Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For Quarterly Period Ended September 30, 2010

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 0-23000

MoqiZone Holding Corporation.

(Exact name of registrant issuer as specified in its charter)

Delaware		95-4217605
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

7A-D Hong Kong Industrial Building

444-452 Des Voeux Road West,

Hong Kong,

(Address of principal executive offices, including zip code)

Registrant’s phone number, including area code +852 3443 4383

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Sec. 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes x No o

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

Large Accelerated Filer o		Accelerated Filer o
Non-accelerated filer o		Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934) Yes o No x

As of November 12, 2010, there were 13,853,455 shares of Common Stock, par value $0.001 outstanding, 1,095 shares of Series A Preferred Stock, par value is $.001, 0 shares of Series B Preferred Stock, par value is $.001, and 869,422 shares of Series C Preferred Stock, par value is $.001.

MOQIZONE HOLDING CORPORATION.

TABLE OF CONTENTS

	Page
PART I - FINANCIAL INFORMATION

Item 1. Financial Statements		3

Consolidated Balance Sheets at September 30, 2010 (unaudited) and December 31, 2009		3

Unaudited Consolidated Statements of Operations and Comprehensive Loss for the three months ended September 30, 2010 and 2009, and from inception through September 30, 2010		4

Unaudited Consolidated Statements of Cash Flows for the three months ended September 30, 2010 and 2009 and from inception through September 30, 2010		5

Unaudited notes to Consolidated Financial Statements		6

Item 2. Management’s Discussion and Analysis or Plan of Operation		21

Item 3. Quantitative and Qualitative Disclosure About Market Risk		30

Item 4T. Controls and Procedures		30

PART II – OTHER INFORMATION

Item 1. Legal Proceedings		32

Item 1A. Risk Factors		32

Item 2. Unregistered Sales of Equity Securities And Use Of Proceeds		32

Item 3. Defaults Upon Senior Securities		33

Item 4. Removed and Reserved		33

Item 5. Other Information		33

Item 6. Exhibits		33

PART I - FINANCIAL INFORMATION

ITEM I — FINANCIAL STATEMENTS

MOQIZONE HOLDING CORPORATION

(A Development Stage Company)

Consolidated Balance Sheets

	September 30, 2010			December 31, 2009
	(unaudited)
ASSETS
Current assets:
Cash		63,233			584,300
Prepayments, deposits and other receivables		241,433			80,180
Inventory		60,112			0
Due from related parties		5,489			1,071

Total current assets		370,267			665,551

Deposit for Viva Red Limited acquisition		160,706			0

Property and equipment, net		778,487			899,247

Total assets		1,309,460			1,564,798

LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
Current liabilities:
Accounts payable		112,746			58,339
Other payables and accruals		152,144			202,468
Accrued directors' fee		224,163			228,901
Due to related parties		0			58
Interest payable		41,277			85,707
Preferred stock dividend payable		67,175			0
Convertible note		246,500			0
Warrant liabilities		3,601,340			25,313,369
Liquidated damages payable		179,200			0
Total current liabilities		4,624,545			25,888,842

Shareholders' deficiency
Common stock, 1,500,000,000 share authorized, $0.001 par value, 13,853,455 and 13,620,260 issued and outstanding as of September 30, 2010 and December 31, 2009, respectively		13,854			13,620
Series A preferred stock		1			1
Series C preferred stock		869			0
Series C preferred stock - Intrinsic Value		1,097,379			0
Warrants		546,298			0
Placement Agent Warrants		115,854			0
Additional paid in capital		1,002,931			447,355
Deficit accumulated during development stage		(6,112,490	)		(24,784,055	)
Accumulated other comprehensive income/(loss) - foreign exchange adjustment		20,219			(965	)
Total shareholders' deficiency		(3,315,085	)		(24,324,044	)

Total liabilities and shareholders' deficiency		1,309,460			1,564,798

See notes to financial statements

MOQIZONE HOLDING CORPORATION

(A Development Stage Company)

Consolidated Statements of Operations and Comprehensive Income (Loss)

	Three months ended September 30,						Nine months ended September 30						From inception August 29, 2007 to September 30,
	2010			2009			2010			2009			2010
	(unaudited)			(unaudited)			(unaudited)			(unaudited)			(unaudited)

Revenue, net		149,395			0			208,612			0			209,984
Costs and expenses
Cost of sales		(144,049	)		0			(196,703	)		0			(196,703	)
Research & development expenses		(35,913	)		0			(248,041	)		0			(278,488	)
Depreciation and amortization expense		(46,303	)		(3,476	)		(140,026	)		(5,554	)		(193,928	)
Selling, general and administrative expenses		(1,155,065	)		(888,486	)		(2,315,120	)		(1,861,341	)		(6,863,258	)
Loss from operations		(1,231,935	)		(891,962	)		(2,691,278	)		(1,866,895	)		(7,322,393	)

Other (expenses)/income
Interest expenses, net of interest income		(41,261	)		(100,405	)		(81,394	)		(130,536	)		(181,229	)
Gain/(loss) on foreign currency transactions		(4,927	)		(20,736	)		(21,417	)		(281	)		(36,267	)
Amortization of placing fees of convertible notes		0			(476,621	)		0			(495,007	)		(58,115	)
Change in fair value of warrants		200,627			(13,472,049	)		21,712,029			(13,472,049	)		1,844,128
Liquidated damages payable		(65,700	)		0			(179,200	)		0			(179,200	)
Total other income/(expenses)		88,739			(14,069,811	)		21,430,018			(14,097,873	)		1,389,317

Net profit/(loss)		(1,143,196	)		(14,961,773	)		18,738,740			(15,964,768	)		(5,933,076	)

Dividend of Series A convertible preferred stock		(22,080	)		0			(67,175	)		0			(179,414	)
Deficit accumulated during development stage		(1,165,276	)		(14,961,773	)		18,671,565			(15,964,768	)		(6,112,490	)

Beneficial conversion feature related to issuance of series C convertible preferred stock		-			-			1,097,379			0			1,097,379
Net income /(loss) applicable to common stockholders		(1,165,276	)		(14,961,773	)		19,768,944			(15,964,768	)		(5,015,111	)

Other comprehensive income (loss)
Foreign currency translation adjustment		(67,737	)		1,843			21,184			(976	)		20,219

Comprehensive income (loss)		(1,210,933	)		(14,959,930	)		18,759,924			(15,965,744	)		(5,912,857	)

Net income/(loss) per share:
Basic		(0.08	)		(3.56	)		1.37			(8.47	)		(1.17	)
Diluted		(0.08	)		(3.56	)		1.37			(8.47	)		(1.17	)

Weighted average number of shares used in computation:
Basic		13,829,353			4,206,946			13,725,271			1,884,343			5,054,326
Diluted		13,829,353			4,206,946			13,725,271			1,884,343			5,054,326

See notes to financial statements

MOQIZONE HOLDING CORPORATION

(A Development Stage Company)

Consolidated Statements of Cash Flows

	Nine months ended September 30,						From inception August 29, 2007 to September 30,
	2010			2009			2010
	(unaudited)			(unaudited)			(unaudited)

Operating activities
Net income/(loss)		18,738,740			(15,964,768	)		(5,933,076	)
Adjustments:
Expenses of share based compensation		430,000						430,000
Capital issued for directors' fees and officer's salaries		0			0			292,883
Depreciation and amortization		140,026			5,554			193,928
Amortization of placement fees of convertible notes		24,650			494,500			82,765
Interest expenses		81,577			111,130			161,247
Warrant liabilities		(21,712,029	)		13,472,049			(1,844,128	)
Other receivables		(161,253	)		(728,741	)		(241,433	)
Inventory		(60,112	)		0			(60,112	)
Accounts payables		54,407			(18,314	)		112,746
Other payables and accruals		(50,521	)		(266,434	)		886,630
Accrued directors' fees		(4,738	)		213,265			224,163
Liquidated damage payable		179,200			0			179,200
Due from/to related parties		(4,476	)		0			16,911
Net cash used in operating activities		(2,344,529	)		(2,681,759	)		(5,498,276	)

Investing activities
Cash acquired from acquisition		0			148,148			0
Deposit for Viva Red Limited acquisition		(160,706	)		0			(160,706	)
Acquisition of property and equipment		(19,266	)		(293,480	)		(970,166	)
Net cash used in investing activities		(179,972	)		(145,332	)		(1,130,872	)

Financing activities
Fund raising		1,982,250			4,150,500			6,749,187
Repayment of convertible notes		0			0			(316,437	)
Loan from owners and officers		0			161,967			20,374
Capital contribution		0			0			221,144
Net cash provided by financing activities		1,982,250			4,312,467			6,674,268

Effect of exchange rate on cash		21,184			(949	)		18,113

(Decrease)/increase in cash		(521,067	)		1,484,427			63,233

Cash, beginning of period		584,300			18,286			0

Cash, end of period		63,233			1,502,713			63,233

Supplement disclosure of cash flow information
Interest paid		0			0			21,008

Supplement disclosure of non-cash transactions
Issuance of shares for dividends and interest		125,810			0			238,049
Preferred stock dividend payable		67,175			0			67,175
Forgiveness of directors' fee		0			0			771,563

See notes to financial statements

Notes to Consolidated Financial Statements

(Unaudited)

NOTE 1. INTERIM FINANCIAL STATEMENTS

The accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s Form 10K filed on April 15, 2010. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for the interim periods are not necessarily indicative of the result to be expected for the full year.

NOTE 2. ORGANIZATION AND NATURE OF OPERATIONS

The accompanying consolidated financial statements include the financial statements of MoqiZone Holding Corporation (the “Company”), its subsidiaries of MoqiZone Holdings Limited, a Cayman Island corporation (“MoqiZone Cayman”), MobiZone Holdings Limited, a Hong Kong corporation (“MobiZone Hong Kong”), MoqiZone (Shanghai) Information Technology Company Limited (“Shanghai MoqiZone”) and a variable interest entity (“VIE”), Shenzhen Alar Technology Company Limited (“Shenzhen Alar”). The Company, its subsidiaries and VIE are collectively referred to as the “Group”. MobiZone Hong Kong operates a Chinese online game content delivery platform company that delivers last mile connectivity to internet cafes installed with our WiMAX equipment and which have joined into our MoqiZone WiMAX Network.

The Share Exchange Agreement, Reverse Merger and Reorganization

On March 15, 2009, Trestle Holdings, Inc. (the “Trestle”) entered into a Share Exchange Agreement with MoqiZone Cayman, Cheung Chor Kiu Lawrence, the principal shareholder of MoqiZone Cayman (“Cheung”), and MKM Capital Opportunity Fund Ltd. (“MKM”), our principal stockholder (the “Agreement”). MoqiZone Cayman is the record and beneficial owner of 100% of the share capital of MobiZone Hong Kong and MobiZone Hong Kong is the record and beneficial owner of 100% of the share capital of Shanghai MoqiZone.

On June 1, 2009, pursuant to the Agreement, and as a result of MoqiZone Hong Kong’s receipt of $4,345,000 in gross proceeds from the financing described below, we acquired all of the issued and outstanding capital stock of MoqiZone Cayman in exchange for the issuance to Cheung and the other shareholders of MoqiZone Cayman of 10,743 shares of our sought to be created Series B convertible preferred stock. The transaction was regarded as a reverse merger whereby MoqiZone Cayman was considered to be the accounting acquirer as it retained control of Trestle after the exchange and Trestle is the legal acquirer. The share exchange was treated as a recapitalization and, accordingly, Trestle reclassified its common stock and additional paid-in-capital accounts for the year ended December 31, 2008. The Financial Statements have been prepared as if MoqiZone had always been the reporting company and then on the share exchange date, had changed its name and reorganized its capital stock.

As of August 28, 2009, our corporate name changed from Trestle Holdings, Inc. to MoqiZone Holding Corporation and our authorized capital increased by 10,000,000 shares of preferred stock. Pursuant to the additional financings we closed in August 2009 and the authority vested in our Board of Directors, we also filed a certificate of designation of Series A preferred stock and certificate of designation of Series B preferred stock with Delaware’s Secretary of State to designate 15,000 of the 15,000,000 shares of preferred stock as Series A preferred stock and 10,743 of the 15,000,000 shares of preferred stock as Series B preferred stock.

