As filed with the Securities and Exchange Commission on June 1, 2011

Registration No. 333-166658

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

AMENDMENT NO. 10
TO
FORM S-1

REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933

CHINA OUMEI REAL ESTATE INC.

(Exact name of registrant as specified in its charter)


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

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

(Address and telephone number of principal executive offices)

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

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

Copies to:


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

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

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

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

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

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

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

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


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

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CALCULATION OF REGISTRATION FEE


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

(1)

In accordance with Rule 416(a), the Registrant is also registering hereunder an indeterminate number of additional Ordinary Shares that may be issued and resold resulting from stock splits, stock dividends or similar transactions.

(2)

Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o).

(3)

Calculated pursuant to Rule 457(o) based on an estimate of the proposed maximum aggregate offering price.

(4)

Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457, based on the last private sales price for ordinary shares of the Registrant as there is currently no public market price for the Registrant’s ordinary shares. Management considered the total number of shares outstanding post offering, the public offering of ordinary shares, estimated market capitalization, forward looking net income, the targeted price-to-earnings ratio and the effect of the current global economic crisis to determine the offering price per share. Accordingly, taking the foregoing factors into consideration, the Registrant arrived at the proposed offering price per share, which is the effective price per share paid by the investors in the Company’s April 2010 private placement.

(5)

Calculated in accordance with Rule 457(g) based upon the exercise price of the Warrants held by selling stockholders named in this registration statement.

(6)

Represents the Registrant’s ordinary shares being registered for resale that have been issued to the selling stockholders named in this registration statement.

(7)

Represents ordinary shares underlying 6% convertible preference shares being registered for resale that have been issued to the selling stockholders named in this registration statement.

(8)

Represents ordinary shares issuable upon exercise of five-year warrants to purchase ordinary shares being registered for resale that such warrants have been issued to certain selling stockholders named in this registration statement.

(9)

Represents ordinary shares issuable upon exercise of three-year warrants to purchase ordinary shares being registered for resale that such warrants have been issued to certain selling stockholder named in this registration statement.

(10)

Previously paid.

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

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EXPLANATORY NOTE

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

•

Public Offering Prospectus. A prospectus, or the Public Offering Prospectus, to be used for the public offering of up to 4,000,000 ordinary shares by us (in addition to 600,000 ordinary shares that may be sold upon exercise of the underwriters’ over-allotment option) through the underwriters named on the cover page of the Public Offering Prospectus.

•

Resale Prospectus. A prospectus, or the Resale Prospectus, to be used for the resale by selling stockholders of 765,000 ordinary shares and 2,774,700 ordinary shares underlying 6% convertible preference shares, $0.002112 par value per share, or Preference Shares. We are also registering 1,526,085 ordinary shares that have been or may be acquired upon the exercise of warrants that have been previously issued to selling stockholders named in the Resale Prospectus.

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

•

they contain different outside and inside front covers;

•

they contain different Offering sections in the Prospectus Summary section beginning on page 1 and 1A respectively;

•

they contain different Use of Proceeds sections on page 24 and 2A respectively;

•

the Capitalization and Dilution sections on page 26 and page 27, respectively, of the Public Offering Prospectus are deleted from the Resale Prospectus;

•

a Selling Stockholder section is included in the Resale Prospectus beginning on page 3A;

•

references in the Public Offering Prospectus to the Resale Prospectus will be deleted from the Resale Prospectus;

•

the Underwriting section from the Public Offering Prospectus on page 111 is deleted from the Resale Prospectus and a Plan of Distribution is inserted in its place;

•

the Legal Matters section in the Resale Prospectus on page 8A deletes the reference to counsel for the underwriters; and

•

the outside back cover of the Public Offering Prospectus is different from the outside back cover of the Resale Prospectus.

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

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

Subject to completion, dated June 1, 2011

4,000,000 Ordinary Shares

[GRAPHIC MISSING]

We are offering 4,000,000 ordinary shares.

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

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

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


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

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

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

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


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

The date of this prospectus is , 2011.

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CHINA OUMEI REAL ESTATE INC.

TABLE OF CONTENTS


	Page
PROSPECTUS SUMMARY		1
RISK FACTORS		9
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS		23
USE OF PROCEEDS		24
MARKET PRICE AND DIVIDENDS ON OUR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS		25
DIVIDEND POLICY		25
CAPITALIZATION		26
DILUTION		27
EXCHANGE RATE INFORMATION		28
SELECTED CONSOLIDATED FINANCIAL DATA		29
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		32
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK		52
BUSINESS		53
HISTORY AND CORPORATE STRUCTURE		81
MANAGEMENT		85
EXECUTIVE COMPENSATION		91
TRANSACTIONS WITH RELATED PERSONS, PROMOTERS AND CERTAIN CONTROL PERSONS; CORPORATE GOVERNANCE		98
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT		100
DESCRIPTION OF SECURITIES		103
SHARES ELIGIBLE FOR FUTURE SALE		110
UNDERWRITING		111
LEGAL MATTERS		119
EXPERTS		119
ADDITIONAL INFORMATION		119
FINANCIAL STATEMENTS		F-1

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

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PROSPECTUS SUMMARY

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

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

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

•

“Caoxian Industrial” refers to Caoxian Industrial Properties Co., Ltd., a PRC limited company;

•

“Exchange Act” refers to the Securities Exchange Act of 1934, as amended;

•

“Hong Kong” refers to the Hong Kong Special Administrative Region of the People’s Republic of China;

•

“Leewell” refers to Leewell Investment Group Limited, a Hong Kong company;

•

“Longhai Hotel” refers to Longhai Hotel Co., Ltd., a PRC limited company;

•

“Longhai Real Estate” refers to Longhai Real Estate Properties Co., Ltd., a PRC limited company;

•

“Oumei” refers to Qingdao Oumei Real Estate Development Co., Ltd., a PRC limited company;

•

“Oumei Weiye” refers to Qingdao Oumei Weiye Project Management Co., Ltd., a PRC limited company;

•

“PRC,” “China,” and “Chinese,” refer to the People’s Republic of China;

•

“Qingdao Xudong” refers to Qingdao Xudong Real Estate Development Co., Ltd., a PRC limited company;

•

“Renminbi” and “RMB” refer to the legal currency of China;

•

“SEC” refers to the Securities and Exchange Commission;

•

“Securities Act” refers to the Securities Act of 1933, as amended;

•

“U.S. dollars,” “dollars” and “$” refer to the legal currency of the United States;

•

“Weifang Longhai Industry” refers to Weifang Longhai Industry Co., Ltd., a PRC limited company;

•

“Weifang Longhai Zhiye” refers to Weifang Longhai Zhiye Co., Ltd., a PRC limited company;

•

“Weifang Qilu” refers to Weifang Qilu Guotai Properties Co., Ltd., a PRC limited company;

•

“Weihai Economic” refers to Weihai Economic & Technology Development Zone Longhai Properties Co., Ltd., a PRC limited company; and

•

“Weihai Mingwei” refers to Weihai Mingwei Industry Co., Ltd., a PRC limited company.

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

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

•

Gross Domestic Product, or GDP, over RMB 200 billion (US$29 billion);

•

GDP per capita over RMB 14,000 (US$2,050);

•

Population with permanent residency in urban area over 1 million;

•

Urban area over 100 km2;

•

Annual sales in residential real estate over 1.5 million square meters; and

•

Average unit selling price of residential real estate over RMB 3,000 (US$439) per square meter.

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

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The Company

Overview of Our Business

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

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

Since our inception, we have completed 17 projects having a gross floor area, or GFA, of 1,461,996 square meters, of which approximately 96% has been sold. In addition, we have seven projects under construction with a total GFA of 540,201 square meters.

In the fiscal year ended December 25, 2010, our total sales increased 17.2% to $110.5 million from $94.3 million in fiscal year 2009, and our net income increased 65.2% to $34.9 million in fiscal year 2010 from $21.2 million in fiscal year 2009. In the three months ended March 25, 2011, our total sales decreased 44.4% to $15.7 million from $28.2 million in the same period in 2010, and our net income decreased 41.9% to $2.4 million in the three months ended March 25, 2011 from $4.1 million in the same period in 2010.

