall guarantee the planned project be approved by government authority concerned without any illegal practice. Capital funds or other raised capitals shall be allocated according to set time and ratio; Party A shall guarantee to finish project on schedule.

Article VIII Rights and obligations of Party B

I. Party B has the right to require Party A to repay principal, interest and costs on schedule; to exert other rights as stipulated in this contract; and to require Party A perform other obligations under this contract;

II. Party B shall issue loans as stipulated in this contract, excluding delays due to Party A or other reasons beyond Party B;

III. Party B shall keep business secrets related to the financial data, production and management provided by Party A, excluding situations formulated by laws and regulations, required by corresponding authorities or as stipulated by both parties;

IV. Party B shall not provide bribery to, or extort and accept bribery from Party A;

V. Party B shall behave with integrity, not damaging Party A’s legitimate interests.

Article IX  Liability of breaching contract and remedial measures for Party B

I.  Default situation for Party B and its liability of breaching contract

(I) If Party B does not issue loan as stipulated in this contract without justification, Party A is entitled to require Party B to continue issuing loan under this contract;

(II) If Party B charges interest and service cost in violation of provisions of national laws and regulations, Party A has the right to require Party B for return.

II. Default situation of Party A

(I) Party A breaches any stipulation or legal obligation under this contract;

(II) Party A expressly states or implies by its action that it will not perform any of the obligations under this contract.

III.  Situations endangering Party B’s creditor right

(I) Party B believes one of the following situations occurred on Party A may endanger the security of its creditor rights under this contract: contracting, taking over, leasing, shareholding reform, reducing registered capital, investment, joint operation, merging, acquisition and reconstruction, separating, joint venture, being applied to stop business for rectification, applying for dissolving, being suspended, being applied for bankruptcy, changing controlling shareholder / actual controller or transferring major asset, suspension and termination of business, criminal prosecution and high amount of administrative penalties by relevant authority, cancellation of registration, suspension of business license, and involvement in major litigation, difficulty of operation, or financial condition deterioration, legal representative or executive officer being unable to perform responsibilities, etc.

(II) Party B believes one of the following situations may endanger the security of its creditor right under this contract: Party A does not perform other due debts (including the due debts to China Construction Bank at all levels or to other third party), transfers property at a low price or for free, abates the debts of third party, delays exercising creditor rights or other rights or provides guarantee for the third party;

(III) Party B believes the following conditions may endanger the security of its creditor rights under this contract: Party A’s shareholder(s) abuses its independent legal status and the limited liabilities of the shareholder to avoid debts;

(IV) Any of preconditions of issuing loan as stipulated in this contract is not continuously met;

(V) Party B believes one of the following situations occur on the guarantor may endanger the security of its creditor rights under this contract:

1. the guarantor violates any of its covenants in the guaranteed contract or provides misrepresentation, error and omitted information in its guaranteed matters;

2. contracting, taking over, leasing, shareholding reform, reducing registered capital, investment, joint operation, merging, acquisition and reconstruction, separating, joint venture, being applied to stop business for rectification, applying for dissolving, being suspended, being applied for bankruptcy, changing controlling shareholder / actual controller or transferring major asset, suspension and termination of business, criminal prosecution and high amount of administrative penalties by relevant authority, cancellation of registration, suspension of business license, and involvement in major litigation, difficulty of operation, or financial condition deterioration, legal representative or executive officer being unable to perform responsibilities, etc.

3. Other situations which would incapacitate or possibly incapacitate the guarantor’s guarantee ability;

(VI) Party B believes one of the following situations occur on the mortgage and pledge may endanger the security of its creditor right under this contract:

1. The mortgaged or pledged property is damaged, lost or reduced on value because of the third party’s behavior, collected by the state, confiscation, expropriation, taken back without compensation, relocation, market situation change or any other reasons;

2. The mortgaged or pledged property is closed down, detained, frozen, deducted, lien, auctioned and supervised by administrative organization, or the ownership is being disputed;

3. The mortgagor or pledgor violates any of the convents stipulated in mortgage contract or pledge contract,  or provides any false, wrong or omitted information in the stated and guaranteed matters;

4. Any other situations that possibly endanger the realization of Party B’s pledge or mortgage right;

(VII) Guarantee is not hold, invalid, revoked or lifted, the guarantor breaches the contract or expressly states or implies by its action that it will not perform its guarantee obligation, the guarantor losses part or the whole guarantee ability, reducing the value of collateral or other situations, Party B believes they may endanger the security of its creditor rights under this contract; or

(VIII) Any other situations that Party B believes endangers the security of its creditor right under this contract.

IV. Party B’s remedial measures

If any situation as stipulated in the second or third paragraph of this article occurs, Party B is entitled to exercise one or several of the following rights:

(I) Stop issuing loans;

(II) Announce loans due immediately; require Party A to immediately repay all due and undue principals, interests, costs of debt under this contract;

(III) If Party A does not use loans as stipulated in this contract, Party B has the right to require Party A to pay liquidated damage which is equal to 10% of the improperly used loan amount, and to refuse Party A from using the unwithdrawn loan under this contract;

(IV) If Party A does not use loans as stipulated in this contract, interest and compound interest of the portion diverted by Party A shall be calculated and collected according to penalty interest rate, and mode of interest settlement from the date of improper use of the loans to the paid off date of principal and interest;

(V) If the loan is overdue, interest and compound interest of the loan principal and interest that are not paid off by Party A (including part or the whole loan principal and interest that is due ahead of time announced by Party B) shall be calculated and collected according to penalty interest rate, and mode of interest settlement from the overdue date to the paid off date of principal and interest. Overdue loan means that Party A does not pay off loans in the stipulated period, or goes beyond the installment limit of principal repayment plan as stipulated in this contract.

Before the loan is overdue, the compound interest for the interest not paid off on time by Party A shall be calculated and collected by loan interest rate as stipulated in this contract.

(VI) Other remedial measures, including but not limited to:

1. Charge corresponding amount in RMB or other kinds of currency from Party A’s account opened with China Construction Bank without advance notice;

2. Exercise guarantee right;

3. Require Party A to provide a new guarantee to all debts under this contract compliant with Party B’s requirements;

4. Terminate the contract.

Article X Other clauses

I. Cost allocation

Unless otherwise agreed by both parties, costs related to legal services, insurance, assessment, registration, custody, identification and notarization etc in this contract and with respect to its  guarantee shall be borne by Party A,.

All costs for Party B to realize its creditor right (including but not limited to legal cost, arbitration fees, property preservation cost, travel expense, execution fees, assessment fees, auction charge, notary fees, delivery fees, advertising fees and attorney fees) shall be borne by Party A.

II. Information disclosure of Party A

Party A agrees that Party B can check Party A’s credit status from the credit database approved and established by People’s Bank of China and credit department, or related organizations and departments, and provide Party A’s information to the above-mentioned credit database. Party A also agrees that Party B can fairly use and disclose Party A’s information.

III. Collection notices

If Party A defaults loan principal and interest, or other contract-breaking situations occur, Party B has the right to report them to the concerned department or organization, and exercises collection notices through media.

IV. Evidentiary effect of Party B’s records

Unless with reliable and confirmed rebuttal evidence, Party B’s internal financial records related to principal, interest, costs, repayment records etc.; the receipts and certificates that Party B produced or kept with regard to Party A’s withdrawing, repaying loan or repaying interest; and collection notices and evidences from Party B are all the evidence to confirm Party B’s creditor right related to Party A. Party A shall have no objection to the above records, receipts or certificates made or kept by Party B.

V. Reservation of rights

Party B’s rights under this contract do not influence and eliminate its any other rights entitled by laws, regulations and other contracts. Party B’s non-exercise, partial exercise and / or delayed exercise of any of its rights does not constitute a waiver or partial waiver of that right.  It also does not affect, restrain and prevent Party B's continued exercise of the rights or the exercise of any other rights. Party B hereto shall not undertake any responsibilities and obligations to Party A.

VI. Except for debts under this contract, if Party A has any debt due to Party B, Party B has the right to charge Party A of corresponding amount in RMB or other kinds of currency from the account opened by Party A in China Construction Bank to pay off any due debts. Party A agrees not to raise any objection.

VII. If Party A’s contact address or information is changed, Party A shall notify Party B in writing immediately. Otherwise, all losses are borne by Party A.

VIII. Charge to funds payable

For all due amounts by Party A under this contract, Party B has the right to charge Party A of the corresponding amount in RMB or other kinds of currency from Party A’s account opened with China Construction Bank without advance notice to Party A. If Party B needs go through currency exchange procedures, Party A has the obligations to assist Party B. All exchange rate risk is undertaken by Party A.

IX. Settlement of dispute

Any dispute occurring in the performing the contract should be settled through negotiation by both parties. If it fails, the dispute should be solved using the first method below:

1. File a law suit with People’s Court in Party B’s domicile.

2. Submit this column is blank to arbitration committee (Place of arbitration is this column is blank). The arbitration shall be conducted in accordance with the arbitration rules effective as of the time of application. The arbitral award is final and has binding upon both parties.

During lawsuit or arbitration, clauses in this contract that are not in controversy shall still be performed.

X. Condition effectiveness

This contract shall take effect after the legal representative (person in charge) or authorized agent of Party A, and the person in charge or authorized agent of Party B sign and seal it.

XI. This contract is in quadruple.

XII. Miscellaneous

I. If Part A fails to repay loan principal and interest, Party B has right to report to People’s Bank of China to list Party A on the “blacklist”. Party B can disclose relevant information to newspaper and other media to urge Party A to repay the loan principal and interest.

II. Party A promises to use loans with stipulated purposes under this contract. The loans cannot be used for purchasing house or other personal use, or engaged in transaction or investment prohibited by the state.

III. Party A commits on the use of the loan as follows: should be used in strict accordance with the "loan contract"; shall not be used in the securities, futures and other aspects of speculative operations; shall not be used in the equity investment; shall not be used on housing, and other individual consumption activities; shall not be engaged in other matters prohibited by law. If Party A is found to use loans for other purposes, Party B shall have the right to refuse issuing loans, or require repayment in advance.

Article XI. Statement

I. Party A understands clearly Party B’s business scope, and the scope of Party B’s authorization.

II. Party A has already read all clauses in this contract. Per Party A’s request, Party B has explained the corresponding clauses in this contract. Party A is completely aware and fully understands the meaning and the relevant legal consequences of the clauses in this contract.

III. Obligations signed and performed by Party A are in compliant with laws, administrative regulations, rules, and the charter or internal constitutional documents of Party A, and also have been approved by Party A’s internal executive body and / or  the State’s relevant authority.

Party A (Seal):

Legal representative (Person in charge) or Authorized agent (Sign):

YU Anming

May 31, 2010

Party B (Seal)

Legal representative (Person in charge) or Authorized agent (Sign):   SHEN,  Yongqing

May 31, 2010

EX-10.2

Guarantee Contract

Contract No: 9381349102010027

Guarantor (Party A): Shanghai Xin Liantang Economic Development Co., Ltd.

Address: No. 15, Lane 588, Zhangliantang Road, Liantang Town, Qingpu District, Postal Code: 201716

Legal representative (Persons in Charge): YOU  Weidong

Fax:                     Tel: 59815035

Lender (Party B): China Construction Bank Corporation, Shanghai Qingpu Sub-branch

Address: No. 550, East Chengzhong Road, Qingpu District , Post Code: 201700

Person in Charge: SHEN  Yongqing

Fax: 59727777   Tel: 59725555

Whereas Party B, for consecutively handling the following A credit business for Shanghai Vomart Auto Parts Co., Ltd.  (hereinafter “Borrower”), during the period commencing from May 31, 2010 to May 30, 2011 (hereinafter “the Term of the Master Contract”), will (and/or has) entered into a Renminbi loan contract, Foreign Exchange Loan Contract, Bank Acceptance Agreement, the Contract of Issuing a Letter of Credit, the Agreement of Issuing a Letter of Guarantee and/or other documents of a legal nature (referred to as the “Master Contract” under the above contracts, agreements and/or other documents of a legal nature signed during the Term of the Master Contract) with Borrower.

A. granting Renminbi/foreign exchange loan;

B. acceptance of commercial bill of exchange;

C. issuing a letter of credit;

D. issuing a letter of guarantee;

E. other credit business:  blank .

Party A is willing to provide the maximum amount guarantee for the series of debts of Borrower under the Master Contract. In accordance with the related laws, regulations and rules, Party A and Party B hereby agree through consultation to enter into this contract for mutual compliance and implementation.

Article 1 Scope of Guarantee

I. Scope of this guarantee is:

1.1 The balance of the principal under the Master Contract that is not more than (currency) Renminbi (in words) RMB ten million only; and

1.2 The interest (including the compound interest and penalty interest), liquidated damage, damages, other amount that Borrower shall pay to Party B (including but not limited to the related handling charge, communication fee, miscellaneous fees and the related bank fees that the beneficiary under the letter of credit refuses to undertake), any and all the fees incurred to Party B arising from the realization of Lender’s right and guarantee right (including but not limited to litigation fees, arbitration fees, fees for preservation of properties, travelling expenses, enforcement fees, appraisal fees, auction fees, public notarization fees, service fees, public announcement fees and attorney’s fees).

2. Provided that Party A fulfils its guarantee responsibilities pursuant to this Contract, the maximum of the principal that it guarantees shall be deducted according to the amount of the principal that Party A settles.

3. Even the loan, advances, interests and fees under the Master Contract or any other debts of Party B are actually formed is beyond the Term of the Master Agreement, they shall be within the scope of guarantee hereof. The expiration date for the performance of the obligation under the Master Contract will not be limited to the expiration date of the Term of the Master Contract.

Article 2  Method of Guarantee

The guarantee provided by Party A hereunder shall be the guarantee with several and joint liability.

Article 3 Term of Guarantee

1. The Term of Guarantee hereunder shall be respectively calculated according to the single credit business that Party B handles for Borrower, namely, starting from the date on which the Master Contract for the single credit business is signed until the two years after the expiration date of the term for performing the obligations of Borrower under the said Master Contract.

2. Where Party B and Borrower reach an agreement regarding the extension of the term for Borrower’s performing the obligations under the Master Contract, the Term of Guarantee shall last for the two years as from the expiration date of the term for performing the obligations as stipulated in the extension agreement. The extension of the term has not to be subject to the consent of Guarantor, who shall still undertake a joint and several liability for the guarantee.

3. Provided that Party B announces to advance the maturity of the Debt in case of the occurrence of any event as stipulated in the laws and regulations or in the Master Contract, the Term of Guarantee shall last for the two years upon the earlier maturity of the Debt.

