As filed with the Securities and Exchange Commission on April 15, 2011

Registration No. 333-166658

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

AMENDMENT NO. 9
TO
FORM S-1

REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933

 

CHINA OUMEI REAL ESTATE INC.

(Exact name of registrant as specified in its charter)

Cayman Islands		6552		N/A
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification No.)

Floor 28, Block C
Longhai Mingzhu Building
No.182 Haier Road, Qingdao 266000
People’s Republic of China
(86) 532 8099 7969

(Address and telephone number of principal executive offices)

 

Mr. Zhaohui John Liang
634 Donna Ct.
River Vale, NJ 07675
(201) 497-5400

(Names, addresses and telephone numbers of agents for service)

 

Copies to:

Louis A. Bevilacqua, Esq. Thomas M. Shoesmith, Esq. Joseph R. Tiano, Jr., Esq. Pillsbury Winthrop Shaw Pittman LLP 2300 N Street, N.W. Washington, D.C. 20037 (202) 663-8000		Richard I. Anslow, Esq. Gregg E. Jaclin, Esq. Anslow & Jaclin, LLP 195 Route 9 South 2nd Floor Manalapan, NJ 07726 (732) 409-1212

 

Approximate date of commencement of proposed sale to public: From time to time after the effective date of this Registration Statement, as determined by market conditions and other factors.

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

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

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

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

If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. o

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

Large accelerated filer o		Accelerated filer o
Non-accelerated filer x		Smaller reporting company o
(Do not check if a smaller reporting company)

TABLE OF CONTENTS

CALCULATION OF REGISTRATION FEE

Title of securities to be registered		Amount to be registered(1)				Proposed maximum offering price per share				Proposed maximum aggregate offering price				Amount of registration fee
Primary Offering:
Ordinary Shares, $0.002112 par value per share			4,600,000			$	6.00			$	27,600,000	(2)		$	2,175	(3)
Secondary Offering:
Ordinary Shares, $0.002112 par value per share			765,000	(6)		$	4.00	(4)		$	3,060,000			$	219
Ordinary Shares Underlying 6% Convertible Preference Shares, $0.002112 par value per share			2,774,700	(7)		$	4.00	(4)		$	11,098,800			$	792
Ordinary Shares Underlying Warrants, $0.002112 par value per share			1,387,350	(8)		$	6.00	(5)		$	8,324,100			$	594
Ordinary Shares Underlying Warrants, $0.002112 par value per share			138,735	(9)		$	5.00	(5)		$	693,675			$	50
TOTAL										$	50,776,575			$	3,830	(10)

 

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

TABLE OF CONTENTS

EXPLANATORY NOTE

This Registration Statement contains two prospectuses, as set forth below.

The Resale Prospectus is substantively identical to the Public Offering Prospectus, except for the following major items:

We have included in this Registration Statement, after the financial statements, a set of alternate pages to reflect the foregoing differences of the Resale Prospectus as compared to the Public Offering Prospectus.

TABLE OF CONTENTS

The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the Securities and Exchange Commission declares our registration statement effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to completion, dated April 15, 2011

4,000,000 Ordinary Shares

 

We are offering 4,000,000 ordinary shares.

We currently anticipate that the public offering price of our ordinary shares will be between $4.00 and $6.00 per share.

Our ordinary shares are not currently listed or quoted for trading on any national securities exchange or national quotation system. We have applied to have our ordinary shares listed on the NASDAQ Global Market under the symbol “OMEI”.

Investing in our ordinary shares involves a high degree of risk. See “Risk Factors” beginning on page 9.

		Per Share				Total
Public offering price		$				$
Underwriting discount		$				$
Proceeds, before expenses, to China Oumei Real Estate Inc.		$				$

We have granted the underwriters a 45-day option to purchase up to 600,000 additional ordinary shares from us at the public offering price, less the underwriting discount and commissions.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The ordinary shares are expected to be delivered on or about         , 2011.

 

Brean Murray, Carret & Co.		Maxim Group LLC
Chardan Capital Markets, LLC

The date of this prospectus is         , 2011.

TABLE OF CONTENTS

CHINA OUMEI REAL ESTATE INC.
  
TABLE OF CONTENTS

		Page
PROSPECTUS SUMMARY			1
RISK FACTORS			9
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS			23
USE OF PROCEEDS			24
MARKET PRICE AND DIVIDENDS ON OUR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS			25
DIVIDEND POLICY			25
CAPITALIZATION			26
DILUTION			27
EXCHANGE RATE INFORMATION			28
SELECTED CONSOLIDATED FINANCIAL DATA			29
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			33
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK			49
BUSINESS			50
HISTORY AND CORPORATE STRUCTURE			78
MANAGEMENT			82
EXECUTIVE COMPENSATION			88
TRANSACTIONS WITH RELATED PERSONS, PROMOTERS AND CERTAIN CONTROL PERSONS; CORPORATE GOVERNANCE			95
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT			97
DESCRIPTION OF SECURITIES			100
SHARES ELIGIBLE FOR FUTURE SALE			107
UNDERWRITING			108
LEGAL MATTERS			116
EXPERTS			116
ADDITIONAL INFORMATION			116
FINANCIAL STATEMENTS			F-1

You should rely only on the information provided in this prospectus. Neither we nor the selling stockholders have authorized anyone to provide you with additional or different information. The selling stockholders are not making an offer of these securities in any jurisdiction where the offer is not permitted. You should assume that the information in this prospectus is accurate only as of the date on the front of the document.

TABLE OF CONTENTS

PROSPECTUS SUMMARY

The items in the following summary are described in more detail later in this prospectus. Therefore, you should also read the more detailed information set out in this prospectus, including the financial statements, the notes thereto and matters set forth under “Risk Factors.”

Except as otherwise indicated by the context, references in this prospectus to “we,” “us,” “our,” “our Company,” or “the Company” are to the combined business of China Oumei Real Estate Inc., a Cayman Islands company, and its consolidated subsidiaries, Leewell, Oumei, Oumei Weiye, Caoxian Industrial, Longhai Hotel, Longhai Real Estate, Qingdao Xudong, Weifang Longhai Industry, Weifang Longhai Zhiye, Weifang Qilu, Weihai Economic and Weihai Mingwei.

In addition, unless the context otherwise requires and for the purposes of this prospectus only:

TABLE OF CONTENTS

In this prospectus we are relying on and we refer to information and statistics regarding the real estate industry in China that we have obtained from various cited public sources. Any such information is publicly available for free and has not been specifically prepared for us for use or incorporation in this prospectus or otherwise.

In addition, at present, there is no uniform standard to categorize the different types and sizes of cities in China. In this prospectus, we refer to Beijing, Shanghai, Guangzhou and Shenzhen as tier one cities, which are the most populous, affluent and competitive cities in the country. They also represent the highest standard and concentration of real estate development activities in China. Tier two cities are cities that generally meet the following criteria, excluding the four aforementioned tier one cities:

Tier three cities are the cities that do not meet one or more criteria listed above.

TABLE OF CONTENTS

The Company

Overview of Our Business

We are one of the leading real estate development companies located in Qingdao, Shandong province, China. We began operations in 2001, and in 2010 we were recognized in the official City of Qingdao Commission of Development & Construction’s evaluation as one of the ten most outstanding real estate developers in Qingdao, measured by a combination of revenue, customer satisfaction, as well as several other factors.

We develop and sell residential and commercial properties, targeting middle and upper income customers in the coastal region of the Shandong peninsula (Greater Qingdao) located in northeastern China, including the cities of Qingdao, Weihai and Yantai, as well as other inland locations, such as Weifang.

Since our inception, we have completed 17 projects having a gross floor area, or GFA, of 1,462,126 square meters, of which approximately 95% has been sold. In addition, we have six projects under construction with a total GFA of 508,342 square meters.

In the fiscal year ended December 25, 2010, our total sales increased 17.2% to $110.5 million from $94.3 million in fiscal year 2009, and our net income increased 65.2% to $34.9 million in fiscal year 2010 from $21.2 million in fiscal year 2009.

Our Competitive Strengths

We believe the following strengths allow us to compete effectively in the Chinese real estate development industry:

TABLE OF CONTENTS

Our Growth Strategy

We intend to increase our market share in the Shandong Province and in other provinces in China by pursuing the following strategies:

Our Corporate History and Background

We were organized under the laws of the Cayman Islands on March 10, 2006 as a blank check development stage company formed for the purpose of acquiring an operating business, through a stock exchange, asset acquisition or similar business combination. From our inception until we completed our reverse acquisition of Leewell on April 14, 2010, our operations consisted entirely of identifying, investigating and conducting due diligence on potential businesses for acquisition.

On April 14, 2010, we completed a reverse acquisition transaction through a share exchange with Leewell whereby we acquired 100% of the issued and outstanding capital stock of Leewell. As a result of the reverse acquisition, Leewell became our wholly-owned subsidiary and Longhai Holdings Company Limited, or Longhai Holdings, the former shareholder of Leewell, became our controlling shareholder. The share exchange transaction with Leewell was treated as a reverse acquisition, with Leewell as the acquirer and China Oumei Real Estate Inc. as the acquired party.

On April 14, 2010, we also completed a private placement transaction with a group of accredited investors. Pursuant to a subscription agreement with the investors, or the Subscription Agreement, we issued to the investors an aggregate of 2,774,700 units, or the Units, for a purchase price of $11,098,800, or $4.00 per Unit. Each Unit consists of one Preference Share, and one warrant to purchase 0.5 ordinary shares, or the Warrants. See “History and Corporate Structure” below for a detailed description of the reverse acquisition and the private placement transaction.

TABLE OF CONTENTS

Our Corporate Structure

All of our business operations are conducted through our Chinese subsidiaries. The chart below presents our corporate structure:

Office Location

Our principal business office is located in China at Floor 28, Block C Longhai Mingzhu Building, No. 182 Haier Road, Qingdao 266000. The telephone number at our executive offices is (86) 532 8099 7969. Our registered office is PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands and our registered agent is Maples Corporate Services Limited. We maintain a website at http://www.chinaoumeirealestate.com that contains information about our company, but that information is not part of this prospectus.

Our Filing Status

We believe that we are qualified as a “foreign private issuer” as defined under Rule 3b-4 of the Exchange Act. As of the last business day of our most recently completed second fiscal quarter of 2010, the majority of our executive officers and directors were citizens or residents of countries other than the U.S. and a majority of our issued and outstanding voting securities were held by Longhai Holdings, a BVI company. In addition, more than 50% of our assets were located in the PRC where our business was principally administered. As a result, we expect to use the disclosure forms for foreign private issuers under the Exchange Act starting in our 2011 fiscal year. Since we initially filed this registration statement on Form S-1, we will continue to utilize Form S-1 for this offering instead of utilizing Form F-1.

TABLE OF CONTENTS

The Offering

TABLE OF CONTENTS

Summary Consolidated Financial Information

The following selected historical financial information should be read in conjunction with our consolidated financial statements and related notes and the information contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” below. The selected consolidated statement of operations data for the years ended December 25, 2008, 2009 and 2010 and the selected balance sheet data as of December 25, 2009 and 2010 are derived from our audited consolidated financial statements included elsewhere in this prospectus. The selected balance sheet data as of December 25, 2008 are derived from our unaudited consolidated financial statements not included in this prospectus.

Our audited consolidated financial statements for the fiscal years ended December 25, 2008, 2009 and 2010 are prepared and presented in accordance with generally accepted accounting principles in the United States, or U.S. GAAP. The selected financial data information is only a summary and should be read in conjunction with the historical consolidated financial statements and related notes contained elsewhere herein. The financial statements contained elsewhere fully represent our financial condition and operations; however, they are not indicative of our future performance.