Our Competitive Strengths

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

•

We have a proven track record of successful large-scale properties development. Since our inception in 2001, we have sold approximately 96% of our completed 17 projects, which have a GFA of 1,461,996 square meters in aggregate. Our ability to cater to our customers’ preferences has been a major factor in the growth of our business. By leveraging our experience and track record, we believe that we can penetrate into the real estate markets in other tier two and tier three cities in China.

•

We have a widely recognized brand name in an attractive coastal market. We have received many awards that acknowledge the quality of our real estate developments. We believe that the quality of our real estate developments and the recognition of our brand name by our customers are important to our success.

•

We have an experienced management team. We have an experienced management team with extensive operating experience and industry knowledge. Our Chairman, Mr. Antoine Cheng, has many years of experience in working with businesses and has developed good business contacts, including in the real estate development business in China. Our Chief Executive Officer, Mr. Weiqing Zhang, has more than 15 years of experience in real estate development and our Chief Financial Officer, Mr. Zhaohui John Liang, has over 15 years of experience in real estate finance, investment and development. Mr. Yang Chen, our President, has more than 17 years of experience in accounting and financial management. In addition, our staff is well trained and is motivated by our incentive programs.

•

We have substantial land reserves at premier locations for use as new development projects. We believe that our ownership of premium land reserves and the fact that we have already planned the development of specific projects for some of those land reserves gives us an advantage over our competitors who do not have similar reserves and must acquire land before commencing their next projects.

•

We have a strong financial profile and excellent credit record. Through credit facilities with top Chinese banks, including Industrial and Commercial Bank of China, who has given us an AA rating, we are able to prudently leverage our business and take advantage of business opportunities.

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•

We have a compelling growth strategy. We expect to continue our growth by achieving higher returns on projects, continuing development of large middle income residential projects, expanding operations to other tier two and tier three cities in China and acquiring projects from distressed developers.

Our Growth Strategy

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

•

We plan to continue to expand in Shandong Province through new urban development projects. In the next five years we will continue to focus on real estate development along the coastline of the Shandong peninsula, particularly in the Qingdao and Weihai regions. We believe that the real estate market in the Qingdao-Weihai region will remain strong over the next several years, not only due to the market awareness created by the global media coverage of Qingdao and its Olympic sailing events, but also because of the unique attraction the region holds for international customers, travelers and investors.

•

We plan to continue to provide cost-effective properties for middle income customers. We intend to capitalize on growth opportunities by continuing to offer high-quality mid-sized residential units featuring modern designs and convenient facilities at competitive prices to middle-income consumers in China.

•

We plan to penetrate the high-end real estate market. We intend to penetrate into the high-end real estate market by developing villas, hotels, and commercial and office buildings that generate high returns. We expect these high-end projects to generate higher returns on investment than middle-income residential properties.

•

We plan to improve project management and cost control. We expect to improve our project management by adopting more stringent financial disciplines in our operations at each stage that will help us to increase our returns on our project investments. We will use our capital more effectively by better managing our assets, receivables and expenditures to attain pre-set targets. We will better anticipate the best land rights reserves for development and will be able to capture them at the lowest prices to maximize our potential returns on our land and on our project investments.

Our Corporate History and Background

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

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

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

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Our Corporate Structure

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

[GRAPHIC MISSING]

Office Location

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

Our Filing Status

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

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The Offering

Ordinary shares offered⁽¹⁾

4,000,000 shares, (4,600,000 shares, if the underwriters exercise the overallotment option)

Ordinary shares outstanding immediately after the offering⁽²⁾

35,020,062 shares, (35,620,062 shares, if the underwriters exercise the overallotment option)

Offering price

We currently estimate that the initial public offering price will be between $4.00 to $6.00 per share.

Use of proceeds

We intend to use the net proceeds from this offering for working capital and general corporate purposes. See “Use of Proceeds” on page 24 for more information on the use of proceeds.

Lock-up

In connection with the private placement closed on April 14, 2010, each of Longhai Holdings and our directors and officers agreed not to transfer any of our capital stock held directly or indirectly by them for an 18-month period following the closing of the private placement. In addition, certain investors of the private placement have entered into lock-up agreements with us, pursuant to which each of them agreed, for a period beginning from the date of the lock-up agreement and continuing to and including 90 days after the date of this prospectus, not to sell, transfer or otherwise dispose of any of our shares. See “Underwriting.''

Risk factors

See “Risk Factors” and other information included in this prospectus for a discussion of the risks you should carefully consider before deciding to invest in our ordinary shares.

Proposed trading market and symbol

We have applied for the listing of our ordinary shares on the NASDAQ Global Market under symbol “OMEI”.

(1)

We are also concurrently registering for resale under a separate Resale Prospectus 765,000 ordinary shares and 2,774,700 ordinary shares underlying the Preference Shares held by the selling stockholders named under such prospectus and 1,526,085 ordinary shares that have been or may be acquired upon the exercise of warrants that have been previously issued to the selling stockholders named in such prospectus. None of these securities registered under the Resale Prospectus are being offered by us and we will not receive any proceeds from the sale of these shares.

(2)

Based on 31,020,062 ordinary shares issued and outstanding as of the date of this prospectus and excluding 1,526,085 ordinary shares underlying warrants that were issued on April 14, 2010.

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Summary Consolidated Financial Information

The following selected historical financial information should be read in conjunction with our consolidated financial statements and related notes and the information contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” below. The selected consolidated statement of operations data for the years ended December 25, 2008, 2009 and 2010 and the selected balance sheet data as of December 25, 2009 and 2010 are derived from our audited consolidated financial statements included elsewhere in this prospectus. The selected balance sheet data as of December 25, 2008 are derived from our unaudited consolidated financial statements not included in this prospectus. We derived our selected consolidated financial data as of March 25, 2011 and for the three months ended March 25, 2010 and 2011 from our unaudited consolidated financial statements included elsewhere in this prospectus, which include all adjustments, consisting of normal recurring adjustments, that our management considers necessary for a fair presentation of our financial position and results of operations as of the dates and for the periods presented.

Our audited consolidated financial statements for the fiscal years ended December 25, 2008, 2009 and 2010 and our unaudited consolidated financial statements for the three months ended March 25, 2010 and 2011 are prepared and presented in accordance with generally accepted accounting principles in the United States, or U.S. GAAP. The selected financial data information is only a summary and should be read in conjunction with the historical consolidated financial statements and related notes contained elsewhere herein. The financial statements contained elsewhere fully represent our financial condition and operations; however, they are not indicative of our future performance.


	Fiscal Year Ended December 25,									Three Months Ended March 25,
U.S. dollars, except shares	2008			2009			2010			2010			2011
										(unaudited)			(unaudited)
Statements of Operations Data
Total sales	$	77,032,561		$	94,315,500		$	110,518,421		$	28,220,196		$	15,703,520
Total cost of sales		(46,321,251	)		(58,296,408	)		(77,209,814	)		(21,211,396	)		(9,336,276	)
Gross profit		30,711,310			36,019,092			33,308,607			7,008,800			6,367,244
Advertising expenses		(112,263	)		(268,222	)		(217,596	)		(88,231	)		(44,195	)
Commission expenses		(574,262	)		(84,982	)		(214,566	)		—			(14,707	)
Selling expenses		(81,415	)		(49,800	)		(61,967	)		(18,401	)		(13,024	)
Bad debt recovery (expense)		(1,198,942	)		(207,523	)		987,374			169,612			(779,133	)
General and administrative expenses		(2,283,744	)		(4,655,596	)		(7,390,963	)		(840,933	)		(1,611,548	)
Income from operations		26,460,684			30,752,969			26,410,889			6,230,847			3,904,637
Miscellaneous income (expense)⁽¹⁾		91,945			327,294			23,899,865			(14,177	)		(54,247	)
Interest Expense		(968,710	)		(866,751	)		(325,969	)		(155,384	)		(28,156	)
Income before income taxes and extraordinary item		25,583,919			30,213,512			49,984,785			6,061,286			3,822,234
Income taxes		(6,602,194	)		(9,058,226	)		(15,042,327	)		(1,952,803	)		(1,434,997	)
Income before extraordinary item		18,981,725			21,155,286			34,942,458			4,108,483			2,387,237
Extraordinary item, net		12,499,576			—			—			—			—
Net income	$	31,481,301		$	21,155,286		$	34,942,458		$	4,180,483		$	2,387,237
Preference stock dividends		—			—			—			—			(476,184	)
Net earnings applicable to common shareholders	$	31,481,301		$	21,155,286		$	34,942,458		$	4,180,483		$	1,911,053
Earnings per common share basic	$	1.04		$	0.70		$	1.14		$	0.14		$	0.06
Earnings per common share diluted	$	1.04		$	0.70		$	1.07		$	0.14		$	0.06
Weighted average common shares outstanding basic		30,235,062			30,235,062			30,770,172			30,235,062			31,020,062
Weighted average common shares outstanding diluted		30,235,062			30,235,062			32,708,661			30,235,062			33,794,762