On August, 31, 2009, a one-for-254.5 reverse stock split became effective and reduced outstanding shares of our common stock to 703,794 shares. Following the reverse stock split described and per the terms and conditions of our share exchange, the Series B Preferred Stock automatically (and without any action on the part of the holders) converted (on the basis of 1,000 shares of common stock for each share of Series B Preferred Stock) into an aggregate of 10,743,000 shares of our common stock, representing approximately 95% of our issued and outstanding shares of common stock, on a fully-diluted basis, as at the time of conversion (but prior to the issuance of any other equity or equity type securities).

As a result of these transactions, our authorized capital now consists of 40,000,000 shares of common stock, 14,974,257 shares of undesignated preferred stock, whose terms shall be determined by the board of directors at the time of issuance, 15,000 shares of Series A preferred stock, and 10,743 shares Series B preferred stock.

NOTE 3. GOING CONCERN

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has sustained a loss since inception of approximately $6,100,000 and has generated minimal revenues from operations since inception. In addition, the Company has a stockholders’ deficit of approximately $3,300,000 as of September 30, 2010. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

NOTE 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(1)	FASB Establishes Accounting Standards Codification ™

In June 2009, the FASB issued Accounting Standards Update No. 2009-01, “Generally Accepted Accounting Principles” (ASC Topic 105) which establishes the FASB Accounting Standards Codification (“the Codification” or “ASC”) as the official single source of authoritative U.S. generally accepted accounting principles (“GAAP”). All existing accounting standards are superseded. All other accounting guidance not included in the Codification will be considered non-authoritative. The Codification also includes all relevant Securities and Exchange Commission (“SEC”) guidance organized using the same topical structure in separate sections within the Codification.

Following the Codification, the Financial Accounting Standards Board will not issue new standards in the form of Statements, FASB Staff Positions or Emerging Issues Task Force Abstracts. Instead, it will issue Accounting Standards Updates (“ASU”) which will serve to update the Codification, provide background information about the guidance and provide the basis for conclusions on the changes to the Codification.

The Codification is not intended to change GAAP, but it will change the way GAAP is organized and presented. The Codification is effective for our third-quarter 2009 financial statements and the principal impact on our financial statements is limited to disclosures as all future references to authoritative accounting literature will be referenced in accordance with the Codification. In order to ease the transition to the Codification, we are providing the Codification cross-reference alongside the references to the standards issued and adopted prior to the adoption of the Codification.

(2)	Basis of Presentation

The preparation of our financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of expenses during the reporting period. On an ongoing basis, we evaluate our estimates which are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. The result of these evaluations forms the basis for making judgments about the carrying values of assets and liabilities and the reported amount of expenses that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions

(3)	Development Stage Company

The Company has been obtaining the requisite approvals from the Chinese government and since inception, has generated minimal revenues from operations. Accordingly, the Company’s activities have been accounted for as those of a “Development Stage Enterprise.” Among the disclosures required are that the financial statements be identified as those of a development stage company, and that the statements of operations and other comprehensive income (loss), owner’s equity and cash flows disclose activity since the date of inception.

(4)	Consolidation

The consolidated financial statements include the financial statements of the Company, its subsidiaries and VIE subsidiary for which the Company is the primary beneficiary. All transaction and balances among the Company, its subsidiaries and VIE subsidiary have been eliminated upon consolidation.

The Group has adopted “Consolidation of Variable Interest Entities.” This interpretation requires certain variable interest entities to be consolidated by the primary beneficiary of the entity if the equity investors in the entity do have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties.

To comply with PRC laws and regulations that restrict foreign ownership of companies that operate online games, the Company operates its online games mainly through Shenzhen Alar, which is wholly owned by certain PRC citizens. Shenzhen Alar holds the licenses and approvals to operate line games in the PRC.

Pursuant to the contractual arrangements with Shenzhen Alar, MoqiZone Shanghai mainly provides the following intra-group services to Shenzhen Alar:

Gaming related licensing service;

Software licensing service;

Equipment and maintenance service;

Strategic consulting service;

Licensing of billing technology; and

Billing service.

In addition, MoqiZone Shanghai has entered into agreements with Shenzhen Alar and its equity owners with respect to certain shareholder rights and corporate governance matters that provide the Company with the substantial ability to control Shenzhen Alar. Pursuant to these contractual arrangements:

·	The equity owners of Shenzhen Alar have granted an irrevocable proxy to individuals designated by MoqiZone Shanghai to exercise the right to appoint directors, general manager and other senior management of Shenzhen Alar;

·	Shenzhen Alar will not enter into any transaction that may materially affect its assets, liabilities, equity or operations without the prior written consent of MoqiZone Shanghai;

·	Shenzhen Alar will not distribute any dividend;

·	The equity owners of Shenzhen Alar have pledged their equity interest in Shenzhen Alar to MoqiZone Shanghai to secure the payment obligations of Shenzhen Alar under all the agreements between Shenzhen Alar and MoqiZone Shanghai; and

·	The equity owners of Shenzhen Alar will not transfer, sell, pledge or dispose of their equity interest in Shenzhen Alar without any prior written consent of MoqiZone Shanghai.

As a result of these agreements, the Company is considered the primary beneficiary of Shenzhen Alar and accordingly Shenzhen Alar’s results are consolidated in the Company’s financial statements.

(5)	Cash and cash equivalents

Cash and cash equivalents represent cash on hand and highly liquid investment placed with banks, which have original maturities less than three months. Cash and cash equivalents kept with financial institutions in the People’s Republic of China (“PRC”) are not insured or otherwise protected. Should any of those institutions holding the Company’s cash become insolvent, or the Company is unable to withdraw funds for any reason, the Company could lose the cash on deposit at that institution.

(6)	Property and equipment

Property and equipment are stated as cost less accumulated depreciation. Depreciation is computed using the straight-line method over the following estimated useful lives:

Network equipment		3 years
Computer equipment		3 years
Leasehold improvements		Lesser of the term of the lease or the estimated useful lives of the assets
Furniture and fixtures		3 years

(7)	Computer software

Purchased computer software for internal use is capitalized and amortized over its estimated useful live starting when it is placed in service.

(8)	Impairment of long-lived assets and intangible assets

Long-lived assets are reviewed for impairment when circumstances indicate the carrying value of an asset may not be recoverable. For assets that are to be held and used, impairment is recognized when the estimated undiscounted cash flows associated with the asset or group of assets is less than their carrying value. If impairment exists, an adjustment is made to write the asset down to its fair value, and a loss is recorded as the difference between the carrying value and fair value. Fair values are determined based on quoted market values, discounted cash flows or internal and external appraisals, as applicable. Assets to be disposed of are carried at the lower of carrying value or estimated net realizable value. No impairment was recognized during the year ended December 31, 2009 and 2008 and nine months ended September 30, 2010.

(9)	Derivative Financial Instruments

In connection with the sale of debt or equity instruments, we may sell options or warrants to purchase our common stock. In certain circumstances, these options or warrants may be classified as derivative liabilities, rather than as equity. Additionally, the debt or equity instruments may contain embedded derivative instruments, such as embedded derivative features, which in certain circumstances may be required to be bifurcated from the associated host instrument and accounted for separately as a derivative instrument liability.

Derivative financial instruments are recorded as liabilities in the consolidated balance sheet, measured at fair value. When available, quoted market prices are used in determining fair value. However, if quoted market prices are not available, we estimate fair value using either quoted market prices of financial instruments with similar characteristics or other valuation techniques.

The identification of, and accounting for, derivative instruments is complex. Our derivative instrument liabilities are re-valued at the end of each reporting period, with changes in the fair value of the derivative liability recorded as charges or credits to income, in the period in which the changes occur. For options, warrants and bifurcated embedded derivative features that are accounted for as derivative instrument liabilities, we estimate fair value using either quoted market prices of financial instruments with similar characteristics or other valuation techniques. The valuation techniques require assumptions related to the remaining term of the instruments and risk-free rates of return, our current common stock price and expected dividend yield, and the expected volatility of our common stock price over the life of the option. The identification of, and accounting for, derivative instruments and the assumptions used to value them can significantly affect our financial statements.

Derivative financial instruments that are not designated as hedges or that do not meet the criteria for hedge accounting under ASC topic 815 “Derivatives and Hedging” are recorded at fair value, with gains or losses reported currently in earnings. The derivative financial instruments we held as of September 30, 2010, were not designated as hedges.

(10)	Policy Revenue Recognition

Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable, and collectability is probable. We license a client-end software to internet cafes for them to automatically update their client-end software on a real time basis. Revenue for such a licensing fee is recognized on a straight-line basis over the license period.

(11)	Deferred income taxes

Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. In addition, ASC topic 740 “Income Taxes” requires recognition of future tax benefits, such as carry forwards, to the extent that realization of such benefits is more likely than not and that a valuation allowance be provided when it is more likely than not that some portion of the deferred tax asset will not be realized.

(12)	Foreign currency translation

Since the Group operates solely in Hong Kong and the PRC, the Group’s functional currency is the Hong Kong Dollar (“HKD”) and the Renminbi (“RMB”). Assets and liabilities are translated into U.S. Dollars at the exchange rates at the end of each reporting period and record the related translation adjustments as a component of other comprehensive income (loss). Revenue and expenses are translated using average exchange rates prevailing during the period. Foreign currency transaction gains and losses are included in current operations.

(13)	Comprehensive income (loss)

Comprehensive income is defined to include all changes in equity except those resulting from investments by shareholders and distributions to shareholders. Among other disclosures, all items that are required to be recognized under current accounting standards as components of comprehensive income are required to be reported in a financial statement that is presented with the same prominence as other financial statements. Comprehensive income includes net income and the foreign currency translation gain, net of tax.

NOTE 5. DUE FROM/TO RELATED PARTIES AND RELATED PARTY TRANSACTIONS

The amounts that are due from/to the directors, officers of the Company and the companies being controlled by them, are non-interest bearing and are due on demand.

The Company purchased computer software in the amount of $157,000 from a related party for our platform technology development. Management has adopted ASC 850-10-50-5 to determine whether the transaction was not carried out on an arms-length basis. According to ASC 850-10-50-5, transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market dealings may not exist and representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated. Therefore, the transaction from the Company’s point of view was not carried out on an arms-length basis.

NOTE 6. ACQUISTION OF NETCAFE FARMER SOFTWARE

On December 21, 2009, we acquired a client-end software called “Netcafe Farmer”. By acquiring Netcafe Farmer, the Company also recruited Mr. Liu Qian and his development team of 4 people. This acquisition was accounted for under the acquisition method of accounting. The cost of the acquisition was approximately US$95,000 (or RMB650,000) and is being amortized over its estimated useful life. Pro forma results of operations as if the acquisitions occurred at the beginning of the periods included in the financial statements are not presented as they would be immaterial.

NOTE 7. DEPOSIT FOR VIVA RED LIMITED

On July 7, 2010, we entered into a Share Transfer Agreement with Smart Lead Enterprises, Inc., a British Virgin Islands Company, whereby we agreed to acquire 51% shares of Viva Red Limited (“Viva Red”). Viva Red is a company that acquires various licenses of mobile phone game and entertainment products and conducts a value-add telecommunication business regarding mobile phones in Mainland China. Viva Red is a wholly owned subsidiary of Smart Lead. They recently entered into a Business Transfer Agreement whereby two contracts with Hunan Telecom will be transferred from Smart Lead to Viva Red; these Hunan contracts will enable Viva Red to conduct mobile game value-added business.

The terms of the Share Transfer Agreement between us and Smart Lead are as follows:

(i)	RMB1,000,000 (approximately US$147,059) as cash deposit paid upon execution;

(ii)	US$490,000 as first cash payment paid after completion of share transfer; this payment will be remitted directly to Viva Red as a loan extended by Smart Lead to Moqizone for working capital of Viva Red for a term of 2 years;

(iii)

US$510,000 less the approximately US$147,059 (RMB1,000,000) as second cash payment paid as of closing, after the revenue of first quarter of 2010 under Hunan Contracts has been paid to account of Viva Red;

(iv)

Stock Consideration payable in 1,200,000 ordinary shares of Moqizone Holding Corporation, within 3 months of closing. The shares will be subject to a 2 year lock-up and the parties have agreed that if the business is not successful within such 2 years, the shares will be returned and the 51% shares of Viva Red will also be returned to Smart Lead although no formal agreement has yet been drafted regarding such a return.