		Fiscal Year Ended December 25,
U.S. dollars, except shares		2008				2009				2010
Statements of Operations Data
Total sales		$	77,032,561			$	94,315,500			$	110,518,421
Total cost of sales			(46,321,251	)			(58,296,408	)			(77,209,814	)
Gross profit			30,711,310				36,019,092				33,308,607
Advertising expenses			(112,263	)			(268,222	)			(217,596	)
Commission expenses			(574,262	)			(84,982	)			(214,566	)
Selling expenses			(81,415	)			(49,800	)			(61,967	)
Bad debt recovery (expense)			(1,198,942	)			(207,523	)			987,374
General and administrative expenses			(2,283,744	)			(4,655,596	)			(7,390,963	)
Income from operations			26,460,684				30,752,969				26,410,889
Miscellaneous income (expense)(1)			91,945				327,294				23,899,865
Income before income taxes and extraordinary item			25,583,919				30,213,512				49,984,785
Income taxes			(6,602,194	)			(9,058,226	)			(15,042,327	)
Income before extraordinary item			18,981,725				21,155,286				34,942,458
Extraordinary item, net			12,499,576				—				—
Net income		$	31,481,301			$	21,155,286			$	34,942,458
Earnings per common share basic		$	1.04			$	0.70			$	1.14
Earnings per common share diluted		$	1.04			$	0.70			$	1.07
Weighted average common shares outstanding basic			30,235,062				30,235,062				30,770,172
Weighted average common shares outstanding diluted			30,235,062				30,235,062				32,708,661

TABLE OF CONTENTS

		As of December 25,
		2008				2009				2010 Actual				2010 As Adjusted(1)
		(unaudited)												(unaudited)
Balance Sheet Data
Working capital		$	18,831,257			$	44,207,072			$	102,581,083			$	120,681,083
Total assets			178,648,355				196,332,843				260,120,259				278,220,259
Total liabilities			115,401,647				101,981,897				115,479,273				115,479,273
Stockholders’ equity			63,246,708				94,350,946				144,640,986				162,740,987

TABLE OF CONTENTS

RISK FACTORS

The ordinary shares being offered by us are highly speculative in nature, involve a high degree of risk and should be purchased only by persons who can afford to lose the entire amount invested in our ordinary shares. Before purchasing any of our ordinary shares, you should carefully consider the following factors relating to our business and prospects. You should pay particular attention to the fact that we conduct all of our operations in China and are governed by a legal and regulatory environment that in some respects differs significantly from the environment that may prevail in the U.S. and other countries. If any of the following risks actually occurs, our business, financial condition or operating results will suffer, the trading price of our ordinary shares could decline, and you may lose all or part of your investment.

RISKS RELATED TO OUR BUSINESS

The recent financial crisis could negatively affect our business, results of operations, and financial condition.

The recent credit crisis and turmoil in the global financial system may have an impact on our business and our financial condition, and we may face challenges if conditions in the financial markets do not improve. Our ability to access the capital markets may be restricted at a time when we would like, or need, to raise capital, which could have an impact on our flexibility to react to changing economic and business conditions. Our business requires access to substantial financing. If we are not able to obtain adequate financing in a timely manner, our ability to complete existing projects and expand our business could be materially adversely affected. In addition, these economic conditions also impact levels of consumer spending, which have recently deteriorated significantly and may remain depressed for the foreseeable future. Real estate market generally declines during recessionary periods and other periods where disposable income is adversely affected. If demand for our products fluctuates as a result of economic conditions or otherwise, our revenue and gross margin could be harmed.

Our business is susceptible to fluctuations in the real estate market of China, especially in certain areas of eastern China where our operations are concentrated, which may adversely affect our sales and results of operations.

Our business depends substantially on the conditions of the PRC real estate market. Demand for real estate in China has grown rapidly in the recent decade but such growth is often coupled with volatility in market conditions and fluctuations in real estate prices. For example, the rapid expansion of the real estate market in major provinces and cities in China in the early 1990s, such as Shanghai, Beijing and Guangdong province, led to an oversupply in the mid-1990s and a corresponding fall in real estate values and rentals in the second half of the decade. Following a period of rising real estate prices and transaction volume in most major cities, the industry experienced a severe downturn in 2008, with transaction volume in many major cities declining by more than 40% compared to 2007.

Average selling prices also declined in many cities during 2008. Fluctuations of supply and demand in China’s real estate market are caused by economic, social, political and other factors. To the extent fluctuations in the real estate market adversely affect real estate transaction volumes or prices, our financial condition and results of operations may be materially and adversely affected.

We are heavily dependent on the performance of the residential property market in China, which is at a relatively early development stage.

The residential property industry in the PRC is still in a relatively early stage of development. Although demand for residential property in the PRC has been growing rapidly in recent years, such growth is often coupled with volatility in market conditions and fluctuation in property prices. It is extremely difficult to predict how much and when demand will develop, as many social, political, economic, legal, and other factors, most of which are beyond our control, may affect the development of the market. The level of uncertainty is increased by the limited availability of accurate financial and market information and the overall low level of transparency in the PRC, especially in tier-two cities that have lagged in progress in these aspects when compared to tier-one cities.

TABLE OF CONTENTS

The lack of a liquid secondary market for residential property may discourage investors from acquiring new properties. The limited amount of property mortgage financing available to PRC individuals may further inhibit demand for residential developments.

The PRC government has recently introduced certain policy and regulatory measures to control the rapid increase in housing prices and cool down the real estate market and our business may be materially and adversely affected by these government measures.

Since the second half of 2009, the PRC real estate market has experienced strong recovery from the financial crisis and housing prices rose rapidly in certain cities. In response to concerns over the scale of the increase in property investments, the PRC government has implemented measures and introduced policies to curtail property speculation and promote the healthy development of the real estate industry in China. On January 7, 2010, the PRC State Council issued a circular to control the rapid increase in housing prices and cool down the real estate market in China. It reiterated that the purchasers of a second residential property for their households must make down payments of no less than 40% of the purchase price and real estate developers must commence the sale within the mandated period as set forth in the pre-sale approvals and at the publicly announced prices. The circular also requested the local government to increase the effective supply of low-income housing and ordinary commodity housing and instructed the People’s Bank of China, or PBOC, and the China Bank Regulatory Commission to tighten the supervision of the bank lending to the real estate sector and mortgage financing. On February 25, 2010, the PBOC increased the reserve requirement ratio for commercial banks by 0.5% to 16.5% and has further increased it from 16.5% to 17.0% effective May 10, 2010. Further, in order to implement the requirements set out in the State Council’s circular, the Ministry of Land and Resources, or the MLR, issued a notice on March 8, 2010 in relation to increasing the supply of, and strengthening the supervision over, land for real estate development purposes. MLR’s notice stipulated that the floor price of a parcel of land must not be lower than 70% of the benchmark land price set for the area in which the parcel is located, and that real estate developers participating in land auctions must pay a deposit equivalent to 20% of the land parcel’s floor price.

In April 2010, the PRC State Council issued a further circular, which provided as follows: purchasers of a first residential property for their households with a gross floor area of greater than 90 square meters must make down payments of no less than 30% of the purchase price; purchasers of a second residential property for their households must make down payments of no less than 50% of the purchase price and the interest rate of any mortgage for such property must equal at least the benchmark interest rate plus 10%; and for purchasers of a third residential property, both the minimum down payment amount and applied interest rate must be significantly higher than the relevant minimum down payment and interest rate which would have been applicable prior to the issuance of the circular (the specific figures shall be decided by the relevant bank on a case-by-case based on the principle of proper risk management). Moreover, the circular provided that banks can decline to provide mortgage financing to either a purchaser of a third residential property or a non-resident purchaser.

It is possible that the government agencies may adopt further measures to implement the policies outlined in the January and April circulars. The full effect of the circulars on the real estate industry and our business will depend in large part on the implementation and interpretation of the circulars by governmental agencies, local governments and banks involved in the real estate industry. The PRC government’s policies and regulatory measures on the PRC real estate sector could limit our access to required financing and other capital resources, adversely affect the property purchasers’ ability to obtain mortgage financing or significantly increase the cost of mortgage financing, reduce market demand for our properties and increase our operating costs. We cannot be certain that the PRC government will not issue additional and more stringent regulations or measures or that agencies and banks will not adopt restrictive measures or practices in response to PRC governmental policies and regulations, which could substantially reduce pre-sales of our properties and cash flow from operations and substantially increase our financing needs, which would in turn materially and adversely affect our business, financial condition, results of operations and prospects.

TABLE OF CONTENTS

Our sales will be affected if mortgage financing becomes more costly or otherwise becomes less attractive.

Substantially all purchasers of our residential properties rely on mortgages to fund their purchases. An increase in interest rates may significantly increase the cost of mortgage financing, thus affecting the affordability of residential properties. In 2008, PBOC changed the lending rates five times. The benchmark lending rate for loans with a term of over five years, which affects mortgage rates, was increased to 5.94% on December 31, 2008. The PRC government and commercial banks may also increase the down payment requirement, impose other conditions or otherwise change the regulatory framework in a manner that would make mortgage financing unavailable or unattractive to potential property purchasers. If the availability or attractiveness of mortgage financing is reduced or limited, many of our prospective customers may not be able to purchase our properties and, as a result, our business, liquidity and results of operations could be adversely affected.

If we are prevented from guaranteeing loans to prospective home purchasers, our sales and pre-sales may decline.

In line with industry practice, we provide guarantees to PRC banks with respect to loans procured by the purchasers of our properties, in the form of a transfer of 5% of the home purchasers’ loan amount from our bank account to a bank designated account, as collateral for the home purchasers’ timely debt service payments. The bank will release these deposits after construction is completed, final deliveries are made, and home purchasers have obtained the ownership documents necessary to secure a mortgage loan. If there are changes in laws, regulations, policies, and practices that would prohibit property developers from providing guarantees to banks in respect of mortgages offered to property purchasers and as a result, banks would not accept any alternative guarantees by third parties, or if no third party is available or willing in the market to provide such guarantees, it may become more difficult for property purchasers to obtain mortgages from banks and other financial institutions during sales and pre-sales of our properties. Such difficulties in financing could result in a substantially lower rate of sale and pre-sale of our properties, which would adversely affect our cash flow, financial condition, and results of operations. We are not aware of any impending changes in laws, regulations, policies, or practices that will prohibit such practice in China. However, there can be no assurance that such changes in laws, regulations, policies, or practices will not occur in China in the future.

We may be unable to acquire land use rights from the government through Longhai Group as we currently do which could increase our cost of sales.

Our revenue depends on the completion and sale of our projects, which in turn depends on our ability to acquire land use rights for such projects. Our land use rights costs are a major component of our cost of real estate sales and increases in such costs could diminish our gross margin. From time to time, we acquire our land use rights through companies owned by Longhai Group, a company wholly-owned by Mr. Antoine Cheng, our Chairman. Longhai Group’s primary business is infrastructure and building construction. Through its infrastructure construction business, Longhai Group works with local governments and often finances (by agreeing to be paid sometime following the completion of construction instead of being paid as construction progresses) the government’s public infrastructure projects that can include old city relocation projects. In exchange for such financing, the local governments invite Longhai Group to bid for premium parcels of land for residential use at public auction as a preferred candidate or grant Longhai Group the right of first refusal to bid for industrial parcels for which the Longhai Group already has land use rights, but whose use has been changed to real estate development. Since Longhai Group does not have the necessary license to engage in residential development in China, it typically sold companies owning these land use rights to us so that we could develop these parcels using our real estate development license.

Although we believe that the aforementioned way in which Longhai Group obtains land use rights is consistent with the PRC government’s long-term policy to develop healthy real estate market, we cannot assure you that the local government will continue to provide Longhai Group land use rights in this way in the future. If this happens, we will have to acquire our land use rights primarily through a public tender, auction or listing-for-sale. Competition in these bidding processes can result in higher land use rights costs for us. In addition, we may not successfully obtain desired land use rights at commercially reasonable costs due to the increasingly intense competition in the bidding processes. We may also need to acquire land use rights through acquisition, which could increase our costs.

TABLE OF CONTENTS

We have significant short-term debt obligations, which mature in less than one year. Failure to extend those maturities of, or to refinance, that debt could result in defaults, and in certain instances, foreclosures on our assets. Moreover, we may be unable to obtain financing to fund ongoing operations and future growth.

The real estate development industry is capital intensive, and development requires significant up-front expenditures to acquire land and begin development. Accordingly, we incur substantial indebtedness to finance our development activities.

At December 25, 2010, we had short-term bank loans outstanding of $1,417,264, long-term bank loans of $35,414,500 maturing within one year, long-term bank loans of $0 maturing in more than one year, and notes payable of $0, which were secured by our land use rights and projects under construction. Failure to obtain extensions of the maturity dates of, or to refinance, these obligations or to obtain additional equity financing to meet these debt obligations would result in an event of default with respect to such obligations and could result in the foreclosure on the collateral. The sale of such collateral at foreclosure would significantly disrupt our business, which could significantly lower our sales and profitability. We may be able to refinance or obtain extensions of the maturities of all or some of such debt only on terms that significantly restrict our ability to operate, including terms that place additional limitations on our ability to incur other indebtedness, to pay dividends, to use our assets as collateral for other financing, to sell assets or to make acquisitions or enter into other transactions. Such restrictions may adversely affect our ability to finance our future operations or to engage in other business activities. If we finance the repayment of our outstanding indebtedness by issuing additional equity or convertible debt securities, such issuances could result in substantial dilution to our stockholders.