(1)

Included in miscellaneous income for the fiscal year ended December 25, 2010 is the sale of a land use right. On December 16, 2010, we executed a buyout transaction with the government of Licang District, Qingdao, in which the government agreed to pay us approximately $23.7 million in exchange for the pre-development land use right in connection with our planned Dongli Garden 2 project. We had previously planned to build residential units on the land, subject to the government’s re-zoning procedure. See Note 21 to our consolidated financial statements included elsewhere in this prospectus for more information.

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	As of December 25,						As of March 25, 2011
	2008		2009		2010		Actual		As Adjusted⁽¹⁾
	(unaudited)						(unaudited)		(unaudited)
Balance Sheet Data
Working capital	$	18,831,257	$	44,207,072	$	102,581,083	$	107,082,682	$	125,182,682
Total assets		178,648,355		196,332,843		260,120,259		274,267,490		292,367,490
Total liabilities		115,401,647		101,981,897		115,479,273		125,814,171		125,814,171
Stockholders’ equity		63,246,708		94,350,946		144,640,986		148,453,319		166,553,319

(1)

The “As Adjusted” information gives effect to the sale of 4,000,000 ordinary shares in this offering (other than pursuant to the underwriters’ over-allotment option) at the assumed public offering price of $5.00 per ordinary share, and after deducting estimated underwriting discounts and commissions and estimated expenses payable by us.

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RISK FACTORS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Substantially all purchasers of our residential properties rely on mortgages to fund their purchases. An increase in interest rates may significantly increase the cost of mortgage financing, thus affecting the affordability of residential properties. Since October 20, 2010, PBOC has raised the lending rates four times. As a result, the benchmark lending rate for loans with a term of over five years, which affects mortgage rates, was increased to 6.80% on April 6, 2011. The PRC government and commercial banks may also increase the down payment requirement, impose other conditions or otherwise change the regulatory framework in a manner that would make mortgage financing unavailable or unattractive to potential property purchasers. If the availability or attractiveness of mortgage financing is reduced or limited, many of our prospective customers may not be able to purchase our properties and, as a result, our business, liquidity and results of operations could be adversely affected.

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

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

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

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

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

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

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

At March 25, 2011, we had short-term bank loans outstanding of $1,430,881, long-term bank loans of $34,968,300 maturing within one year, long-term bank loans of $0 maturing in more than one year, and notes payable of $0, which were secured by our land use rights and projects under construction. Failure to obtain extensions of the maturity dates of, or to refinance, these obligations or to obtain additional equity financing to meet these debt obligations would result in an event of default with respect to such obligations and could result in the foreclosure on the collateral. The sale of such collateral at foreclosure would significantly disrupt our business, which could significantly lower our sales and profitability. We may be able to refinance or obtain extensions of the maturities of all or some of such debt only on terms that significantly restrict our ability to operate, including terms that place additional limitations on our ability to incur other indebtedness, to pay dividends, to use our assets as collateral for other financing, to sell assets or to make acquisitions or enter into other transactions. Such restrictions may adversely affect our ability to finance our future operations or to engage in other business activities. If we finance the repayment of our outstanding indebtedness by issuing additional equity or convertible debt securities, such issuances could result in substantial dilution to our stockholders.

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

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

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

We may not be able to successfully execute our strategy of expanding into new geographical markets in China, which could have a material adverse effect on our business and results of operations.

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

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

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

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

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

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

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

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

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

We face intense competition from other real estate developers.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

You may have difficulty enforcing judgments against us.

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

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

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

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

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

Future inflation in China may inhibit our ability to conduct business in China.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Under the New Enterprise Income Tax Law, we may be classified as a “resident enterprise” of China. Such classification will likely result in unfavorable tax consequences to us and our non-PRC shareholders.

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

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

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

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

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

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

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

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

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

•

expiration of lock-up agreements;

•

our earnings releases, actual or anticipated changes in our earnings, fluctuations in our operating results or our failure to meet the expectations of financial market analysts and investors;

•

changes in financial estimates by us or by any securities analysts who might cover our stock;

•

speculation about our business in the press or the investment community;

•

significant developments relating to our relationships with our customers or suppliers;

•

stock market price and volume fluctuations of other publicly traded companies and, in particular, those that are in the real estate industry;

•

customer demand for our products;

•

investor perceptions of the real estate industry in general and our company in particular;

•

the operating and stock performance of comparable companies;

•

general economic conditions and trends;

•

major catastrophic events;

•

announcements by us or our competitors of new products, significant acquisitions, strategic partnerships or divestitures;

•

changes in accounting standards, policies, guidance, interpretation or principles;

•

loss of external funding sources;

•

failure to maintain compliance with NASDAQ rules;

•

sales of our ordinary shares, including sales by our directors, officers or significant shareholders; and

•

additions or departures of key personnel.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

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

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

•

our anticipated growth strategies and our ability to manage the expansion of our business operations effectively;

•

our dependence on the growth of the real estate market in China and in the local areas in which we do business; and

•

our ability to maintain or increase our market share in the competitive markets in which we do business.

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

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

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USE OF PROCEEDS

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

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

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

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Market Information

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

Holders

As of May 31, 2011, there were approximately 515 holders of record of our ordinary shares. This number does not include shares held by brokerage clearing houses, depositories or others in unregistered form.

DIVIDEND POLICY

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

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

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

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CAPITALIZATION

The following table sets forth our capitalization (i) as of March 25, 2011 and (ii) on an adjusted basis to give effect to the receipt of estimated net proceeds of $18.1 million from the sale of 4,000,000 ordinary shares in this offering at the assumed public offering price of $5.00 per ordinary share, and after deducting estimated underwriting discounts and commissions and estimated expenses payable by us.

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


	March 25, 2011
	Actual		As Adjusted
	(in thousands)
Cash:
Cash and cash equivalents	$	39,133	$	57,233
Restricted cash		3,030		3,030
Total cash	$	42,163	$	60,263
Debt:
Short-term debt	$	1,431	$	1,431
Long-term debt		34,968		34,968
Total debt	$	36,399	$	36,399
Stockholders’ equity:
Preference shares, $0.002112 par value, 20,000,000 shares authorized, 2,774,700 issued and outstanding	$	6	$	6
Ordinary shares, par value $0.002112 per share, authorized 100,000,000 shares, 31,020,062 shares issued and outstanding and 35,020,062 shares issued and outstanding on an as adjusted basis		65		74
Additional paid in capital		17,642		35,733
Warrants Outstanding		3,177		3,177
Appropriated retained earnings		18,042		18,042
Unappropriated retained earnings		97,112		97,112
Accumulated other comprehensive income		12,409		12,409
Total shareholders’ equity	$	148,453	$	166,553
Total capitalization	$	183,421	$	201,521

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DILUTION

Our net tangible book value on March 25, 2011 was approximately $89.0 million, or $2.87 per ordinary share. “Net tangible book value” is total assets minus the sum of liabilities and intangible assets. “Net tangible book value per share” is net tangible book value divided by 31,020,062 ordinary shares issued and outstanding on March 25, 2011.