(v)

Viva Red, after obtaining the business under the Hunan Telecom contract, will operate the business covered by the Hunan contracts through the Company’s VIE company, Shenzhen Alar or another VIE established to operate the business, as the contracts cannot be performed in China by a foreign owned company.

As of September 30, 2010, a cash deposit of US$160,706 was paid and recorded in long-term investment.

NOTE 8. CONVERSION OF CONVERTIBLE NOTES

Upon effectiveness of the Reverse Split on August 31, 2009, each $1,000 principal amount of Notes (see Note 2) was automatically cancelled and exchanged for one share of Series A Preferred Stock. Since we sold a total of 494.5 Units, upon exchange of the Notes, a total of 4,945 shares of Series A Preferred Stock were issued, which were convertible into an aggregate of 2,747,222 shares of common stock, subject to anti-dilution and other adjustments as provided in the Series A Preferred Stock Certificate of Designations.

We raised a total of $4,945,000 from 11 accredited investors from the Financings after repayment of the Convertible Notes. As a result of the Financings, we issued a total of approximately 494.5 Units of securities each consisting of (a) the Notes, (b) the Class A Warrants, and (c) the Class B Warrants. Pursuant to the sale of approximately 494.5 Units, we issued an aggregate of approximately $4,945,000 of Notes, Class A Warrants to purchase up to 1,373,614 shares of common stock and Class B Warrants to purchase up to 1,373,614 of common stock. The net proceeds from the Financings are to be used for working capital and general corporate purposes. We are obligated to file a registration statement within 150 days of the second closing, providing for the resale of the shares of common stock underlying the securities issued pursuant to the Financings.

In connection with the June 1 Financing and August 11 Financing, we granted warrants to purchase up to 582,779 shares of common stock respectively to Tripoint Global Equities, LLC, the placement agent or its designees. These warrants have the same terms as the warrants issued to Investors and included in the Units. The placement agent received a total of 582,779 warrants to purchase up to 582,779 shares of our common stock from the Financing. These warrants have the same terms as the warrants issued to Investors and included in the Units.

Following the Reverse Stock Split and the automatic conversion of the Series B preferred stock issued under the Share Exchange Agreement to the MoqiZone Cayman shareholders into Series B Conversion Shares:

all of the issued and outstanding Notes have been, by their terms be deemed cancelled;

all interest accrued on the Notes (at the rate of 8% per annum) from the date of issuance to the date of cancellation will be paid, at the Company’s option, in cash or in a shares of Trestle common stock valued at $1.80 per share;

each $1,000 principal amount of cancelled MobiZone Hong Kong Note has been exchanged for one share of Series A Preferred Stock, $0.001 par value per share. The Series A Preferred Stock (i) a liquidation value of $1,000 per share, (ii) vote, together with the Trestle common stock, on an “as converted basis”, and (iii) are convertible, at any time after issuance, at the option of the holder, into shares of the Company’s common stock at a conversion price of $1.80 per share, subject to customary adjustments, including weighted average anti-dilution protection.

Pursuant to the terms of the Financing, the Company has agreed to cause (i) the maximum number of shares of Moqizone common stock issuable upon conversion of all shares of Series A Preferred Stock and (ii) the maximum number of Class A Warrant Shares and Class B Warrant Shares to be registered for resale under the Securities Act of 1933, as amended, pursuant to a registration rights agreement, which provides inter alia that Moqizone shall file a registration statement for the Registrable Shares within 30 days after the completion of the Reverse Stock Split and cause the registration statement to become effective within 150 days after the completion of the Reverse Stock Split or 180 days in the event of a full review by the SEC. If Moqizone does not comply with the foregoing obligations under the registration rights agreement, it will be required to pay cash liquidated damages to Investors, at the rate of 2% of the $10,000 offering price of each Unit sold in the offering ($200.00) for each 30 day period after the Registration Date that such Registrable Shares have not be registered for resale under the Securities Act of 1933, as amended; provided that, such liquidated damages shall not exceed $1,000 per Unit sold in the offering (a minimum of $400,000 and a maximum of $800,000); provided, however, that such liquidated damages shall not apply to any Registrable Shares that are subject to an SEC comment with respect to Rule 415 promulgated under the Securities Act of 1933, as amended

In addition, in the event the Company’s revenues for the year ending December 31, 2010 shall equal or exceed $21,560,000, the management shareholders of MoqiZone Cayman shall be issued warrants to purchase up to 900,000 additional shares of the Company’s common stock at an exercise price of $1.80 per share, exercisable for a period of three years.

Under the terms of the Share Exchange Agreement, all of the shareholders of MoqiZone Cayman who are members of our senior management, have deposited in an escrow account an aggregate of 900,000 shares of the Company’s common stock. These shares (the “Performance Shares”) would have been delivered to the management group shareholders only in the event that the Company achieves certain performance targets over the twelve consecutive months commencing July 1, 2009 and ending June 30, 2010 (the “Measuring Period”). If $6,000,000 or more raised in the Financing, then: (i) in the event that we realize at least $19,171,000 (the “Target Revenue”) of revenues by the end of the Measuring Period, all of the Performance Shares will be released to the management group, and (ii) in the event that less than the Target Revenue is realized by the end of the Measuring Period, a pro-rata portion of the Performance Shares shall be distributed to the purchasers of the Units offered hereby, based upon 0.2347 Performance Shares for each USD $1.00 that the actual revenues achieved by the end of the Measuring Period shall be less than the Target Revenue, or 45,000 Performance Shares for each 1% of $19,171,000 ($191,710) by which the actual revenues shall be less than the Target Revenue. If less than $6,000,000 is raised in the Financing, then: (i) in the event that we realize at least $10,450,000 (the “Lower Target Revenue”) in reported revenues by the end of the Measuring Period, all of the Performance Shares will be released to the management group and (ii) in the event that less than $10,450,000 of reported revenues are realized by the end of the twelve month Measuring Period, a pro-rata portion of the Performance Shares shall be distributed to the purchasers based upon 0.4306 Performance Shares for each USD $1.00 that the actual revenues achieved by the end of the Measuring Period shall be less than the Lower Target Revenue, or 45,000 Performance Shares for each 1% of $10,450,000 ($104,500) by which the actual revenues shall be less than the Lower Target Revenue. As we only raised $5,245,000 which is less than $6,000,000 from our Financings, the Lower Target Revenue scenario is applicable.

The Performance Warrants

Certain of the members of our senior management will be, under the terms of the Share Exchange Agreement, entitled to receive three year warrants to purchase 900,000 shares of Moqizone common stock, exercisable at $1.80 per share (the “Performance Warrants”) in the event that our audited net income as of the date that is 24 months after the Final Closing of the Financings shall equal or exceed $21,560,000, assuming that we complete this Offering with the sale of at least 600 Units for $6,000,000. If however, we complete the Offering for an aggregate amount less than $6,000,000, than such persons shall only be entitled to receive the Performance Warrants in the event that our audited net income as of the date that is 24 months after the Final Closing of the Financing equals or exceeds $5,000,000.

NOTE 9. WARRANT LIABILITY

As described in Note 8 (Conversion of Convertible Notes), we issued a total of approximately 494.5 Units of securities each consisting of (a) the Notes, (b) the Class A Warrants, and (c) the Class B Warrants. Pursuant to the sale of approximately 494.5 Units, we issued an aggregate of approximately $4,945,000 of Notes, Class A Warrants to purchase up to 1,373,614 shares of common stock and Class B Warrants to purchase up to 1,373,614 of common stock will be issued. The Class A warrants have an exercise price of $2.50 per share with a three year term and the Class B warrants have an exercise price of $3.00 per share with a three year term.

The Class A, Class B and Placement Agent warrants (“Warrants”) have an initial exercise price which is subject to adjustments in certain circumstances for stock splits, combinations, dividends and distributions, reclassification, exchange or substitution, reorganization, merger, consolidation or sales of assets, issuance of additional shares of common stock or equivalents.

Accounting for Warrants

The Warrants are entitled to a price adjustment provision that allows the price of the Warrants to be reduced in the event the Company issues any additional shares of common stock at a price per share less than the then-applicable warrant price, The Company determined that the Warrants meet the definition of a derivative under ASC Topic 815, Derivatives and Hedging “ASC Topic 815”). In determining whether the Warrants were eligible for a scope exception from ASC Topic 815, the Company considered the provisions of ASC Topic 815-40 (Determining Whether an Instrument (or Embedded Feature) Is Indexed to an Entity’s Own Stock). The Company determined that the Warrants do not meet a scope exception because they are not deemed indexed to the Company’s own stock. Pursuant to ASC Topic 815, derivatives should be measured at fair value and re-measured at fair value with changes in fair value recorded in earnings at each reporting period.

Fair Value

Warrant Liability

The warrants that each investor received as a result of our Financings and conversion of the convertible notes (see Note 10 for additional details) contained a down round protection if the company sells or issue shares at a price per share less that the then-applicable warrant price. As such and in accordance with the accounting guidelines, we valued the warrants as a derivative financial instrument and the corresponding liabilities were entered onto our consolidated balance sheet, measured at fair value. The Company determined the fair value of the warrants as follows as of August 31, 2009 (effective issuance date).

The Company used the Black-Scholes option-pricing model with the following assumptions: an expected life equal to the contractual term of the warrants (three years), underlying stock price of $5.09 (as at August 31, 2009 – effective date of conversion), no dividends; a risk free rate of 1.49% which equals three -year yield on Treasury bonds at constant (or fixed) maturity (for those warrants with an effective issue date of August 31); and volatility of 55.24%. Although the Company’s common stock (as a result of the recent reverse merger) had been publicly traded since March 2009, Management also considered liquidity, financial condition and the recent conversion of its convertible notes in Series A preferred stock when determining the fair value of its common stock. After reviewing these factors, Management believed that the quoted market price of its securities provided the most reliable evidence of its fair value and should be used since it was available and deemed to be most relevant. As the Company’s stock had only a short trading history, historical volatility information was not available. In accordance with the guidance in ASC 718-10-30-2, the Company identified three similar public entities and considered the historical volatilities of those public entities in calculating the expected volatility appropriate to the company (the calculated value). Under the assumptions, the Black-Scholes option pricing model yielded an aggregate value of approximately $9,968,597.

The Company performed the same calculations as of December 31, 2009 and September 30, 2010, to revalue the warrants as of those respective dates. In using the Black Scholes option-pricing model at December 31, 2009, the Company used an underlying stock price of $10.00 per share; no dividends; a risk free rate of 1.7% which equals three-year yield on Treasury bonds at constant (or fixed) maturity (for those warrants with an effective issue date of August 31); and volatility of 57.77%. At September 30, 2010, the Company used the Black Scholes option-pricing model with an underlying stock price of $3.00 per share; no dividends; a risk free rate of 1.0% which equals three-year yield on Treasury bonds at constant (or fixed) maturity (for those warrants with an effective issue date of August 31); and volatility of 57.77%. The resulting aggregate allocated value of the warrants as of December 31, 2009 equaled approximately $25,313,000 and $3,601,340 as of September 30, 2010. As a result a change in fair value of approximately $19,868,000 was recorded for the year ended December 31, 2009 and a change in fair value of approximately $21,700,000 was recorded for the nine months ended September 30, 2010.

Upon the earlier of the warrant exercise or the expiration date, the warrant liability will be reclassified into shareholders’ equity. Until that time, the warrant liability will be recorded at fair value based on the methodology described above.

NOTE 10. ACCOUNTING FOR SERIES A PREFERRED STOCK

The management has adopted ASC 480-10, “S99 SEC Materials”. Under this rule, ASR 268 requires equity instruments with redemption features that are not solely within the control of the issuer to be classified outside of permanent equity. As there was no redemption provision attached to Series A Preferred Stock, it has been classified as permanent equity.