Article 4 Independence of the Guarantee Contract

The validity of this Contract is independent from the Master Contract. Failure to establish, ineffective, invalidity, partial invalidity, revocation or rescinded of the Master Contract shall not affect the effectiveness of this Contract. If the Master Contract is determined as not established, ineffective, invalid or partially invalid, or revoked or rescinded, Party A shall be jointly and severally liable for the debts arising from Borrower returning the property or compensating the losses.

Article 5  Amendment of the Master Contract

1. Party A agrees that Party B and the Borrower, while concluding master contract or amend it (including but not limited to renewal of the period of repaying debts, or increase of the principal of Lender’s rights), need not to notify Party A and that Party A shall still undertake guarantee liabilities within the maximum amount and guarantee scope as specified herein.

2. The guarantee liabilities of Party A shall not be mitigated due to any one of the following events:

(1) Restructuring, consolidation, merger, division, increase or decrease of the registered capital, joint venture, joint operation, change of the name of Party B or Borrower;

(2) Party B entrusts a third party to fulfill its obligations under the Master Contract.

3. Where the Lender’s rights under the Master Contract are transferred, the guarantee hereunder shall be transferred therewith.

4. Where the transfer of Lender’s rights or debts under the Master Contract is ineffective, invalid, revoked or rescinded, Party A shall still undertake a joint and several guarantee liability to Party B as specified herein.

Article 6 Responsibility of Guarantee

1. if the debts under the Master Contract matures or Party B announces the debts are matured in advance pursuant to the provisions of the Master Contract or the law, where Borrower fails to fully fulfill the debts on time or Borrower violates other provisions of the Master Contract, Party A shall undertake the guarantee liability within the Scope of Guarantee.

2. No matter whether Party B has other guarantee for the debts under the Master Contract (including but not limited to such guarantee methods: guarantee, mortgage, pledge, letter of guarantee or standby letter of credit), no matter when it is established, whether it is valid, whether Party B files a claim against other guarantors, whether a third party agrees to undertake the whole or partial debts under the Master Contract, or whether other guarantee is provided by Borrower itself, the guarantee liability of Party A hereunder shall not be mitigated or exempted, Party B may directly require Party A to undertake the guarantee liability within its scope of guarantee as stipulated herein and Party A shall not raise any objection.

3. In the event that the Lender’s rights under the Master Contract fail to be fully settled after Party A undertakes the guarantee liability, Party A undertakes that, its claims to the right of subrogation or the right to seek compensation against other Borrower or guarantor shall not cause any harm to the interest of Party B and agrees that the settlement of the debts under the Master Contract is superior to the fulfillment of Party A’s right of subrogation or the right to seek compensation.

To be more specific, prior to the full settlement of Party B’s Lender’s rights:

(1) Party A agrees not to claim for the right of subrogation or the right to seek compensation against other Borrower or guarantor; if for any reason whatsoever, Party A fulfils the above rights, the amount it obtains shall be first used to settle the outstanding Lender’s right of Party B;

(2) Provided that the debts under the Master Contract has a security for things, Party A agrees not to file any claim for the security thing or the amount obtained from the disposal thereof, which shall be first used to settle the outstanding Lender’s right of Party B;

(3) Provided that Borrower or other guarantor provides counter-guarantee for Party A, the amount that Party A obtains based on the above counter-guarantee shall be first used to settle the outstanding Lender’s right of Party B.

4. Party A has been fully aware of the interest rate risks. Provided that Party B adjusts the interest rate level, the method of calculating or settling the interests pursuant to the provisions of the Master Contract or the change to the interest policy of the State, which results in the increase of the interest, penalty interest or compound interest that Borrower shall repay, Party A shall be jointly and severally liable for the increased part.

5. Provided that in addition to the debts under the Master Contract, Borrower has other due debts to Party B, Party B shall be entitled to first allocate and collect the amount in Renminbi or other currency from the account that Borrower opens in the China Construction Bank system to settle any due debt. The guarantee liability of Party A shall not be mitigated or exempted thereby.

Article 7  Other Obligations of Party A

1. Party A shall supervise the use of the loan by Borrower (including the purposes), and accept the supervision of Party B on the capital, property and operation status of Party A, provide such information, documents and materials as the financial statements according to the request of Party B and ensure its accuracy, authenticity, integrity and validity thereof. Without the written consent of Party B, Party A shall not provide guarantee for a third party that is beyond its capacity;

2. In case of any of the following: contracting, trust (takeover), lease, share-equity transformation, decrease of registered capital, investment, joint operation, consolidation, merger, acquisition and restructuring, division, joint venture, applying for or being applied for suspension of business for internal rectification, applying for dissolution, being revoked, applying for or being applied for bankruptcy, change to the controlling shareholder/actual controller or transfer of major assets, production suspension, shut-down, being imposed a significant amount of fines by the competent authority, being deregistered, being revoked the business license, being involved in major legal dispute, severe difficulties or financial deterioration occurred to production or operation , legal representative or major responsible person unable to perform the normal duties, or losing or probably losing the guarantee capacity for any reason, Party A shall immediately inform Party B in writing and carry out the undertaking, transfer or commitment of the guarantee liability hereunder or provide a new guarantee for the performance of the Master Contract to be acknowledged by Party B.

3. In the event that there is any change to such aspects as the name, legal representative (responsible person), domicile, scope of business, registered capital or the articles of association of the company (enterprise) of Party A, Party A shall inform Party B in writing within seven (7) working days upon the change and attach the related materials changed.

Article 8 Miscellaneous

1. Allocation and Collection of Payables with respect to all the payables of Party A hereunder, Party B shall be entitled to allocate and collect the corresponding amount in Renminbi or other currency from the bank account that Party A opens in the China Construction Bank system, without informing Party A in advance. Where the procedures regarding settlement and sale of foreign exchange or purchase/sale of foreign exchange is required, Party A shall be obliged to assist Party B in this regard and the foreign exchange rate risks shall be undertaken by Party A.

2. Use of Party A’s Information

Party A agrees Party B to inquire about the credit status of Party A in the credit database established under the approval of the People’s Bank of China or credit competent authority or inquire the related entity or department and agrees Party B to provide Party A’s information to the credit database established under the approval of the People’s Bank of China or credit authority.

3. Public Announcement and Collection

With respect to the defaults of Party A, Party B shall be entitled to notify the related department or entity and to make public announcements for collection through the news media.

4.  Evidentiary Effectiveness of Party B’s Records

Unless there is reliable and definite evidence to the contrary, the internal accounting records of Party B regarding the principal, interest, fees and re-payment records, documents, voucher prepared or kept by Party B that are generated during such business procedures as withdrawal, repayment, interest payment that Party A goes through and the records and vouchers of the loan-collection by Party B shall all constitute the definite evidence to prove the Lender’s right relationship between Party A and Party B. Party A shall not raise any objection only on the ground that the aforesaid records, accounts, documents and vouchers are unilaterally prepared or kept by Party B.

5. Reservations of Rights

Party B’s rights hereunder shall not affect and exclude any other rights it shall be entitled to pursuant to the laws, regulations and other contracts. Any tolerance, grace for any default or delay, or preference or suspension in exercising any right hereunder shall not be deemed as a waiver of the rights and interests hereunder or permission or approval of any breaches, nor shall it affect, prevent or obstruct continuous exercise of such right or any other right or result in Party B’s assumption of obligations and responsibilities to Party A.

In the event that Party B fails to or delays in exercising any right under the Master Contract or fails to exhaust any remedy under the Master Contract, the guarantee responsibility of Party A hereunder shall not be mitigated or exempted. However, provided that Party B exempts the debts under the Master Contract, the guarantee responsibility of Party A hereunder shall be mitigated or exempted accordingly.

6. Dissolution or Bankruptcy of Borrower

Where Party A obtain the information that Borrower enters into dissolution or bankruptcy procedure, Party A shall inform Party B to file claims. In the meantime, it shall take part in the dissolution or bankruptcy procedure promptly and exercise the right to recourse first. Provided that Party A knows or should know Borrower enters into dissolution or bankruptcy procedures but fails to first exercise the right to recourse promptly, the losses thereof shall be solely undertaken by Party A.

Notwithstanding the provisions in the second sub-paragraph of the fifth paragraph of this clause, during the bankruptcy procedure of Borrower, in the event that Party B enters into a reconciliation agreement with Borrower or agrees to the re-construction plan, Party B’s rights hereunder shall not be damaged due to the reconciliation agreement or re-construction plan and the guarantee responsibility of Party A shall not be mitigated or exempted. Party A shall not use the conditions as stipulated in the reconciliation agreement or reconstruction plan to oppose the rights and claims of Party B. With respect to the part of the Lender’s rights that Party B makes compromises to Borrower in the reconciliation agreement or the reconstruction plan and hence is not settled, Party B shall still be entitled to request Party A to continuously settle.

7. Dissolution or Bankruptcy of Party A

Where Party A becomes dissolved or bankrupt, even if the Lender’s rights of Party B under the Master Contract are not expired, Party B shall be entitled to take part in the liquidation or bankruptcy procedures of Party A and file claims.

8. Where there is a change to the correspondence address or contact of Party A, Party A shall immediately notify Party B in writing. Any losses arising from failure to notify Party B promptly shall be solely undertaken by Party A.

9. Settlement of Disputes

Any dispute arising from the performance of this Contract may be settled through negotiations, if failing of negotiations, it shall be settled in the _____ way as follows:

(1) File a lawsuit to the people’s court at Party B’s location.

(2) Submit to    blank     Arbitration Committee (the place of arbitration in this column is blank) for arbitration in accordance with the effective rules at the time of applying for arbitration. The arbitration award shall be final and binding upon both parties.

During the litigation or arbitration, the provisions of this Contract that are not in dispute shall continue to be implemented.

10. Conditions for the Effectiveness of this Contract

The Contract shall come into force as soon as being signed or sealed by Party A’s legal representative (person in charge) or authorized agent and Party B’s representative or authorized agent.

11. This Contract is in quadruplicate.

12. Other Provisions

Article 9  Statement and guarantee of Party A

1. Party A clearly knows the business scope and scope of authorization of Party B.

2. Party A has already read all the clauses of this contract and the Master Contract. Upon Party A’s request, Party B has already explained the clauses of this Contract and the Master Contract. Party A is completely aware of and fully understands the meaning and the corresponding legal consequences of the clauses of this Contract and the Master Contract.

3. Party A has the legal qualification to be Guarantor. The Guarantee provided by Party A hereunder complies with the provisions of the law, administrative regulations, rules and articles of association or internal constitutional documents of Party A, and has already obtained the approval of the company’s internal competent body and/or the State’s competent authority. Any liabilities arising from the lack of Party A in the right to sign this Contract shall be undertaken by Party A, including but not limited to full compensation for the losses that Party B suffered thereby.

4. Party A acknowledges that it fully understands the conditions of Borrower’s assets, debts, operation, credit and credibility, whether the Borrower has the subject qualification and authority to sign the Master Contract and all the contents of the Master Contract.

Party A (Seal):

Legal representative (Person in Charge) or Authorized agent (Signature):

May 31, 2010

Party B (Seal)

Legal representative  or Authorized agent (Signature):

May 31, 2010

EX-10.3

Loan Agreement

Borrower: Shanghai Vomart Auto Parts Co., Ltd.	(Hereinafter referred to as Party A)
Address: No. 288 Maodian Road, Qingpu District
Postal code: 201715
Tel: 59815555
Fax:
Legal representative: Yu Anming
Opening bank and account No.:
Lender: China CITIC Bank LLC, Shanghai Branch	(Hereinafter referred to as Party B)
Address: 61 Nanjing Road East
Postal code: 200002
Tel: 21029000
Fax:
Legal representative /Person in charge: Zuo Weiguo
Signing place: Shanghai
Signing Date: June 23, 2010

Pursuant to the "Contract Laws of the PRC", "General Rules on Loans" and other relevant laws, regulations and rules, Party A and Party B, following consultations, mutually agree to enter into this contract ( “Contract”) as follows:

Article I Type of Loan

1.1 Party B agrees to provide Party A with the following loans in type (1) as per convention of the Contract:

(1) Short-term loans (2) medium-term loans (3) long-term loans

Article II loan amount (principal, similarly hereinafter) and the loan period

2.1 The loan amount under the Contract is RMB (in words): Fifteen million, (in figures): 15,000,000.

2.2 The loan term under the Contract shall be (in words) one year (month / year), starting from June 23, 2010 till June 23, 2011.

2.3 The actual loan term and loan amount are subjected to term, date and amount recorded in loan note under this contract. Loan note is a constituent part of the Contract and has the same legal effect as the Contract.

Article III Loan purpose

3.1 The loan under the Contract is used for turnover of working capital. Without the written consent of Party B, Party A shall not change the loan purpose. Consequences incurred due to that Party A uses the loan by changing loan purpose or breaching "General Rules on Loans" or other laws and regulations without the written consent of Party B, Party B shall not be held any responsibility.

Article IV  Loan interest rate and interest

4.1 The loan interest rate of the loan shall be determined with the following means in type (1):

(1) Go up (up / down) by 10 (% or BPs) as per benchmark interest rate over the same period on the same grade of the People's Bank of China on the actual withdrawal date of the loan, i.e. loan interest rate of the Contract is 5.841%.

(2) Go (up / down) by 10 (% or BPs) as per benchmark interest rate over the same period on the same grade of the People's Bank of China on the actual withdrawal date of the loan, i.e. loan interest rate of the contract is %.

4.2 The Loan adopts the following means in type 2 to determine adjustment mode of the interest rate.

(1) Fixed interest rate, interest rate remains unchanged within loan period.

(2) Floating interest rate, adjusted in accordance with the following means in type 1, loan interest rate after adjustment is interest rate after floating in accordance with means of agreement of Section 4.1 of the Contract based on applicable benchmark interest rate of People's Bank of China over the same period and on the same grade on the interest rate adjustment date.

① From actual withdrawal date, the first interest rate adjustment date is determined on____ (D/M/Y), and adjust the interest rate every ____ (in words) month (1/3/6/12) since interest rate adjustment date, for interest rate adjustment date being date corresponding to the first interest rate adjustment date, then the last day of the adjustment month is the interest rate adjustment date.

4.3 The interest of the loan is calculated from the date of actual withdrawal, calculation formula of the interest is: interest= actual loan balance× actual days during the interest calculation × annual interest rate / 360 days.

4.4 As to non-one-time loan repayment, the first interest settlement date is on September 20, 2010, interest settle means is the following type (2).