After giving effect to the sale by us of 4,000,000 ordinary shares in this offering at the assumed public offering price of $5.00 per share and after deducting the underwriting discounts and commissions and estimated expenses related to this offering payable by us, our adjusted net tangible book value as of March 25, 2011 would have been $107.1 million, or $3.06 per ordinary share. This represents an immediate increase in net tangible book value of $0.19 per share to our existing shareholders and an immediate decrease in the net tangible book value of $1.94 per share to new investors. Dilution in the net tangible book value per share to new investors represents the difference between the offering price per share and the net tangible book value per ordinary share immediately after this offering. The following table illustrates this per share dilution:


Assumed public offering price	$	5.00
Net tangible book value as of March 25, 2011	$	2.87
Increase in net tangible book value attributable to this offering	$	0.19
As adjusted net tangible book value as of March 25, 2011 after giving effect to this offering	$	3.06
Dilution in as adjusted net tangible book value to new investors in this offering	$	1.94

A $1.00 increase in the assumed public offering price of $5.00 per share would increase our adjusted net tangible book value per share after this offering by $0.11 per share and would increase the dilution per share to new investors in this offering by $0.81 per share, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the underwriting discounts and commissions and estimated expenses related to this offering payable by us.

If the underwriters exercise their over-allotment option to purchase up to 600,000 additional ordinary shares from us in full in this offering at the assumed public offering price of $5.00 per share, the adjusted net tangible book value as of March 25, 2011 after giving effect to this offering would increase to $3.08 per share, and dilution per share to new investors in this offering would be $1.92 per share.

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EXCHANGE RATE INFORMATION

Our business is primarily conducted in China, and the financial records of our PRC subsidiaries are maintained in RMB, their functional currency. However, we use the U.S. dollar as our reporting currency. The assets and liabilities of our PRC subsidiaries are translated from RMB into U.S. dollar at the exchange rates on the balance sheet date, shareholders’ equity is translated at the historical rates and the revenues and expenses are translated at the weighted average exchange rate for the period. We make no representation that any RMB or U.S. dollar amounts could have been, or could be, converted into U.S. dollars or RMB, as the case may be, at any particular rate, or at all. The PRC government imposes control over its foreign currency reserves in part through direct regulation of the conversion of RMB into foreign exchange and through restrictions on foreign trade. On May 31, 2011, the exchange rate was ¥1 to $0.1544.

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


	InterBank Buying Rate⁽¹⁾
Fiscal Year Ended December 25,	Year End⁽²⁾		Weighted Average⁽³⁾
	(U.S. Dollar per RMB)
2005		0.1240		0.1222
2006		0.1281		0.1255
2007		0.1360		0.1315
2008		0.1480		0.1434
2009		0.1468		0.1466
2010		0.1507		0.1479
2011 (through May 31, 2011)		0.1544		0.1528

(1)

The exchange rates are based on daily RMB to U.S. Dollar Interbank Exchange Rates published on OANDA.com.

(2)

All periods end December 25 of the stated year.

(3)

Weighted averages for a period are calculated by using the average of the exchange rates on each calendar day during the period.

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SELECTED CONSOLIDATED FINANCIAL DATA

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

We derived our selected consolidated financial data as of March 25, 2011 and for the three months ended March 25, 2010 and 2011 from our unaudited consolidated financial statements included elsewhere in this prospectus, which include all adjustments, consisting of normal recurring adjustments, that our management considers necessary for a fair presentation of our financial position and results of operations as of the dates and for the periods presented.

Our audited consolidated financial statements for the fiscal years ended December 25, 2008, 2009 and 2010 and our unaudited consolidated financial statements for the three months ended March 25, 2010 and 2011 are prepared and presented in accordance with U.S. GAAP. The selected financial data information is only a summary and should be read in conjunction with the historical consolidated financial statements and related notes of Leewell contained elsewhere herein. The financial statements contained elsewhere fully represent our financial condition and operations; however, they are not indicative of our future performance.

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U.S. dollars, except shares


	Fiscal Year Ended December 25,															Three Months Ended March 25,
	2006			2007			2008			2009			2010			2010			2011
	(unaudited)			(unaudited)												(unaudited)			(unaudited)
Statements of Operations Data
Total sales	$	54,291,244		$	51,850,312		$	77,032,561		$	94,315,500		$	110,518,421		$	28,220,196		$	15,703,520
Total cost of sales		(33,703,168	)		(36,243,778	)		(46,321,251	)		(58,296,408	)		(77,209,814	)		(21,211,396	)		(9,336,276	)
Gross profit		20,588,076			15,606,534			30,711,310			36,019,092			33,308,607			7,008,800			6,367,244
Advertising expenses		(47,051	)		(46,492	)		(112,263	)		(268,222	)		(217,596	)		(88,231	)		(44,195	)
Commission expenses		(789,497	)		(134,989	)		(574,262	)		(84,982	)		(214,566	)		—			(14,707	)
Selling expenses		(6,192	)		(2,187	)		(81,415	)		(49,800	)		(61,967	)		(18,401	)		(13,024	)
Bad debt recovery (expense)		(154,710	)		(245,243	)		(1,198,942	)		(207,523	)		987,374			169,612			(779,133	)
General and administrative expenses		(4,092,355	)		(807,589	)		(2,283,744	)		(4,655,596	)		(7,390,963	)		(840,933	)		(1,611,548	)
Income from operations		15,498,271			14,370,034			26,460,684			30,752,969			26,410,889			6,230,847			3,904,637
Miscellaneous income (expense)		16,022			10,280			91,945			327,294			23,899,865			(14,177	)		(54,247	)
Interest expense		(121,597	)		(70,963	)		(968,710	)		(866,751	)		(325,969	)		(155,384	)		(28,156	)
Income before income taxes and extraordinary item		15,392,696			14,309,351			25,583,919			30,213,512			49,984,785			6,061,286			3,822,234
Income taxes		(5,130,644	)		(5,090,161	)		(6,602,194	)		(9,058,226	)		(15,042,327	)		(1,952,803	)		(1,434,997	)
Income before extraordinary item		10,262,052			9,219,190			18,981,725			21,155,286			34,942,458			4,108,483			2,387,237
Extraordinary item, net		—			—			12,499,576			—			—			—			—
Net income	$	10,262,052		$	9,219,190		$	31,481,301		$	21,155,286		$	34,942,458		$	4,108,483		$	2,387,237
Preference stock dividends		—			—			—			—			—			—			(476,184	)
Net earnings applicable to common shareholders	$	10,262,052		$	9,219,190		$	31,481,301		$	21,155,286		$	34,942,458		$	4,108,483		$	1,911,053
Foreign currency translation adjustment		687,566			2,107,856			3,486,204			474,414			3,470,209			(68,958	)		1,901,280
Comprehensive income	$	10,949,618		$	11,327,046		$	34,967,505		$	21,629,700		$	38,412,667		$	4,039,525		$	4,288,517
Earnings per common share basic	$	0.34		$	0.30		$	1.04		$	0.70		$	1.14		$	0.14		$	0.06
Earnings per common share diluted	$	0.34		$	0.30		$	1.04		$	0.70		$	1.07		$	0.14		$	0.06
Weighted average common shares outstanding basic		30,235,062			30,235,062			30,235,062			30,235,062			30,770,172			30,235,062			31,020,062
Weighted average common shares outstanding diluted		30,235,062			30,235,062			30,235,062			30,235,062			32,708,661			30,235,062			33,794,762
Cash Flow Data
Net cash provided by (used in)
Operating Activities	$	(5,953,059	)	$	1,212,951		$	61,015,081		$	11,250,820		$	27,325,191		$	5,064,137		$	6,496,587
Investing Activities		(59,164	)		(13,689,661	)		(58,521,630	)		234,814			(136,156	)		(166,782	)		(19,800	)
Financing Activities		5,759,286			14,167,583			(3,805,052	)		(9,866,408	)		3,435,399			(4,028,790	)		(1,393,986	)
Effect of exchange rate changes on cash		(57,807	)		9,891			16,518			6,573			701,545			(1,246	)		459,696
Net increase (decrease) in cash	$	(310,744	)	$	1,700,764		$	(1,295,083	)	$	1,625,799		$	31,325,979		$	867,319		$	5,542,497