While we believe that our revenue growth projections and our ongoing cost controls will allow us to generate cash and achieve profitability in the foreseeable future, there is no assurance as to when or if we will be able to achieve our projections. Our future cash flows from operations, combined with our accessibility to cash and credit, may not be sufficient to allow us to finance ongoing operations or to make required investments for future growth. We may need to seek additional credit or access capital markets for additional funds. There is no assurance that we would be successful in this regard.

Our practice of pre-selling projects may expose us to substantial liabilities.

It is common practice by property developers in China, including us, to pre-sell properties (while still under construction), which involves certain risks. For example, we may fail to complete a property development that may have been fully or partially pre-sold, which would leave us liable to purchasers of pre-sold units for losses suffered by them without adequate resources to pay the liability if funds have been used on the project. In addition, if a pre-sold property development is not completed on time, the purchasers of pre-sold units may be entitled to compensation for late delivery. If the delay extends beyond a certain period, the purchasers may be entitled to terminate the pre-sale agreement and pursue a claim for damages that exceeds the amount paid and our ability to recoup the resulting liability from future sales.

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.

TABLE OF CONTENTS

We are dependent on third-party subcontractors, manufacturers, and distributors for all architecture, engineering and construction services, and construction materials. A discontinued supply of such services and materials will adversely affect our projects.

We are dependent on third-party subcontractors, manufacturers, and distributors for all architecture, engineering and construction services, and construction materials. Services and materials purchased from our five largest subcontractors or suppliers accounted for 86.9% for the year ended December 25, 2010. A discontinued supply of such services and materials will adversely affect our construction projects and the success of the Company.

We are subject to extensive government regulation that could cause us to incur significant liabilities or restrict our business activities.

Regulatory requirements could cause us to incur significant liabilities and operating expenses and could restrict our business activities. We are subject to statutes and rules regulating, among other things, certain developmental matters, building and site design, and matters concerning the protection of health and the environment. Our operating expenses may be increased by governmental regulations, such as building permit allocation ordinances and impact and other fees and taxes, that may be imposed to defray the cost of providing certain governmental services and improvements. Any delay or refusal from government agencies to grant us necessary licenses, permits, and approvals could have an adverse effect on our operations.

We depend on the availability of additional human resources for future growth.

We are currently experiencing a period of significant growth in our sales volume. We believe that continued expansion is essential for us to remain competitive and to capitalize on the growth potential of our business. Such expansion may place a significant strain on our management and operations and financial resources. As our operations continue to grow, we will have to continually improve our management, operational, and financial systems, procedures and controls, and other resources infrastructure, and expand our workforce. There can be no assurance that our existing or future management, operating and financial systems, procedures, and controls will be adequate to support our operations, or that we will be able to recruit, retain, and motivate our employees. Further, there can be no assurance that we will be able to establish, develop, or maintain the business relationships beneficial to our operations, or to do so or to implement any of the above activities in a timely manner. Failure to manage our growth effectively could have a material adverse effect on our business and the results of our operations and financial condition.

We may be adversely affected by the fluctuation in raw material prices and selling prices of our products.

The land and raw materials used in our projects have experienced significant price fluctuations in the past. There is no assurance that they will not be subject to future price fluctuations or pricing control. The land and raw materials used in our projects may experience price volatility caused by events such as market fluctuations or changes in governmental programs. The market price of land and raw materials may also experience significant upward adjustment, if, for instance, there is a material under-supply or over-demand in the market. These price changes may ultimately result in increases in the selling prices of our products, and may, in turn, adversely affect our sales volume, sales, operating income, and net income.

We face intense competition from other real estate developers.

The property industry in the PRC is highly competitive. In the tier-two cities we focus on, local and regional property developers are our major competitors, and an increasing number of large state-owned and private national property developers have started entering these markets. Many of our competitors, especially the state-owned and private national property developers, are well capitalized and have greater financial, marketing, and other resources than we have. Some also have larger land banks, greater economies of scale, broader name recognition, a longer track record, and more established relationships in certain markets. In addition, the PRC government’s recent measures designed to reduce land supply further increased competition for land among property developers.

TABLE OF CONTENTS

Competition among property developers may result in increased costs for the acquisition of land for development, increased costs for raw materials, shortages of skilled contractors, oversupply of properties, decrease in property prices in certain parts of the PRC, a slowdown in the rate at which new property developments will be approved and/or reviewed by the relevant government authorities and an increase in administrative costs for hiring or retaining qualified personnel, any of which may adversely affect our business and financial condition. Furthermore, property developers that are better capitalized than we are may be more competitive in acquiring land through the auction process. If we cannot respond to changes in market conditions as promptly and effectively as our competitors, or effectively compete for land acquisition through the auction systems and acquire other factors of production, our business and financial condition will be adversely affected.

In addition, risk of property over-supply is increasing in parts of China, where property investment, trading and speculation have become overly active. We are exposed to the risk that in the event of actual or perceived over-supply, property prices may fall drastically, and our revenue and profitability will be adversely affected.

We may have to suffer monetary losses by reducing up to $0.80 of the excise price of the warrants that we issued to our investors in the April 2010 private placement since the registration statement of which this prospectus is a part has not been declared effective within the time periods specified.

In connection with the April 2010 private placement described above, we entered into a Subscription Agreement. Under the terms of the Subscription Agreement, if this registration statement is not declared effective by the SEC within 180 days following the closing of the April 2010 private placement, then we are required to pay the investors, as liquidated damages, 1.0% of the amount invested for each 30-day period during which such failure continues, for up to a maximum of 10% of each investor’s investment pursuant to the Subscription Agreement. On October 11, 2010, we entered into Amendment No. 1 to the Subscription Agreement with certain investors, pursuant to which we amended Section 8.1 of the Subscription Agreement with respect to the liquidated damages that we may be liable for. Pursuant to Amendment No. 1, in lieu of the cash liquidated damages amount that would otherwise have been payable by us for our failure to cause this registration statement to be declared effective within the prescribed period, we are required to reduce the initial exercise price of the warrants issued to each investor by $0.08 per calendar month, or portion thereof, until such time that this registration statement is declared effective by the SEC; provided that, in no event will we be obligated to reduce the initial exercise price of the warrants by more than $0.80 in aggregate. We have failed to cause this registration statement to be declared effective by the SEC with the prescribed period. There can be no assurance that this registration statement will be declared effective by the SEC in the coming future. Therefore, we may have to suffer monetary losses by reducing up to $0.80 of the exercise price of the warrants.

We could be adversely affected by the occurrence of natural disasters.

From time to time, our developed sites may experience strong winds, storms, flooding and earth quakes. Natural disasters could impede operations, damage infrastructure necessary to our constructions and operations. The occurrence of natural disasters could adversely affect our business, the results of our operations, prospects and financial condition.

We have limited insurance coverage against damages or loss we might suffer.

The insurance industry in China is still in an early stage of development and business interruption insurance available in China offers limited coverage compared to that offered in many developed countries. We carry insurance for potential liabilities related to our vehicles, but we do not carry business interruption insurance and therefore any business disruption or natural disaster could result in substantial damages or losses to us. In addition, there are certain types of losses (such as losses from forces of nature) that are generally not insured because either they are uninsurable or insurance cannot be obtained on commercially reasonable terms. Should an uninsured loss or a loss in excess of insured limits occur, our business could be materially adversely affected. If we were to suffer any losses or damages to our properties, our business, financial condition and results of operations would be materially and adversely affected.

TABLE OF CONTENTS

Our operating subsidiaries must comply with environmental protection laws that could adversely affect our profitability.

We are required to comply with the environmental protection laws and regulations promulgated by the national and local governments of the PRC. Some of these regulations govern the level of fees payable to government entities providing environmental protection services and the prescribed standards relating to construction. Although our construction technologies allow us to efficiently control the level of pollution resulting from our construction process, due to the nature of our business, wastes are unavoidably generated in the processes. If we fail to comply with any of these environmental laws and regulations in the PRC, depending on the types and seriousness of the violation, we may be subject to, among other things, warning from relevant authorities, imposition of fines, specific performance and/or criminal liability, forfeiture of profits made, or an order to close down our business operations and suspension of relevant permits.

Our business depends substantially on the continuing efforts of our senior executives and other key personnel, and our business may be severely disrupted if we lost their services.

Our future success heavily depends on the continued service of our senior executives and other key employees. In particular, we rely on the expertise and experience of Mr. Antoine Cheng, our Chairman, Mr. Weiqing Zhang, our Chief Executive Officer, Mr. Zhaohui John Liang, our Chief Financial Officer, and Mr. Yang Chen, our President. If one or more of our senior executives are unable or unwilling to continue to work for us in their present positions, we may have to spend a considerable amount of time and resources searching, recruiting, and integrating the replacements into our operations, which would substantially divert management’s attention from our business and severely disrupt our business. This may also adversely affect our ability to execute our business strategy. Moreover, if any of our senior executives joins a competitor or forms a competing company, we may lose customers, suppliers, know-how, and key employees.

We may be exposed to potential risks relating to our internal controls over financial reporting and our ability to have those controls attested to by our independent auditors. In particular, we may have potential material weaknesses or significant deficiencies in our internal controls over financial reporting due to our accounting staff’s relative lack of experience and knowledge of U.S. GAAP. If we are unable to receive a positive attestation from our independent auditors with respect to our internal controls when we are required under applicable laws, investors and others may lose confidence in the reliability of our financial statements which could affect the trading price of our stock.

Our management is responsible for establishing and maintaining adequate internal controls over financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with U.S. GAAP.

As directed by Section 404 of the Sarbanes-Oxley Act of 2002, or SOX 404, the SEC adopted rules requiring public companies to include a report of management on their internal controls over financial reporting in their annual reports. In addition, the independent registered public accounting firm auditing the financial statements of a company that is not a non-accelerated filer under Rule 12b-2 of the Exchange Act must also attest to the operating effectiveness of the company’s internal controls. Since we just completed the reverse acquisition of Leewell on April 14, 2010, we have not evaluated Leewell and its consolidated subsidiaries’ internal control systems in order to allow our management to report on our internal controls on a consolidated basis as required by these requirements of SOX 404. Under current law, we will be required to complete such evaluation and include the report of management in our annual report for the fiscal year ending December 25, 2010.

We can provide no assurance that our management will conclude that our internal controls over financial reporting are effective, or that our independent registered public accounting firm will issue a positive opinion on our internal controls over financial reporting when we are required under applicable laws. In particular, we may have potential material weaknesses or significant deficiencies in our internal controls over financial reporting due to our accounting staff’s relative lack of experience and knowledge of U.S. GAAP. Our accounting staff (other than our Chief Financial Officer), including the director of our accounting department,

TABLE OF CONTENTS

have limited experience in preparing financial statements in accordance with U.S. GAAP and will require additional training and assistance in U.S. GAAP. We may also need to hire additional personnel who are experienced in U.S. GAAP.

Failure to achieve and maintain an effective internal control environment could result in our not being able to accurately report our financial results, prevent or detect fraud or provide timely and reliable financial and other information pursuant to the reporting obligations we have as a public company, which could have a material adverse effect on our business, financial condition and results of operations. Further, it could cause our investors to lose confidence in the information we report, which could adversely affect the price of our stock price.

RISKS RELATED TO DOING BUSINESS IN CHINA

Uncertainties with respect to the PRC legal system could limit the legal protections available to you and us.

We conduct substantially all of our business through our operating subsidiaries in the PRC. Our operating subsidiaries are generally subject to laws and regulations applicable to foreign investments in China and, in particular, laws applicable to foreign-invested enterprises. The PRC legal system is based on written statutes, and prior court decisions may be cited for reference but have limited precedential value. Since 1979, a series of new PRC laws and regulations have significantly enhanced the protections afforded to various forms of foreign investments in China. However, since the PRC legal system continues to evolve rapidly, the interpretations of many laws, regulations, and rules are not always uniform, and enforcement of these laws, regulations, and rules involve uncertainties, which may limit legal protections available to you and us. In addition, any litigation in China may be protracted and result in substantial costs and diversion of resources and management attention. In addition, most of our executive officers and directors are residents of China and not of the United States, and substantially all the assets of these persons are located outside the United States. As a result, it could be difficult for investors to affect service of process in the United States or to enforce a judgment obtained in the United States against our Chinese operations and subsidiaries.