The management has also adopted ASC 815-15-25-1. It requires that an embedded derivative shall be separated from the host contract and accounted for as a derivative if and only if all of the following three criteria are met: (a) the economics characteristics and risks of the embedded derivative are not clearly and closely related to the economics characteristics and risks of the host contract; (b) the hybrid instrument is not re-measured at fair value under otherwise applicable GAAP with changes in fair value reported in earnings as they occur; and (c) a separate instrument with the same terms as the embedded derivative would be a derivative instrument subject to the requirements of section 815-10-15. Additionally, under ASC 815-15-25-16 through ASC 815-15-25-18, if the host contract encompasses a residual interest in an entity, then its economic characteristics and risks shall be considered that of an equity instrument and an embedded derivative would need to possess principally equity characteristics (related to the same entity) to be considered clearly and closely related to the host contract. Given the fact that the Series A Preferred Stock encompasses a residual interest in the company and it is related to the company itself, the conversion feature is clearly and closely related to the host instrument. Thus, the embedded conversion feature in Series A preferred stock should not be account as a derivative instrument.

Equity instruments that contain a beneficial conversion feature are recorded as a deemed dividend to the holders of the convertible equity instruments. The deemed dividend associated with the beneficial conversion is calculated as the difference between the fair value of the underlying common stock less the proceeds that have been received for the equity instrument limited to the value received. The beneficial conversion amount is recorded as a reduction on the carrying value of the equity instrument and an increase to additional paid-in-capital.

In the case of conversion of the convertible note, the fair market value of the warrant liability exceeded the cash raised in the financings and therefore the residual value assigned to the Preferred Stock was nil. As such, the financing was not deemed to have a beneficial conversion feature and any value assigned to a beneficial conversion was deemed to be zero.

NOTE 11. SERIES C FINANCING

We completed a private equity financing of $1,956,200 on March 29, 2010, with 7 accredited investors. Net proceeds from the offering, are approximately $1,760,400. Pursuant to the financing, we issued a total of 869,422 units of our securities at $2.25 per unit. Each Unit consists of (i) one (1) share of the Company’s Series C Convertible Preferred Stock, par value $0.001 per share (the “Preferred Shares”), convertible into one share of the Company’s common stock, par value $0.001 per share (the “Common Stock”), and (ii) a Series C Warrant (the “Series C Warrant”) and Series D Warrant (the “Series D Warrant”), (collectively the “Warrants”), with the total amount of Warrants of each Series exercisable to purchase that number of shares of Common Stock as shall be equal to fifty percent (50%) of the number of Units purchased in the Offering. Series C Warrant has an exercise price of $2.50 and Series D Warrant has an exercise price of $3.00. Each of the Warrants have a term of three (3) years.

In connection with this financing, we paid cash compensation to a placement agent in the amount of approximately $196,000. We also granted warrants to purchase up to 869,422 shares of common stock consisting of Series C Warrants to purchase up to 434,711 shares of common stock at a price of $2.50 per share and Series D Warrants to purchase 434,711 shares of common stock at a price of $3.00 per share. Additionally, in connection with this financing, we granted warrants to purchase up to 86,942 shares of common stock at a price of $2.25 per share, Series C Warrants to purchase up to 43,471 shares of common stock at a price of $2.50 per share and Series D Warrants to purchase 43,471 shares of common stock at a price of $3.00 per share to the placement agent or its designees. These warrants have the same terms as the warrants issued to Investors that are included in the Units.

Pursuant to the March 29, 2010 financing, 869,422 of the 1,000,000 shares of preferred stock were designated as Series C Preferred Stock, which maintain the following basic rights:

(a)	pays an annual dividend of 8%, payable quarterly, at Moqizone’s option, in cash or in shares of common stock;

(b)	has a par value of $0.001 per share;

(c)	has a preference over the Moqizone common stock or any other Junior Stock on liquidation and the liquidation value is $2.25 per share;

(d)	converts at any time after issuance, at the option of the holder, into shares of Moqizone common stockand,

(e)	votes together with the Moqizone common stock on an “as converted basis.”

NOTE 12. ACCOUNTING FOR SERIES C PREFERRED STOCK

The management has adopted ASC 480-10, “S99 SEC Materials.” Under this rule, ASR 268 requires equity instruments with redemption features that are not solely within the control of the issuer to be classified outside of permanent equity. As there was no redemption provision attached to Series C Preferred Stock, it has been classified as permanent equity.

The management has also adopted ASC 815-15-25-1. It requires that an embedded derivative shall be separated from the host contract and accounted for as a derivative if and only if all of the following three criteria are met: (a) the economics characteristics and risks of the embedded derivative are not clearly and closely related to the economics characteristics and risks of the host contract; (b) the hybrid instrument is not re-measured at fair value under otherwise applicable GAAP with changes in fair value reported in earnings as they occur; and (c) a separate instrument with the same terms as the embedded derivative would be a derivative instrument subject to the requirements of section 815-10-15. Additionally, under ASC 815-15-25-16 through ASC 815-15-25-18, if the host contract encompasses a residual interest in an entity, then its economic characteristics and risks shall be considered that of an equity instrument and an embedded derivative would need to possess principally equity characteristics (related to the same entity) to be considered clearly and closely related to the host contract. Given the fact that the Series C Preferred Stock encompasses a residual interest in the company and it is related to the company itself, the conversion feature is clearly and closely related to the host instrument. Thus, the embedded conversion feature in Series C preferred stock should not be accounted as a derivative instrument.

Allocation of Proceeds and calculation of beneficial conversion feature

The following table summarizes the initial allocation of proceeds to the Series C preferred stock and the warrants:

Proceeds from Series C Financing	$	1,956,200
Financing Commissions from Series C Preferred Stock	$	195,800
Proceeds from Series C Financing After Commission	$	1,760,400
Value of Series C Preferred Stock	$	1,098,248
Value of Investor Warrants	$	546,298
Value of Placement Agent Warrants	$	115,854

The Company then evaluated whether a beneficial conversion feature exists by comparing the operable conversion price of Series C preferred stock with the fair value of the common stock at the commitment date. The Company concluded that the fair value of common stock was greater than the operable conversion price of Series C preferred stock at the commitment date and the intrinsic value ($1,321,521) of the beneficial conversion feature is greater than the proceeds allocated to the Series A preferred stock ($1,098,248). In accordance to ASC Topic 470 subtopic 20, if the intrinsic value of beneficial conversion feature is greater than the proceeds allocated to the Series C preferred stock, the amount of the discount assigned to the beneficial conversion feature is limited to the amount of the proceeds allocated to the Series C preferred stock. Accordingly, the total proceeds allocated to Series C preferred stock were allocated to the beneficial conversion feature with a credit to Additional paid-in capital upon the issuance of the Series C preferred stock. Since the Series C preferred stock may convert to the Company’s common stock at any time on or after the initial issue date, all discounts were immediately recognized as a deemed dividend and a reduction to net income attributable to common shareholders in the period the preferred stock was issued.

As such, the following table summarizes the final allocation of proceeds to the Series C preferred stock and the warrants:

Proceeds from Series C Financing	$	1,956,200
Financing Commissions from Series C Preferred Stock	$	195, 800
Proceeds from Series C Financing After Commission	$	1,760,400
Beneficial Conversion Feature – Deemed Dividend	$	1,098,248
Value of Series C Preferred Stock	$	-
Value of Investor Warrants	$	546,298
Value of Placement Agent Warrants	$	115,854

NOTE 13. INTEREST ON CONVERSION TO SERIES A PREFERRED STOCK

On January 6, 2010, the board of directors passed a resolution to issue 47,504 shares of our common stock that was due as interest as a result of the conversion of the $4,945,000 convertible notes (see note 5 for additional details) into 4,945 of our Series A Convertible Preferred Stock. The number of shares issued was calculated at a rate of 8% per annum (subject to a pro rata adjustment) of the liquidation preference amount payable in shares equal to (i) the interest payment divided by (ii) $1.80. As such, the shares were valued at approximately $85,510 and the total aggregate value of the transaction was recorded as an interest payment.

NOTE 14. SERIES A PREFERRED STOCK DIVIDEND

On January 30, 2010, we issued an aggregate of 62,355 shares of common stock, as dividends, to the holders our Series A Convertible Preferred Stock as shown in the table below. The number of shares issued was calculated at a rate of 8% for the Series C Preferred Stock, per annum (subject to a pro rata adjustment) of the liquidation preference amount payable in shares which, when multiplied by $1.80 would equal the amount of such quarterly dividend not paid in cash. As such, the shares were valued at approximately $112,200 and the total aggregate value of the transaction was recorded as a preferred stock dividend.

NOTE 15. SERIES A PREFERRED STOCK CONVERSION

On June 1, 2010 we issued 27,778 shares of our common stock pursuant to a shareholders conversion of 50 shares of our Series A Preferred Stock that he owned. We did not receive any proceeds from this conversion. The shares were issued pursuant to the exemption from registration provided by Section 4(2) of the Securities Act for issuances not involving any public offering.

NOTE 16. SERIES C PREFERRED STOCK DIVIDEND

On July 30, 2010, we issued an aggregate of 17,913 shares of common stock, as dividends, to the holders our Series C Convertible Preferred Stock as shown in the table below. The number of shares issued was calculated at a rate of 8% for the Series C Preferred Stock, per annum (subject to a pro rata adjustment) of the liquidation preference amount payable in shares which, when multiplied by $2.25 would equal the amount of such quarterly dividend not paid in cash. As such, the shares were valued at $40,300 and the total aggregate value of the transaction will be recorded as a preferred stock dividend.

NOTE 17. CONVERTIBLE NOTE FINANCING

We completed the initial closing of a private equity financing of $246,500 on August 27, 2010 with 2 accredited investors pursuant to a Securities Purchase Agreement. Net proceeds from the offering, are approximately $221,850. Pursuant to the financing, we issued a total of 11 units of our securities at $22,500 per unit. Each Unit consists of (i) an 8% Convertible Note, convertible into shares of the Common Stock, (ii) a Series E Warrant, and (iii) a Series F Warrant, each such warrant gives the holder the right to purchase up to that number of shares of our common stock as shall be equal to fifty percent (50%) of the number of shares of common stock underlying the Convertible Note. Each of the Warrants has a term of three (3) years.

In connection with the August 27th financing, we paid cash compensation to a placement agent in the amount of $24,650. We also issued, to the placement agent or its designees, in connection with this financing, warrants to purchase up to that number of shares of our common stock as shall be equal to ten percent (10%) of the total number of shares underlying the Units. These warrants have the same terms as the warrants issued to Investors that are included in the Units.

NOTE 18. LIQUIDATED DAMAGES FOR INEFFECTIVE REGISTRATION STATEMENT

On June 1 and August 9, 2009, the Company entered into Registration Rights Agreement with the Investors (the “Investor RRA”). Under the Investor RRA, the Company was required to prepare and file a registration statement for sale of the Common stock issuable to the investors and holders of the Series A Preferred Stock no later than thirty (30) days after the completion of the Trestle Reverse Split (effective on August 31, 2009 as described in Note 5), the Company shall file with the SEC a Registration Statement (the “Resale Registration Statement”) registering for resale at prevailing market prices all of the Registrable Securities. The Company shall use its best efforts to obtain effectiveness of the Registration Statement with respect to all Registrable Securities no later than one hundred and fifty (150) days after the completion of the Trestle Reverse Split, and shall respond to all oral and written comments from the staff of the SEC.

The Company filed the initial registration statement to fulfill the Company’s obligations under the RRA on September 30, 2009. Per the terms of the agreement, the Company is subject to certain monetary obligations if, the registration statement was not declared effective by the SEC by January 28, 2010. The obligations are payments in an amount equal to two percent (2%) of the aggregate principal amount of the Notes or aggregate Stated Value of the Series A Preferred Stock (as applicable) for each month (or part thereof) following the Required Filing Date that the Resale Registration Statement shall not have been duly filed with the SEC, and/or for each month (or part thereof) following the Required Effective Date that the Resale Registration Statement shall not have been declared effective by the SEC, up to a maximum amount of 10%.

Since the registration statement was not declared effective by the SEC by January 28, 2010, the Company began accruing liquidated damages for $22,900 (or 2 percent of $1,145,000 of the stated value of the outstanding Series A Preferred Stock outstanding as of January 28, 2010) for each month that the registration statement was not declared effective by the SEC. As of September 30, 2010, the company had accrued $179,200 of liquidated damages. The company is currently planning to speak with the Series A shareholder concerning an adjustment and/or cancelation of these damages.