	As of December 25,										As of March 25, 2011
	2006		2007		2008		2009		2010		Actual		As Adjusted⁽¹⁾
	(unaudited)		(unaudited)								(unaudited)		(unaudited)
Balance Sheet Data
Current assets	$	92,211,870	$	69,443,412	$	105,072,009	$	133,002,971	$	194,356,501	$	207,574,357	$	225,674,357
Total assets		94,711,799		87,822,788		178,648,355		196,332,843		260,120,259		274,267,490		292,367,490
Current liabilities		57,741,400		59,977,634		86,240,752		88,795,899		91,775,418		100,491,675		100,491,675
Long-term liabilities		7,686,000		—		29,160,895		13,185,998		23,703,855		25,322,496		25,322,496
Total liabilities		65,427,400		59,977,634		115,401,647		101,981,897		115,479,273		125,814,171		125,814,171
Stockholders’ equity		29,284,399		27,845,154		63,246,708		94,350,946		144,640,986		148,453,319		166,553,319

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Quarterly Financial Results

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

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

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



	Mar 25, 2011			Dec 25, 2010			Sep 25, 2010			Jun 25, 2010			Mar 25, 2010			Dec 25, 2009			Sep 25, 2009			Jun 25, 2009			Mar 25, 2009
Sales	$	15,703		$	21,590		$	31,765		$	28,241		$	28,220		$	48,496		$	14,876		$	10,856		$	16,813
Sales to related party		—			86			616			—			—			3,274			—			—			—
Total sales		15,703			21,676			32,381			28,241			28,220			51,770			14,876			10,856			16,813
Cost of sales		(9,336	)		(15,501	)		(21,418	)		(18,935	)		(21,211	)		(29,044	)		(9,602	)		(8,642	)		(10,154	)
Cost of sales to related party		—			(17	)		(127	)		—			—			(854	)		—			—			—
Total cost of sales		(9,336	)		(15,518	)		(21,545	)		(18,935	)		(21,211	)		(29,898	)		(9,602	)		(8,642	)		(10,154	)
Gross profit		6,367			6,158			10,836			9,306			7,009			21,872			5,274			2,214			6,659
Advertising expenses		(44	)		(15	)		(53	)		(62	)		(88	)		(39	)		(56	)		(10	)		(163
Commission expenses		(15	)		(26	)		(188	)		—			—			—			—			(85	)		—
Selling expenses		(13	)		(6	)		(25	)		(13	)		(18	)		(16	)		(18	)		(7	)		(9	)
Bad debt recovery (expense)		(779	)		555			251			11			169			123			(841	)		383			127
General and administrative expenses		(1,612	)		(1,751	)		(1,860	)		(2,938	)		(841	)		(2,910	)		(718	)		(483	)		(544	)
Total operating expenses		(2,463	)		(1,243	)		(1,875	)		(3,002	)		(778	)		(2,842	)		(1,633	)		(202	)		(589	)
Income from operations		3,904			4,915			8,961			6,304			6,231			19,030			3,641			2,012			6,070
Miscellaneous income (expense)		(54	)		23,673			45			195			(14	)		150			(6	)		(8	)		191
Interest income (expense)		(28	)		(27	)		(64	)		(79	)		(155	)		(33	)		(31	)		(339	)		(464	)
Income before income taxes and extraordinary items		3,822			28,561			8,942			6,420			6,062			19,147			3,604			1,665			5,797
Income taxes – current & deferred		(1,435	)		(7,670	)		(2,936	)		(2,483	)		(1,953	)		(5,236	)		(1,297	)		(962	)		(1,563	)
Net income	$	2,387		$	20,891		$	6,006		$	3,937		$	4,109		$	13,911		$	2,307		$	703		$	4,234
Preference stock dividends		(476	)		—			—			—			—			—			—			—			—
Net earnings applicable to common shareholders	$	1,911		$	20,891		$	6,006		$	3,937		$	4,109		$	13,911		$	2,307		$	703		$	4,234

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

Overview

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

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

Since our inception, we have completed 17 projects having a GFA of 1,461,996 square meters, of which approximately 96% has been sold. In addition, we have seven projects under construction with a total GFA of 540,201 square meters.

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

Principal Factors Affecting Our Financial Performance

Our operating results are primarily affected by the following factors:

•

Growth in the Chinese economy. We operate in China and derive almost all of our revenues from sales to customers in China. Economic conditions in China, therefore, affect virtually all aspects of our operations, including the demand for our properties, the availability and prices of our raw materials, and our other expenses. China has experienced significant economic growth, achieving a compound annual growth rate of more than 10% in gross domestic product from 1996 through 2008. In 2009 the annual growth rate was 9.2% and in 2010 it was 10.3%. China is expected to experience continued growth in all areas of investment and consumption. However, if the global economic recession were to become more protracted, China’s growth might be somewhat more modest, since China has not been entirely immune to the global economic slowdown and has been experiencing a slowing in its growth rate.

•

Growth of the Chinese real estate market and the local markets in which our properties are sold. China’s real estate bull market began more than six years ago. According to the National Bureau of Statistics of China, the total GFA of residential and commercial properties sold increased from 224.1 million square meters in 2001 to 937.1 million square meters in 2009, a compound annual growth rate, or CAGR, of 19.6%.Qingdao’s real estate market has also experienced strong growth. According to the Qingdao Statistics Yearbooks 2004 – 2010 and the Qingdao Municipal Bureau of Statistics, the CAGR in Qingdao from 2003 to 2009 for GFA completed was 6.7% and the CAGR for GFA sold was 17.9%. Weihai’s real estate market has seen similar increases. According to the Weihai Statistics Yearbooks 2004 – 2010 and the Weihai Municipal Bureau of Statistics, the CAGR from 2003 to 2009 for GFA completed was 22.4% and for the GFA sold was 22.9%. Despite moderations in growth caused by the current global economic weakness in 2008 and

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2009, we believe the structural forces in China and in the markets in which we sell our properties support continuing good demand for real estate during the next 10 years, however there can be no assurance that current trends will continue.

•

China’s Economic Stimulus Programs. In response to the global financial and economic crisis, the Chinese government announced an RMB 4 trillion stimulus program on November 27, 2008. Within the RMB 4 trillion package, about RMB 400 billion will go toward civil works, including low-income housing and renovation, which we believe will benefit Shandong Province. Two additional categories (technology advances and industry restructuring, which together will be allocated RMB 370 billion, and infrastructure, which will be allocated RMB 1.5 trillion) are also expected to benefit industries in Qingdao, Weihai, Weifang, and the entire Shandong Province. On February 26, 2009, China’s State Council reinforced China’s 2008 stimulus package by announcing further measures to stimulate specific industries in 2009. The industries included automobile, iron and steel, textiles, equipment manufacturing, shipbuilding, electronics and information technology, petrochemicals, light industries, nonferrous metals, and logistics. We believe that the stimulus plan will benefit us both directly and indirectly in three ways. First, from a macro-economic perspective, the RMB 400 billion will mainly be invested in the development of infrastructure in China, which will most likely create more jobs, improve people’s living standard, and accelerate the process of Chinese urbanization, which will in turn increase demand for urban housing at all income levels and continue to bolster the long-term growth of China’s real estate market. Second, we also believe that the stimulus package and its further efforts focused on 10 industries will improve Greater Qingdao’s economy, further strengthen the region’s long-term competitive ability, and support the demand for middle and upper income housing, as well as the need for better commercial and office space, and a few world-class hotels. Third, increased government spending on low-income housing will provide us with various opportunities for development, even though our general strategy focuses on middle and upper income customers. For example, as indicated under “Business — Project Development Process,” the government’s public infrastructure projects, including old city relocation projects, afford us the opportunity to acquire additional land for our future development projects, which would normally not have been otherwise available. Although individuals and governments around the world hope that government stimulus efforts are starting to have the desired effects, the true benefits of these and perhaps additional stimulus efforts by local, provincial, and national governments in China, as well as by other countries, is not yet assured, since the sustainability of the global economic recovery is yet to be proven.