You may have difficulty enforcing judgments against us.

Most of our assets are located outside of the United States and most of our current operations are conducted in the PRC. In addition, most of our directors and officers are nationals and residents of countries other than the United States. A substantial portion of the assets of these persons is located outside the United States. As a result, it may be difficult for you to effect service of process within the United States upon these persons. It may also be difficult for you to enforce in U.S. courts judgments on the civil liability provisions of the U.S. federal securities laws against us and our officers and directors, most of whom are not residents in the United States and the substantial majority of whose assets are located outside of the United States. In addition, there is uncertainty as to whether the courts of the PRC would recognize or enforce judgments of U.S. courts. Our counsel as to PRC law, has advised us that the recognition and enforcement of foreign judgments are provided for under the PRC Civil Procedures Law. Courts in China may recognize and enforce foreign judgments in accordance with the requirements of the PRC Civil Procedures Law based on treaties between China and the country where the judgment is made or on reciprocity between jurisdictions. China does not have any treaties or other arrangements that provide for the reciprocal recognition and enforcement of foreign judgments with the United States. In addition, according to the PRC Civil Procedures Law, courts in the PRC will not enforce a foreign judgment against us or our directors and officers if they decide that the judgment violates basic principles of PRC law or national sovereignty, security, or the public interest. So it is uncertain whether a PRC court would enforce a judgment rendered by a court in the United States.

The PRC government exerts substantial influence over the manner in which we must conduct our business activities.

The PRC government has exercised and continues to exercise substantial control over virtually every sector of the Chinese economy through regulation and state ownership. Our ability to operate in China may be harmed by changes in its laws and regulations, including those relating to taxation, import and export tariffs, environmental regulations, land use rights, property, and other matters. We believe that our operations in China are in material compliance with all applicable legal and regulatory requirements. However, the central

TABLE OF CONTENTS

or local governments of the jurisdictions in which we operate may impose new, stricter regulations or interpretations of existing regulations that would require additional expenditures and efforts on our part to ensure our compliance with such regulations or interpretations.

Accordingly, government actions in the future, including any decision not to continue to support recent economic reforms and to return to a more centrally planned economy or regional or local variations in the implementation of economic policies, could have a significant effect on economic conditions in China or particular regions thereof and could require us to divest ourselves of any interest we then hold in Chinese properties or joint ventures.

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.

Restrictions on currency exchange may limit our ability to receive and use our sales effectively.

The majority of our sales will be settled in RMB and U.S. dollars, and any future restrictions on currency exchanges may limit our ability to use revenue generated in RMB to fund any future business activities outside China or to make dividend or other payments in U.S. dollars. Although the Chinese government introduced regulations in 1996 to allow greater convertibility of the RMB for current account transactions, significant restrictions still remain, including primarily the restriction that foreign-invested enterprises may only buy, sell or remit foreign currencies after providing valid commercial documents, at those banks in China authorized to conduct foreign exchange business. In addition, conversion of RMB for capital account items, including direct investment and loans, is subject to governmental approval in China, and companies are required to open and maintain separate foreign exchange accounts for capital account items. We cannot be certain that the Chinese regulatory authorities will not impose more stringent restrictions on the convertibility of the RMB.

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

Because our business transactions are denominated in RMB and our funding and results of operations will be denominated in USD, fluctuations in exchange rates between USD and RMB will affect our balance sheet and financial results. Since July 2005, RMB is no longer solely pegged to the USD but instead is pegged against a basket of currencies as a whole in order to keep a more stable exchange rate for international trading. With the very strong economic growth in China in the last few years, RMB is facing very high pressure to appreciate against USD. Such pressure could result more fluctuations in exchange rates and in turn our business would be suffered from higher exchange rate risk. There are very limited hedging tools available in China to hedge our exposure in exchange rate fluctuations. The hedging tools that are available are also ineffective in the sense that these hedges cannot be freely preformed in the PRC financial market, and more important, the frequent changes in PRC exchange control regulations would limit our hedging ability for RMB.

Restrictions under PRC law on our PRC subsidiaries’ ability to make dividends and other distributions could materially and adversely affect our ability to grow, make investments or acquisitions that could benefit our business, pay dividends to you, and otherwise fund and conduct our business.

Substantially all of our sales are earned by our PRC subsidiaries. However, as discussed more fully under “Business — PRC Government Regulations — Dividend Distributions,” PRC regulations restrict the ability of our PRC subsidiaries to make dividends and other payments to their offshore parent company. Any limitations on the ability of our PRC subsidiaries to transfer funds to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends and otherwise fund and conduct our business.

TABLE OF CONTENTS

Failure to comply with PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident shareholders to personal liability, limit our ability to acquire PRC companies or to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to distribute profits to us or otherwise materially adversely affect us.

In October 2005, the PRC State Administration of Foreign Exchange, or SAFE, issued the Notice on Relevant Issues in the Foreign Exchange Control over Financing and Return Investment Through Special Purpose Companies by Residents Inside China, generally referred to as Circular 75. Circular 75 and its implementing guidelines, issued in June 2007 (known as Notice 106), require PRC residents to register with the competent local SAFE branch before establishing or acquiring control over an offshore special purpose company, or SPV, for the purpose of engaging in an equity financing outside of China. See “Business — PRC Government Regulations — Circular 75” for a detailed discussion of Circular 75 and its implementation.

We have asked our shareholders, who are PRC residents as defined in Circular 75, to register with the relevant branch of SAFE, as currently required, in connection with their equity interests in us and our acquisitions of equity interests in our PRC subsidiaries. However, we cannot provide any assurances that they can obtain the above SAFE registrations required by Circular 75 and Notice 106. Moreover, because of uncertainty over how Circular 75 will be interpreted and implemented, and how or whether SAFE will apply it to us, we cannot predict how it will affect our business operations or future strategies. For example, our present and prospective PRC subsidiaries’ ability to conduct foreign exchange activities, such as the remittance of dividends and foreign currency-denominated borrowings, may be subject to compliance with Circular 75 and Notice 106 by our PRC resident beneficial holders.

In addition, such PRC residents may not always be able to complete the necessary registration procedures required by Circular 75 and Notice 106. We also have little control over either our present or prospective direct or indirect shareholders or the outcome of such registration procedures. A failure by our PRC resident beneficial holders or future PRC resident shareholders to comply with Circular 75 and Notice 106, if SAFE requires it, could subject these PRC resident beneficial holders to fines or legal sanctions, restrict our overseas or cross-border investment activities, limit our subsidiaries’ ability to make distributions or pay dividends or affect our ownership structure, which could adversely affect our business and prospects.

Our business and financial performance may be materially adversely affected if the PRC regulatory authorities determine that our acquisition of Oumei constitutes a Round-trip Investment without MOFCOM approval.

On August 8, 2006, six PRC regulatory agencies promulgated the Regulation on Mergers and Acquisitions of Domestic Companies by Foreign Investors which were further amended by PRC Ministry of Commerce, or MOFCOM, on June 22, 2009, or the 2006 M&A Rule. Among other things, the 2006 M&A Rule regulates “Round-trip Investments,” defined as having taken place when a PRC business that is owned by PRC individual(s) is sold to a non-PRC entity that is established or controlled, directly or indirectly, by those same PRC individual(s). See “Business — PRC Government Regulations — Mergers and Acquisitions” for a detailed discussion of the 2006 M&A Rule.

Leewell acquired Oumei in 2007 from Mr. Weiqing Zhang and Ms. Xiaoyan Cheng. At the time of the acquisition, Leewell was owned and controlled by Mr. Li Zhou, a citizen of the Commonwealth of Australia, who was acting as a nominee for Mr. Zhang and Ms. Cheng. The PRC authorities could take the position that this transaction therefore constituted a “Round-Trip Investment” requiring the prior approval of the central office of MOFCOM in Beijing, which we did not obtain. If the PRC authorities take this position, they could invalidate our acquisition and ownership of our Chinese subsidiaries. If this were to happen, we would replace our ownership structure of Oumei with a series of contractual arrangements which would give us control over, and the economic benefit of, the operations of our Chinese subsidiaries. These arrangements are described more fully under “Business — PRC Government Regulations — Merger and Acquisition.”

Additionally, the PRC regulatory authorities may take the view that these transactions require the prior approval of the China Securities Regulatory Commission, or CSRC, before MOFCOM approval is obtained. If we cannot obtain MOFCOM or CSRC approval if required by the PRC regulatory authorities to do so, the PRC regulatory authorities may impose fines and penalties on our operations in the PRC, limit our operating privileges in the PRC, delay or restrict the repatriation of the proceeds from this offering into the PRC, restrict

TABLE OF CONTENTS

or prohibit payment or remittance of dividends to us or take other actions that could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects, as well as the trading price of our shares.

Under the New 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.

China passed a New Enterprise Income Tax Law, or the New EIT Law, and its implementing rules, both of which became effective on January 1, 2008. Under the New EIT Law, an enterprise established outside of China with “de facto management bodies” within China is considered a “resident enterprise,” meaning that it can be treated in a manner similar to a Chinese enterprise for enterprise income tax purposes. See “Business — PRC Government Regulations — Taxation” and “Business — PRC Government Regulations —  Dividend Distributions” for a detailed discussion of the New EIT Law.

It remains unclear whether the PRC tax authorities would require or permit our overseas registered entities to be treated as PRC resident enterprises. We do not currently consider our company to be a PRC resident enterprise. However, if the PRC tax authorities determine that we are a “resident enterprise” for PRC enterprise income tax purposes, a number of unfavorable PRC tax consequences could follow. First, we may be subject to the enterprise income tax at a rate of 25% on our worldwide taxable income as well as PRC enterprise income tax reporting obligations. In our case, this would mean that income such as interest on offering proceeds and non-China source income would be subject to PRC enterprise income tax at a rate of 25%. Second, although under the New EIT Law and its implementing rules dividends paid to us from our PRC subsidiaries would qualify as “tax-exempt income,” we cannot guarantee that such dividends will not be subject to a 10% withholding tax, as the PRC foreign exchange control authorities, which enforce the withholding tax, have not yet issued guidance with respect to the processing of outbound remittances to entities that are treated as resident enterprises for PRC enterprise income tax purposes. Finally, it is possible that future guidance issued with respect to the new “resident enterprise” classification could result in a situation in which a 10% withholding tax is imposed on dividends we pay to our non-PRC shareholders and with respect to gains derived by our non-PRC shareholders from transferring our shares.

We may be exposed to liabilities under the Foreign Corrupt Practices Act and Chinese anti-corruption laws, and any determination that we violated these laws could have a material adverse effect on our business.

We are subject to the Foreign Corrupt Practices Act, or FCPA, and other laws that prohibit improper payments or offers of payments to foreign governments and their officials and political parties by U.S. persons and issuers as defined by the statute, for the purpose of obtaining or retaining business. We have operations, agreements with third parties, and make most of our sales in China. The PRC also strictly prohibits bribery of government officials. Our activities in China create the risk of unauthorized payments or offers of payments by the employees, consultants, sales agents, or distributors of our Company, even though they may not always be subject to our control. It is our policy to implement safeguards to discourage these practices by our employees. However, our existing safeguards and any future improvements may prove to be less than effective, and the employees, consultants, sales agents, or distributors of our Company may engage in conduct for which we might be held responsible. Violations of the FCPA or Chinese anti-corruption laws may result in severe criminal or civil sanctions, and we may be subject to other liabilities, which could negatively affect our business, operating results and financial condition. In addition, the U.S. government may seek to hold our Company liable for successor liability FCPA violations committed by companies in which we invest or that we acquire.