NOTE 19. SHARE BASED COMPENSATION

JFS Investment Inc and Garden State Securities Consultancy services

On July 12, 2010, the Company engaged JFS Investments Inc. (“JFS”) to provide consulting services. The initial term of the agreement is for one year. As compensation, the Company agreed to issue JFS 225,000 shares of the Company’s common stock that vest as follows: 70,000 upon execution of the agreement and 17,222 shares per month beginning in January 2011 and continuing until September 2011. The 225,000 shares were valued at $2.50 per share, the closing bid of the Company’s common stock on July 12, 2010, the date of the agreement. Therefore, total aggregate value of the shares granted to JFS is approximately $563,000. The cost of these shares will be expensed as they vest. As such, the Company recognized $175,000, which was recorded in general, and administrative expenses as share-based compensation expenses, on July 12, 2010 and will recognize approximately $43,000 per month beginning in January 2011 and continuing through September 2011.

As additional compensation, the Company also granted JFS 150,000 three-year exercisable options at a price of US$2.25 per share. Of these options, 37,500 of the Options vested immediately and the balance will vest 12,500 per month beginning in January 2011 and continuing until September 2011. These options were valued at approximately US$160,000 which represents the grant date fair value of these options. The related compensation expenses will be recognized over its vesting period. The cost of these options will be expensed as they vest and will be recorded in general and administrative expenses as share-based compensation expenses. Pursuant to these options, we incurred approximately $40,000 of expenses on July 12, 2010 and will incur approximately $13,000 per month beginning in January 2011 and continuing through September 2011.

The Company estimates the fair value of these options using the Black-Scholes option pricing model with the following assumptions: an expected life equal to the contractual term of the options underlying stock price of $2.50 per share, no dividends; a risk free rate of 1.06%, which was the three-year yield on Treasury bonds at constant (or fixed) maturity and volatility of 58%. The expected volatility is calculated using historical data obtained from comparable public companies due to lack of liquidity of the Company’s underlying stock. Exercise price of the option is the contractual exercise price of the option.

On July 12, 2010, the Company engaged Garden State Securities (“GSS”) to provide consulting services. The initial term of the agreement is for one year. As compensation, the Company agreed to issue GSS 225,000 shares of the Company’s common stock that vest as follows: 70,000 upon execution of the agreement and 17,222 shares at the beginning in January 2011 and continuing until September 2011. . The 225,000 shares were valued at $2.50 per share, the closing bid of the Company’s common stock on July 12, 2010, the date of the agreement. Therefore, total aggregate value of the shares granted to JFS is approximately $563,000. The cost of these shares will be expensed as they vest. As such, the Company recognized $175,000, which were recorded in general, and administrative expenses as share-based compensation expenses, on July 12, 2010 and will recognize approximately $43,000 per month beginning in January 2011 and continuing through September 2011.

As additional compensation, the Company also granted GSS three-year warrants in the aggregate 150,000 shares of the Company’s common stock at an exercise price of US$2.25 per share. Of these warrants, 37,500 vested immediately and the balance will vest 12,500 per month beginning in January 2011 and continuing until September 2011. These warrants were valued at approximately US$160,000 which represents the grant date fair value of these warrants. The cost of these warrants will be expensed as they vest and will be recorded in general and administrative expenses as share-based compensation expenses. Pursuant to these warrants, incurred approximately $40,000 of expenses on July 12, 2010 and will incur approximately $13,000 per month beginning in January 2011 and continuing through September 2011.

The Company estimates the fair value of these warrants using the Black-Scholes option pricing model with the following assumptions: an expected life equal to the contractual term of the warrants (three), underlying stock price of $2.50 per share, no dividends; a risk free rate of 1.06%, which three-year yield on Treasury bonds at constant (or fixed) maturity and volatility of 58%. The expected volatility is calculated using historical data obtained from comparable public companies due to lack of liquidity of the Company’s underlying stock. Exercise price of the warrant is the contractual exercise price of the warrant.

Employee share option plan

On July 22, 2010, the Board of Directors approved the 2010 Equity Incentive Plan, pursuant to which 1,500,000 shares of our common stock are reserved for issuances to current and prospective employees, non-employee directors, consultants or other persons who provide services to us that hold positions of responsibility and whose performance, in management’s – or other board appointed committee – judgment, can have a significant effect on our success.

On July 22, 2010, the Company granted an aggregate of 1,455,000 three-year options to 51 employees to purchase common stock at an exercise price of US$2.25 per share. These options shall vest semi-annually in equal amounts over the life of the options. These options were valued at approximately US$1,548,000 which represents the grant date fair value of these options. Going forward the cost of these options will be expensed as they vest and will be recorded in general and administrative expenses as share-based compensation expenses. Pursuant to these options, we will incur approximately $258,000 of expenses on January 22, 2011 and incurring in equal amounts every six months with the last expense incurring on July 22, 2013.

The Company estimates the fair value of these options using the Black-Scholes option pricing model with the following assumptions: an expected life equal to the three year contractual term of the options, underlying stock price of $2.50 per share, no dividends; a risk free rate of 0.92%, which is the three-year yield on Treasury bonds at constant (or fixed) maturity and volatility of 58%. The expected volatility is calculated using historical data obtained from comparable public companies due to lack of liquidity of the Company’s underlying stock. Exercise price of the option is the contractual exercise price of the option.

NOTE 20. COMMITMENTS AND CONTIGENCIES

Legal Contingencies

In January 2009, Shanghai Moqizone entered into an Exclusive Business Cooperation Agreement and certain ancillary agreements, including an Equity Pledge Agreement, Exclusive Option Agreement, Loan Agreement and Irrevocable Power of Attorney with SZ Mellow. This arrangement was necessary as a foreign owned company, such as Moqizone, cannot directly hold an ISP license in China, As a result, similar VIE arrangements, whereby the ISP license is held by a domestically owned Chinese company but the operations are directed by the foreign owned entity, are common. Pursuant to our agreement with SZ Mellow, we had a right to direct and control the management of SZ Mellow and an option to purchase the equity of SZ Mellow in the event that Chinese law permits such acquisition. Following our successful capital raise and entry to the U.S. capital markets, the Chinese shareholders of SZ Mellow, who are also parties to the VIE agreements between Moqizone and SZ Mellow refused to cooperate with management of Moqizone and demanded additional consideration beyond what was set forth in the existing agreements.

Management 2009, Shanghai Moqizone entered into an Exclusive Business Cooperation Agreement and certain ancillary agreements, including an Equity Pledge Agreement, Equity Pledge Agreement, Exclusive Option Agreement, Loan Agreement and Irrevocable Power of Attorney with SZ Mellow. This arrangement was necessary as a foreign owned company, such as Moqizone, cannot directly hold an ISP license in China, As a result, similar VIE arrangements, whereby the ISP license is held by a domestically owned Chinese company but the operations are directed by the foreign owned entity, are common. Pursuant to our agreement with SZ Mellow, we had a right to direct and control the management of SZ Mellow and an option to purchase the equity of SZ Mellow in the event that Chinese law permits such acquisition. Following our successful capital raise and entry to the U.S. capital markets, the Chinese shareholders of SZ Mellow, who are also parties to the VIE agreements between Moqizone and SZ Mellow refused to cooperate with management of Moqizone and demanded additional consideration beyond what was set forth in the existing agreements.

Management’s position is that the shareholders were acting in contravention of the existing VIE agreements and consulted legal counsel with regard to potential remedies. On September 21, 2009, we served SZ Mellow and their respective shareholders a demand letter pursuant to the VIE Agreement demanding, amongst other things, the return of approximately US$117,647 (RMB800,000), certain computer equipment and also provided a 30 day notice to terminate VIE agreement. As of June 30, 2010, we have not had any response from the shareholders of the SZ Mellow in relation to our demands.

We have been advised that the serving of the 30 day notice is sufficient to terminate the VIE Agreement between the Company and SZ Mellow. Accordingly, The SZ Mellow Agreements were terminated at the expiry of the 30-day notice on October 20, 2009. The Company is considering taking legal action against the SZ Mellow and the shareholders of SZ Mellow in order to enforce our further demands.

NOTE 21. SUBSEQUENT EVENTS

We have further evaluated events after the date of these financial statements through the date that these financial statements were issued. There were no other material subsequent events except the above as of that date.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and the related notes included elsewhere in this interim report. Our consolidated financial statements have been prepared in accordance with U.S. GAAP. In addition, our consolidated financial statements and the financial data included in this interim report reflect our reorganization and have been prepared as if our current corporate structure had been in place throughout the relevant periods. The following discussion and analysis contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including, without limitation, statements regarding our expectations, beliefs, intentions or future strategies that are signified by the words “expect,” “anticipate,” “intend,” “believe,” or similar language. All forward-looking statements included in this document are based on information available to us on the date hereof, and we assume no obligation to update any such forward-looking statements. Our business and financial performance are subject to substantial risks and uncertainties. Actual results could differ materially from those projected in the forward-looking statements. In evaluating our business, you should carefully consider the information set forth under the heading “Risk Factors” in our Registration Statement on Form S-1 filed with SEC on October 15, 2010. Readers are cautioned not to place undue reliance on these forward-looking statements.

Overview

We are a Chinese online game delivery platform company that offers digital infrastructure solutions to China’s online game industry. Through our subsidiary Shanghai MoqiZone and VIE SZ Alar, we provide the following product solutions and services:

Installation of WiMAX CPE (Customer Premises Equipment) at internet cafes with connection to our proprietary Moqizone WiMAX Network; and

Access to digital entertainment content such as online games, movies, and video hosted by the Company via the Moqizone WiMAX Network; and

Installation of Netcafe Farmer which is a peer-to-peer program allowing real time gaming content updates for all the PCs within the internet cafes; and

Publishing online gaming content and issuing prepaid cards for players.

As our business develops, we believe our business model could eliminate unnecessary cost associated with traditional digital media content delivery value chain. We are still in the preliminary stages of rolling out our WiMAX CPE installation. We have already commenced our business with Netcafe Farmer. We have also commenced reselling prepaid online game cards. We have successfully deployed a few WiMAX test sites in Beijing, Suzhou and Shenzhen and are now building out our MoqiZone WiMAX Network business in Chengdu. As of September 30, 2010, over 30 internet cafés in Chengdu have been installed with our WiMAX CPE and approximately 700 Internet Cafés are installed with Netcafe Farmer.

Netcafe Farmer in conjunction with our WiMAX Network will provide the necessary backbone infrastructure to allow us to roll out our gaming services and products. As our business continues to develop, our revenue will mainly be generated from cash collected from prepaid game cards. We will provide a profit sharing online billing system for internet cafes, game providers, marketing promotion companies and ourselves, via www.moqizone.com., This will allow profit sharing through the universal Moqizone Prepaid Card. We believe that this will effectively discourage price wars on prepaid game cards at retail locations, help internet cafés avoid obsolete prepaid card inventory and provide a more user friendly payment system by unifying prepaid game cards across different content providers’ games. The universal prepaid game card will be distributed via internet cafés and will be collected through our Point of Sales system. In addition, our software provides real-time reporting, payment and customer tracking via www.moqizone.com to internet cafés and content providers. As such, Moqizone can data mine customer behavior for gaming community management.

As of September 30, 2010, we have commenced generating revenue from selling prepaid cards and have generated limited revenue from Netcafe Farmer. Since the Fall of 2009 we have launched more than 30 WiMAX connected internet cafes in our test cities, however, to date they currently are only utilizing our WiMAX Network free of charge for testing purposes and not yet producing revenue. Our goal is to deploy our online game content delivery platform on the WiMAX Network and via Netcafe Farmer in various targeted cities in China.

We are working to expand and redevelop Netcafe Farmer which already has approximate 700 internet café customers and is already generating revenue. The target is to expand the customer base of Netcafe Farmer to also cover large scale residential development as well as school campuses.

We entered into business partnership with Win’s Entertainment Limited (“Win’s”), a major motion picture producing company in Hong Kong through a series of proprietary content agreements in November 2009. To date, we have developed one online game - “Flirting Scholars II Online” which began open beta testing on July 9, 2010 in parallel with road show of the original movie “Flirting Scholars II”. The official approval by the Ministry of Culture is still pending due to the latest change of the rules and regulations of publishing online games in China. After we are granted approval, we plan to begin generating revenue via the sale of this game. We are currently developing and working towards publishing the game outside of China in other portals or websites.