•

Recent Efforts by the Chinese Government to Cool Down the Real Estate Industry. As discussed in “Business — Our Industry — The Real Estate Industry in China — Recent Efforts by the Chinese Government to Cool Down the Real Estate Industry,” in response to concerns over the scale of the increase in property investments, the PRC government has implemented certain measures and introduced policies to curtail property speculation and promote the healthy development of the real estate industry in China. We believe that we have the ability, willingness, and flexibility to provide housing across all the price ranges in our target markets in China. We believe that demand will continue to grow reasonably for primary housing across the range of incomes, as China’s overall economy grows at a more sustainable pace and the government continues its nationwide policy to promote urbanization. In addition, we believe that targeting middle-income customers in second-tier and third-tier cities and offering affordable products make our properties less of a target for real estate speculation. Moreover, because we have consistently adopted a strategy of conducting much of our operations in second-tier and third-tier cities, focusing on middle-income families in these second-tier and third-tier cities, and offering affordable, “bread and butter” type of housing for the vast majority of the population in under-served markets, we believe that our properties have been and will continue to be less of a target for real estate speculation. We also believe that the government’s efforts to curb speculative activity in the housing market will in fact benefit us in that they provide a long-term, healthy, and sustainable policy environment for our growth strategy. However, there can be no assurance that China’s current more restrictive approach to the economics of housing, especially in the speculative or over-invested parts of the housing market, would not have a negative influence on our business, especially in the near term.

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Taxation

Cayman Islands

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

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

Hong Kong

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

China

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

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

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Results of Operations

Comparison of Three Months Ended March 25, 2011 and March 25, 2010

The following table shows key components of our results of operations during the three months ended March 25, 2011 and 2010, in both dollars and as a percentage of our total sales.


U.S. dollars, except percentages	Three Months Ended March 25, 2011						Three Months Ended March 25, 2010
	Dollars			Percent of Total Sales			Dollars			Percent of Total Sales
Sales	$	15,703,520			100.0	%	$	28,220,196			100.0	%
Sales to related party		—			—			—			—
Total sales		15,703,520			100.0	%		28,220,196			100.0	%
Cost of sales		(9,336,276	)		(59.4	)%		(21,211,396	)		(75.2	)%
Cost of sales to related party		—			—			—			—
Total cost of sales		(9,336,276	)		(59.4	)%		(21,211,396	)		(75.2	)%
Gross profit		6,367,244			40.6	%		7,008,800			24.8	%
Advertising expenses		(44,195	)		(0.2	)%		(88,231	)		(0.3	)%
Commission expenses		(14,707	)		(0.1	)%		—			—
Selling expenses		(13,024	)		(0.1	)%		(18,401	)		(0.1	)%
Bad debt recovery (expense)		(779,133	)		(5.0	)%		169,612			0.6	%
General and administrative expenses		(1,611,548	)		(10.3	)%		(840,933	)		(3.0	)%
Income from operations		3,904,637			24.9	%		6,230,847			22.0	%
Miscellaneous income (expenses)		(54,247	)		(0.4	)%		(14,177	)		(0.1	)%
Interest expense and finance charges (net of interest income)		(28,156	)		(0.2	)%		(155,384	)		(0.5	)%
Income before income taxes		3,822,234			24.3	%		6,061,286			21.4	%
Income taxes		(1,434,997	)		(9.1	)%		(1,952,803	)		(6.9	)%
Net income	$	2,387,237			15.2	%	$	4,108,483			14.5	%
Preference stock dividends		(476,184	)		(3.0%)			—			—
Net earnings applicable to common shareholders	$	1,911,053			12.2	%	$	4,108,483			14.5	%
Foreign currency translation adjustment		1,901,280			12.1	%		(68,958	)		(0.2	)%
Comprehensive income	$	4,288,517			27.3	%	$	4,039,525			14.3	%

Sales. Our total sales decreased 44.4% to $15.7 million in the three months ended March 25, 2011 from $28.2 million in the same period in 2010. The decline was mainly attributable to the Dongli Garden Phase I project, which contributed $20.1 million in sales, or 71.3% of total sales, in the first quarter of 2010, but only $0.1 million in sales in the same period in 2011. For Dongli Garden Phase I, the fourth quarter of 2009 and first quarter of 2010 were the peak season of the government-sponsored villagers (residents who were the prior holders of the land use rights) relocation process, which tapered off in the second half of 2010. Meanwhile, in the first quarter of 2011, our new project Chongqing Garden has not met all the revenue recognition criteria. First quarter sales were also negatively impacted by additional restrictive government policies issued recently to curb housing prices and speculation, as buyers became increasingly cautious due to new government tightening measures.

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

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The following table sets forth the aggregate GFA and the related revenues recognized by project (finished projects) for the three months ended March 25, 2011 and 2010:


	Total GFA⁽¹⁾		GFA Delivered for Three Months Ended March 25,				Percentage of Total GFA Delivered as of March 25,⁽²⁾						Revenues Recognized for Three Months Ended March 25,⁽³⁾
	Total GFA⁽¹⁾		2011		2010		2011			2010			2011					2010
	m²		m²		m²		%			%			US$		%			US$		%
Fuxiang Huayuan 1		52,830		—		—		100	%		100	%		—		—			—		—
Fuxiang Huayuan 2		18,392		—		—		100	%		100	%		—		—			38,664		0.1	%
Xingfu Renjia 1		85,551		—		—		100	%		100	%		254,086		1.6	%		4,287,173		15.2	%
Oumei Complex 1		91,778		—		—		100	%		100	%		259,917		1.7	%		349,232		1.2	%
Longhai Lidu 1		51,451		—		—		100	%		100	%		—		—			50,475		0.2	%
Longhai Lidu 2		79,308		—		43,181		100	%		71	%		372,357		2.4	%		2,135,598		7.6	%
Qilu Textile Centre (comm.)		139,510		—		—		100	%		100	%		418,097		2.7	%		42,766		0.2	%
Total		518,820		—		43,181							$	1,304,457				$	6,903,908

(1)

The amounts for “total GFA” in this table and the other tables in this section are the amounts of total saleable GFA and are derived on the following basis: (a) for properties that are sold, since total GFA of buildings includes sellable GFA and unsellable GFA (such as common areas and property management spaces, etc.), the total GFA is based on the sale contracts relating to such property; (b) for unsold properties that are completed or under construction, the total GFA is calculated based on the detailed construction blueprint and the calculation method approved by the PRC government for saleable GFA, after necessary adjustments; and (c) for properties that are under planning, the total GFA is calculated based on the floor area ratio approved in the land grant contract and our internal projections, subject to adjustments upon completion of construction blueprints.

(2)

Percentage of total GFA delivered is the total GFA delivered as of a period end divided by the project’s total GFA. This calculation does not apply to projects in which 100% of GFA had been completed and delivered prior to the current period.

(3)

Percentage of all real estate sales revenues for the financial period, including finished goods and work-in-process inventory.

The following table sets forth the percentage of completion, the percentage sold and related revenues for our projects for the three months ended March 25, 2011 and 2010.


	Total GFA		Percentage of Completion as of March 25,						Percentage Sold — Accumulated as of March 25,⁽¹⁾						Revenues recognized for Three Months Ended March 25,⁽²⁾
	Total GFA		2011			2010			2011			2010			2011					2010
	m²		%			%			%			%			US$		%			US$		%
Qilu Textile Centre (Residential)		67,942		98	%		91	%		91	%		84	%		59,334		0.4	%		118,295		0.4	%
Weihai International Plaza		45,828		80	%		30	%		29	%		—			1,326,539		8.5	%		—		—
Dongli Garden 1		213,315		69	%		48	%		55	%		43	%		60,346		0.4	%		20,116,275		71.3	%
Longhai Mingzhu		51,902		97	%		80	%		79	%		74	%		4,166,129		26.5	%		—		—
Oumei Complex 2		70,587		64	%		—			21	%		—			5,077,063		32.3	%		—		—
Xingfu Renjia 2		58,768		85	%		—			50	%		—			3,323,525		21.2	%		—		—
Total		508,342													$	14,012,936				$	20,234,570

(1)

Percentage sold is calculated by dividing contracted sales value from property sales by total estimated sales value of the relevant project, estimated as of the time of preparation of our interim financial statements as of and for the applicable period.