RISKS RELATED TO THIS OFFERING AND THE MARKET FOR OUR ORDINARY SHARES GENERALLY

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

Our ordinary shares are not currently listed or quoted for trading on any national securities exchange or national quotation system. We have applied for the listing of our ordinary shares on the NASDAQ Global Market under the symbol “OMEI”. There is no guarantee that the NASDAQ Global Market, or any other

TABLE OF CONTENTS

exchange or quotation system, will permit our shares to be listed and traded. If we fail to obtain a listing on the NASDAQ Global Market, we may seek quotation on the OTC Bulletin Board. FINRA has enacted changes that limit quotations on the OTC Bulletin Board to securities of issuers that are current in their reports filed with the SEC. The effect on the OTC Bulletin Board of these rule changes and other proposed changes cannot be determined at this time. The OTC Bulletin Board is an inter-dealer, over-the-counter market that provides significantly less liquidity than the NASDAQ Global Market. The quotation of our shares on the OTC Bulletin Board may result in a less liquid market available for existing and potential stockholders to trade our shares, could depress the trading price of our ordinary shares and could have a long-term adverse impact on our ability to raise capital in the future.

The price of our ordinary shares could be volatile and could decline following this offering at a time when you want to sell your holdings.

We have applied to have our ordinary shares listed on the NASDAQ Global Market under the symbol “OMEI” and the trading is expected to start upon the effectiveness of this registration statement. Although we believe that this offering and the NASDAQ listing will improve the liquidity for our ordinary shares, there is no assurance that the offering will improve volume, reduce volatility and stabilize our share price. Numerous factors, many of which are beyond our control, may cause the market price of our ordinary shares to fluctuate significantly. These factors include:

Securities class action litigation is often instituted against companies following periods of volatility in their stock price. This type of litigation could result in substantial costs to us and divert our management’s attention and resources.

Moreover, securities markets may from time to time experience significant price and volume fluctuations for reasons unrelated to operating performance of particular companies. For example, from September 2008 until June 2009, securities markets in the United States, China and throughout the world experienced a historically

TABLE OF CONTENTS

large decline in share price. These market fluctuations may adversely affect the price of our ordinary shares and other interests in our company at a time when you want to sell your interest in us.

Future sales or perceived sales of our ordinary shares could depress our stock price.

In addition to the 4,000,000 ordinary shares offered in this offering, the registration statement of which this prospectus is a part also covers 765,000 ordinary shares and 2,774,700 ordinary shares underlying the Preference Shares and 1,526,085 ordinary shares underlying the Warrants issued in a private placement closed on April 14, 2010. Certain investors of the private placement have entered into lock-up agreements with us, pursuant to which each of them agreed, for a period beginning from the date of the lock-up agreement and continuing to and including 90 days after the date of this prospectus, not to sell, transfer or otherwise dispose of any of our shares. See “Underwriting.” Each selling stockholder named in the registration statement may sell or transfer any ordinary shares after the effective date of the registration statement (subject to expiration of applicable lock-up restrictions).

Additionally, all of our executive officers and directors and certain of our shareholders have agreed not to sell shares of our ordinary shares for a period of 18 months starting on April 14, 2010. Ordinary shares subject to these lock-up agreements will become eligible for sale in the public market upon expiration of these lock-up agreements, subject to limitations imposed by Rule 144 under the Securities Act. See “Shares Eligible for Future Sale.” If the holders of these shares were to attempt to sell a substantial amount of their holdings at once, the market price of our ordinary shares could decline. Moreover, the perceived risk of this potential dilution could cause shareholders to attempt to sell their shares and investors to short the ordinary shares, a practice in which an investor sells shares that he or she does not own at prevailing market prices, hoping to purchase shares later at a lower price to cover the sale. As each of these events would cause the number of shares of our ordinary shares being offered for sale to increase, our ordinary shares market price would likely further decline. All of these events could combine to make it very difficult for us to sell equity or equity-related securities in the future at a time and price that we deem appropriate.

We may be subject to penny stock regulations and restrictions and you may have difficulty selling our ordinary shares.

The SEC has adopted regulations which generally define so-called “penny stocks” as an equity security that has a market price of less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exemptions. If our ordinary shares become a “penny stock”, we may become subject to Rule 15g-9 under the Exchange Act, or the Penny Stock Rule. This rule imposes additional sales practice requirements on broker-dealers that sell such securities to persons other than established customers and “accredited investors” (generally, individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000, or $300,000 together with their spouses). For transactions covered by Rule 15g-9, a broker-dealer must make a special suitability determination for the purchaser and receive the purchaser’s written consent to the transaction prior to sale. As a result, this rule may affect the ability of broker-dealers to sell our securities and may affect the ability of purchasers to sell any of our securities in the secondary market.

For any transaction involving a penny stock, unless exempt, the rules require delivery, prior to any transaction in a penny stock, of a disclosure schedule prepared by the SEC relating to the penny stock market. Disclosure is also required to be made about sales commissions payable to both the broker-dealer and the registered representative and current quotations for the securities. Finally, monthly statements are required to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stock.

There can be no assurance that our ordinary shares will qualify for exemption from the Penny Stock Rule. In any event, even if our ordinary shares were exempt from the Penny Stock Rule, we would remain subject to Section 15(b)(6) of the Exchange Act, which gives the SEC the authority to restrict any person from participating in a distribution of penny stock if the SEC finds that such a restriction would be in the public interest.

We may use these proceeds in ways with which you may not agree.

While we currently intend to use the proceeds from this offering for working capital and general corporate purposes, we have considerable discretion in the application of the proceeds. You will not have the

TABLE OF CONTENTS

opportunity, as part of your investment decision, to assess whether the proceeds are being used in a manner agreeable to you. You must rely on our judgment regarding the application of the net proceeds of this offering. The net proceeds may be used for corporate purposes that do not immediately improve our profitability or increase the price of our shares.

We do not intend to pay dividends for the foreseeable future.

For the foreseeable future, we intend to retain any earnings to finance the development and expansion of our business, and we do not anticipate paying any cash dividends on our ordinary shares. Accordingly, investors must be prepared to rely on sales of their ordinary shares after price appreciation to earn an investment return, which may never occur. Investors seeking cash dividends should not purchase our ordinary shares. Any determination to pay dividends in the future will be made at the discretion of our board of directors and will depend on our results of operations, financial condition, contractual restrictions, restrictions imposed by applicable law and other factors our board of directors deems relevant.

Holders of our ordinary shares may face difficulties in protecting their interests because we are incorporated under Cayman Islands law.

Our corporate affairs are governed by our amended and restated memorandum and articles of association, and by the Companies Law (2010 Revision) and the common law of the Cayman Islands. The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are not as clearly established as under statutes or judicial precedent in existence in jurisdictions in the United States. Therefore, shareholders may have more difficulty in protecting their interests in the face of actions by our management or board of directors than would shareholders of a corporation incorporated in a jurisdiction in the United States, due to the comparatively less developed nature of Cayman Islands law in this area.

Shareholders of Cayman Islands exempted companies have no general rights under Cayman Islands law to inspect corporate records and accounts or to obtain copies of lists of our shareholders. Our directors have discretion under our amended and restated memorandum and articles of association to determine whether and to what extent and at what times and places and under what conditions or regulations our accounts, books and documents, or any of them, shall be open to the inspection of shareholders not being directors, and no shareholder (not being a director) shall have any right of inspecting any account, book or document except as conferred by applicable law or the relevant code, rules and regulations of the exchange on which our shares are listed (if any), or authorized by our directors or by ordinary resolution of our shareholders. This may make it more difficult for you to obtain the information needed to establish any facts necessary for a shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest.

Provisions of our articles of association and Cayman Islands corporate law may impede a takeover or make it more difficult for shareholders to change the direction or management of the Company, which could reduce shareholders’ opportunity to influence management of the Company.

Our articles of association permit our board of directors to issue up to 20,000,000 preference shares from time to time, with such rights and preferences as they consider appropriate. These terms may include voting rights including the right to vote as a series on particular matters, preferences as to dividends and liquidation, conversion rights and redemption rights provisions. The issuance of any preference shares could reduce the value of such ordinary shares. In addition, specific rights granted to future holders of preference shares could be used to restrict our ability to merge with, or sell assets to, a third party. The ability of the board of directors to issue preference shares could make it more difficult, delay, discourage, prevent or make it more costly to acquire or effect a change-in-control, which in turn could prevent shareholders from recognizing a gain in the event that a favorable offer is extended and could materially and negatively affect the market price of our ordinary shares.

TABLE OF CONTENTS

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements. The forward-looking statements are contained principally in the sections entitled “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Business”. These statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to, the factors described in the section captioned “Risk Factors” above.

In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar expressions intended to identify forward-looking statements. Forward-looking statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties. Given these uncertainties, you should not place undue reliance on these forward-looking statements. These forward-looking statements include, among other things, statements relating to:

Also, forward-looking statements represent our estimates and assumptions only as of the date of this prospectus. You should read this prospectus and the documents that we reference in this prospectus, or that we filed as exhibits to the registration statement of which this prospectus is a part, completely and with the understanding that our actual future results may be materially different from what we expect.

Except as required by law, we assume no obligation to update any forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, even if new information becomes available in the future.

TABLE OF CONTENTS

USE OF PROCEEDS

We estimate that we will receive net proceeds from this offering of approximately $18.1 million (approximately $20.9 million if the underwriters exercise their overallotment option in full), based on the assumed public offering price of $5.00 per ordinary share, which is the midpoint of the range set forth on the cover page of this prospectus.

We have no specific plan for the offering proceeds except to generate funds for working capital and general corporate purposes, including to fund potential future acquisitions, and to create a public market for our ordinary shares. As of the date of this prospectus, we have not entered into any purchase agreements, understandings or commitments with respect to any acquisitions.

We will have broad discretion in the way that we use the net proceeds of this offering. Pending the final application of the net proceeds of this offering, we intend to invest the net proceeds of this offering in short-term, interest-bearing, investment-grade securities. See “Risk Factors — Risks Related to this Offering and the Market for Our Ordinary Shares Generally — We may use these proceeds in ways with which you may not agree.”

TABLE OF CONTENTS

MARKET PRICE AND DIVIDENDS ON OUR COMMON EQUITY
AND RELATED SHAREHOLDER MATTERS

Market Information

There currently is no market for our ordinary shares. We have applied to list our ordinary shares on the NASDAQ Global Market as soon as practicable. However, we cannot assure you that we will be able to meet the initial listing standards of the NASDAQ Global Market, or that we will be able to maintain any such listing. If we determine that we will not be able to meet the initial listing standards of the NASDAQ Global Market, we may apply to have our ordinary shares listed on the NASDAQ Capital Market or another stock exchange or for a quotation on an over-the-counter quotation service. If we determine to apply for a quotation on an over-the-counter quotation service, however, an investor may find it difficult to obtain accurate quotations as to the market value of our ordinary shares and trading of our ordinary shares may be extremely sporadic. For example, several days may pass before any shares may be traded. A more active market for our ordinary shares may never develop. In addition, if we failed to meet the criteria set forth in SEC regulations, various requirements would be imposed by law on broker-dealers who sell our securities to persons other than established customers and accredited investors. Consequently, such regulations may deter broker-dealers from recommending or selling our ordinary shares, which may further affect its liquidity and could make it more difficult for us to raise additional capital.

Holders

As of April 14, 2011, there were approximately 515 holders of record of our ordinary shares. This number does not include shares held by brokerage clearing houses, depositories or others in unregistered form.

DIVIDEND POLICY

On December 10, 2008, our board of directors authorized a special dividend of $0.7174 per share to our shareholders of record. Two of our shareholders, Access America Fund, LP and Mid-Ocean Consulting Limited, did not accept the dividend, which resulted in a total dividend payment of $166,074.80.

On December 31, 2010, we paid a dividend to the holders of our Preference Shares in the amount of $476,184. See “Description of Securities — Preference Shares” for a description of our Preference Shares, which were issued to the investors in our April 14, 2010 private placement, and the rights of the holders thereof to annual dividends.

Other than the foregoing, we have never declared or paid a cash dividend. Any future decisions regarding dividends will be made by our board of directors. We currently intend to retain and use any future earnings for the development and expansion of our business and do not anticipate paying any cash dividends on our ordinary shares in the foreseeable future. Our board of directors has complete discretion on whether to pay dividends on our ordinary shares. Even if our board of directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the board of directors may deem relevant.

TABLE OF CONTENTS

CAPITALIZATION

The following table sets forth our capitalization (i) as of December 25, 2010 and (ii) on an adjusted basis to give effect to the receipt of estimated net proceeds of $18.1 million from the sale of 4,000,000 ordinary shares in this offering at the assumed public offering price of $5.00 per ordinary share, and after deducting estimated underwriting discounts and commissions and estimated expenses payable by us.

You should read this table in conjunction with the information contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our audited consolidated financial statements, including the related notes, contained elsewhere in this prospectus.