In July 2010, we entered into a share transfer agreement with Smart Lead Enterprises, Inc. to acquire 51% of Viva Red Limited (“Viva Red”), a company that acquires various licenses of mobile phone game and entertainment products and conducts value-added telecommunication services for mobile phones in China. Per the terms of the agreement, we made an initial cash deposit of approximately US$148,000 and to date we have made deposits totaling approximately $160,706. Once this transfer is completed, we are plan to leverage Viva Red to help us achieve our long-term goal of providing mobile gaming platform and service all the China Telecom customers. We are currently developing our mobile gaming delivery platform, configuring mobile games for different mobile handsets and are discussing forming strategic business partnership with various domestic and international content providers. The plan is to roll out our delivery platform by the end of the third quarter of 2010 and begin generating revenue in the fourth quarter of 2010

Once we finalize our acquisition of Viva Red, we are going to extend our game delivery platform to cover mobile phone users. The plan is to roll out our delivery platform by the end of the third quarter of 2010 and begin generating revenue in the fourth quarter of 2010.

Our key business development objectives over the next two years are as follows:

	·	Growing and expanding our business penetration that serves Internet cafes throughout selected targeted cities in China; and

	·	Building a diverse gaming platform that serves traditional professional gamers, casual gamers, including mobile phone users; and

	·	Publishing internally developed games for both PC gamers and Mobile users.

These business objectives will require the build out of our Moqizone WiMAX Network and continuous research and development. We will not be able to generate significant revenue until we have a basic foundation for all of these components.

Liquidity and Capital Resources

As at September 30, 2010, we had a cash balance of $63,233. On March 29, 2010, we completed a private equity financing of $1,956,200 with 7 accredited investors. Net proceeds from the offering, were approximately $1,760,400.

On August 27, 2010, we completed the initial closing of a private equity financing of approximately $247,000. Net proceeds from the offering, are approximately $221,850. Although we expect the net proceeds of these recent financings will allow us to continue operations and business development until December 2010 before additional capital is required to continue to fund our operations, we will need additional capital to continue to grow our business and execute our business plans. Based on our current business development plans, we will need approximately US$2 million of additional financing to fund our WiMAX deployment to the point where our cash flow from operating activities will be positive and a further US$1 million to aggregate and license contents. In addition to the $3 million of financing described above, we will need an approximately $10,000,000 of additional funding to completely deploy our online game delivery platform in all of our targeted cities by 2014. As a result, we currently estimate that we will need an additional $13,000,000 to fund our current business plans and expansion.

If we do not receive additional financing prior to December 2010, we may have to restrict or discontinue our business. If we are able to raise a portion of the required funding, we will need to scale back our plans outlined herein. For example, if we are only able to secure $3 million of additional funding (as described above will be sufficient to fund our WiMAX deployment and aggregation of license contents), we believe that this will allow us to become cash flow positive and slowly expand our business from cash generated from operations. If we are able to secure additional financing of more than $3 million but less than $13 million, we will need to refine and modify our business plan based on both the amount of capital raised and the timing of these raises.. As such, our success is dependent on future financings and there is substantial doubt about our ability to continue as a going concern.

Our cash requirements may vary materially from those currently anticipated due to changes in our operations, including engagement into new businesses, our marketing and distribution activities, product research and development, expansion of our personnel and the timing of our receipt of revenues. Our ability to obtain additional financing in the future will depend in part upon the prevailing capital market conditions, as well as our business performance. There can be no assurance that we will be successful in our efforts to arrange additional financing on terms satisfactory to us or at all. Accordingly, our business and operations are substantially dependent on our ability to raise additional capital to: (i) supply working capital for the expansion of sales and the costs of marketing of new and existing products; and (ii) fund ongoing selling, general and administrative expenses of our business.

Critical Accounting Policies and Estimates

Our financial information has been prepared in accordance with generally accepted accounting principles in the United States, which requires us to make judgments, estimates and assumptions that affect (1) the reported amounts of our assets and liabilities, (2) the disclosure of our contingent assets and liabilities at the end of each fiscal period and (3) the reported amounts of revenues and expenses during each fiscal period. We continually evaluate these estimates based on our own historical experience, knowledge and assessment of current business and other conditions, our expectations regarding the future based on available information and reasonable assumptions, which together form our basis for making judgments about matters that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, our actual results could differ from those estimates. Some of our accounting policies require a higher degree of judgment than others in their application.

When reviewing our financial statements, you should consider (1) our selection of critical accounting policies, (2) the judgment and other uncertainties affecting the application of those policies, and (3) the sensitivity of reported results to changes in conditions and assumptions. We believe the following accounting policies involve the most significant judgment and estimates used in the preparation of our financial statements.

Fair Value.

Fair value is generally based on independent sources such as quoted market prices or dealer price quotations. To the extent certain financial instruments trade infrequently or are non-marketable securities, they may not have readily determinable fair values. The Company may estimate the fair value of the Warrants and Preferred stock using various pricing models and available information that management deems most relevant. Among the factors considered in determining the fair value of financial instruments are discounted anticipated cash flows, the cost, terms and liquidity of the instrument, the financial condition, operating results and credit ratings of the issuer or underlying company, the quoted market price of similar traded securities, and other factors generally pertinent to the valuation of financial instruments. In regards to the warrants issued in our financings, Management and the board of directors consider market price quotations, recent stock offering prices and other factors in determining fair market value for purposes of valuing the common stock. The fair value of each warrant granted is estimated on the date of grant using the Black-Scholes option-pricing model with the various weighted average assumptions, including dividend yield, expected volatility, average risk-free interest rate and expected lives.

Stock Compensation.

We account for stock-based employee compensation arrangements using the fair value method in accordance with the provisions of the ASC 718, “Compensation-Stock Compensation”. It requires that the fair value of employees awards issued, modified, repurchased or cancelled after implementation, under share-based payment arrangements, be measured as of the date the award is issued, modified, repurchased or cancelled. The resulting cost is then recognized in the statement of earnings over the service period.

We periodically issue common stock for acquisitions and services rendered. Common stock issued is valued at the estimated fair market value, as determined by our management and board of directors. Management and the board of directors consider market price quotations, recent stock offering prices and other factors in determining fair market value for purposes of valuing the common stock. The fair value of each option granted is estimated on the date of grant using the Black-Scholes option-pricing model with the various weighted average assumptions, including dividend yield, expected volatility, average risk-free interest rate and expected lives.

FASB Establishes Accounting Standards Codification ™

Basis of Presentation - Development Stage Company

The Company has been obtaining the requisite approvals from the Chinese government and since inception, has not earned any revenue from operations. Accordingly, the Company’s activities have been accounted for as those of a “Development Stage Entities”, as set forth in ASC 205-915. Among the disclosures required by ASC 205-915 are that the Company’s financial statements be identified as those of a development stage company, and that the statements of operations and other comprehensive income (loss), owner’s equity and cash flows disclose activity since the date of the Company’s inception.

Use of estimates in the preparation of financial statements

The preparation of our financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of expenses during the reporting period. On an ongoing basis, we evaluate our estimates which are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. The result of these evaluations forms the basis for making judgments about the carrying values of assets and liabilities and the reported amount of expenses that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions. The following accounting policies require significant management judgments and estimates:

Impairment of long-lived assets . We assess the potential impairment of long-lived assets and identifiable intangibles under the guidance of ASC 360-15, "Accounting for the Impairment or Disposal of Long-Lived Assets." which states that a long-lived asset should be tested for recoverability whenever events or changes in circumstances indicate that the carrying amount of the long-lived asset exceeds its fair value. An impairment loss is recognized only if the carrying amount of the long-lived asset exceeds its fair value and is not recoverable.

Deferred income taxes. The Company accounts for income taxes in accordance with ASC 740 which requires that deferred tax assets and liabilities be recognized for future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. In addition, ASC 740 requires recognition of future tax benefits, such as carry forwards, to the extent that realization of such benefits is more likely than not and that a valuation allowance be provided when it is more likely than not that some portion of the deferred tax asset will not be realized.

Foreign currency translation. Our reporting currency is the US dollar. Our functional currency is United States dollars (“US$”), and the functional currency of our Hong Kong subsidiary is Hong Kong dollars (“HK$”). The functional currency of our PRC operating entities is the Renminbi (“RMB’), and PRC is the primary economic environment in which our businesses operate. Assets and liabilities are translated into U.S. Dollars at the year end exchange rates and records the related translation adjustments as a component of other comprehensive income (loss). Revenue and expenses are translated using average exchange rates prevailing during the period. Foreign currency transaction gains and losses are included in current operations.

We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. There can be no assurance that actual results will not differ from these estimates.

Income Taxes

Moqizone Holdings Corporation, formerly Trestle Corporation, Inc., is a Delaware corporation and conducts all of its business through our Shanghai MoqiZone subsidiary. All business is conducted in PRC. As the Delaware holding company has not recorded any income for the year ended December 31, 2009 and 2008, it is not subject to any income taxes in the United States. Moqizone Holdings Limited was incorporated in the Cayman Islands. Under the laws of Cayman Islands, the Company is not subject to tax on income or capital gain. In addition, payment of dividends by Moqizone Holdings Limited is not subject to withholding tax in the Cayman Islands.

Under the current Hong Kong Inland Revenue Ordinance, MoqiZone Hong Kong is subject to 16.5% income tax on its taxable income generated from operations in Hong Kong. Additionally, payments of dividends by MoqiZone Hong Kong to us are not subject to any Hong Kong withholding tax.

The new Enterprise Income Tax Law (or EIT Law) imposes a unified income tax rate of 25.0% on all companies established in China. Shanghai MoqiZone and the VIE are subject to 25% PRC income tax. Under the new EIT Law, an enterprise established outside of the PRC with “de facto management bodies” within the PRC is considered as a resident enterprise and will normally be subject to the enterprise income tax at the rate of 25.0% on its global income. The new EIT Law, however, does not define the term “de facto management bodies.” If the PRC tax authorities subsequently determine that we should be classified as a resident enterprise, then our global income will be subject to PRC income tax at a tax rate of 25.0%.

With the introduction of the EIT Law, China has resumed imposition of a withholding tax (10.0% in the absence of a bilateral tax treaty or new domestic regulation reducing such withholding tax rate to a lower rate). As MoqiZone Hong Kong is the sole shareholder of Shanghai MoqiZone, the dividends from Shanghai MoqiZone may be taxed at a reduced withholding tax rate of 5% per the Double Tax Avoidance Arrangement between Hong Kong and Mainland China.

Our PRC companies are subject to PRC business tax. We primarily pay business tax on gross revenues generated from online game operations, rentals, service fees and license fees. Our PRC operating companies pay business tax on their gross revenues derived from online game operations at a rate ranging from 3% to 5%, and this business tax is deducted from total revenues. In addition, our PRC subsidiaries pay a 5% business tax on the gross revenues derived from their contractual arrangements with our PRC operating companies, and these taxes are primarily recorded in operating expenses in accordance with our accounting policy.

Results of Operations

The following table sets forth items from the consolidated statements of operations as reported for each period

For the three months ended September 30, 2010 and 2009

Three months ended Sept 30,	2010			2009
Revenues	$	149,395		$	-
Cost of revenues	$	144,049		$	-
Gross profit	$	5,346		$	-
Research & development expenses	$	35,913		$	-
Depreciation and amortization expense	$	46,303		$	3,476
Selling, general and administrative expenses	$	1,155,065		$	888,486
Other income (expense)	$	88,739		$	(14,069,811	)
Income taxes	$	-		$	-
Net profit (Loss)	$	(1,143,196	)	$	(14,961,773	)
Foreign adjustment	$	(67,737	)	$	1,843
Comprehensive income (Loss)	$	(1,210,933	)	$	(14,959,930	)

Revenues. Total revenues for the three months ended September 30, 2010 were approximately $149,000 as compared to no revenue during the three months ended September 30, 2009. Total revenues include approximately $146,000 revenue which was derived from reselling prepaid game cards by MobiZone Hong Kong; and approximately $1,500 revenue which was derived from reselling Netcafe Farmer by Shanghai Moqizone during the second quarter of 2010. As a result, for the three months ended September 30, 2010, roughly 97% of our revenue was generated via the sale of prepaid cards. The Company has just begun its business in prepaid card reselling and is currently strengthening the business of Netcafe Farmer. The Company is still at its the initial stage of launching its Moqizone WiMAX Network business to service internet cafés and therefore has not reported any revenue from this business unit. Management believes that the reselling of the prepaid game card will continue to grow as we expand and increase our digital entertainment contents. Management also expects “Flirting Scholar II Online” will generate revenue once we obtain the official approval from the Ministry of Culture. Furthermore, Netcafe Farmer is performing a version upgrade and is expected to expand its customer demography to include residential complex and campus infrastructure in the next 6 months. If additional funding is available, Management believes that over the next two years as we continue to grow and expand our business penetration in Internet cafes throughout targeted cities in China, we will begin to experience significant revenue growth.