(1) Monthly interest settlement, interest settlement date is the 20th of each month;

(2) Quarterly interest settlement, interest settlement date is the 20th of the end month of each quarter.

4.5 Party A shall, before each interest settlement date, prepare enough corresponding amount ahead of time in Party B’s account, for Party B’s deduction and collection of interest on the account; in case Party A choose to pay interest to Party B in other means, scheduled interest remittance shall be guaranteed. if the interest settlement date is not a banking day, then the interest shall be remitted one day ahead of the banking day, interest that Party B does not receive in full on interest settlement date is deemed that Party A does not pay interest on time.

4.6 When the loan expires, interest shall be paid off along with principal. If loan maturity date is a statutory holiday or public holiday, if loan is repaid on the last banking day before a statutory holiday or public holiday, interest shall be calculated according to the contract rate, however, interest calculated at contact rate corresponding to days between maturity date and repaying date shall be deducted. if loan is repaid on the first banking day of statutory holiday or public holiday, interest corresponding to days between maturity date and repaying date shall be charged in extra as per contract interest rate, if loan fails to be repaid on the first banking day after statutory holiday or public holiday, interest shall be calculated from this day as per overdue loans.

Article V Withdrawal

5.1 Party A shall withdraw money according to the following plan; the planed withdrawal date is a banking day:

Sequence	Withdrawal date	Withdrawal amount
1	2010 6.23	15000000.

5.2 If Party A or guarantor of Party B do not perform all legal or contractual obligations, including but not limited to, Party A fails to provide complete the loan materials in accordance with Party B’s requirement, and the guarantor fails to handle registration procedures for guarantee completion timely, etc. then Party A agrees that Party B shall be entitled to change the foregoing withdrawal plan, changes on the withdrawal plan cause changes on the loan period, shall be processed in accordance with agreement of Section 2.3 under the Contract.

5.3 Unless otherwise agreed in the contract, Party A shall withdraw money as per withdrawal plan agreed in the Contract; Party A shall not change the withdrawal plan without written consent of Party B. if the withdrawal time and / or withdrawal amount is to be changed, then Party A shall notify Party B in writing ahead of time within five banking days before withdrawal date agreed in the Contract. Party B agrees to grant Party A withdrawal grace period of 3 banking days, loan not being withdrawn within grace period is deemed as that Party A automatically cancels the withdrawal of the loan, and Party A shall not withdraw the loan, and shall assume the liability for breach of contract in accordance with Section 12.2 under the Contract.

5.4 If Party B’s actual issued loan principal changes due to Party A’s automatic cancellation of the loan, loan principal under the Contract shall be calculated as per actual occurred loan document.

5.5 Party A shall, in accordance with the above withdrawal plan of Section 5.1 or that consented for modification in writing by Party B, and submit an irrevocable notice of withdrawal or loan document or other withdrawal notice to Party B within three banking days before each proposed withdrawal date. upon Party B’s approval for examination, loan shall be issued whereby, and whereby serving as evidence of a loan of the withdrawals. If Party A fails to submit the withdrawal notice within the above period to Party B, and also fails to propose the grace withdrawal request, the case shall be processed in accordance with agreement of Section 5.3 of the article.

Article VI  Means of repayment

6.1 The loan under the Contract shall adopt the following means in type to repay:

(1) Regular interest payment, due principal payment

(2) One-time principal and interest repayment

(3) Other means:

6.2 Party A shall repay the principal as per the following repayment programs:

Sequence	Repayment date	Withdrawal amount
1	2010 6.23	15000000.

6.3 For the loan principal and interest to be repaid by Party A, money not less the amount of principal and interest repayable shall be remitted in Party B’s account (account number 7511120182400019569), and hereby authorize Party B to automatically deduct debit principal and interest of the loan from the account.

6.4 If Party A needs early repayment, then Party A shall submit irrevocable prepayment plan to Party B in writing within 30 days before the planed repayment date, and shall obtain Party B’s written consent.

Article VII Loan extension

7.1 If Party A fails to repay the loans under this contract, when loan extension is required, Party A shall propose a written application to Party B within 10 banking days before the expiration of the loan, upon approved for examination by Party B, an agreement for loan extension shall be signed. If Party B does not agree on extension, Party A shall repay the loan on schedule; otherwise, Party B shall be entitled to take the money as overdue loans.

Article VIII Loan guarantee

8.1 Loans under the contract adopt the following guarantee means in type 3:

(1) Collateral guarantee

(2) Pledge guarantee

(3) Guarantee

(4) Guarantee of other means:

Party B’s guarantor of the above guarantees signs guarantee contract with the following number based on the specific guarantee items in the Contract:

(1)	(3)
(2)	(4)

Article IX Party A’s representations and warranties

9.1 Party A is a Chinese corporate or other legal organizations established as per the law of the People's Republic of China, it boasts civil rights and act capacity for signing or performing this contract, and is able to assume civil liability independently, besides, Party A has obtained all necessary internal and external legal approval and authorization for signing this contract.

9.2 Statements and representations of all documents relevant to the loans provided by Party A as per Party B’s requirements are effective, legal, authentic, accurate and complete.

Article X Party A’s rights and obligations

10.1 Party A shall be entitled to withdraw and use the loans as per the duration and purpose agreed in the contract.

10.2 Party A shall pay off the loan principal and interest as per agreement of the contract.

10.3 Party A shall periodically or at any time at Party B’s requirement, provide statements and other documents authentically reflecting its operations and financial status.

10.4 During loan holding period, any significant change in Party A’s operating decisions, including but not limited to , stock conversion and changes in operation scope and the registered capital, etc. that may affect the interests of Party B shall be notified in writing to Party B at least thirty days in advance and obtain Party B’s prior written consent, liquidation obligations or pre- liquidation loan for implementation of loan shall provide organizations accepted by Party B.

10.5 Party A shall actively cooperate with Party B in its investigating and supervising Party A’s operation and loan application status, various costs incurred from obstruction acts of Party B shall be borne by Party A.

10.6 Without the written consent of Party B, Party A shall not transfer or disguised transfer debt obligations under the contract in any manner.

10.7 Party A shall transfer, lease or dispose material assets or revenues with debt set guarantee means other than debt under the contract in whole or in substantial part, shall be notified to Party B in writing at least thirty days in advance and obtain Party B's prior written consent.

10.8 In the event that any event unfavorable to debt performance of the contract occurs, including but not limited to involvement in litigation, arbitration, criminal prosecution, administrative penalties, suspension and termination of business, dissolution, declared bankruptcy, suspension of business license, revocation, financial condition deterioration, etc. Party A shall inform Party B in writing within three days from the date that the aforementioned events occur or are likely to occur.

10.9 If the guarantor encounters (including but not limited to) suspension and termination of business or declared bankruptcy, insolvency, suspension of business license, revocation and operating loss, etc., and it loses guarantee capacity corresponding to the loan in part or in whole, or value rights of mortgagee, collateral and pledge serving as loan guarantee under this contract reduce, Party A shall provide Party B with accepted new guarantees.

10.10 During loan holding period, if Party A changes the corporate name, legal representative, project manager, address, phone, fax, etc., it shall be notify Party B in writing within seven days after the change.

10.11 During loan holding period, Party A shall not illegally inflow bank credit funds into the stock market or real estate market via Party A’s bank accounts or any third party's bank accounts.

Article XI Party B’s rights and obligations

11.1 Party B shall be entitled to examine and understand Party A’s operation and loans application status.

11.2 If Party B’s gains from disposing mortgage and pledge are insufficient to settle all claims within warranty range of the contract; Party B shall be entitled to claim for the insufficient part from Party A.

11.3 Under the precondition that Party A fulfills the obligations agreed in this contract, and meets conditions for loan grant of Party B, Party B shall grant the loan in full to Party A periodically.

11.4 Party B shall be entitled to require Party A to provide relevant documents as per review needs for issuance of the loans, Party B shall keep confidential of Party A’s related data, documents, information provided by Party A, however, those to be inquired or disclosed are excluded in accordance with laws and regulations.

Article XII Liability for breach of contract

12.1 Upon execution of the contract, both Party A and Party B shall fulfill the obligations of this contract, either party that fails to perform or does not completely fulfill the obligations of this contract, shall assume the corresponding responsibility for breach of the contract.

12.2 Without the written consent of Party B, and Party A fails to withdraw the loan as agreed in this contract, Party B shall be entitled to collect liquidated damages according to actual overdue days as per interest rate agreed in the contract.

12.3 If Party B fails to grant loans as per the contract, Party A shall be entitled to request Party B to pay the liquidated damages according to actual overdue days as per interest rate agreed in the contract.

12.4 If one of the following circumstances occur, Party B shall be entitled to suspend or terminate the issuance of money not withdrawn under the contract, and request Party A of immediate repayment of all money withdrawn, the interest payable and other costs, meanwhile, take appropriate measures by law, the date when Party B requires Party A to repay the foregoing money shall be the date of payment under the contract expiration date of the debt ahead of schedule, Party B shall be entitled directly deduct money from Party A’s any account opened by Party B or its branch so as to repay Party A of debt under the contract;

12.4.1 Party A fails to repay the loan principal and interest under this contract on schedule;

12.4.2 Party fails to fulfill any obligation agreed in the contract;

12.4.3 The loan’s related certificates and documents submitted by Party A to Party B relating to Article IX of this contract are proved to be inauthentic, inaccurate, incomplete or intentionally misleading.

12.4.4 Party A ceases to pay its due debts, or is unable or indicates that it can not repay the debt;

12.4.5 Party A’s suspension or termination of business, declared bankrupt, dissolution, suspension of business license and revocation or litigation, arbitration or criminal or administrative penalties that have adverse impact on Party A’s operation or financial status :

12.4.6 Changes on Party A’s address, business scope, legal representative and other industrial and commercial registration or major foreign investment, severely affected or threatened the Party B’s fulfillment of claims;

12.4.7 Significant financial loss, assets loss, or assets loss arising from external guarantee or other financial crisis occur on the part of Party A;

12.4.8 Operation and finance of Party A’s controlling shareholder and other affiliated company are exposed to major crisis, or Party A makes large related transactions with controlling shareholders and other affiliated company, which impacts the normal operation of Party A;

12.4.9 Party A’s industry undergoes adverse changes;

12.4.10 Party A fails to handle settlement or deposit and other related businesses as agreed in Party B’s territory;

12.4.11 Party A changes use of loan funds without permission;

12.4.12 Senior management is involved in major corruption, bribery, fraud or illegal business cases;

12.4.13 Party A defaults on other creditors;

12.4.14 Party A’s guarantor breaches agreement of guarantee contract or default occurred under the contract;

12.4.15 Other events that constitute a threat, harm or likely to endanger and damage Party B’s rights and interests occur on the side of Party A.

12.5 If Party A fails to repay the principal agreed in the contract, Party B shall be entitled to exercise the rights stipulated in Section12.4 of the article, it is also entitled to, according to actual number of days overdue, calculate and collect interest with an extra 50% default interest rate based on loan interest rate of the contract.

12.6 If Party A fails to pay interest, Party B is entitled to collect compound interest based on the actual number of days overdue and in accordance with default interest rate agreed in Section 12.5 of the article.

12.7 If Party A fails to use the loan as per purposes agreed in the Contract, Party B shall be entitled to exercise right in Section 12.4 hereof, it is also entitled to, from the appropriation date of the default application part, calculate and collect interest with an extra 100% default interest rate at loan interest rate applicable to the contract at that time according to default application days.

12.8 If Party A repays ahead of schedule, Party B is entitled to, from the date of prepayment of Party A, according to amount of early repayment, remaining maturity period of loans and loan interest rate agreed in the contract, cullet liquidated damage at 50% rate in one-time off manner, the liquidated damage is calculated as: liquidated damage =the amount of early repayment ×remaining maturity period of loans (in terms of years) ×loan interest rate agreed in the contract × rates.

12.9 If Party A violates the provision of article 10.11, Party A shall compensate the losses incurred to Party B.

12.10 All costs incurred from Party B’s fulfillment of claims (including but not limited to legal fees, travel expenses, (within 2% of total claims) legal counsel fees, property preservation fees, notarization certification fees, translation fees, assessment and auction fees, etc.) shall be borne by Party A.

Article XIII Obligations continuity

13.1 Party A’s all obligations under the contract hold continuity, which is entirety binding to its successor, receiver, assignee and subjects after the merger, reorganization and change of name, etc., and is not subject to impact of any disputes, claims and proceedings and any instructions of a higher-level organization and any contract and document signed between the debtor of the master contract and any natural or legal person, besides, the continuity remains unchanged regardless of main debtor’s bankrupt, insolvency, the loss of corporate status, changes on articles of association and any change in nature.

Article XIV Notarization

14.1 If either party under the contract proposes notarization request, the contract shall be notarized in notary organization prescribed by the State, the costs shall be borne by Party A.

14.2 If Party B proposes to handle notarization document with compulsory execution efficacy, Party A agrees that Party B may hold the notarization document with compulsory execution efficacy applied and issued by notarization organ of the contract, if Party B’s loan principal and interest and related costs are not paid off within repayment period agreed in the contract, Party B can hold the notarization document and directly apply for compulsory execution to the local people's court within Party B’s territory, all costs incurred whereof shall be borne by Party A, Party A shall unconditionally agree to the compulsory execution of the local court within Party B’s territory, and forgo any right of defense.

Article XV Other agreed items

If this provision conflicts with other provisions in the Contract, then this provision shall prevail.

Article XVI Applicable law

16.1 The Contract is applicable to laws of PRC.

Article XVII Resolution of disputes

17.1 Any dispute occurred due to or related to this contract, both parties shall be resolved through consultation; if consultation fails, both parties agree to solve with the following means in type 2:

(1) Apply arbitration to board of arbitration

(2) Institute a proceeding or apply compulsory execution to local people’s court in Party B's territory

Article XVIII Accumulation of Party B's rights

18.1 Party B's rights under this contract are cumulative, which does not affect or exclude that Party B can enjoy any rights of Party A as per law and other contracts. Unless indicated in writing by Party B, Party B's non-exercise, partial exercise and / or delayed exercise of any of its rights, does not constitute a waiver or partial waiver of that right, besides, it also does not affect, restrain and prevent Party B's continued exercise of the rights or exercise of any other rights.

Article XIX Execution, changes and termination of the contract

19.1 The contract comes into effect upon signing (signature or signature sealing) and official sealing or special sealing for the contract by Party A’s legal representatives or authorized agents or Party B’s legal representatives or persons in charge or authorized agents.