		December 25, 2010
		Actual				As Adjusted
		(in thousands)
Cash:
Cash and cash equivalents		$	33,590			$	51,690
Restricted cash			2,286				2,286
Total cash		$	35,876			$	53,976
Debt:
Short-term debt		$	1,417			$	1,417
Long-term debt			35,415				35,415
Total debt		$	36,832			$	36,832
Stockholders’ equity:
Preference shares, $0.002112 par value, 20,000,000 shares authorized, 2,774,700 issued and outstanding		$	6			$	6
Ordinary shares, par value $0.002112 per share, authorized 100,000,000 shares, 31,020,062 shares issued and outstanding and 35,020,062 shares issued and outstanding on an as adjusted basis			65				74
Additional paid in capital			17,642				35,733
Warrants Outstanding			3,177				3,177
Appropriated retained earnings			17,371				17,371
Unappropriated retained earnings			95,872				95,872
Accumulated other comprehensive income			10,508				10,508
Total shareholders’ equity		$	144,641			$	162,741
Total capitalization		$	180,056			$	198,156

TABLE OF CONTENTS

DILUTION

Our net tangible book value on December 25, 2010 was approximately $86.0 million, or $2.77 per ordinary share. “Net tangible book value” is total assets minus the sum of liabilities and intangible assets. “Net tangible book value per share” is net tangible book value divided by 31,020,062 ordinary shares issued and outstanding on December 25, 2010.

After giving effect to the sale by us of 4,000,000 ordinary shares in this offering at the assumed public offering price of $5.00 per share and after deducting the underwriting discounts and commissions and estimated expenses related to this offering payable by us, our adjusted net tangible book value as of December 25, 2010 would have been $104.1 million, or $2.97 per ordinary share. This represents an immediate increase in net tangible book value of $0.20 per share to our existing shareholders and an immediate decrease in the net tangible book value of $2.03 per share to new investors. Dilution in the net tangible book value per share to new investors represents the difference between the offering price per share and the net tangible book value per ordinary share immediately after this offering. The following table illustrates this per share dilution:

Assumed public offering price		$	5.00
Net tangible book value as of December 25, 2010		$	2.77
Increase in net tangible book value attributable to this offering		$	0.20
As adjusted net tangible book value as of December 25, 2010 after giving effect to this offering		$	2.97
Dilution in as adjusted net tangible book value to new investors in this offering		$	2.03

A $1.00 increase in the assumed public offering price of $5.00 per share would increase our adjusted net tangible book value per share after this offering by $0.11 per share and would increase the dilution per share to new investors in this offering by $0.89 per share, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the underwriting discounts and commissions and estimated expenses related to this offering payable by us.

If the underwriters exercise their over-allotment option to purchase up to 600,000 additional ordinary shares from us in full in this offering at the assumed public offering price of $5.00 per share, the adjusted net tangible book value as of December 25, 2010 after giving effect to this offering would increase to $3.00 per share, and dilution per share to new investors in this offering would be $2.00 per share.

TABLE OF CONTENTS

EXCHANGE RATE INFORMATION

Our business is primarily conducted in China, and the financial records of our PRC subsidiaries are maintained in RMB, their functional currency. However, we use the U.S. dollar as our reporting currency. The assets and liabilities of our PRC subsidiaries are translated from RMB into U.S. dollar at the exchange rates on the balance sheet date, shareholders’ equity is translated at the historical rates and the revenues and expenses are translated at the weighted average exchange rate for the period. We make no representation that any RMB or U.S. dollar amounts could have been, or could be, converted into U.S. dollars or RMB, as the case may be, at any particular rate, or at all. The PRC government imposes control over its foreign currency reserves in part through direct regulation of the conversion of RMB into foreign exchange and through restrictions on foreign trade. On April 15, 2011, the exchange rate was ¥1 to $0.1533.

The following table sets forth information concerning exchange rates between the RMB and the U.S. dollar for the periods indicated.

		InterBank Buying Rate(1)
Fiscal Year Ended December 25,		Year End(2)				Weighted Average(3)
		(U.S. Dollar per RMB)
2005			0.1240				0.1222
2006			0.1281				0.1255
2007			0.1360				0.1315
2008			0.1480				0.1434
2009			0.1468				0.1466
2010			0.1507				0.1479
2011 (through April 15, 2011)			0.1533				0.1522

TABLE OF CONTENTS

SELECTED CONSOLIDATED FINANCIAL DATA

The following selected historical financial information should be read in conjunction with our consolidated financial statements and related notes and the information contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” below.

The selected consolidated statement of operations data and statement of cash flows data for the years ended December 25, 2008, 2009 and 2010 and the selected balance sheet data as of December 25, 2009 and 2010 are derived from our audited consolidated financial statements included elsewhere in this prospectus. The selected consolidated financial data for the years ended December 25, 2006 and 2007 and the selected balance sheet data as of December 25, 2006, 2007 and 2008 are derived from our unaudited consolidated financial statements not included in this prospectus.

Our audited consolidated financial statements for the fiscal years ended December 25, 2008, 2009 and 2010 are prepared and presented in accordance with U.S. GAAP. The selected financial data information is only a summary and should be read in conjunction with the historical consolidated financial statements and related notes of Leewell contained elsewhere herein. The financial statements contained elsewhere fully represent our financial condition and operations; however, they are not indicative of our future performance.

TABLE OF CONTENTS

U.S. dollars, except shares

		Fiscal Year Ended December 25,
		2006				2007				2008				2009				2010
		(unaudited)				(unaudited)
Statements of Operations Data
Total sales		$	54,291,244			$	51,850,312			$	77,032,561			$	94,315,500			$	110,518,421
Total cost of sales			(33,703,168	)			(36,243,778	)			(46,321,251	)			(58,296,408	)			(77,209,814	)
Gross profit			20,588,076				15,606,534				30,711,310				36,019,092				33,308,607
Advertising expenses			(47,051	)			(46,492	)			(112,263	)			(268,222	)			(217,596	)
Commission expenses			(789,497	)			(134,989	)			(574,262	)			(84,982	)			(214,566	)
Selling expenses			(6,192	)			(2,187	)			(81,415	)			(49,800	)			(61,967	)
Bad debt recovery (expense)			(154,710	)			(245,243	)			(1,198,942	)			(207,523	)			987,374
General and administrative expenses			(4,092,355	)			(807,589	)			(2,283,744	)			(4,655,596	)			(7,390,963	)
Income from operations			15,498,271				14,370,034				26,460,684				30,752,969				26,410,889
Miscellaneous income (expense)			16,022				10,280				91,945				327,294				23,899,865
Interest expense			(121,597	)			(70,963	)			(968,710	)			(866,751	)			(325,969	)
Income before income taxes and extraordinary item			15,392,696				14,309,351				25,583,919				30,213,512				49,984,785
Income taxes			(5,130,644	)			(5,090,161	)			(6,602,194	)			(9,058,226	)			(15,042,327	)
Income before extraordinary item			10,262,052				9,219,190				18,981,725				21,155,286				34,942,458
Extraordinary item, net			—				—				12,499,576				—				—
Net income			10,262,052				9,219,190				31,481,301				21,155,286				34,942,458
Foreign currency translation adjustment			687,566				2,107,856				3,486,204				474,414				3,470,209
Comprehensive income		$	10,949,618			$	11,327,046			$	34,967,505			$	21,629,700			$	38,412,667
Earnings per common share basic		$	0.34			$	0.30			$	1.04			$	0.70			$	1.14
Earnings per common share diluted		$	0.34			$	0.30			$	1.04			$	0.70			$	1.07
Weighted average common shares outstanding basic			30,235,062				30,235,062				30,235,062				30,235,062				30,770,172
Weighted average common shares outstanding diluted			30,235,062				30,235,062				30,235,062				30,235,062				32,708,661
Cash Flow Data
Net cash provided by (used in)
Operating Activities		$	(5,953,059	)		$	1,212,951			$	61,015,081			$	11,250,820			$	27,325,191
Investing Activities			(59,164	)			(13,689,661	)			(58,521,630	)			234,814				(136,156	)
Financing Activities			5,759,286				14,167,583				(3,805,052	)			(9,866,408	)			3,435,399
Effect of exchange rate changes on cash			(57,807	)			9.891				16,518				6,573				701,545
Net increase (decrease) in cash		$	(310,744	)		$	1,700,764			$	(1,295,083	)		$	1,625,799			$	31,325,979

TABLE OF CONTENTS

		As of December 25,
		2006				2007				2008				2009				2010 Actual				2010 As Adjusted(1)
		(unaudited)				(unaudited)				(unaudited)												(unaudited)
Balance Sheet Data
Current assets		$	92,211,870			$	69,443,412			$	105,072,009			$	133,002,971			$	194,356,501			$	212,456,501
Total assets			94,711,799				87,822,788				178,648,355				196,332,843				260,120,259				278,220,259
Current liabilities			57,741,400				59,977,634				86,240,752				88,795,899				91,775,418				91,775,418
Long-term liabilities			7,686,000				—				29,160,895				13,185,998				23,703,855				23,703,855
Total liabilities			65,427,400				59,977,634				115,401,647				101,981,897				115,479,273				115,479,273
Stockholders’ equity			29,284,399				27,845,154				63,246,708				94,350,946				144,640,986				162,740,986

TABLE OF CONTENTS

Quarterly Financial Results

The following table presents our unaudited quarterly consolidated statement of operations for the quarters presented. We believe that the historical quarterly information has been prepared substantially on the same basis as the audited consolidated financial statements, and all necessary adjustments, consisting only of normal recurring adjustments, have been included in the amounts below to state fairly the unaudited quarterly results of operations data.

The numbers for the quarter ended September 25, 2010 in the following table have been corrected due to an error we identified subsequent to the issuance of the September 25, 2010 unaudited quarterly report. Specifically, there was a mathematical error in computing the GFA for a large sales contract in our Longhai Mingzhu project, which led to an overstament net income of $1.19 million for the quarter ended September 25, 2010. This error impacted gross profit, income from operations, and net income in the following table. No other periods were affected.

(All amounts in thousands of U.S. dollars)

		Dec 25, 2010				Sep 25, 2010				Jun 25, 2010				Mar 25, 2010				Dec 25, 2009				Sep 25, 2009				Jun 25, 2009				Mar 25, 2009
Sales		$	21,590			$	31,765			$	28,241			$	28,220			$	48,496			$	14,876			$	10,856			$	16,813
Sales to related party			86				616				—				—				3,274				—				—				—
Total sales			21,676				32,381				28,241				28,220				51,770				14,876				10,856				16,813
Cost of sales			(15,501	)			(21,418	)			(18,935	)			(21,211	)			(29,044	)			(9,602	)			(8,642	)			(10,154	)
Cost of sales to related party			(17	)			(127	)			—				—				(854	)			—				—				—
Total cost of sales			(15,518	)			(21,545	)			(18,935	)			(21,211	)			(29,898	)			(9,602	)			(8,642	)			(10,154	)
Gross profit			6,158				10,836				9,306				7,009				21,872				5,274				2,214				6,659
Advertising expenses			(15	)			(53	)			(62	)			(88	)			(39	)			(56	)			(10	)			(163	)
Commission expenses			(26	)			(188	)			—				—				—				—				(85	)			—
Selling expenses			(6	)			(25	)			(13	)			(18	)			(16	)			(18	)			(7	)			(9	)
Bad debt recovery (expense)			555				251				11				169				123				(841	)			383				127
General and administrative expenses			(1,751	)			(1,860	)			(2,938	)			(841	)			(2,910	)			(718	)			(483	)			(544	)
Total operating expenses			(1,243	)			(1,875	)			(3,002	)			(778	)			(2,842	)			(1,633	)			(202	)			(589	)
Income from operations			4,915				8,961				6,304				6,231				19,030				3,641				2,012				6,070
Miscellaneous income (expense)			23,673				45				195				(14	)			150				(6	)			(8	)			191
Interest income (expense)			(27	)			(64	)			(79	)			(155	)			(33	)			(31	)			(339	)			(464	)
Income before income taxes and extraordinary items			28,561				8,942				6,420				6,062				19,147				3,604				1,665				5,797
Income taxes – current & deferred			(7,670	)			(2,936	)			(2,483	)			(1,953	)			(5,236	)			(1,297	)			(962	)			(1,563	)
Income before extraordinary items			20,891				6,006				3,937				4,109				13,911				2,307				703				4,234
Extraordinary items, net of income tax			—				—				—				—				—				—				—				—
Net income		$	20,891			$	6,006			$	3,937			$	4,109			$	13,911			$	2,307			$	703			$	4,234

TABLE OF CONTENTS

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

Overview

We are one of the leading real estate development companies located in Qingdao, Shandong province, China. In 2010, we were recognized in the official City of Qingdao Commission of Development & Construction’s evaluation as one of the ten most outstanding real estate developers in Qingdao, measured by a combination of revenue, customer satisfaction, as well as several other factors.