(2)

Percentage of all real estate sales revenues for the financial period, including finished goods and work-in-process inventory.

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The following table sets forth the square meters sold and average selling price per square meter by each project on a consolidated basis for the three months ended March 25, 2011 and 2010.



	For Three Months Ended March 25, 2011												For Three Months Ended March 25, 2010
	Contract Sales⁽¹⁾		Revenues Recognized from Prior Contract Sales⁽²⁾		Revenues Recognized in Current Period⁽³⁾		Remaining Contract Amounts to be Recognized⁽⁴⁾		Square Meters Sold⁽⁵⁾		Average Selling Price⁽⁶⁾		Contract Sales⁽¹⁾		Revenues Recognized from Prior Contract Sales⁽²⁾		Revenues Recognized in Current Period⁽³⁾		Remaining Contract Amounts to be Recognized⁽⁴⁾		Square Meters Sold⁽⁵⁾		Average Selling Price⁽⁶⁾
	US$		US$		US$		US$		m²		US$/m²		US$		US$		US$		US$		m²		US$/m²
Fuxiang Huayuan 1		—		—		—		—		—		—		—		—				—		—		—
Fuxiang Huayuan 2		—		—		—		—		—		—		38,664		—		38,664		—		—		—
Xingfu Renjia 1		254,086		—		254,086		—		928		274		4,287,173		—		4,287,173		—		14,833		289
Xingfu Renjia 2		11,214,681		7,891,156		3,323,525		—		29,299		383		—		—		—		—				—
Longhai Lidu 1		—		—		—		—		—		—		50,475		—		50,475		—		123		410
Longhai Lidu 2		372,357		—		372,357		—		824		452		13,693,142		11,557,544		2,135,598		—		36,011		380
Qilu Textile Centre (Comm)		418,097		—		418,097		—		845		495		42,766		—		42,766		—		123		348
Qilu Textile Centre (Residential)		59,334		—		59,334		—		130		456		118,295		—		118,295		—		460		257
Weihai International Plaza		17,029,484		12,297,048		1,326,539		3,405,897		13,177		1,292		—		—		—		—		—		—
Dongli Garden 1		60,346		—		60,346		—		60		1,014		20,116,275		—		20,116,275		—		56,614		355
Longhai Mingzhu		4,294,978		—		4,166,129		128,849		2,523		1,702		—		—		—		—		—		—
Oumei Complex 1		259,917		—		259,917		—		787		330		349,232		—		349,232		—		1,186		294
Oumei Complex 2		5,592,387		—		5,077,063		515,324		12,288		455		—		—		—		—		—		—
Sales of Inventory⁽¹⁾		386,127		—		386,127		—		1,603		241		1,081,718		—		1,081,718		—		1,775		609
Total		39,941,794		20,188,204		15,703,520		4,050,070		62,464		639		39,777,740		11,557,544		28,220,196		—		111,125		358

(1)

“Contract Sales” are comprised of two sub-groups: (a) contracts entered into prior to the current period that, as of the beginning of the current period, still have unrecognized portions (these are the total amounts, including previously recognized and unrecognized); and (b) brand new contracts entered into in the current period.

(2)

“Revenues recognized from prior contract sales” are revenues recognized prior to the current period from prior contracts. In this column, we demonstrate the portion within the above-listed “sub-group (1)” that had previously been recognized as revenues prior to the current period. In other words, the amount shown in this column is part of the amount in the above-listed “sub-group (1).” We think this disclosure is relevant because it enables the reader to focus on the potential revenues as of the beginning of the current period, by eliminating previously recognized revenues from the total contract sales stated in the first column.

(3)

“Revenues recognized in current period” include the revenues recognized in the current period, both from the un-recognized portion of previous contracts and from new contracts signed in the current period.

(4)

“Remaining contract amounts to be recognized” represents the revenues that remain to be recognized as of the end of the current period, ie., (4) = (1) – (2) – (3)

(5)

“Square meters sold” are the total GFA of all contract sales reflected in (1) above.

(6)

“Average selling price” is defined as (1) divided by (5) above.

(7)

The sales of inventory are defined as the sale of unsold properties from projects completed prior to the applicable period, in which a very small number of units remained unsold at the beginning of the current period and the Company had withdrawn active selling activity.

Cost of sales. Our total cost of sales decreased 56.0% to $9.3 million in the three months ended March 25, 2011 from $21.2 million in the same period in 2010, mainly due to the decrease in sales.

Gross profit and gross profit margin. Our gross profit decreased 9% to $6.4 million in the three months ended March 25, 2011 from $7.0 million in the same period in 2010. Gross profit as a percentage of total sales (gross margin) was 40.6% for the three months ended March 25, 2011 and 24.8% for the three months ended March 25, 2010. The decrease in the gross profit was due to the decrease in total sales as noted above, offset by an improved gross profit margin. The improvement in gross profit margin is mainly attributable to the fact that Dongli Garden Phase I, which had a low gross profit margin because of villager relocation efforts, contributed approximately 71.3% of total sales in the three months ended March 25, 2010, compared

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with only 0.4% in the same period of 2011. Dongli Garden was a joint effort between us and local government agencies, and Phase I of the project mainly involved relocating villagers previously residing on the parcel designated for Phase II. Therefore, as part of the government’s urban modernization initiatives, the government strictly regulated the selling prices of all Phase I units, which were on average considerably below would-be market prices and in turn resulted in a lower profit margin. Meanwhile, we were required by the government to offer pricing concessions to relocated former villagers based on the sizes of parcels they previously resided on.

Advertising expenses. Advertising expenses decreased 49.9% to $0.04 million in the three months ended March 25, 2011 from $0.09 million in the same period in 2010, mainly due to the fact that, as more of the existing projects were completed by the end of 2010, we reduced our advertising efforts in the three months ended March 25, 2011 on existing projects.

Commission expenses. Commissions paid to independent sales agents amounted to $0.01 million in the three months ended March 25, 2011, while we paid no commissions in the same period in 2010. In addition to our salaried internal salespersons, we used temporary independent sales agents to maximize our sales efforts for commercial/office projects such as Weihai International Plaza and Longhai Mingzhu in the three months ended March 25, 2011. We did not rely as heavily on these temporary sales agents during the same period in 2010.

Selling expenses. Our selling expenses decreased 29.2% to $0.01 million in the three months ended March 25, 2011 from $0.02 million in the same period in 2010, mainly due to the absence in the first quarter of 2011 of the sales and marketing materials purchased for the intense selling effort in the first phase of pre-sales for Weihai International Plaza in the same period in 2010.

Bad debt recovery (expense). Our bad debt expense in the three months ended March 25, 2011 was $0.8 million, compared to bad debt recovery of $0.2 million in the same period in 2010, primarily due to an additional provision for doubtful accounts receivable made in accordance with our bad debt allowance policy.

General and administrative expenses. General and administrative expenses increased 92% to $1.6 million in the three months ended March 25, 2011 from $0.8 million in the same period in 2010, primarily due to the increases in land use tax and employee compensation and benefit expenses, as well as expenses related to our public offering registration.

Interest expense and finance charges (net of interest income). Interest expense decreased 82% to $0.03 million in the three months ended March 25, 2011 from $0.16 million in the same period in 2010, primarily due to a decrease in the average balance of our borrowings and an increase in the proportion of capitalized interest among all interest paid as more projects went into the construction phase. Please refer to Notes 12 and 13 to our unaudited consolidated financial statements for detailed information on our short-term and long-term borrowings.

Income taxes. Income taxes decreased 26.5% to $1.4 million in the three months ended March 25, 2011 from $2 million in the same period in 2010, due to lower income before taxes.

Net income. As a result of the foregoing factors, net income decreased 41.9% to $2.4 million in the three months ended March 25, 2011 from $4.1 million in the same period in 2010.

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

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


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

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

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


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

(1)

(2)

(3)

Percentage of all real estate sales revenues for the financial period, including finished goods and work-in-process inventory.

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


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

(1)

(2)

Percentage of all real estate sales revenues for the financial period, including finished goods and work-in-process inventory.