19.2 Upon execution of the contract, apart from the existing agreement of the contract, either party shall not change or terminate this contract; if change or termination of the contract is needed, both parties shall go into negotiated consensus and reach a written agreement.

19.3 Upon execution of the contract, Party B shall transfer claim under this contract in whole or in part to a third party without Party A’s permission, but Party B shall notify Party A in writing.

19.4 Upon execution of the contract, Party A shall transfer debt under this contract in whole or in part of the to a third person, it shall submit written documents to Party B that the Guarantor agrees to transfer and continue to take guarantee duties or provide new warranties, besides, Party B’s written consent shall be obtained.

Article XX Others

20.1 For unaccomplished matters of this contract, both parties can otherwise reach a written agreement as the appendix to the contract. Any appendix, modification or supplement of the contract shall constitute an integral part of the contract, which has the same legal effect as this contract.

20.2 If any provision of this contract or partial content of any provision are deemed invalid, the invalid provisions or the invalid part does not affect validity of the contract and the other provisions of this contract or other content of the provisions.

20.3 Once any notice, demand or other communication, including but not limited to telex, telegram, fax and other correspondence concerning this contract given by Party B to Party A are delivered, they will be sent to Party A; Post correspondence is deemed to have been submitted to Party A from the third day after registered mailing. If a special delivery in person is given by Party B to Party A, the delivery date is the recipient date of Party A.

20.4 The contract’s original copy is prepared in triplicates, one for Party A , one for Party B , one for the relevant department.

20.5 Party B has taken reasonable measures to draw attention of Party A for provisions that exclude or restrict its responsibilities under the contract, and give full explanation to its relevant provisions as requested by Party A; both parties hold no objection to the content understanding of all provisions of this contract.

Party A:	Party B:
Legal representative:	Legal representative / person in charge:
(or authorized agent)	(or authorized agent)

EX-10.4

Contract No.: (200) Bank of Shanghai ZBZ No. 731112103032

Maximum Amount Guarantee Contract

 Maximum Amount Guarantee Contract

Guarantor: YBM GROUP CHINA CO., LTD (hereinafter referred to as Party A)

Address:  Baotian Industrial Park, Tangxia Town, Ruian City, Zhejiang. Postal code: 325500

Tel: 0577-65218870

Fax:

Legal representative: CHEN, Xiuqin

Place of Signing: Shanghai

Date of Signing: June 5, 2010

Creditor: China CITIC Bank Co. Ltd, Shanghai Branch (hereinafter referred to as Party B)

Address: 61 East Nanjing Road, Shanghai. Postal code: 200002

Tel: 23029000

Fax: 63611600

Legal representative: ZUO Weiguo

Place of Signing: Shanghai

Date of Signing: June 5, 2010

In order to guarantee the implementation of multiple claims (hereinafter referred to the Principal Debt) continuously occurred within a certain period between Party B and Shanghai Vomart Auto Parts Co., Ltd. (hereinafter referred to the Debtor), Party A agrees to provide the maximum amount guarantee. According to "Contract Law of PRC", "Security Law of PRC" and other relevant laws and regulations, Party A and Party B have hereby reached the following agreement via equality and negotiated consensus:

Article I Definitions

1.1 The maximum amount guarantee: refers to Party A and Party B set a maximum amount based on the multi- debts continuously occurred within a certain period on the part of the debtor, Party A, within the range of maximum amount, fulfills the agreement of providing Party B with guarantee on debt for the debtor. The maximum amount refers to total balance of all debts borne by the debtor to Party B (including contingent liabilities).

Article II  The Secured Debt

2.1 The secured debt refers to a series of debts occurred to Party B handling business credit for the debtor commencing from June 23, 2010 to September 23, 2011, including but not limited to various types of loans, bank notes, letters of guarantee, letters of credit and other banking business.

2.2 Maximum amount principal of the secured debt is equivalent of RMB sixteen million only (in words). If Party A performs guarantee obligations pursuant to this contract, the maximum amount of the principal that it guarantees shall be deducted according to the amount of the principal that Party A settles.

2.3 Within the agreed term and the maximum amount, a series of contracts, agreements and other legal documents signed by Party B and the debtor on the basis of the formation of credit-debt relation shall be the Master Contract of this contract.

Article III  Method of Guarantee

3.1 Party A provides several and joint liability guarantee. If the single debt under the master contract matures, the debtor does not fulfill or does not fully fulfill the debts on time, Party B shall be entitled to request Party A to undertake guarantee liability.

3.2 When the debtor fails to fulfill his obligations per Master Contract, no matter whether Party B has other guarantee for the debts under this contract (including but not limited to such guarantee methods:, guarantee, mortgage, pledge, letter of guarantee, standby letter of credit), Party B is entitled to directly request Party A to undertake the guarantee liability within its scope of guarantee.

Article IV  Term of Guarantee

4.1 The term of Guarantee assumed by Party A shall be two years, that is, two years since expiration date for fulfillment of debt made by the debtor per agreement of each specific business contract. The term of Guarantee under each specific business contract shall be calculated separately.

4.2 Provided that the agreed debt matures ahead of time in terms of laws and regulations or according to master contract or stipulations under the master contract made by both parties, the earlier maturity date is the expiration date of fulfillment of the debt.

4.3 Provided that the business under the master contract is L/C, bank accepted draft or letter of guarantee, then the guarantee period is two years from the date of advance; the guarantee period of each fractional advance shall be calculated separately on the date of each advance applied.

Article V  Scope of Guarantee

5.1 The scope of Guarantee includes principal, interest, penalty interest, compound interest, liquidated damage, damage, and cost for realization of the debt (including but not limited to legal fees, arbitration fees, (within 20% of total amount of principal debts) legal fees, travel expenses, appraisal fees, auction fees or sale fees, transfer fees, security fees, public announcement fees and implementation fees, etc.) and all other fees payable under the master contract.

Article VI Party A’s Representation and Warranty

6.1 Party A is a legal person or other legal organizations established under the law of the People's Republic of China, it boasts civil rights and act capacity for signing or performing this contract, and is able to assume civil liability independently, besides, Party A has obtained all necessary internal and external legal approval and authorization for signing this contract.

6.2 Party A shall fully understand and agree all major provisions of the master contract, voluntarily provides guarantee for the debtor, and all Party A’s contents under the contract are authentic.

6.3 The establishment of the guarantee will not encounter any restrictions or will not cause any illegal situation.

6.4 All documents, reports and statements provided by Party A shall be legitimate, authentic, accurate and complete. In addition to the written disclosure to Party B, Party A also has disclosed any other large liabilities (including contingent liabilities), breach of contract, litigation, arbitration or other major assets issues that may affect the performance of this contract.

Article VII Party A’s rights and obligations

7.1 Party A shall provide Party B with legal documents which can verify its legal identity in an authentic and effective manner.

7.2 During validity period of the contract, if Party A changes its legal name, legal representative, project manager, address, phone, fax, etc., it shall notify Party B in writing within seven days upon the change.

7.3 if the debts under the Master Contract matures or the debts are matured in advance pursuant to the provisions of the Master Contract, where Borrower fails to repay principal and interest of debts per master contract, Party B has right to directly request Party A to pay off the debt. Party A guarantees that it has not any reason to reject repay all claims requested by Party B, and shall waive the right of defense stipulated in Article XX of the Guarantee Law.

7.4 Party A shall be obliged to provide Party B with balance sheet and description of all external guarantees; it shall also periodically or at any time at Party B’s requirement, provide its consolidated financial statements and other documents authentically reflecting its operations and financial status.

7.5 During validity period of the contract, such events that may impact Party A’s guarantee capacity occur, including but not limited to, stock conversion, reorganization, merger, division, shareholding restructuring, joint-venture, cooperation, joint operation, contracting, leasing, change of business scope and registered capital, and significant asset transfer, and others, Party A shall notify Party B in writing thirty (30) days in advance.

7.6 During validity period of the contract, In the event that any event unfavorable to Party A’s guarantee capacity occurs, including but not limited to suspension and termination of business, dissolution, applying for or being applied for bankruptcy, suspension of business license, revocation, financial condition deterioration, and involvement in litigation, arbitration, criminal prosecution and administrative penalties, etc., Party A shall inform Party B in writing within three days from the date that the aforementioned events occur or are likely to occur.

7.7 In validity period of the contract, if Party A further provides a third party with any kind of guarantee, Party B’s interests shall not be damaged.

7.8 In validity period of the contract, if situation stipulated in paragraphs 7.5 and 7.6 of this article occurs hereof, Party A shall guarantee to properly implement all guaranteed responsibilities under this contract, it shall also provide specific schemes for implementation of the guaranteed responsibility.

7.9 The debtor fails to pay off debt under the master contract in whole or in part as agreed (including laws and regulations or agreement as per master contract, or both parties of the master contract agree that debt of the master contract matures), Party B requires Party A to assume guarantee responsibility, Party A shall immediately pay Party B per amount and means designated by Party starting from the date of receipt of Party B’s written notice , so as to pay off debt under master contract on behalf of the debtor.

7.10 If Party A fails to perform the obligation as stipulation of paragraph 7.9 in the article, Party A authorizes Party B to directly deduct from any account opened by Party B and / or exercise the disposal right to Party A’s property or property rights legally possessed and managed by Party B so as to pay off debt under the contract. When Party B collects money from Party A’s account, if currency type of debt in the account differs from that of the master contract, listing price published by Party B prevails for conversion on that date.

7.11 If a third party provides guarantee for fulfillment of debt under the master contract, Party A shall continue to assume guarantee responsibility agreed in article III of the contract.

Article VIII Party B’s rights and obligations

8.1 when Party B transfers all claims under the master contract to a third party, it shall promptly notify Party A in writing after signing the transfer contract.

8.2 Party B and the debtor under the contract shall not notify Party A when signing the specific business contract in terms of specific credit business under the master contract.

8.3 The debtor fails to fully or partially fulfill all debt as per agreement of the master contract (including laws and regulations or agreement per master contract or both parties of the master contract agree the debt of the master contract matures in advance), Party B is entitled to require Party A to assume guarantee responsibility as stipulation of the contract.

8.4 Party B shall keep confidential of Party A’s related data, documents, information provided by Party A, excluding those to be inquired or disclosed in accordance with laws and regulations.

Article IX Liability for breach of contract

9.1 Upon execution of the contract, both Party A and Party B shall fulfill the obligations of this contract, either party fails to perform or does not completely fulfill the obligations of this contract, this default party shall assume the corresponding responsibility for breach of the contract, and shall compensate the losses incurred to the other party.

9.2 If statement and guarantee in Article VI of this contract made by Party A is inauthentic, inaccurate, incomplete or intentionally misleading cause losses to Party B, Party A shall compensate Party B.

9.3 The contract is invalid due to Party A’s fault. Patty A shall compensate Party B’s losses within guarantee scope.

9.4 In the event that one of the following situation occurs within validity period of the contract, Party B is entitled to require Party A to assume guarantee responsibility or carry out corresponding legal measures to Party A, Party A’s property or property rights.

9.4.1 The implementation term of debt under any master contract expires and Party A does not pay off the debt to Party B;

9.4.2 According to laws, regulations, provisions of master contract, debt under master contract agreed by both parties matures ahead of time, and Party A does not pay off the debt to Party B;

9.4.3 Significant financial loss, assets loss, or assets loss arising from external guarantee or other financial crisis occur on Party A, and Party A does not provide corresponding guarantee or guarantee provided by Party A is not satisfied by Party B;

9.4.4 Operation and finance of Party A’s controlling shareholder and other affiliated company are exposed to major crisis, or Party A makes large related transactions with controlling shareholders and other affiliated company, which impacts the normal operation of Party A, and Party A does not provide corresponding guarantee or guarantee provided by Party A is not satisfied by Party B;

9.4.5 Party A’s industry undergoes adverse changes, and Party A does not provide corresponding guarantee or guarantee provided by it is not satisfied by Party B;

9.4.6 Senior management of Party A is involved in major corruption, bribery, fraud or illegal business cases, and Party A does not provide corresponding guarantee or guarantee provided by Party A is not satisfied by Party B;

9.4.7 Party A defaults on other creditors, and Party A does not provide corresponding guarantee or guarantee provided by Party A is not satisfied by Party B;

9.4.8 Suspension and termination of business, applied bankruptcy, being declared bankruptcy, dissolution, suspension and revocation of Party A's business license.

9.4.9 Party A violates the stipulation of paragraph 2.8 of the contract and fails to fulfill all guarantee responsibilities under the contract or specific scheme for fulfilling all guarantee responsibilities provided by Party A is not satisfied by Party B.

9.4.10 Other events that constitute a threat, harm or likely to endanger and damage Party B’s rights and interests occur on the part of Party A.

Article X Accumulation of rights

10.1 Party B's rights under this contract are cumulative, which does not affect or exclude that Party B can enjoy any rights of Party A pursuant to the laws and other contracts. Unless indicated in writing by Party B, Party B's non-exercise, partial exercise and / or  any delay exercise of any of its rights does not constitute a waiver or partial waiver of the right, it also does not affect, restrain and prevent Party B to continue exercise of the rights or exercise of any other rights.

Article XI Obligation Continuity

11.1 Party A’s all obligations and joint liabilities under the contract have continuity, which are entirely binding to its successor, receiver, assignee and subjects after their merger, reorganization and change of name, etc., and is not subject to impact of any disputes, claims and legal proceedings and any instructions of a higher-level organization, as well as any contract and document signed between the debtor of the master contract and any natural or legal person, and the continuity also remains unchanged regardless of main debtor’s bankruptcy, insolvency, loss of business qualifications, changes on articles of association and any change in nature.

Article XII Other agreed items

If this provision conflicts with other provisions in the contract, then this provision shall prevail.

Article XIII Applicable law

13.1 The Contract is governed by the PRC laws.

Article XIV Resolution of disputes

14.1 Any dispute arising from the performance of this contract shall be settled through negotiations by both parties; if it fails, both parties agree to solve the dispute in the following type (2):

(1) Apply arbitration toboard of arbitration

(2) Bring a law suit to the local people’s court in Party B's territory.

Article XV Effectiveness of the contract

15.1 The contract is independent from the master contract, invalidity of the master contract due to any reason does not impact the efficacy of the contract, and the contract is still valid. Party A’s joint guarantee obligations under this contract extend to the debtor’s legal obligations after invalidity of the master contract (including but not limited to the return of compensation for loss).

15.2 If any provision of this contract or partial content of any provision are deemed invalid now or in the future, the invalid provision or the invalid part of the provision does not affect validity of the contract and the other provisions of this contract or other content of the provision.