Through our Chinese subsidiaries, we develop and sell residential and commercial properties, targeting middle and upper income customers in the coastal region of the Shandong peninsula (Greater Qingdao) located in northeastern China, including the cities of Qingdao, Weihai and Yantai, as well as other inland locations, such as Weifang.

Since our inception, we have completed 17 projects having a GFA of 1,462,126 square meters, of which approximately 95% has been sold. In addition, we have six projects under construction with a total GFA of 508,342 square meters.

In the fiscal year ended December 25, 2010, our total sales increased 17.2% to $110.5 million from $94.3 million in fiscal year 2009, and our net income increased 65.2% to $34.9 million in fiscal year 2010 from $21.2 million in fiscal year 2009.

Our mission is to provide high-quality, comfortable, and convenient living space to middle and upper income customers, primarily in Shandong Province and in other provinces in China, while also earning for our shareholders an internal rate of return that exceeds our cost of capital. We expect to increase our market share through aggressive internal growth and prudent acquisitions in Shandong Province and in other provinces in China. Our goal is to be one of the top two real estate developers in Greater Qingdao in the next five years by capturing and exploiting the growth opportunities in Shandong Province and by providing the most desirable coastal and inland apartments to middle and upper income customers, as well as by increasing our development of commercial properties.

Principal Factors Affecting Our Financial Performance

Our operating results are primarily affected by the following factors:

TABLE OF CONTENTS

TABLE OF CONTENTS

Taxation

Cayman Islands

The Government of the Cayman Islands does not, under existing legislation, impose any income, corporate or capital gains tax, estate duty, inheritance tax, gift tax or withholding tax upon us or our shareholders. The Cayman Islands are not party to a double tax treaty with any country that is applicable to any payments made to or by us.

We have received an undertaking from the Governor-in-Cabinet of the Cayman Islands that, in accordance with section 6 of the Tax Concessions Law (1999 Revision) of the Cayman Islands, for a period of 20 years from April 2006 no law which is enacted in the Cayman Islands imposing any tax to be levied on profits, income, gains or appreciations shall apply to us or our operations and, in addition, that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax shall be payable (i) on or in respect of our shares, debentures or other obligations or (ii) by way of the withholding in whole or in part of a payment of dividend or other distribution of income or capital by us to our shareholders or a payment of principal or interest or other sums by us due under a debenture or other obligation.

Hong Kong

Our direct subsidiary, Leewell, was incorporated in Hong Kong and under the current laws of Hong Kong, is subject to Profits Tax of 16.5%. No provision for Hong Kong Profits Tax has been made as Leewell has no taxable income.

China

Under the New EIT Law, Oumei and its subsidiaries are subject to an earned income tax of 25.0%. See “Business — PRC Government Regulations — Taxation” for a detailed description of the New EIT Law and tax regulations applicable to our Chinese subsidiaries.

Our future effective income tax rate depends on various factors, such as tax legislation, the geographic composition of our pre-tax income and non-tax deductible expenses incurred. Our management carefully monitors these legal developments to determine if there will be any change in the statutory income tax rate.

TABLE OF CONTENTS

Results of Operations

Comparison of Fiscal Years Ended December 25, 2010 and December 25, 2009

The following table shows key components of our results of operations during the fiscal years ended December 25, 2010 and 2009, in both dollars and as a percentage of our total sales.

U.S. dollars, except percentages		Fiscal Year Ended December 25, 2010								Fiscal Year Ended December 25, 2009
		Dollars				Percent of Total Sales				Dollars				Percent of Total Sales
Sales		$	109,816,618				99.4	%		$	91,041,042				96.5	%
Sales to related party			701,803				0.6	%			3,274,458				3.5	%
Total sales			110,518,421				100.0	%			94,315,500				100.0	%
Cost of sales			(77,065,740	)			(69.8	)%			(57,442,457	)			(60.9	)%
Cost of sales to related party			(144,074	)			(0.1	)%			(853,951	)			(0.9	)%
Total cost of sales			(77,209,814	)			(69.9	)%			(58,296,408	)			(61.8	)%
Gross profit			33,308,607				30.1	%			36,019,092				38.2	%
Advertising expenses			(217,596	)			(0.2	)%			(268,222	)			(0.3	)%
Commission expenses			(214,566	)			(0.2	)%			(84,982	)			(0.1	)%
Selling expenses			(61,967	)			(0.1	)%			(49,800	)			(0.1	)%
Bad debt recovery (expense)			987,374				0.9	%			(207,523	)			(0.2	)%
General and administrative expenses			(7,390,963	)			(6.6	)%			(4,655,596	)			(4.9	)%
Income from operations			26,410,889				23.9	%			30,752,969				32.6	%
Miscellaneous income			23,899,865				21.6	%			327,294				0.3	%
Interest expense and finance charges (net of interest income)			(325,969	)			(0.3	)%			(866,751	)			(0.9	)%
Income before income taxes			49,984,785				45.2	%			30,213,512				32.0	%
Income taxes			(15,042,327	)			(13.6	)%			(9,058,226	)			(9.6	)%
Net income			34,942,458				31.6	%			21,155,286				22.4	%
Foreign currency translation adjustment			3,470,209				3.1	%			474,414				0.5	%
Comprehensive income		$	38,412,667				34.7	%		$	21,629,700				22.9	%

Sales.  Our total sales increased 17.2% to $110.5 million in the fiscal year ended December 25, 2010 from $94.3 million in the fiscal year ended December 25, 2009, primarily as a result of our sales of new units in our Weihai International Plaza and Xingfu Renjia projects in the 2010 fiscal year. No revenue was recognized for these projects in 2009.

We apply the percentage of completion method of accounting for revenue recognition of our development properties. See “Critical Accounting Policies — Revenue Recognition” below for a detailed discussion of how we recognize revenue under the percentage of completion method of accounting.

The following table sets forth the aggregate GFA and the related revenues recognized by project (finished projects) for the fiscal years ended December 25, 2010 and 2009:

		Total GFA(1)				GFA Delivered for Twelve Months Ended December 25,								Percentage of Total GFA Delivered as of December 25,(2)								Revenues recognized for Twelve Months Ended December 25,(3)
						2010				2009				2010				2009				2010								2009
		m2				m2				m2				%				%				US$				%				US$				%
Fuxiang Huayuan 1			52,830				—				—				—				—				101,999				0.1	%			—				—
Fuxiang Huayuan 2			18,392				—				18,392				—				100	%			—				—				5,530,848				6	%
Xingfu Renjia 1			85,551				—				85,551				—				100	%			11,605,811				11	%			11,664,726				12	%
Oumei Complex 1			91,778				—				39,624				—				100	%			2,015,980				2	%			7,093,081				8	%
Longhai Lidu1			51,451				—				—				—				—				270,591				0.2	%			192,788				0.2	%
Longhai Lidu 2			79,308				65,491				13,817				100	%			17	%			6,261,968				6	%			20,508,323				22	%
Qilu Textile Centre (comm.)			139,510				2,204				6,735				100	%			99	%			2,827,457				3	%			488,946				0.5	%
Total			518,820				67,695				164,119											$	23,083,806							$	45,478,712

TABLE OF CONTENTS

The following table sets forth the percentage of completion, the percentage sold and related revenues for our projects for the fiscal years ended December 25, 2010 and 2009.

		Total GFA				Percentage of Completion as of December 25,								Percentage Sold —  Accumulated as of December 25,(1)								Revenues recognized for Twelve Months Ended December 25,(2)
						2010				2009				2010				2009				2010								2009
		m2				%				%				%				%				US$				%				US$				%
Qilu Textile Centre (Residential)			67,942				98	%			90	%			90	%			86	%			2,024,932				2	%			8,342,029				9	%
Weihai International Plaza			45,828				75	%			—				27	%			—				11,956,609				11	%			—				—
Dongli Garden 1			213,315				69	%			48	%			55	%			17	%			29,708,882				27	%			16,142,992				17	%
Longhai Mingzhu			51,902				97	%			80	%			74	%			40	%			31,856,112				29	%			21,961,666				23	%
Oumei Complex 2			70,587				68	%			—				4	%			—				1,361,844				1	%			—				—
Xingfu Renjia 2			58,768				95	%			—				37	%			—				7,672,692				7	%			—				—
Total			508,342																			$	84,581,071							$	46,446,687

TABLE OF CONTENTS

The following table sets forth the square meters sold and average selling price per square meter by each project on a consolidated basis for the fiscal years ended December 25, 2010 and 2009.

		For Twelve Months Ended December 25, 2010																								For Twelve Months Ended December 25, 2009
		Contract Sales(1)				Revenues recognized from prior contract sales(2)				Revenues recognized in current period(3)				Remaining contract amounts to be recognized(4)				Square meters sold(5)				Average selling price(6)				Contract Sales(1)				Revenues recognized from prior contract sales(2)				Revenues recognized in current period(3)				Remaining contract amounts to be recognized(4)				Square meters sold(5)				Average selling price(6)
		US$				US$				US$				US$				m2				US$/m2				US$				US$				US$				US$				m2				US$/m2
Fuxiang Huayuan			101,999				—				101,999				—				—				—				—				—				—				—				—				—
Fuxiang Huayuan			—				—				—				—				—				—				5,530,847				—				5,530,847				—				18,392				301
Xingfu Renjia			11,605,811				—				11,605,811				—				38,772				299				11,664,726				—				11,664,726				—				43,811				266
Xingfu Renjia			8,076,518				—				7,672,692				403,826				21,707				372				—				—				—				—				—				—
Longhai Lidu			270,591				—				270,591				—				678				399				192,788				—				192,788				—				578				334
Longhai Lidu			22,789,841				16,527,873				6,261,968				—				58,905				387				23,917,534				—				20,508,323				3,409,211				63,640				376
Qilu Textile Centre (Comm)			2,908,901				81,444				2,827,457				—				7,400				393				523,563				—				488,946				34,617				1,405				373
Qilu Textile Centre (Residential)			2,717,852				573,737				2,024,932				119,183				8,288				328				8,585,811				—				8,342,029				243,782				29,765				288
Weihai International Plaza			15,942,145				—				11,956,609				3,985,536				12,582				1,267				—				—				—				—				—				—
Dongli Garden			29,708,882				—				29,708,882				—				80,414				369				16,142,992				—				16,142,992				—				36,855				438
Longhai Mingzhu			55,676,839				22,150,422				31,856,112				1,670,305				38,612				1,442				27,452,082				—				21,961,666				5,490,416				20,533				1,337
Oumei Complex			2,082,483				—				2,015,980				66,503				7,156				291				7,093,081				—				7,093,081				—				35,346				201
Oumei Complex			1,361,844				—				1,361,844				—				2,619				520				—				—				—				—				—				—
Sales of Inventory(7)			2,853,544				—				2,853,544				—				8,417				339				2,390,102				—				2,390,102				—				4,613				518
Total		$	156,097,250			$	39,333,476			$	110,518,421			$	6,245,353				285,550			$	547			$	103,493,526				—			$	94,315,500			$	9,178,026				254,938			$	406

Cost of sales.  Our total cost of sales increased 32.4% to $77.2 million in fiscal year 2010 from $58.3 million in fiscal year 2009, mainly due to the increase in sales and an increase of certain costs described more fully under “Gross profit and gross profit margin” below.