Cost of Revenues Cost of Revenue for the three months ended September 30, 2001 was approximately $144,000 as compared to no cost of revenue during the three months ended September 30, 2001. The cost or revenue represents the cost of the prepaid cards sold. The selling of prepaid cards only began during the second quarter of 2010. The business was conducted by MobiZone Hong Kong. This cost of revenue represents approximately 96% of total revenue generated (or a gross profit margin of 4%). The Company has just begun reselling prepaid game cards and the management believes that as the sales increases, the Company will be able to increase it gross profit margin.

Research and Development Expenses. Research and development expenses were approximately $36,000 for the three months ended September 30, 2010 as compared to no research and development expenses during the three months ended September 30, 2009. The net increase of $36,000 was mainly attributable to the development of “Flirting Scholars II Online”. As of September 30, 2010, we had approximately 10 technical staff working on the development of “Flirting Scholars II Online” in conjunction with certain a third party developers.

Selling, General and Administrative Expenses. Selling, General and Administrative expenses was approximately $1,155,000 for the three months ended September 30, 2010, as compare with $888,000 during the same quarter in 2009. This is an increase of approximately $267,000 or 30% was the result of increased costs associated with establishing, building, and supporting our infrastructure; and promoting our products and services as well as our upcoming online games. These expenses includes (a) general salaries of all the staff; (b) consulting, legal and accounting and other professional fees related to establishing our business; (c) sales and marketing cost on promoting our products and services such as Netcafe Farmer and “Flirting Scholars II Online”. As of September 30, 2010, our total staffing was approximately 55 as compared with approximately 35 during the same period in 2009, representing an expansion of approximately 20 team members. Legal and accounting, and other professional fees has also increased significantly during the reporting period as compared with 2009. Sales and marketing expenses have increased due to increased marketing activities to promote our own products and services, inclusing the initial marketing activities for Flirting Scholars II was beta launched on July 9, 2010. We anticipate that these costs will rise significant when we start more widespread promoting “Flirting Scholars II Online” in later part of 2010. In addition, as we continue to expand our operations, we believe that our sales and markets cost will increase and will begin to be offset by our expected revenue growth.

Other income (expense). Other income (expense) includes the following items:-

Interest income/expense. Interest expenses for the three months ended September 30, 2010 was approximately $41,000 as compared to interest expenses of approximately $100,000 for the same period in 2009. This decrease of approximately $59,000 was mainly due to the interest expense accrued from our Series A and Series C Preferred Stock for the three months period ended September 30, 2010.

Changes in Fair Value of Warrants. We accounted for our warrants issued to investors and placement agent as a result of our 2009 financing and conversion of the convertible note as derivative liabilities under ASC Topic 815 “Derivatives and Hedging” (formerly SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”), because it contains a “Down-round” protection that were applicable if we were to issue new shares of common stock or common stock equivalents at a price per share less than the exercise price of the Warrants. the “Down-round protection” provision is not considered to be an input to the fair value of a fixed-for-fixed option on equity shares which lead to the Warrants to fail to be qualified as indexed to the Company’s own stock and then fail to meet the scope exceptions of ASC Topic 815. Therefore, we accounted for the Warrants as derivative liabilities under ASC Topic 815. Pursuant to ASC Topic 815, derivative should be measured at fair value and re-measured at fair value with changes in fair value recorded in earnings at each reporting period.

As a result, for the three months ended September 30, 2010, the Company recognized a gain of approximately $200,000 which was related to the change in the fair value of warrants issued in conjunction with our 2009 financing and the conversion of the convertible note on August 31, 2009 preferred stock and the market price of the common stock underlying such warrants. $13,000,000 loss was recorded for the three months ended September 30, 2009.

Liquidated damages for ineffective registration statement. On June 1 and August 11, 2009, the Company entered into Registration Rights Agreement with investors (the “Investor RRA”) of the private financings we closed on those same dates. Under the Investor RRA, the Company was required to prepare and file a registration statement for sale of the Common stock issuable to the investors and holders of the Series A Preferred Stock no later than thirty (30) days after the completion of the Trestle Reverse Split, which occurred on August 31, 2009. Additionally, the Company was required to use its best efforts to obtain effectiveness of the Registration Statement with respect to all Registrable Securities no later than one hundred and fifty (150) days (January 28, 2010) after the completion of the Reverse Split

Since the registration statement was not declared effective by the SEC by January 28, 2010, the Company began accruing liquidated damages for $22,900 (or 2 percent of $1,145,000 of the state value of the outstanding Series A Preferred Stock outstanding as of January 28, 2010) for each month that the registration statement was not declared effective by the SEC (up to a maximum of 10%). As of September 30, 2010, the company had accrued $65,700 liquated damages during the third quarter of 2010. There is no such expense in 2009 and therefore no such loss was recorded for the three months ended September 30, 2009. The company is currently planning to speak with the Series A shareholders concerning an adjustment and/or cancelation of these damages.

Gain/(Loss) on foreign currency translation. Loss on foreign currency transactions was approximately $4,927 for the three months ended September 30, 2010 while $20,736 loss was recorded for the three months ended September 30, 2009.

As a result, other income of approximately $89,000 for the three months ended September 30, 2010 was recorded as compared to other loss of approximately $14,100,000 for the three months ended September 30, 2009. This increase was primarily attributed to gain associated with the change in fair value of the recently issued warrants during the third quarter of 2010.

Net Profit/(Loss). Net loss for the three months ended September 30, 2010, was approximately $1,100,000 as compared with net loss of approximately $14,960,000 for the three months ended September 30, 2009. The difference of $13,860,000 was mainly due to the decrease in change in the fair value of warrants issued in conjunction with our 2009 financing and the conversion of the convertible note on August 31, 2009. Aside from gains or losses associated with changes in the fair value of our warrants, Management believes that our net loss will gradually decrease as we begin to gain traction and start increasing our revenue from our prepaid gaming cards and the delivery of digital online entertainment content via various game delivery platforms.

Foreign Currency Translation Adjustment. Our reporting currency is the US dollar. The functional currency of our PRC operating entities including Shanghai Moqizone and SZ Mellow is RMB. Results of operations and cash flow are translated at average exchange rates during the period, and assets and liabilities are translated at the unified exchange rate as quoted by the People’s Bank of China at the end of the period. Translation adjustments resulting from this process are included in accumulated other comprehensive income in the statement of shareholders’ equity. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.

Currency translation adjustments resulting from this process are included in accumulated other comprehensive income amounted to a loss of approximately $68,000 for the three months ended September 30, 2010 as compared with a gain of $1,800 for the three months ended September 30, 2009.

Comprehensive Income/(Loss). As a result of the above, the comprehensive loss, which adds the currency adjustment to Net Income, was approximately $1,200,000 for the three months ended September 30, 2010 as compared to $14,960,000 during the same period in 2009.

For the nine months ended September 30, 2010 and 2009

Nine months ended Sept 30,	2010		2009
Revenues	$	208,612	$	-
Cost of revenues	$	196,703	$	-
Gross profit	$	11,909	$	-
Research & development expenses	$	248,041	$	-
Depreciation and amortization expense	$	140,026	$	5,554
Selling, general and administrative expenses	$	2,315,120	$	1,842,341
Other income (expense)	$	21,430,018	$	(14,097,873	)
Income taxes	$	-	$	-
Net profit (Loss)	$	18,738,740	$	(15,945,768	)
Foreign adjustment	$	21,184	$	(976	)
Comprehensive income (Loss)	$	18,759,924	$	(15,946,744	)

Revenues. Total revenues for the nine months ended September 30, 2010 were $208,000 as compared to no revenue during the six months ended September 30, 2009. Total revenues include approximately $201,000 revenue which was derived from reselling prepaid game cards by MobiZone Hong Kong; and approximately $7,000 revenue which was derived from reselling Netcafe Farmer by Shanghai Moqizone during the third quarter of 2010. As a result, approximately 97% of our revenue was from the reselling of prepaid cards for the nine months ended September 30, 2010. The Company has just begun its business in prepaid card reselling in the second quarter of 2010 and is currently strengthening the business of Netcafe Farmer. The Company is still at its the initial stage of launching its Moqizone WiMAX Network business to service internet cafés and therefore has not reported any revenue from this business unit. Management believes that the reselling of the prepaid game card will continue to grow as we expand and increase our digital entertainment contents. Management also expects “Flirting Scholar II Online” will generate revenue once we obtain the official approval from the Ministry of Culture. Furthermore, Netcafe Farmer is performing a version upgrade and is expected to expand its customer demographic to include residential complex and campus infrastructure in the next 6 months. If additional funding is available, Management believes that over the next two years as we continue to grow and expand our business penetration in Internet cafes throughout targeted cities in China, we will begin to experience significant revenue growth.

Cost of Revenues Cost of Revenue for the nine months ended September 30, 2010 was approximately $197,000 as compared to no cost of revenue during the three months ended September 30, 2009. The cost or revenue represents the cost of the prepaid cards sold. The selling of prepaid cards only began during the second quarter of 2010. The business was conducted by MobiZone Hong Kong. This cost of revenue represents approximately 94% of total revenue generated (or a gross profit margin of 6%). The Company has just begun reselling prepaid game cards and the management believes that as the sales increases, the Company will be able to increase it gross profit margin.

Research and Development Expenses. Research and development expenses were approximately $248,000 for the nine months ended September 30, 2010 as compared to no research and development expenses during the nine months ended September 30, 2009. The net increase of approximately $248,000 was mainly attributable to the development of “Flirting Scholars II Online”. As of September 30, 2010, we had approximately 10 technical staff working on the development of “Flirting Scholars II Online” in conjunction with certain third party developers.

Selling, General and Administrative Expenses. Selling, General and Administrative expenses was approximately $2,315,000 for the nine months ended September 30, 2010, as compare with $1,842,000 during the same quarter in 2009.

This is an increase of approximately $473,000 or 26% was the result of increased costs associated with establishing, building, and supporting our infrastructure; and promoting our products and services as well as our upcoming online games. These expenses includes (a) general salaries of all the staff; (b) consulting, legal and accounting and other professional fees related to establishing our business; (c) sales and marketing cost on promoting our products and services such as Netcafe Farmer and “Flirting Scholars II Online”. As of September 30, 2010, our total staffing was approximately 55 as compared with approximately 35 during the same period in 2009, representing an expansion of approximately 20 team members. Legal and accounting, and other professional fees has also increased significantly during the reporting period as compared with 2009. Sales and marketing expenses have increased due to increased marketing activities to promote our own products and services, inclusing the initial marketing activities for Flirting Scholars II was beta launched on July 9, 2010. We anticipate that these costs will rise significant when we start more widespread promoting “Flirting Scholars II Online” in later part of 2010. In addition, as we continue to expand our operations, we believe that our sales and markets cost will increase and will begin to be offset by our expected revenue growth.

Other income (expense). Other income (expenses) includes the following items:-

Interest income/expense. Interest expenses for the nine months ended September 30, 2010 was approximately $81,000 as compared to interest expenses of approximately $130,000 for the same period in 2009. This decrease of approximately $49,000 was mainly due to the interest expense accrued from our Series A and Series C Preferred Stock for the nine months period ended September 30, 2010.

As a result, for the nine months ended 30 September, 2010, the Company recognized a gain of approximately $21,712,000 which was related to the change in the fair value of warrants issued in conjunction with our 2009 financing and the conversion of the convertible note on August 31, 2009 preferred stock and the market price of the common stock underlying such warrants. $13,000,000 loss was recorded for the nine months ended September 30, 2009.