Article XVI Execution, change and termination of the contract

16.1 The contract shall come into effect upon being signed (signature or signature sealed) and or sealed by Party A’s legal representative or authorized agents and Party B’s legal representative or Person-in-charge, or authorized agent.

16.2 Upon execution of the contract, apart from the existing stipulations of the contract, either party shall not change or terminate this contract; if change or termination of this contract is needed, both parties shall negotiate and reach a written agreement.

Article XVII Others

17.1 For unaccomplished matters of this contract, both parties can otherwise reach a written agreement as the Appendix to the contract. Any appendix, modification or supplement of the contract shall constitute an integral part of the contract, which has the same legal effect as this contract.

17.2  Any notice, request or other correspondence given by Party B to Party A, including but not limited to telex, telegram, fax and other letters with respect to this contract, are delivered once they are sent out to Party A; the certified mail from post office is deemed to have been delivered to Party A from the third day after mailing. The special delivery by person shall be deemed to be delivered upon receipt of Party A.

17.3  The contract is prepared in duplicate, one for Party A, one for Party B.

17.4 Party B has taken reasonable measures to draw attention of Party A for the provisions that exclude or restrict its responsibilities under the contract, and give full explanation to the relevant provisions as requested by Party A; both parties have no objection to all terms and contents of this contract.

Party A:  YBM GROUP CHINA CO., LTD (Seal)  Party B: CITIC Bank Co. Ltd, Shanghai Branch (Seal) 

Legal representative: CHEN Xiuqin	Legal representative:	ZUO Weiguo
	/Person in Charge
(or authorized agent)	(or authorized agent)

EX-10.5

Working Capital Loan Agreement

Borrower : Shanghai Vomart Auto Parts Co.,  Ltd. (hereinafter referred to as Party A)

Lender : YBM Group China Co.,  Ltd.  ( hereinafter referred to as Party B)

In order to clarify responsibility and to maintain good credit, Party A and Party B, through mutual consultations, hereby have entered the following contract (“Contract”):

Article I  Loan amount and usage

Party A, currently in its marketing development and expansion period, lacks sufficient funds, and hereby A applies for loan from Party B. Party B agrees to provide Party A with loans with a total amount no more than RMB 50 million as Party A’s working capital turnover.

Article II. Term of loan

The term of loan in this contract is three years.

Article III  Loan method

Party A shall file an application for each loan. Upon Party B’s examination and approval, Party B shall transfer the loan amount to Party A’s designated account.

Article IV  Loan  interest

All loans under the Contract  are interest-free.

This contract shall take effect after being signed or sealed by both parties. It shall expire automatically upon being paid off by Party A.

This contract is in duplicate. One for Party A and one for Party B.

Borrower (seal): Shanghai Vomart Auto Parts Co., Ltd.

Date: May 10, 2008

Lender (seal): YBM Group China Co., Ltd.

Date: May 10, 2008

EX-10.6

Loan Agreement

Lender:  SHEN, Zhoufeng

Borrower:  Shanghai Vomart Auto Parts Co.,  Ltd.,  Nanjing Branch

1 Loan amount: RMB 352,823.80. This loan is interest-free.

2 Term of Repayment: the loan amount shall be paid off within two years from the date of signing this Agreement.

This Agreement shall take effect after being signed or sealed by both parties. It shall expire automatically upon being paid off by the borrower.

This Agreement is in duplicate. One for the lender and one for the borrower.

Lender (seal): SHEN, Zhoufeng	Borrower (seal):	Shanghai Vomart Auto Parts Co. Ltd., Nanjing Branch
Date: May 1, 2009	Date: May 1, 2009

EX-10.7

Loan Agreement

Lender:  YU  Anming

Borrower:  Shanghai Vomart Auto Parts Co.,  Ltd.,  Nanjing Branch

1 Loan amount: RMB 477,220.  This loan is interest-free.

2 Term of Repayment: the loan amount shall be paid off within two years from the date of signing this Agreement.

This Agreement shall take effect after being signed or sealed by both parties. It shall expire automatically upon being paid off by the borrower.

This Agreement is in duplicate. One for the lender and one for the borrower.

Lender (seal): YU  Anming	Borrower (seal):	Shanghai Vomart Auto Parts Co. Ltd., Nanjing Branch
Date: May 1, 2009	Date: May 1, 2009

EX-10.8

File No. 

Exclusive Distribution Agreement

Party A: YBM Group China Co., Ltd.

Party B: Shanghai Vomart Auto Parts Co.,Ltd.

According to the relevant provisions of Contract Law of the People’s Republic of China and Product Quality Law of the People’s Republic of China, Party A and Party B, through mutual friendly consultation on the basis of equality and mutual benefit, have reached the following agreement (“Agreement”) regarding distribution of Auto accessories:

Article 1    Clauses and Effectiveness of Agreement

1. This agreement includes three parts: (a) the body of the Agreement; (b) Appendix I - Cargo Receipt;(c) Appendix II - Purchase and Sale List

2.  This agreement and its appendixes shall become effective after being signed and sealed by the authorized agents of both parties. This agreement is in duplicate, one for party A and one for Party B with the equal legal effect. In the event of modification and supplement of any clause in this agreement, both parties shall sign the amended clause and hereto shall become effective upon being signed and sealed by the authorized agents of both parties.

3.  The components of the Agreement need to be printed except the signatures of representatives and signing date. Any written or altered parts are invalid

4.  In the event that any provision or content of this agreement is invalid, the remaining provisions and contents shall not be affected and shall remain valid.

5.The validity of this Agreement is 1 year: from July 1, 2010 to June 30, 2011.

6． After this agreement matures, if both parties continue to have purchasing order transactions, both parties shall implement according to the provisions in this agreement; but they shall implement according to the new agreement signed by both parties during or after this period.

7. Authorized Region and nature: Part A agrees to authorize Part B as the exclusive distributor in mainland China (referred to as “Distribution Territory”)

Article 2  Representation and Warranty.

1. Through friendly consultation, both parties have entered into this agreement , through friendly consultation on the basis of honesty, equality, fairness, and voluntariness.

2.   Both parties have read and fully understood all clauses of this agreement. With respect to any non conducive terms, one party has been fully explained by the other party and has understood prior to signing this agreement. In accordance with the provisions of contract law, has been faithfully fulfilled the notification obligation.

3.  Warranty of Party B.

1) Party B has the valid legal qualification and continuous reliable capacity to enter into and perform this Agreement；

2) Prior to signing the Agreement, Part B shall provide copy of its business license, tax registration certificate , legal representative ID and original certification of authorization signed by the authorized representative with the seal, and provide the originals for verification per Party A's requirement;

3) Part B guarantees the authenticity, accuracy and integrity of the materials provided by PartyＢ;

4) Part B commits and guarantees to legally use Part A’s trademarks, corporate names and the relevant logos after Party A’s written consent, shall not harm Party A’s reputation and slander Party A’s credibility;

4.  Part A guarantees to provide Part B with products. In the event of claims arising as a result of quality problems, Party B shall notify Party A the quantity of these defective products and specifications in writing. Party A will dispatch business or quality control personnel to provide onsite services, or Party B return the products. If there is proved to be  product problems by Party A, the defective products shall be replaced with other equal value products as compensation.

Article 3  Name, Variety, Specification, Quantity, Price and Quality of  the Authorized distribution products

1. Refer to Appendix 2 for the list of products’ name, variety, specifications, quantity, and price provided by Part A. Appendix 2 - purchase and sale list shall have the equal legal effect as this agreement upon being signed and sealed by legal representative or authorized agent.

2. The standard of products technology and quality provided by Part A shall be implemented according to the national standard or the industry standard; otherwise shall be implemented according to the enterprise manufacture standard.  If there is no technology and quality standard, it shall be implemented according to realization of the agreement purpose and products usage.

3. Party A has the right to offset any amount owed by Party B to any amount owned to Party B regardless of the amount owned under this agreement or by other means.

Article 4  Delivery time & term

   See Appendix 2

Article 5   Product price and payment method

   See Appendix 2

Article 6   Delivery & Ownership

1. Hereinafter refers to “warehouse ”,  the designated delivery place.  According to the stipulation of both parties, a delivery has taken place once the products leave the warehouse for Party A to perform the agreement. Part A shall undertake the risk of products loss and damage prior to products leaving warehouse, once the products leave the warehouses, the risk shall pass to Party B

2. In the event that Party A fails to fulfill the agreement and fails to confirm any specific delivery due to Party B’s fault, Party A shall reserve the right to store product in warehouse, but Party B shall bear the risk and cost. The above mentioned choice doesn’t affect Part A to obtain other rights or remedies per this contract;

3. The product ownership can only be transferred on condition that Part B has paid off the amount and also Party B does not owe any payment of Party A in this agreement or outside this agreement.  Prior to the above conditions are met, the product ownership shall not be transferred and be kept by Party A;

4. Before Party A transfers the product ownership to Party B,  Party B shall transfer to the unpaid cargo to Party A requested by Party A at the first time. If Party B fails to fulfill the corresponding provision, Party A shall  access  to any place possessed, hold or controlled by Party B and re-attain the above-mentioned products without bearing any liability.

Article  7  Intellectual property Rights, trade mark and trade name

1. The registered or unregistered trade mark, trade name, design, intellectual property right of Part A, including its company group and subsidiary  shall belong to Part A. Part B is only entitled to use Party's trademark logo during the valid period of the Agreement in the purpose of selling Party A’s products but not for any other purpose. Party B shall not change, cover, move, remove or damage products related to trademarks and brand names.  Upon expiration date of the Agreement, Party B shall not use the trademark symbol in any way or any purpose.

2. Part A guarantees that the supplied products does not constitute any infringement of industrial property and intellectual property; B guarantees that the purchased product is not used for any infringement purpose of industrial property and intellectual property. Violators shall bear all tort liabilities hereto.

Article 8  Product acceptance

1. The product acceptance date is three days starting from the date of receipt of Part B;

2. During the acceptance period, if Part B finds the number of products, variety, type, size, appearance which can be observed, are not in accordance with the contract, Part B shall notice Part A in written and meanwhile shall properly keep the products. If Part B doesn’t raise any objection during the acceptance period, the products will be taken as compliance with the terms of the Agreement.

3.If  Party B’s Custody of the product has caused the loss, loss increase, decline in the quality, Party B shall bear the corresponding liability.

Article  9  Confidentiality

1. Party B shall strictly keep the buying price, sales price, promotion costs, and other commercial and technical information ( including but not limited to price, marketing information and the customer name list) related to Party A’s business, products, programs, or development as confidentiality per Party A.  Without the written consent from Part A, Party B shall not disclose it to any third party. Otherwise, Party A is entitled to request Party B to compensate its loss caused by Party B’s violation of the confidentiality

2. The effect of this confidential clause is independent from the this Agreement, which shall not be invalid and terminated because this Agreement is invalid or terminated. Party B shall continue to involve the confidentiality of the confidential information.

Article  10  Force majeure

1. Force majeure is defined any event or circumstance, at the time of signing this agreement, does not exist and can not reasonably be foreseen , and can be not controlled by any party, allowing a party can not fully or partially fulfill its obligations under this agreement. These circumstances include but are not limited to: the delay is caused by state or government action (including but not limited to failure to fulfill its obligations on time and make the necessary approval or license), crises, wars, strikes, natural disasters and energy shortages etc. The party affected by Force majeure of should immediately give a written notice to the other party, indicating the circumstances, causes and possible consequences, and shall attain a available proof of the force majeure event from the government department or a notary public within a reasonable time.  The exempted obligation only can be limited to the scope and duration caused by the majeure.

2. In the event that the behavior of one party is terminated during the force majeure, the other party, in a reasonable commercial range, may terminate to perform all or part of its obligation correspondingly, but shall pay the due amounts.

3. In the event that the force majeure continues to last for more than 30 days,  the non-affected party is not liable to terminate this agreement, but it shall notify the other party in writing and pay the due amounts or return back to  the delivered product.

Article  10  Termination of  Agreement

1. Party A has the right to unilaterally cancel the agreement under the following circumstance, and has right to recover all loans and products from to Party B. Party B shall compensate Party A all the losses caused thereby:

1) In the event that Party B violates the provisions stipulated in this agreement, Party B still does not make ratification upon Party A’s written notice, then Party A has right to terminate this agreement immediately by sending a written notice to Party B.

2) Party B’s mode of operation is against the state laws and regulations.  Party A shall terminate the Agreement by notifying Party B in writing

3) Party B is automatically or forced to close down, liquidation, bankruptcy, frozen and seized property or is involved in commercial or criminal liability etc, Party A has right to terminate this agreement immediately by sending a written notice to Party B.

2.Within ten days after the termination of this Agreement, both parties shall

 cooperate to settle the outstanding amount during the cooperation period.

Article 11  Responsibility of breach the contract

1. Part B fails to pay the payment and cost as stipulated in the Agreement, Party B shall pay liquidated damages at Thousandth of the due amount per day.

2. In the event of termination of this Agreement or returning goods due to Party B’s fault, Party B shall pay liquidated damages at 30% of the involved product price to Party A

3. If Party A fails to deliver goods on time or delay the delivery due to Party B’s fault, Party B shall pay liquidated damages to Party A at thousandth of the contract price per day and also is responsible for the actual losses of Party A. Otherwise, Party A shall pay liquidated damages to Party B at thousandth of the contract price per day.

4. In the event that the products provided by party A has quality problem and can not meet national standards, industry standards, manufacturer standards and purpose of realization this Agreement, they shall be replaced or returned.

Article 12  Settlement of Disputes

Both parties shall negotiate for settlement in time if there is any dispute during the execution process of this Agreement. If the negotiation fails, both parties may also request mediation. If the mediation fails, then shall solve through Shanghai Arbitration Committee.

Article  13  Conflict of interest

Both parties shall avoid all issues related to conflict of interest with the other party and shall ensure the best reputation. Responsibilities of both parties to abide by the provisions of this agreement, including but not limited to: prevent its employees  providing or receiving expensive gifts, etiquette, hospitality, bills, loans and other things that are deemed to damage the reputation and interests of the other party. If one party knows any employee or representative of the other party conducts interests or influence it, that party shall notify the other party as soon as possible.

Article 14  Miscellaneous

1. “In written” used in this Agreement refers to  letters, telegrams, faxes, and graphs.