Gross profit and gross profit margin.  Our gross profit decreased 7.5% to $33.3 million in fiscal year 2010 from $36.0 million in fiscal year 2009. Gross profit as a percentage of total sales (gross margin) was 30.1% for fiscal year 2010 and 38.2% for fiscal year 2009. The decrease in the gross profit margin was partially due to sales of new properties related to villager relocation efforts for our Dongli Garden project, which contributed approximately 26% of total sales in 2010 (compared with only 12% in 2009). The project was a joint effort between us and local government agencies, and Phase I of the project mainly involved relocating

TABLE OF CONTENTS

villagers previously residing on the parcel designated for Phase II. Therefore, as part of the government’s urban modernization initiatives, the government strictly regulated the selling prices of all Phase I units, which were on average considerably below would-be market prices and in turn resulted in a lower profit margin. Meanwhile, we are required by the government to offer pricing concessions to relocated former villagers based on the sizes of parcels they previously resided on. In addition, in fiscal year 2010, for the Longhai Mingzhu project, we booked an additional $2.1 million in cost of sales to account for a portion of the difference between book value and the fair market value of the assets when we acquired the entity that owned the project, which significantlly contributed to the decrease in the gross profit margin. Another contributing factor is the fact that in fiscal year 2009 we sold a significantly higher amount of accessory spaces (storage and garages), to which no construction cost was allocated, leading to a higher gross profit margin in fiscal year 2009 than in 2010.

Advertising expenses.  Advertising expenses decreased 18.9% to $0.22 million in fiscal year 2010 from $0.27 million in fiscal year 2009, mainly due to the fact that most of the existing projects were completed by the end of 2009 and we reduced our advertising efforts in the 2010 fiscal year on existing projects.

Commission expenses.  Commission paid to independent sales agents amounted to $0.21 million in fiscal year 2010, as compared to $0.08 million in fiscal year 2009, an increase of 152.5%. In addition to our salaried internal salespersons, we used temporary independent sales agents to maximize our pre-sales in the first phase of sales for our Weihai International Plaza project in the 2010 fiscal year. We did not rely as heavily on these temporary sales agents during fiscal year 2009.

Selling expenses.  Our selling expenses increased 24.4% to $0.06 million in fiscal year 2010 from $0.05 million in fiscal year 2009, mainly due to selling expenses related to our Weihai International Plaza, Longhai Mingzhu and Xingfu Renjia projects. Most of our projects are residential projects. As commercial/office projects, our Weihai International Plaza and Longhai Mingzhu projects naturally involved more selling and marketing efforts and costs than a typical residential project, including rental and fit out of the sales center, production of posters, brochures and other media advertisement, and hiring and training of sales personnel.

Bad debt recovery (expense).  Our bad debt recovery in fiscal year 2010 was $0.99 million, compared to bad debt expense of $0.20 million in fiscal year 2009, primarily due to the fact that management has been putting more effort in receivables collection, particularly focusing on those projects that previously had high receivable amounts such as Qilu Textile Centre, Fuxiang Huayuan, and Longhai Lidu, during the past year, while during 2009, we made a provision for doubtful accounts receivable in accordance with our bad debt allowance policy.

General and administrative expenses.  General and administrative expenses increased 58.8% to $7.4 million in fiscal year 2010 from $4.7 million in fiscal year 2009, primarily due to expenses related to new subsidiaries that we acquired since 2009, including Caoxian Industrial and Longhai Real Estate, and expenses related to the April 14, 2010 reverse acquisition and private placement transactions, as well as our public offering registration.

Miscellaneous income.  Included in miscellaneous income for the fiscal year ended December 25, 2010 is the sale of land use rights. On December 16, 2010, we executed a buyout transaction with the government of Licang District, Qingdao, in which the government agreed to pay us approximately $23.7 million in exchange for the pre-development land use right in connection with our planned Dongli Garden 2 project. We had previously planned to build residential units on the land, subject to the government’s re-zoning procedure. Prior to the transaction, the historical cost of the land use right was zero due to the fact that it was categorized as “state allocated land,” which had no value until zoned by the government for commercial development. Therefore, no cost was incurred in connection with this transaction, and the income of approximately $23.7 million was included in miscellaneous income.

Interest expense and finance charges (net of interest income).  Interest expense decreased 62.4% to $0.3 million in fiscal year 2010 from $0.9 million in fiscal year 2009, primarily due to a decrease in the average balance of our borrowings and an increase in the proportion of capitalized interest among all interest paid as more projects went into the construction phase. Please refer to Notes 12 and 13 to our consolidated financial statements for detailed information on our short-term and long-term borrowings.

TABLE OF CONTENTS

Income taxes.  Income taxes increased 66.1% to $15.0 million in fiscal year 2010 from $9.1 million in the fiscal year 2009, due to higher income before taxes.

Net income.  Net income increased 65.2% to $34.9 million in fiscal year 2010 from $21.2 million in 2009, mainly due to the increase in total sales and the sale of land use rights noted above.

Comparison of Fiscal Years Ended December 25, 2009 and December 25, 2008

The following table shows key components of our results of operations during the fiscal years ended December 25, 2009 and 2008, in both dollars and as a percentage of our total sales.

U.S. dollars, except percentages		Fiscal Year Ended December 25, 2009								Fiscal Year Ended December 25, 2008
		Dollars				Percent of Total Sales				Dollars				Percent of Total Sales
Sales		$	91,041,042				96.5	%		$	77,032,561				100.0	%
Sales to related party			3,274,458				3.5	%			—				—
Total sales			94,315,500				100.0	%			77,032,561				100.0	%
Cost of sales			(57,442,457	)			(60.9	)%			(46,321,251	)			(60.1	)%
Cost of sales to related party			(853,951	)			(0.9	)%			—				—
Total cost of sales			(58,296,408	)			(61.8	)%			(46,321,251	)			(60.1	)%
Gross profit			36,019,092				38.2	%			30,711,310				39.9	%
Advertising expenses			(268,222	)			(0.3	)%			(112,263	)			(0.1	)%
Commission expenses			(84,982	)			(0.1	)%			(574,262	)			(0.7	)%
Selling expenses			(49,800	)			(0.1	)%			(81,415	)			(0.1	)%
Bad debt expense			(207,523	)			(0.2	)%			(1,198,942	)			(1.6	)%
General and administrative expenses			(4,655,596	)			(4.9	)%			(2,283,744	)			(3.0	)%
Income from operations			30,752,969				32.6	%			26,460,684				34.4	%
Miscellaneous income			327,294				0.3	%			91,945				0.1	%
Interest expense			(866,751	)			(0.9	)%			(968,710	)			(1.3	)%
Income before income taxes and extraordinary items			30,213,512				32.0	%			25,583,919				33.2	%
Income taxes			(9,058,226	)			(9.6	)%			(6,602,194	)			(8.6	)%
Income before extraordinary items			21,155,286				22.4	%			18,981,725				24.6	%
Extraordinary items, net			—				—				12,499,576				16.3	%
Net income			21,155,286				22.4	%			31,481,301				40.9	%
Foreign currency translation adjustment			474,414				0.5	%			3,486,204				4.5	%
Comprehensive income		$	21,629,700				22.9	%		$	34,967,505				45.4	%

Sales.  Our total sales increased 22.4% to $94.3 million in the fiscal year ended December 25, 2009 from $77.0 million in the fiscal year ended December 25, 2008, mainly due to sales by two project development companies that we acquired during this period, the completion and sales of the Xingfu Renjia project phase 1 and the Fuxiang Huayuan project phase 2, in addition to a higher average selling price per square meter for both residential and commercial properties delivered in fiscal year 2009 compared with fiscal year 2008.

Effective December 26, 2008, we adopted the percentage of completion method of accounting for revenue recognition for all building construction projects in progress in which the construction period was expected to be more than 12 months at that date. The full accrual method was used before that date for all of our residential and commercial projects. We changed to the percentage of completion method for contracts longer than one year because this method more accurately reflects how revenue is earned on these contracts, particularly for interim reporting purposes. ASC 250 requires retrospective application of a change in accounting principle unless impracticable. The change to the percentage of completion method had no effect on our December 25, 2008 financial statements. See “— Critical Accounting Policies — Revenue Recognition” below for a detailed discussion of how we recognize revenue under the percentage of completion method of accounting.

TABLE OF CONTENTS

The following table sets forth the aggregate GFA and the related revenues recognized by project (finished projects) for the fiscal years ended December 25, 2009 and 2008:

		Total GFA(1)				GFA Delivered for Twelve Months Ended December 25,								Percentage of Total GFA Delivered as of December 25,(2)								Revenues recognized for Twelve Months Ended December 25,(3)
						2009				2008				2009				2008				2009								2008
		m2				m2				m2				%				%				US$				%				US$				%
Fuxiang Huayuan 1			52,830				—				52,830				—				100	%			—				—				13,682,009				18	%
Fuxiang Huayuan 2			18,392				18,392				—				100	%			—				5,530,847				6	%			—				—
Xingfu Renjia 1			85,551				85,551				—				100	%			—				11,664,726				12	%			—				—
Oumei Complex 1			91,778				39,624				52,154				100	%			57	%			7,093,081				8	%			9,421,360				12	%
Total			248,551				143,567				104,984											$	24,288,654							$	23,103,369

The following table sets forth the percentage of completion, the percentage sold and related revenues for our projects for the fiscal years ended December 25, 2009 and 2008.

		Total GFA				Percentage of Completion as of December 25,								Percentage Sold —  Accumulated as of December 25,(1)								Revenues recognized for Twelve Months Ended December 25,(2)
						2009				2008				2009				2008				2009								2008
		m2				%				%				%				%				US$				%				US$				%
Longhai Lidu 1			51,450				100	%			100	%			96	%			95	%			192,788				0.2	%			17,787,318				23	%
Longhai Lidu 2			79,308				86	%			67	%			80	%			—				20,508,323				22	%			—				—
Qilu Textile Centre (Comm)			139,510				99	%			98	%			79	%			78	%			488,946				0.5	%			25,720,880				33	%
Qilu Textile Centre (Residential)			67,942				90	%			37	%			79	%			37	%			8,342,029				9	%			7,049,269				9	%
Weihai International Plaza			45,828				—				—				—				—				—				—				—				—
Dongli Garden 1			213,315				48	%			—				17	%			—				16,142,992				17	%			—				—
Longhai Mingzhu			51,902				80	%			—				40	%			—				21,961,666				23	%			—				—
Oumei Complex 2			70,587				—				—				—				—				—				—				—				—
Total			719,842																			$	67,636,744							$	50,557,467

TABLE OF CONTENTS

The following table sets forth the square meters sold and average selling price per square meter by each project on a consolidated basis for the fiscal years ended December 25, 2009 and 2008.

		For Twelve Months Ended December 25, 2009																								For Twelve Months Ended December 25, 2008
		Contract Sales(1)				Revenues recognized from prior contract sales(2)				Revenues recognized in current period(3)				Remaining contract amounts to be recognized(4)				Square meters sold(5)				Average selling price(6)				Contract Sales(1)				Revenues recognized from prior contract sales(2)				Revenues recognized in current period(3)				Remaining contract amounts to be recognized(4)				Square meters sold(5)				Average selling price(6)
		US$				US$				US$				US$				m2				US$/m2				US$				US$				US$				US$				m2				US$/m2
Fuxiang Huayuan 1			—				—				—				—				—				—				13,682,010				—				13,682,010				—				52,830				259
Fuxiang Huayuan 2			5,530,848				—				5,530,848				—				18,392				301				—				—				—				—				—				—
Xingfu Renjia 1			11,664,726				—				11,664,726				—				43,811				266				—				—				—				—				—				—
Oumei Complex 1			7,093,081				—				7,093,081				—				35,346				201				9,421,360				—				9,421,360				—				37,622				250
Longhai Lidu 1			192,788				—				192,788				—				578				334				17,787,318				—				17,787,318				—				48,656				366
Longhai Lidu 2			23,917,534				—				20,508,323				3,409,211				63,640				376				—				—				—				—				—				—
Qilu Textile Centre (Comm)			523,563				—				488,946				34,617				1,405				373				25,720,880				—				25,720,880				—				108,373				237
Qilu Textile Centre (Residential)			8,585,811				—				8,342,029				243,782				29,765				288				7,049,269				—				7,049,269				—				26,427				267
Weihai International Plaza			—				—				—				—				—				—				—				—				—				—				—				—
Dongli Garden 1			16,142,992				—				16,142,992				—				36,855				438				—				—				—				—				—				—
Longhai Mingzhu			27,452,082				—				21,961,666				5,490,416				20,533				1,337				—				—				—				—				—				—
Oumei Complex 2			—				—				—				—				—				—				—				—				—				—				—				—
Sales of Inventory(7)			2,390,102				—				2,390,102				—				4,613				518				3,371,725				—				3,371,725				—				9,039				373
Total		$	103,493,527				—			$	94,315,500			$	9,178,026				254,938			$	406			$	77,032,562				—			$	77,032,562				—				282,947			$	272