Liquidated damages for ineffective registration statement. On September 1 and August 11, 2009, the Company entered into Registration Rights Agreement with investors (the “Investor RRA”) of the private financings we closed on those same dates. Under the Investor RRA, the Company was required to prepare and file a registration statement for sale of the Common stock issuable to the investors and holders of the Series A Preferred Stock no later than thirty (30) days after the completion of the Trestle Reverse Split, which occurred on August 31, 2009. Additionally, the Company was required to use its best efforts to obtain effectiveness of the Registration Statement with respect to all Registrable Securities no later than one hundred and fifty (150) days (January 28, 2010) after the completion of the Reverse Split

Since the registration statement was not declared effective by the SEC by January 28, 2010, the Company began accruing liquidated damages for $22,900 (or 2 percent of $1,145,000 of the state value of the outstanding Series A Preferred Stock outstanding as of January 28, 2010) for each month that the registration statement was not declared effective by the SEC (up to a maximum of 10%). As of September 30, 2010, the company had incurred and accrued $179,200 liquated damages for the nine months ended September 30, 2010. There is no such expense in 2009 and therefore no such loss was recorded for the nine months ended September 30, 2009. The company is currently planning to speak with the Series A shareholders concerning an adjustment and/or cancelation of these damages.

Gain/Loss on foreign currency translation. Loss on foreign currency transactions was approximately $21,417 for the nine months ended September 30, 2010 while $281 loss was recorded for the nine months ended September 30, 2009.

As a result, other income of approximately $21,430,000 for the nine months ended September 30, 2010 was recorded as compared to other loss of approximately $14,098,000 for the nine months ended September 30, 2009. This increase was primarily attributed to gain associated with the change in fair value of the recently issued warrants during the nine months ended September 30, 2010.

Net Profit/(Loss). Net income for the nine months ended September 30, 2010, was approximately $18,739,000. This net income was substantially due to the gain of approximately $21,712,000 related to the change in the fair value of warrants issued in conjunction with our 2009 financing and the conversion of the convertible note on August 31, 2009 as described above. Without this non-cash gain, the company would have had a net loss of approximately $2,474,000 (before the non-cash loss) for the nine months ended September 30, 2009. The difference of $499,000 was mainly due to the increase in R&D expenses and costs associated with building our infrastructure, promoting our products and services and costs asscoaited with the development of “Flirting Scholars II Online”. Aside from gains or losses associated with changes in the fair value of our warrants,Management believes that our net loss will gradually decrease when we begin to gain traction and start increasing revenue from our prepaid gaming cards and the delivery of digital online entertainment content via various game delivery platforms.

Currency translation adjustments resulting from this process are included in accumulated other comprehensive income and amounted to a gain of $21,184 for the nine months ended September 30, 2010 as compared to a loss of approximately $976 for the nine months ended September 30, 2009.

Comprehensive Income/Loss. As a result of the above, the comprehensive gain, which adds the currency adjustment to Net Income, was approximately $18,760,000 for the nine months ended September 30, 2010 as compared with a loss of $15,947,000 during the same period in 2009.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item 4T. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures designed to provide reasonable assurance that material information required to be disclosed by us in the reports we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that the information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. We performed an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on this evaluation, our Chief Executive Officer and our Acting Chief Financial Officer have concluded that our disclosure controls and procedures are effective in ensuring that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission, and are effective in providing reasonable assurance that information required to be disclosed by the Company in such reports is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Acting Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, control may become inadequate because of changes in conditions, or because the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

(b) Management’s Annual Report on Internal Control over Financial Reporting

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act and for assessing the effectiveness of internal control over financial reporting.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness of internal control over financial reporting to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management has assessed the effectiveness of the Company’s internal control over financial reporting as of September 30, 2010. In making its assessment of internal control over financial reporting, management used the criteria established in Internal Control — Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission. This assessment included an evaluation of the design of the Company’s internal control over financial reporting and testing of the operational effectiveness of those controls.

Based on the results of this assessment, management concludes that the Company’s internal control over financial reporting has material weaknesses as of September 30, 2010, described below.

Per Rule 13a-15(e), disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

This quarterly report does not include an attestation report of the company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the company to provide only management's report in this annual report.

In our last quarterly report for the period ended June 30, 2010, we described the company as having a significant deficiency. Upon further review and evaluation, management has now concluded that the Company has a material weakness A material weakness is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected. Management identified the following material weaknesses during its assessment of our internal control over financial reporting as of September 30, 2010.

	Reliance on financial reporting consultants for review of critical accounting areas and disclosures and material non-standard transactions;
	Lack of sufficient accounting staff which results in a lack of segregation of duties necessary for a good system of internal control; Lack of sufficient documentation with our existing financial processes, risk assessment and internal controls.

Currently we do not have sufficient in-house expertise in US GAAP reporting. Instead, we rely very much on the expertise and knowledge of external financial advisors in US GAAP conversion. External financial advisors have helped prepare and review the consolidated financial statements. Since last quarter management has met on numerous occasions and discussed the following plans to remedy the material weaknesses discussed above. We are seeking to do the following:

Recruit experienced professionals to augment and upgrade our financial staff to address issues of timeliness and completeness in US GAAP financial reporting. We plan to hire an assistant for the Company’s Acting Chief Financial Officer who is experienced with US GAAP reporting, and can further assist in the preparation of financial statements in conformity with US GAAP and the SEC reporting requirements. Specifically, we believe that additional accounting staff trained in U.S. GAAP would improve our controls and procedures, specifically with regard to the preparation of our financial statements

The Company has made efforts to improve our current accounting staff’s knowledge of U.S. accounting standards. Specifically, we believe that improving our current staff’s knowledge will allow the Company to depend less on certain outside consultants to review accounting transactions and disclosures.

The Company does not currently have an audit committee and/or audit committee chair. In the future we plan to locate and appoint an audit committee (comprised of independent members of our board of directors) and an audit committee chairman, who will meet the SEC’s definition of a “financial expert” in the Sarbanes-Oxley Act Section 406 and 407. We believe that the increased oversight provided by the planned audit committee will assist the Company with establishing proper oversight of our controls and procedures. Nevertheless, the Company cannot assure you of when it will identify a qualified candidate or when it will be able to form an independent audit committee or locate an audit committee chairman.

We believe that the remediation measures we are taking, if effectively implemented and maintained, will remediate the material weaknesses discussed above. However, to date, we have not been able to implement any of these plans due to our limited financial resources so at this time.

Except as described above, there were no changes in the Company’s internal control over financial reporting that occurred during the third quarter ended September 30, 2010 that have materially affected, or that are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

We are currently not a party to any legal or administrative proceedings and are not aware of any pending or threatened legal or administrative proceedings against us other than those that have been disclosed here. We may from time to time become a party to various legal or administrative proceedings arising in the ordinary course of our business.

Item 1A. Risk Factors

Based on our status as a smaller reporting company, we are not required to provide this information.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On June 1, 2009, we completed a private financing of $4,345,000, with 10 accredited investors, which includes $300,000 that we received in October 2008 pursuant to a Convertible Loan Agreement with two accredited investors (the “Convertible Notes”); the Convertible Notes automatically convert into the same securities issued to the investors pursuant to the June 1 Financing. The net proceeds from the June 1 Financing were approximately $3,637,000. The securities offered in this Financing were sold pursuant to a Securities Purchase Agreement (the “Purchase Agreement”) by and among the Company, MoqiZone Cayman, Lawrence Cheung, MKM Capital Opportunity Fund Ltd. and each of the purchasers thereto (the “Investors”). Pursuant to the Purchase Agreement, we issued a total of approximately 435 Units of securities consisting of (a) $10,000 of 8% exchangeable convertible notes of MoqiZone Hong Kong due March 31, 2011 (the “Notes”), (b) three year Class A callable warrants (the “Class A Warrants”) to purchase 2,778 shares of common stock of Trestle, at an exercise price of $2.50 per share, and (c) three year Class B non-callable warrants (the “Class B Warrants”) to purchase 2,778 shares of common stock of Trestle at an exercise price of $3.00 per share. The exercise prices of the Warrants are subject to weighted average and other anti-dilution adjustments. Pursuant to the sale of approximately 435 Units, we issued an aggregate of approximately $4,345,000 of Notes, Class A Warrants to purchase up to 1,206,948 shares of common stock and Class B Warrants to purchase up to 1,206,948 shares of common stock will be issued.

On August 11, 2009, we completed a private equity financing of $900,000 with 3accredited investors (the “Second Financing”). Net proceeds from the Second Financing are approximately $800,000. Pursuant to the Second Financing, we issued a total of approximately 90 Units of securities consisting of (a) $10,000 of 8% exchangeable convertible notes of MoqiZone Hong Kong due March 31, 2011 (the “Notes”), (b) three year Class A callable warrants (the “Class A Warrants”) to purchase 2,778 shares of common stock of Trestle, at an exercise price of $2.50 per share, and (c) three year Class B non-callable warrants (the “Class B Warrants”) to purchase 2,778 shares of common stock of Trestle at an exercise price of $3.00 per share. The exercise prices of the Warrants are subject to weighted average and other anti-dilution adjustments. Pursuant to the sale of approximately 90 Units, we issued an aggregate of approximately $900,000 of Notes, Class A Warrants to purchase up to 250,000 shares of common stock and Class B Warrants to purchase up to 250,000 shares of common stock will be issued. All of the securities issued in the Second Financing contain the same terms and conditions as the securities issued to the Investors of the First Financing.

In connection with the Financings, we granted warrants to purchase up to 582,779 warrants to purchase up to 582,779 shares of our common stock to TriPoint Global Equities, LLC, the placement agent or its designees. These warrants have the same terms as the warrants issued to Investors and included in the Units

The 2010 Financings

We completed a private equity financing of $1,956,200 on March 29, 2010, with 7 accredited investors. Net proceeds from the offering, are approximately $1,760,400. Pursuant to the financing, we issued, for $1,956,000, a total of 869,422 units of our securities at $2.25 per unit. Each Unit consists of (i) one (1) share of the Company’s Series C Convertible Preferred Stock, par value $0.001 per share (the “Preferred Shares”), convertible into one share of the Company’s common stock, par value $0.001 per share (the “Common Stock”), and (ii) a Series C Warrant (the “Series C Warrant”) and Series D Warrant (the “Series D Warrant”), collectively the “Warrants”), with the total amount of Warrants of each Series exercisable to purchase that number of shares of Common Stock as shall be equal to fifty percent (50%) of the number of Units purchased in the Offering. Each of the Warrants has a term of three (3) years.

In connection with this financing, we paid cash compensation to a placement agent in the amount of $195,620. Additionally, in connection with this financing, we granted warrants to purchase up to 86,942 shares of common stock, Series C Warrants to purchase up to 43,471 shares of common stock and Series D Warrants to purchase 43,471 shares of common stock to the placement agent or its designees. These warrants have the same terms as the warrants issued to Investors that are included in the Units.

Additionally, we completed the initial closing of a private equity financing of approximately $247,000 on August 27, 2010 with 2 accredited investors pursuant to a Securities Purchase Agreement. Net proceeds from the offering, are approximately $207,000. Pursuant to the financing, we issued a total of 11 units of our securities at $22,500 per unit. Each Unit consists of (i) an 8% Convertible Note, convertible into shares of the Common Stock, (ii) a Series E Warrant, and (iii) a Series F Warrant, each such warrant gives the holder the right to purchase up to that number of shares of our common stock as shall be equal to fifty percent (50%) of the number of shares of common stock underlying the Convertible Note. Each of the Warrants has a term of three (3) years.

The Financings were consummated pursuant to the exemption from the registration provisions of the Securities Act of 1933, as amended, provided by Section 4(2) of the Securities Act, Rule 506 of Regulation D and/or Regulation S promulgated there under.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Removed and Reserved

Item 5. Other Information

None.

ITEM 6. EXHIBITS

(a) The following exhibits are filed as part of this report.

Exhibit No.		Document
31.1		Certification of Chief Executive Officer required by Rule 13a-14/15d-14(a) under the Exchange Act

31.2		Certification of Acting Chief Accounting Officer required by Rule 13a-14/15d-14(a) under the Exchange Act

32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of Acting Chief Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		MOQIZONE HOLDING CORPORATION.

Date: November 12, 2010		/s/ Lawrence Cheung
		Name: Lawrence Cheung
		Title: Chief Executive Officer
		And Acting Chief Accounting Officer

MOQIZONE HOLDING Corp 10-Q