2. all amendments, supplement, deletion or change to this Agreement must be in writing and a supplemental agreement shall be signed. The Supplementary agreement constitutes an integral part of this agreement, and has the same legal effect as this agreement

3. This agreement is in triplicate,  two for Part A, one for Part B, shall become effective upon being signed and sealed by both parties.

Part A: YBM Group China Co., Ltd.  Part B: Shanghai Vomart Auto Parts Co.,Ltd.

Legal representative:	Legal representative:
Authorized agent:	Authorized agent:
Tel.:	Tel.:
Add. :	Add.:
Post code:	Post code:
Account Number:	Account Number:
Date: July 1, 2010	Date: July 1, 2010

Appendix I      Cargo Receipt

Upon receiving the goods, Party B shall check its integrity, packing list, and the match of goods. If any goods are damaged, missing, inconsistency of a single item, party B shall request the carrier to sign delivery receipt on the spot to confirm the reason of damaging or missing goods, detailed name, quantity, packaging, and shall notify  party A’s staff as soon as possible.

After inspecting and receiving all goods, Party B’s authorized personnel shall sign the receipt for the actual received quantity, signature, seal and write the time of receipt. The authorized personnel’s signature or seal shall be on the receipt hereinto.

Part B shall provide Party A with the authorized personnel’s signature or receipt stamp style, and shall promptly notify party A with any changed information or material.

Part A  does not accept any returned goods that have been accepted by Party B

Company:
Delivery address:
Authorized recipient	Contact Tel/Cell：
Signature style :	Stamp style:
Available Time ( list in details)：
Unavailable time (e.g. Saturday, Sunday and holiday):

Part B  signature/seal:

Date:

Appendix II    Purchase and Sale List

Product Name: Filter, belt, brake pads and generator.

Manufacturer: YBM Group China Co., Ltd. and its subsidiaries.

EX-10.9

Letter of Undertaking

YBM Group China Co., Ltd  hereby makes the following solemn commitment:

Our company hereby authorizes Shanghai Vomart Auto Parts Co. Ltd  to have the right of exclusive, free use of  the trademark No 6454234, registered under the name of YBM Group China Co., Ltd. All  economic and non-economic interests related to this trademark are attributed to Shanghai Vomart Auto Parts Co. Ltd. Our company does not authorize any other person or organization to use this trademark or benefit from the use of the trademark.

We are committed to freely transfer the trademark No 6454234 to Shanghai Vomart Auto Parts Co. Ltd  as soon as possible so that Shanghai Vomart Auto Parts will become its legitimate registrant.

Company:  YBM Group China Co., Ltd

Date:  July 30, 2010

EX-10.10

Labor Contract

Party A (the employer): Shanghai Vomart Auto Parts Co., Ltd. Address: No. 288 Maodian Road, Liantang Town, Qingpu District Economic type: Limited Liability Legal representative: Shen Zhoufeng Postal code: 201715 Contact #: 021-59815555 Name of Party B: Zhoufeng Shen Registered location: Puxie, Lucheng District, Wenzhou city, Zhejiang Province ID card No: 330323197210200035 Current Residence address ( Street): No. 128-66  Civil Aviation Road Postal code: Contact:

Party B has been advised on and fully understood its applied post/position’s job nature and requirements, working conditions, labor protection and other basic information related to implementation of rights and obligations of labor contract from Party A, and he commits that the application data provided to Party A is authentic and valid. According to Labor Law of PRC , Contract Law of PRC and other provisions of relevant laws and regulations, both Parties have reached the following agreement (“Contract”) on the principle of legality, fairness, equality, free will, consensus and good faith:

I. Contract  type and period

1.  Contract period

Party A and Party B select the following type 1 to determine duration of this contract:

1) Fixed period, from October 21, 2010 to January 1, 2013, a total ofmonths.

2)  Non-fixed period, from         (MM/DD/YY) till appearance of termination conditions by laws and regulations.

3) Period on the base of completion of certain tasks: from          (MM/DD/YY) tillwhen the work is completed, then the Contract will terminate automatically.

2. Probation period

1)  Probation period starts on         (MM/DD/YY )and ends on         (MM/DD/YY), a total ofmonths.

2) If Party B has been proved not to meet the employment requirements during the probation period, Party A shall terminate the Labor Contract at any time after providing reasons.

II  Post and work location

1. Party A, based on operating (working) need, employs Party B to serve as General Manager of the General Management Department.

2.  Change of post

1) According to the company's operating needs and Party B's working performance or health condition, Party A shall change Party B's post and the corresponding work arrangement, while Party B shall present full understanding and consent.

2) Party’s B work content shall be based on job description or job responsibilities scope provided by Party A.  According to work content standard specified in the preceding paragraph, Party B shall complete the work task in a timely, qualitative and quantitative manner, and further accept Party A’s evaluation.

3) If Party B fails to meet the evaluation criteria after evaluation, it is regarded that Party B is not qualified for the post as stipulated in the contract; Party A shall notify Party B in writing to change his post.

4) Upon receiving Party A’s written notice for post change in conformity to agreed conditions, Party B shall report to the new post on the date specified in the notice, otherwise Party A may terminate this contract.

5) For Party A’s operation needs, Party B's work locations includes but not limited to the following:  location of Party A’s domestic branches; location of Party A’s affiliated organizations; location of Party A’s customers and suppliers and other regions where Party A launches business activities. Party B's working location and working time shall be arranged by Party A based on work demand and business needs.

III.  Working hour, break and vacation

1.  Party A shall, according to post nature, business needs etc, make specific arrangements on Party B’s working hours in compliance with government regulations. And Party B now implements working system determined in the following item 1

1) Standard working hours: 5 days per week,  no more than 8 hours per day. Meal time is not included in the working hours.

2) Comprehensive calculating working time System: working hour is comprehensively calculates according to period approved by the government, and specific work and break time shall be executed according to the company’s regulations.

3) Variable interval working system:  the post of variable interval working system shall be implemented according to the government approval, under condition of ensuring the completion of tasks, work and break time shall be implemented according to the company’s regulations.

2 For variable interval and comprehensive working time system, Party A’s obtainment of valid approval from the labor administrative department serves as a precondition.  In the valid period of labor contract, if the post is not approved or the approval qualification is revoked, both parties shall implement automatically in accordance with the standard working hours system; If Party B’s post that is originally implemented in standard working hours system, implements  in comprehensive calculating working time system or variable interval working system upon approval by relevant government authority,  then Party B's working time is automatically implemented in accordance with the approval.

3.  Based on its work demand and the operation needs, Party A can arrange Party B to work overtime by law. If Party B works overtime by Party A’s arrangement or approval, by law, party A shall provide Party B with the corresponding compensatory leave time or pay overtime wages according to the Party A's relevant rule and regulations. All overtime work needs prior application or approval; otherwise it is regarded as invalid.

4. Party B can enjoy statutory holidays and other holidays in accordance with the State’s regulations and Party A’s system.

IV. Labor protection and working conditions

1.  Party A shall provide Party B with sound working environment and labor protection facilities in accordance with state’s regulations; shall establish and improve labor safety and hygiene system; shall strictly implement state labor safety and hygiene regulations and standards and provide Party B with labor safety and hygiene education so as to prevent accidents in the work process and reduce occupational hazards. Party B shall consciously attend with a view to enhancing awareness of labor safety and self-protection.

V. Labor remuneration

1. Party A confirms that Party B shall implement the followingwage form in accordance with the company’s wage system:

1). Hourly wages

During probation period, Party B’s basic wage is RMB 8000 Yuan/ month before taxes. The performance bonus is ____ Yuan/ month, which is vouched and issued according to Party B’s job performance and its assessment thereof.

Upon becoming a regular employee, Party B’s basic wage when is ____ Yuan/ month before taxes, and the performance bonus is ____ Yuan/ month, which is vouched and issued according to Party B’s job performance and its assessment thereof.

Bonus of business personnel is implemented according to the company’s bonus-awarding policy for business personnel.

In the event that Party A’s wage system or Party B’s post is changed, Party B’s wage is determined according to the wage standards of the new post.

2). Other wage forms, as specified below:

2. Party A shall pay monetary wages to Party B monthly, with a pay day on the 15th of the following month. If Party B has any issues with the wage payment, Party B shall consult with HR personnel within a week. Otherwise, it will be regarded as Party B’s consent.

VI. Social insurance and welfare

1. Party A and Party B shall participate in a social insurance or comprehensive insurance of non-resident employees in accordance with the provision of local governments. Party A shall pay the due amount on behalf of Party B, which shall be withheld from Party B’s wage.

2. In the valid period of the Contract, Party A shall reimburse Party B according to the relevant state and local (i.e., Party B’s working location) regulations and provisions in the events of Party B’s maturity leave, retirement, sickness, industrial injury, disability, and death.

VII. Labor discipline, rules and regulations

1. Party A formulates and publishes various rules and regulations according to related national laws and regulations.

2. Party B shall abide by the rules and regulations, formulated by Party A according to laws, which are discussed and published or notified to Party B. Party B shall obey Party A’s leadership, management and direction, and keep secret of Party A’s business.

3. If Party B violates labor discipline or Party A’s rules and regulations, Party A may take certain disciplinary actions, or impose economic punishment to Party B in accordance with the State and Party A’s rules and regulations, even to terminate the Labor Contract.

VIII. Modification, rescission, termination and renewal of Labor Contract

1. If one of the following situations occurs, Party A and Party B can modify the contract:

1) Both parties reach a consensus not to damage interests of country, collectivity and others;

2) In the case of the occurrence of substantial changes to objective circumstances, on the basis of which the Labor Contract is entered into, the labor contract may be modified upon mutual consultation by both parties;

3) Labor Contract can not be fully fulfilled because of force majeure;

4) Laws and regulations, on the basis of which the Labor Contract is entered into, have been amended;

5) Other situations regulated in laws and regulations.

2. Party A can terminate the contract if any one of the following situations happens to Party B:

1) Party B fails to satisfy the employment requirements during the probation period;

2) Substantially violates the rules and regulations stipulated by Party A;

3) Party B has neglected its own duties materially or been engaged in malpractice for personal interest , but has caused heavy losses to the interest of Party A;

4) Party B establishes labor relationship with other employers without written consent of Party A, and refuses to rectify even with Party A’s warning;

5) Party B misleads Party A to enter into or modify the Labor Contract through cheating, coercion or taking advantages of Party A’s vulnerability;

6) Party B is subjected to criminal liability;

3. If one of the following situations happens, Party A can terminate this contract, but shall notify Party B in writing 30 days in advance;

1) Party A lays off employees under legal procedures;

2) Party B has been attached by a disease or has non-industrial injury. After the medical treatment period expires, Party B can neither perform the former job nor engage in other jobs arranged by Party A;

3) Party B is not competent for the work and still fails to complete the work after receiving training or post adjustment;

4) The original contract can not be performed because of substantial changes in objective circumstances on which the original Labor Contract was based. Both parties can not reach a consensus on modifying the Labor Contract upon mutual consultation.

4. If one of the following situations happens to Party B, Party A can not terminate the Labor Contract in accordance with Section 3 above of this Article (with the exception that is stipulated by laws and regulations);

1) Party B has not gone through occupational health examination prior to leaving the position, or  is a suspected occupational patient in diagnosis stage or medical observation stage;

2) Party B has been attached by an occupational disease or has industrial injury, and has lost or partially lost labor capacity;

3) Party B has been attached by a disease or has non-industrial injury but still is in the regulated medical treatment period;

4) Female employee in pregnancy, childbirth, and breast-feeding period;

5) Party B has consecutively worked for more than 15 years for Party A and is less than 5 years to reach the retirement age as stipulated by law;

6) Other situations as stipulated by laws and administrative regulations.

5. If one of the following situations happens, Party B can notify Party A to terminate this contract at any time:

1) Party A fails to pay labor remuneration and social insurance as stipulated in the Contract, or fails to provide labor protection or working condition as stipulated in the Labor Contract;

2) Party A has forced Party B to work by means of violence, threaten or unlawful restrain of Party B’s liberty;

3) Party A has forced Party B to work in dangerous condition in violation of safety regulations;

4) The rules and regulations of the employer violate provisions of laws and regulations and endanger employee’s’ rights and interests;

5) Labor Contract is invalid because of violation of the first item of the Article 26 in Labor Contract Law of People’s Republic of China;

6) Other situations as stipulated in laws and administrative regulations.

6. Unless as stipulated in Section 5 of this Article, Party B can terminate this contract by notifying Party A in writing 30 days in advance.

7. This contract can be terminated upon mutual consultation by both parties.

8. If one of the following situations happens, this contract can be terminated automatically. Both parties go through the procedures of terminating Labor Contract:

1) Term of this contract is full

2) Party B starts enjoying basic retirement pension lawfully;

3) Death of Party B or declared death or missing by People’s Court;

4) Party A is declared bankruptcy lawfully;

5) Party A is revoked its business license, is ordered to shut down or dissolve; or Party A decides to dissolve in advance;

6) Other situations as stipulated in laws and administrative regulations.

10. If both parties have the intention to renew the contract, they shall conduct mutual consultation on the renewal procedures prior to the end of the contract. If both parties can reach an agreement, then the Labor Contract can be renewed.

11. After this contract matures, if both parties still have labor relationship, they shall retroact or renew Labor Contract within one month.

12. Party B shall, upon the termination or cancellation of the Contract, return on time all used, borrowed or kept articles, tools, and technical information of Party A (including any information carrier or customer information related to Party A’s business) according to Party A’s termination rules, and agree that Party A can deduct debts from the Party B’s salary or compensation if Party B does not pay off debts to Party A.

IX. Nullification of Labor Contract

Before Party B signs the Labor Contract, Party A has the right to know Party B’s basic information directly related to Labor Contract, including but not limited to Party B’s education background, resume, qualification or certificate and whether Party B’s previous labor relation was cancelled or terminated, etc. Party B shall state and commit in writing of the authenticity of all materials presented. If Party B misrepresents information on purpose or hides any basic information mentioned above to cheat Party A to sign the Labor Contract, it shall be regarded as Party B’s fraudulent conduct to mislead Party A. Hereto Party A has the right to terminate the contract, the loss caused to Party A shall be fully undertaken by Party B.

X. Responsibilities by canceling, termination or violation of Labor Contract

1. If one of the following situations happens, Party A shall undertake liability for damage;

1) Labor rules and regulations stipulated by Party A violate laws and regulations, and cause damages to Party B;

2) Invalid Labor Contract due to Party A‘s fault that has caused damages to Party B;

3) Party A terminates the labor contract in violation of labor laws and regulations, or intentionally delays to sign the labor contract, and has caused damage to Party B;

4) Other situations as stipulated in laws and regulations.

2. If one of the following situations happens, Party B shall undertake liability for damage;

1) Party B violates labor laws and regulations or rules stipulated by Party A, and has caused damages to Party A;

2) Invalid Labor Contract due to Party B‘s fault that has caused damages to Party A;

3) Leaving employee fails to transfer works following the rules, and has caused damages to Party A;

4) Party B violates Article IX in this contract, and has caused damages to Party A;

3.  Compensatory damages of Party B, include but not limited to:

1) Training expense and recruiting fee paid by Party A;

2) Direct economic losses to production, operating and work caused by Party B;;

3) Other compensation stipulated in this contract.

XI. Settlement of labor dispute

Any dispute occurring in performing the labor contract should be settled through negotiation by both parties. In case it fails, one party can resort to the Board of Arbitration in Party A’s domicile. The party that does not accept the arbitral decision can file a law suit with People’s Court in Party A’s domicile within 15 days upon receiving the arbitration award.

XII. Other contents consulted by both parties

1. Any matters uncovered in this contract shall be subjected to mutual consultation by both parties. But consensus reached by both parties shall not conflict with existing state labor laws and regulations.

2. During the valid period of the labor contract, all patents, copyrights and other intellectual properties produced by Party B on job duty using Party A’s material and technology shall belong to Party A. Party B has no right to implement commercial development.

3. After signing this contract, Party B shall not be employed by any other employers to engage in the same, similar or competitive business with Party A.

4. Party B shall strictly keep Party A’s and its affiliated company’s confidential information and business secrets during the valid period of the labor contract. Party B shall not disclose it to any third party (including Party A’s employee not related to the work). Party B’s violation of the confidentiality is regarded as a serious breaching of the contract, and constitutes sufficient reason for Party B to be dismissed.

5. Both parties shall enter into another Service Agreement whenever Party B is trained with cost covered by Party A. This agreement is as an appendix of the Contract and shall has the same legal effect as the Contract.

6.  Both parties shall enter into another Non-Competitive Agreement if Party B holds an important post with access to confidential business information of Party A. This agreement is as an appendix of the Contract and shall has the same legal effect as the Contract.

XIII Miscellaneous

1. This labor contract is in triplicate, two for Party A, one for Party B, and will take into effect after execution of both parties, with the same legal validity.

2. Appendix of the Contract has the same legal effect as the Contract. However, if the clauses of this contract have any conflict or inconformity with contents of appendix, contents in the appendix shall prevail.

3. Party B confirms that the following address is the mailing address for documents related to the labor contract. If the address is changed, Party B shall notify Party A and the address on this contract shall be changed accordingly.

Current address and post code:	Employee signs and confirms
Changed address and post code:	Employee signs and confirms
Changed address and post code:	Employee signs and confirms

XIV. Special Notes

1. Party B acknowledges to have received and agrees to abide by the various rules and regulations of Party A that are effective at the time the contract is signed. If Party A’s existing rules and regulations, matters uncovered or contract clauses conflict with current labor laws and regulations, the latter shall prevail. Otherwise, they are still legal and thus effective.

2. This contract shall become effective upon being signed or sealed by both parties. The contract will be invalid once altered or signed without authorization.

3.

Appendix 1. “Employee Manual”

2.

3.

Party A seal:
(Legal representative or authorized agent, seal)
	Shanghai Vomart Auto Parts Co.,ltd.	Party B signature:
		Shen Zhoufeng
		Oct 21, 2010
Oct 21, 2010

EX-14.1

CODE OF ETHICS AND BUSINESS CONDUCT FOR OFFICERS, DIRECTORS AND

EMPLOYEES OF TEEN EDUCATION GROUP, INC.

A goal of TEEN EDUCATION GROUP, INC. (the “Company”) and its subsidiaries is to promote professional and ethical conduct with respect to its business practices worldwide. This code provides ethical standards to which all of our executive officers, including our principal executive, financial and accounting officers, our directors, our financial managers and all employees are expected to adhere and promote regarding individual and peer responsibilities, and responsibilities to other employees, the Company, the public and other stakeholders.

1. TREAT IN AN ETHICAL MANNER THOSE TO WHOM WE HAVE AN OBLIGATION We  are  committed  to  honesty,  just  management,  fairness,  providing  a  safe  and  healthy

environment free from the fear of retribution, and respecting the dignity due everyone.

For the communities in which we live and work we are committed to observe sound environmental business practices and to act as concerned and responsible neighbors, reflecting all aspects of good citizenship.

For our shareholders we are committed to pursuing sound growth and earnings objectives and to exercising prudence in the use of our assets and resources.

For our suppliers and partners we are committed to fair competition and the sense of responsibility required of a good customer and teammate.

2. PROMOTE A POSITIVE WORK ENVIRONMENT

All employees want and deserve a workplace where they feel respected, satisfied, and appreciated. We respect cultural diversity and will not tolerate harassment or discrimination of any kind — especially involving race, color, religion, gender, age, national origin, disability, and veteran or marital status.

Providing an environment that supports honesty, integrity, respect, trust, responsibility, and citizenship permits us the opportunity to achieve excellence in our workplace. While everyone who works for the Company must contribute to the creation and maintenance of such an environment, our executives and management personnel assume special responsibility for fostering a work environment that is free from the fear of retribution and will bring out the best in all of us. Supervisors must be careful in words and conduct to avoid placing, or seeming to place, pressure on subordinates that could cause them to deviate from acceptable ethical behavior.

3. PROTECT YOURSELF, YOUR FELLOW EMPLOYEES, AND THE WORLD WE LIVE IN

We are committed to providing a drug-free, safe and healthy work environment, and to observing environmentally sound business practices. We will strive, at a minimum, to do no harm and where possible, to make the communities in which we work a better place to live. Each of us is responsible for compliance with environmental, health and safety laws and regulations.

4. KEEP ACCURATE AND COMPLETE RECORDS

We must maintain accurate and complete Company records. Transactions between the Company and outside individuals and organizations must be promptly and accurately entered in our books in accordance with generally accepted accounting practices and principles. No one should rationalize or even consider misrepresenting facts or falsifying records. It will not be tolerated and will result in disciplinary action.

5. OBEY THE LAW

We will conduct our business in accordance with all applicable laws and regulations. Compliance with the law does not comprise our entire ethical responsibility. Rather, it is a minimum, absolutely essential condition for performance of our duties. In conducting business, we shall:

A. STRICTLY ADHERE TO ALL COMPETITION LAWS

Officer, directors and employees must strictly adhere to all antitrust and related competition and antimonopoly laws. Such laws exist in the United States, China and other countries where the Company may conduct business. These laws prohibit practices in restraint of trade such as price fixing and boycotting suppliers or customers. They also bar pricing intended to run a competitor out of business; disparaging, misrepresenting, or harassing a competitor; stealing trade secrets; bribery; and kickbacks.

B. STRICTLY COMPLY WITH ALL SECURITIES LAWS

In our role as a publicly owned company, we must always be alert to and comply with the securities laws and regulations of the United States, China, and other countries where the Company may conduct its business.

C. DO NOT ENGAGE IN SPECULATIVE OR INSIDER TRADING

United States law and Company policy prohibits officers, directors and employees, directly or indirectly through their families or others, from purchasing or selling company stock while in the possession of material, non-public information concerning the Company. This same prohibition applies to trading in the stock of other publicly held companies on the basis of material, non-public information. To avoid even the appearance of impropriety, Company policy also prohibits  officers,  directors  and  employees  from  trading  options  on  the  open  market  in Company stock under any circumstances.

Material, non-public information is any information that could reasonably be expected to affect the price of a stock. If an officer, director or employee is considering buying or selling a stock because of inside information they possess, they should assume that such information is material.

It is also important for the officer, director or employee to keep in mind that if any trade they make becomes the subject of an investigation by the government, the trade will be viewed after-the-fact with the benefit of hindsight. Consequently, officers, directors and employees should always carefully consider how their trades would look from this perspective.

Two simple rules can help protect you in this area: (1) Don't use non-public information for personal gain. (2) Don't pass along such information to someone else who has no need to know.

This guidance also applies to the securities of other companies for which you receive information in the course of your employment.

D. BE TIMELY AND ACCURATE IN ALL PUBLIC REPORTS

As a public company, we must be fair and accurate in all reports filed with the United States Securities and Exchange Commission. Our officers, directors and management are responsible for ensuring that all reports are filed in a timely manner and that they fairly present the financial condition and operating results of the Company.

Securities laws are vigorously enforced. Violations may result in severe penalties including significant fines against the Company. There may also be sanctions against individual employees including substantial fines and prison sentences.

The Chief Executive Officer and Chief Financial Officer will certify to the accuracy of reports filed with the SEC in accordance with the Sarbanes-Oxley Act of 2002. Officers and Directors who knowingly or willingly make false certifications may be subject to criminal penalties or sanctions including fines and imprisonment.

6. AVOID CONFLICTS OF INTEREST

Our officers, directors and employees have an obligation to give their complete loyalty to the best interests of the Company. They should avoid any action that may involve, or may appear to involve, a conflict of interest with the company. Officers, directors and employees should not have any financial or other business relationships with suppliers, customers or competitors that might impair, or even appear to impair, the independence of any judgment they may need to make on behalf of the Company.

HERE ARE SOME WAYS A CONFLICT OF INTEREST COULD ARISE:

- Employment by a competitor, or potential competitor, regardless of the nature of the employment, while employed by us.

- Acceptance of gifts, payment, or services from those seeking to do business with us.

- Placement of business with a firm owned or controlled by an officer, director or employee or his/her family.

- Ownership of, or substantial interest in, a company that is a competitor, client or supplier.

- Acting as a consultant to one of our customers, clients or suppliers.

- Seeking the services or advice of an accountant or attorney who has provided services to us. Officers, directors and employees are under a continuing obligation to disclose any situation that presents the possibility of a conflict or disparity of interest between the officer, director or employee and the Company. Disclosure of any potential conflict must be made and approval from the Board of Directors must be obtained before making any decisions or taking any action that could reasonably be expected to involve a conflict of interest.

7. COMPETE ETHICALLY AND FAIRLY FOR BUSINESS OPPORTUNITIES

We must comply with the laws and regulations that pertain to the acquisition of goods and services.  We  will   compete  fairly  and  ethically  for  all   business   opportunities.   In circumstances where there is reason to believe that the release or receipt of non-public information is unauthorized, do not attempt to obtain and do not accept such information from any source.

If you are involved in Company transactions, you must be certain that all statements, communications, and representations are accurate and truthful.

8. AVOID ILLEGAL AND QUESTIONABLE GIFTS OR FAVORS

The sale and marketing of our products and services should always be free from even the perception that favorable treatment was sought, received, or given in exchange for the furnishing or receipt of business courtesies. Our officers, directors and employees will neither give nor accept business courtesies that constitute, or could be reasonably perceived as constituting, unfair business inducements or that would violate law, regulation or policies of the Company, or could cause embarrassment to or reflect negatively on the Company's reputation.

9.      MAINTAIN THE INTEGRITY OF CONSULTANTS, AGENTS, AND REPRESENTATIVES

Business integrity is a key standard for the selection and retention of those who represent us. Agents, representatives and consultants must certify their willingness to comply with the Company's policies and procedures and must never be retained to circumvent our values and principles. Paying bribes or kickbacks, engaging in industrial espionage, obtaining the proprietary data of a third party without authority, or gaining inside information or influence are just a few examples of what could give us an unfair competitive advantage and could result in violations of law.

10. PROTECT PROPRIETARY INFORMATION

Proprietary Company information may not be disclosed to anyone without proper authorization. Keep proprietary documents protected and secure. In the course of normal business activities, suppliers, customers and competitors may sometimes divulge to you information that is proprietary to their business. Respect these confidences.

11. OBTAIN AND USE COMPANY ASSETS WISELY

Personal use of Company property must always be in accordance with corporate policy.

Proper use of Company property, information resources, material, facilities and equipment is your responsibility. Use and maintain these assets with the utmost care and respect, guarding against waste and abuse, and never borrow or remove Company property without management's permission.

12. FOLLOW THE LAW AND USE COMMON SENSE IN POLITICAL CONTRIBUTIONS AND ACTIVITIES

We encourage our employees to become involved in civic affairs and to participate in the political process. Employees must understand, however, that their involvement and participation must be on an individual basis, on their own time and at their own expense. United States law prohibits corporations from donating corporate funds, goods, or services, directly or indirectly, to candidates for governmental offices either in the United States or China — this includes employees' work time. Local and state/provincial laws also govern political contributions and activities as they apply to their respective jurisdictions.

13.BOARD OF DIRECTORS.

The Company’s Board of Directors shall be empowered to enforce the Company’s Code of Ethics.

14. DISCIPLINARY MEASURES.

The Company shall consistently enforce its Code of Ethics through appropriate means of discipline. Violations of the Code shall be promptly reported to the Board of Directors. Pursuant to procedures adopted by it, the Board of Directors shall determine whether violations of the Code have occurred and, if so, shall determine the disciplinary measures to be taken against any employee or agent of the Company who has so violated the Code.

Any information you may have concerning any violation of this Code of Ethics should be brought to the attention of the Board of Directors. If you provide information to the Board of Directors, it will be treated in confidence. Communications to the Board of Directors should be sent to the attention of Mr. Qun Hu, being the Chairman of the Board of Directors.  You may report possible violations, and questions or comments by sending an e-mail to the email address, or anonymously by calling the number below:

Telephone:  86-21-39252120

E-mail address:  ljj.0615@163.com

The disciplinary measures, which may be invoked at the discretion of the Board of Directors, include, but are not limited to, counseling, oral or written reprimands, warnings, probation or suspension without pay, demotions, reductions in salary, termination of employment and restitution.

Persons subject to disciplinary measures shall include, in addition to the violator, others involved in the wrongdoing such as (i) persons who fail to use reasonable care to detect a violation, (ii) persons who if requested to divulge information withhold material information regarding a violation, and (iii) supervisors who approve or condone the violations or attempt to retaliate against employees or agents for reporting violations or violators.

EX-16.1

Exhibit 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

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	As of
	September 30, 2010		June 30, 2010
ASSETS
Current assets:
Cash and cash equivalents	$	894,607	$	2,786,069
Accounts receivable, net		1,431,010		1,148,177
Inventory		4,315,387		3,676,681
Other receivables, net		221,156		171,341
Value added tax recoverable		746,051		237,292
Advances to vendors		502,681		1,037,363
Prepaid expenses		82,367		52,037
Loan to non-related third parties		0		1,327,159
Total current assets		8,193,259		10,436,119
Property and equipment, net		370,614		310,280
Total Assets	$	8,563,873	$	10,746,399
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings	$	3,736,273	$	3,686,554
Accounts payable		776,480		748,310
Advance from customers		280,580		103,978
Accrued expenses and other liabilities		12,397		10,462
Taxes payable		170,163		59,578
Due to related parties		3,351,555		5,936,768
Total current liabilities		8,327,448		10,545,650
Stockholders' equity
Commom Stock, $0.129 par value, 10,000 shares authorized, 1,000 shares issued and outstanding at September 30, 2010 and June 30, 2010		129		129
Additional paid in capital		144,568		144,568
Statutory reserves		1,567		0
Retained earnings		79,537		56,876
Accumulated other comprehensive loss		10,624		(824	)
Total stockholders' equity		236,425		200,749
Total Liabilities and Stockholders' Equity	$	8,563,873	$	10,746,399

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

HONGKONG CHARTER INTERNATIONAL GROUP LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	For the three monthts ended September 30,
	2010			2009
Revenues
Automotive supplies revenue	$	2,579,911		$	800,358
Automotive maintenance service		182,382			229,530
Total revenues		2,762,293			1,029,888
Cost of revenues
Cost of supplies		2,221,670			739,194
Cost of maintenance service		10,943			14,816
Total cost of revenues		2,232,613			754,010
Gross profit		529,680			275,879
Selling, general and administrative expenses		423,556			255,422
Operating income		106,124			20,456
Other (income) expenses
Interest income		(452	)		(17	)
Interest expenses		52,607			0
Foreign currency exchange gain		(8,560	)		0
Other expenses		3,961			2,057
Total other (income) expenses		47,556			2,040
Income before income taxes		58,568			18,416
Provision for income taxes		34,340			2,766
Net income	$	24,228		$	15,650
Other comprehensive income ( loss)
Foreign currency translation gain(loss)		11,447			113
Comprehensive income	$	35,675		$	15,763
Basic and diluted income per common share
Basic	$	24.23		$	15.65
Diluted	$	24.23		$	15.65
Weighted average common shares outstanding
Basic		1,000			1,000
Diluted		1,000			1,000

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

HONGKONG CHARTER INTERNATIONAL GROUP LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	For the three monthts ended September 30,
	2010			2009
Cash flows from operating activities
Net income	$	24,228		$	15,650
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization		18,679			26,546
Allowance for doubtful accounts		(28,964	)		7,633
Inventory allowance		9,972			0
Changes in assets and liabilities:
(Increase) decrease in -
Account receivables		(236,191	)		(281,020	)
Inventory		(592,322	)		(183,097	)
Other receivables		(49,772	)		(227,859	)
Value added tax recoverable		(499,749	)		(13,081	)
Prepaid expenses		(25,594	)		(36,542	)
Advance to vendors		542,367			36,416
Increase (decrease) in -
Accounts payable		17,870			84,110
Advance from customers		173,187			(13,245	)
Accrued expenses and other liabilities		1,774			128,559
Taxes payable		108,521			(25,579	)
Net cash used in operating activities		(535,994	)		(481,510	)
Cash flows from investing activities
Purchase of Property and Equipment		(74,184	)		(159,523	)
Proceeds from loan to non-related third parties		1,329,600			0
Net cash provided by (used in) investing activities		1,255,416			(159,523	)
Cash flows from financing activities
Proceeds (payments) from (to) related parties		(2,634,648	)		698,189
Net cash provided by (used in) financing activities		(2,634,648	)		698,189
Effect of exchange rate changes on cash and cash equivalents		23,764			100
Net increase (decrease) in cash and cash equivalents		(1,891,462	)		57,256
Cash and cash equivalents, beginning of period		2,786,069			96,883
Cash and cash equivalents, end of period	$	894,607		$	154,139
Supplemental disclosures of cash flow information:
Interest paid	$	52,607		$	0
Income taxes paid	$	34,340		$	2,766

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

HONGKONG CHARTER INTERNATIONAL GROUP LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

THREE MONTHS ENDED SEPTEMBER 30, 2010

(UNAUDITED)

	Common Stock				Additional Paid in		Statutory reserves		Retained		Accumulated Other
	Shares		Amount		Capital		(Note 1)		Earnings		Comprehensive Loss			Total
Balance at June 30, 2010		1,000		129		144,568		0		56,876		(824	)		200,749
Net income for the period								1,567		22,661					24,228
Foreign currency translation adjustments										0		11,447			11,447
Balance at September 30, 2010		1,000	$	129	$	144,568	$	1,567	$	79,537	$	10,624		$	236,425

Note 1: accrued at 10% of accumulated profits

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

HONGKONG CHARTER INTERNATIONAL GROUP LIMITED

NOTES TO CONDENSED 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 (in equivalent to $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 automotive parts distribution and providing automotive maintenance services (which was temporarily suspended in August, 2010) in China. The Company distributes a broad selection of international brand names (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”).

The accompanying unaudited condensed consolidated financial statements reflect all material adjustments consisting of only normal recurring adjustments which, in the opinion of management, are necessary for a fair presentation of results for the interim periods. Certain information and footnote disclosures required under accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission, although the Company believes that the disclosures are adequate to make the information presented not misleading.  These condensed consolidated financial statements should be read in conjunction with the Management’s Discussion and Analysis and the condensed consolidated financial statements and notes thereto included in Form 8-K as filed with the Securities and Exchange Commission on November 12, 2010.

The results of operations for the three months ended September 30, 2010 are not necessarily indicative of the results to be expected for the entire year or for any other period.

NOTE 2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principle of consolidation

The accompanying condensed 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 (the “PRC 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 US GAAP, 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 advances to suppliers, and useful lives for property and equipment. Actual results could differ from those estimates.

HONGKONG CHARTER INTERNATIONAL GROUP LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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, which are not 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

EX-99.2

HONGKONG CHARTER INTERNATIONAL GROUP LIMITED

(PARENT ONLY)

CONDENSED BALANCE SHEET

AS OF SEPTEMBER 30, 2010

(UNAUDITED)

ASSETS
Cash and cash equivalents	$	16,518
Long-term investments		175,858
Total assets	$	192,376
SHAREHOLDERS' LIABILITIES AND EQUITY
Total liabilities	$	-
Stockholders' equity:
Commom Stock, $0.129 par value, 10,000 shares authorized,
1,000 shares issued and outstanding at September 30, 2010	$	129
Additional paid in capital		144,568
Retained earnings		47,679
Total shareholders' equity	$	192,376
Total liabilities and stockholders' equity	$	192,376

HONGKONG CHARTER INTERNATIONAL GROUP LIMITED

(PARENT ONLY)

CONDENSED STATEMENTS OF OPERATIONS

FOR THREE MONTHS ENDED SEPTEMBER 30, 2010

(UNAUDITED)

Revenues	$	-
Cost of revenues		-
Gross profit		-
Operating expenses
Selling, general and administrative		-
Financiall expenses		(129	)
Income (loss) before income taxes(benefits)		(129	)
Provision for income tax (benefits)		-
Net income (loss)		(129	)

HONGKONG CHARTER INTERNATIONAL GROUP LIMITED

(PARENT ONLY)

CONDENSED STATEMENTS OF CASH FLOWS

FOR THREE MONTHS ENDED SEPTEMBER 30, 2010

(UNAUDITED)

Cashflow from operating activities:
Net loss	$	(129	)
Net cash (used) / provided from operating activities		(129	)
Cash flow from investing activities
Return of equity interest investment in a subsidiary		493
Net cash (used) / provided from investing activities		493
Cash flow from financing activities
Cash contribution		-
Investment in subsidiaries		-
Net cash (used) / provided from financing activities		-
Net increase / (decrease) in cash		364
Cash and cash equivalents- Beginning of year	$	16,154
Cash and cash equivalent- End of year	$	16,518
Supplemental disclosures of cash flow information:
Interest paid	$	-
Income taxes paid	$	-

EX-99.3

Exhibit 99.3

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	2
CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2010 AND 2009	3
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED JUNE 30, 2010 AND 2009	4
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY FOR THE YEARS ENDED JUNE 30, 2010 AND 2009	5
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED JUNE 30, 2010 AND 2009	6
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	7-14

1

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

2

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

3

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

4

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

5

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

6

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”).

Note 2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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 advances to vendors and useful lives for property and equipment. Actual results could differ from those estimates.

Note 2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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.

Note 2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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 equipments, furniture and fixture and automobiles, 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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Note 2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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”) at a 17% rate on the amount of goods sold or maintenance services provided. The amount of VAT liability is determined by applying the applicable tax rate to the invoiced amount of goods sold (output VAT) or services provided  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.  The VAT collected from sales is not revenue of the company, and is recorded as a liability on the balance sheet until such VAT is paid. The Company reports revenues net of PRC’s VAT for all periods presented in the consolidated statement of operations.

The VAT collected from sales is not revenue of the company, and is recorded as a liability on the balance sheet until such VAT is paid. The company reports revenues net of PRC’s VAT for all periods presented in the consolidated statement of operations.

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Note 2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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.

Note 2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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:

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Note 2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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.

Note 3. INVENTORY

As of June 30, 2010 and 2009, the Company’s inventories are mainly composed of finished goods of automotive parts in the total amount of $3,676,681 and $1,312,007, respectively.

Note 4. OTHER RECEIVABLES, NET

Other receivables are mainly composed of advance to employees and other parties for the daily operation of business. Other receivable as of June 2010 and 2009 amounted to $171,341 and $ 30,203, net of bad debt allowance of $4,759 and $ 0, respectively.

Note 5. LOANS TO OUTSIDE PARTIES

As of June 30, 2010 and 2009, the Company had a $1,327,159 (RMB 9 Million) and $0, respectively, loan to one unrelated company, this loan is unsecured, non-interest bearing and due upon demand. This loan was subsequently collected in full in July, 2010.

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 Note 6. PROPERTY AND EQUIPMENTS

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

	As of June 30,
	2010			2009
Office equipment	$	129,981		$	31,048
Furniture and fixture		44,414			64,257
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.

Note 7.  SHORT-TERM LOAN

The Company has a loan payable in the amount of $1,474,622 to China construction bank, Qingpu branch. The loan has one year term from May 31, 2010 to May 30, 2011 at a fixed interest rate of 5.31% per year. The loan is guaranteed by a non-related third party.

On June 23, 2010, the Company signed a loan contract with China CITIC Bank for the amount of $2,211,933 (RMB 15,000,000). The loan has one year term with a variable rate, which shall increase each quarter by a compound rate of 10% over the initial annual rate of 5.31%. The loan is guaranteed by Yi Ben Ma Group, an affiliated company. Mr. Anming Yu is one of the major shareholders of Yi Ben Ma Group.

Note 8. TAXES

Corporation income tax (“CIT”)

The Company and its subsidiaries are governed by the Income Tax Law of the People’s Republic of China concerning the private-run enterprises, which are generally subject to tax at a new statutory rate of 25% on income reported in the statutory financial statements after appropriate tax adjustments.

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Note 8. TAXES (Continued)

But in 2008 and the first and second quarter of 2009, the Company was subject to a special statutory rate, which was calculated as 25% on 4% of sales after appropriate tax adjustments. The permanent difference in 2009 was due to a total net loss of $ 38,599 in the third and fourth quarter of 2008, which the Company could not deduct because of the special statutory rate. In the third and fourth quarter of 2009 and 2010, the company is subject to the tax rate of 25% on income before taxes. The permanent difference in 2010 is primarily resulted from non-deductible expense. There were no deferred income taxes for the years ended June 30, 2010 and 2009 as the Company did not recognize any temporary difference items.

The following table reconciles the statutory rates to the Company’s effective tax rate for the years ended June 30, 2010 and 2009:

	For the years ended June 30,
	2010			2009
China Statutory income tax rate		25.00	%		25.00	%
Permanent difference		(7	)%		12.00	%
Effective tax rate		25.00	%		37.00	%

For the years ended June 30, 2010 and 2009, the Company had a tax provision of $7,642 and $49,725, respectively.

Note 9.  RELATED PARTY TRANSACTIONS

As of June 30, 2010 and 2009, the Company had payable to related parties as follows:

	As of June 30,
	2010		2009
Yi Ben Ma Group	$	5,812,215	$	2,470,761
Anming Yu		72,525		69,864
Zhoufeng Shen		52,028		51,653
Total	$	5,936,768	$	2,592,278

Yi Ben Ma Group is an affiliated company, one of the major suppliers of the Company. Mr. Yu is one of the primary shareholders of Yi Ben Ma Group.  These related party loans are used by the Company as operating capital. The loans are generally unsecured, non-interest bearing and due upon demand.

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Note 9.  RELATED PARTY TRANSACTIONS (Continued)

For the years ended June 30, 2010 and 2009, the Company also had sales and purchase transactions with Yi Ben Ma Group as follows:

	For the year ended June 30,
	2010		2009
Sales to Yi Ben Ma Group	$	22,902	$	-
Purchases from Yi Ben Ma Group	$	540,031	$	117,529

Yi Ben Ma group supports the Company’s development plan by providing working capital. On May 10, 2008, Vomart obtained a three-year line of credit from YBM amounting to approximately $7.5 million (RMB 50 million). This line of credit is unsecured, non-interest bearing and due upon demand. As of June 30, 2010, the balance of borrowings from YBM was $5.8 million (RMB 39.4 million). The unused line of credit as of June 30, 2010 was $1.7 million (RMB 10.6 million).

Note 10. SEGMENT REPORTING

The Company follows FASB ASC 280 – Segment Reporting, which requires that companies disclose segment data based on how management makes decision about allocating resources to segments and evaluating their performance. The Company operates in two reportable segments; automotive supplies sales and automotive maintenance service. The accounting policies of the segments are the same as described in the summary of significant accounting policies. The Company evaluates segment performance based on gross profit from operations. The components of operating income for one segment may not be comparable to another segment. The Company’s segment information for the years ended June 30, 2009 and 2010 has been disclosed on the statements of operations.

Note 11. COMMITMENTS

From time to time, the Company leases office spaces in Shanghai, Hangzhou, Nanjing, Ningbo and Shijiazhuang in China to provide sales of automotive parts and maintenance services business. These lease agreements are short-term in nature and will expire before May 2013.

The minimum obligations under such commitments (unless otherwise stated) for the years ended June until their expiration are summarized below:

Year	Amount
2011	$	93,661
2012		33,060
2013		17,936
Total	$	144,657

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