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



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

(1)

“Contract Sales'' are comprised of two sub-groups: (a) contracts entered into prior to the current period that, as of the beginning of the current period, still have unrecognized portions (these are the total amounts, including previously recognized and unrecognized); and (b) brand new contracts entered into in the current period.

(2)

(3)

(4)

“Remaining contract amounts to be recognized” represents the revenues that remain to be recognized as of the end of the current period, ie., (4) = (1) – (2) – (3)

(5)

“Square meters sold” are the total GFA of all contract sales reflected in (1) above.

(6)

“Average selling price” is defined as (1) divided by (5) above.

(7)

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

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

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

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

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

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

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

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

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

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

TABLE OF CONTENTS

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

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

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

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


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

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

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

TABLE OF CONTENTS

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


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

(1)

(2)

(3)

Percentage of all real estate sales revenues for the financial period, including finished goods and work-in-process inventory.

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


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

(1)

(2)

Percentage of all real estate sales revenues for the financial period, including finished goods and work-in-process inventory.

TABLE OF CONTENTS

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



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

(1)

(2)

(3)

(4)

“Remaining contract amounts to be recognized” represents the revenues that remain to be recognized as of the end of the current period, ie., (4) = (1) – (2) – (3)

(5)

“Square meters sold” are the total GFA of all contract sales reflected in (1) above.

(6)

“Average selling price” is defined as (1) divided by (5) above.

(7)

Cost of sales. Our total cost of sales increased 25.9% to $58.3 million in the fiscal year 2009 from $46.3 million in the fiscal year 2008, mainly in support of the increase in sales, plus higher costs in constructing high rise tower office buildings in fiscal year 2009, which are more expensive to construct than the low rise buildings completed in fiscal year 2008.

Gross profit and gross profit margin. Our gross profit increased 17.3% to $36.0 million in the fiscal year 2009 from $30.7 million in the fiscal year 2008. Gross profit as a percentage of total sales (gross margin) was 38.2% for the fiscal year 2009 and 39.9% for the fiscal year 2008. The decline in the gross margin was primarily due to the Fuxiang Garden Phase 2 and the Xingfu Renjia Phase 1 projects, both of which had lower than average selling prices. Additionally, the costs of construction of high rise office tower buildings in fiscal year 2009 are relatively higher than the projects sold in fiscal year 2008.

TABLE OF CONTENTS

Advertising expenses. Advertising expenses increased 138.9% to $0.3 million in the fiscal year 2009 from $0.1 million in the fiscal year 2008, mainly due to our increased advertising efforts to create buyer awareness and interest in our newly available properties at our Qilu Textile Center and Weihai Longhai International Plaza projects, as well as in our Xingfu Renjia residential project.

Commission expenses. Commissions paid to independent sales agents decreased 85.2% between fiscal year 2009 ($0.1 million) and fiscal year 2008 ($0.6 million) since we used temporary independent sales agents to maximize our pre-sales in the first phase of sales for residential and commercial properties in 2008. In 2009, we did not rely as heavily on these temporary sales agents.

Selling expenses. Our selling expenses decreased 38.8% to $0.05 million in the fiscal year 2009 from $0.08 million in the fiscal year 2008, mainly due to the absence in 2009 of the sales and marketing materials purchased for the intense selling effort in the first phase of pre-sales for residential and commercial properties in 2008.

Bad debt expense. Our bad debt expense declined 82.7% in fiscal year 2009 ($0.2 million) from fiscal year 2008 ($1.2 million), primarily due to the write back of an allowance against other receivables which was recorded in 2008. This was partially offset by an additional provision for doubtful accounts receivable made in accordance with the Company’s bad debt allowance policy.

General and administrative expenses. General and administrative expenses increased 103.9% in fiscal year 2009 ($4.7 million) from fiscal year 2008 ($2.3 million), primarily due to the increase in Land Appreciation Tax and the expenses incurred in anticipation of the reverse acquisition transaction with Leewell and related private placement.

Interest expense. Interest expense decreased 10.5% to $0.9 million in the fiscal year 2009 from $1.0 million in fiscal year 2008, primarily due to lower average borrowings in 2009.

Income taxes. Income taxes increased 37.2% to $9.1 million in the fiscal year 2009 from $6.6 million in the fiscal year 2008, mainly due to higher income before taxes.

Income before extraordinary items. Income before extraordinary items was up 11.5% to $21.2 million in the fiscal year 2009 compared with $19.0 million in 2008, as a result of the factors described above.

Extraordinary items, net. In fiscal year 2008, we acquired four project companies (Qingdao Xudong, Weifang Longhai Industry, Weifang Longhai Zhiye and Weifang Qilu) and recorded a gain of $12.5 million as an extraordinary item, based on the differences between our purchase prices and the estimated fair market values of the acquisitions.

Net income. Net income decreased 32.7% to $21.2 million in fiscal year 2009 from $31.5 million in 2008, primarily due the absence in fiscal year 2009 of a gain from extraordinary items that occurred in fiscal year 2008, and due to higher income taxes in 2009.

Liquidity and Capital Resources

As of March 25, 2011, we had cash and cash equivalents of approximately $39.1 million. The following table provides a summary of our net cash flows from operating, investing, and financing activities. To date, we have financed our operations primarily through net cash flow from operations, augmented by cash proceeds from recent financing activities, short-term bank borrowings and equity contributions by our shareholders.

TABLE OF CONTENTS


U.S. Dollars	Three Months Ended March 25,						Fiscal Year Ended December 25,
	2011			2010			2010			2009			2008
Net cash provided by operating activities	$	6,496,587		$	5,064,137		$	27,325,191		$	11,250,820		$	61,015,081
Net cash provided by (used in) investing activities		(19,800	)		(166,782	)		(136,156	)		234,814			(58,521,630	)
Net cash provided by (used in) financing activities		(1,393,986	)		(4,028,790	)		3,435,399			(9,866,408	)		(3,805,052	)
Effects of exchange rate change in cash		459,696			(1,246	)		701,545			6,573			16,518
Net increase (decrease) in cash and cash equivalents		5,542,497			867,319			31,325,979			1,625,799			(1,295,083	)
Cash and cash equivalents at beginning of the period		33,590,417			2,264,438			2,264,438			638,639			1,933,722
Cash and cash equivalent at end of the period	$	39,132,914		$	3,131,757		$	33,590,417		$	2,264,438		$	638,639

Net cash flow from operating activities

In accordance with Accounting Standards Codification, or ASC, 230, Statement of Cash Flows, cash flows from our operations are calculated based upon the local currencies. As a result, amounts related to assets and liabilities reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheet.

Net cash provided by operating activities was $6.5 million in the three months ended March 25, 2011, compared with $5.1 million in the same period last year. Net income after adjustment for noncash items was $4.4 million in the three months ended March 25, 2011. This increase was augmented by a reduction in inventories of $2.

Registration No. 333-166658

UNITED STATESSECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549

AMENDMENT NO. 10 TOFORM S-1

REGISTRATION STATEMENTUNDER THE SECURITIES ACT OF 1933

CHINA OUMEI REAL ESTATE INC.

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

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

CALCULATION OF REGISTRATION FEE

EXPLANATORY NOTE

Subject to completion, dated June 1, 2011

4,000,000 Ordinary Shares

CHINA OUMEI REAL ESTATE INC. TABLE OF CONTENTS

PROSPECTUS SUMMARY

The Company

Overview of Our Business

Our Competitive Strengths

Our Growth Strategy

Our Corporate History and Background

Our Corporate Structure

Office Location

Our Filing Status

The Offering

Summary Consolidated Financial Information

RISK FACTORS

RISKS RELATED TO OUR BUSINESS

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

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

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

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

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

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

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

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

We may not be able to successfully execute our strategy of expanding into new geographical markets in China, which could have a material adverse effect on our business and results of operations.

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

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

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

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

We face intense competition from other real estate developers.

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

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

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

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

RISKS RELATED TO DOING BUSINESS IN CHINA

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

You may have difficulty enforcing judgments against us.

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

Future inflation in China may inhibit our ability to conduct business in China.

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

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

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

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

Under the New Enterprise Income Tax Law, we may be classified as a “resident enterprise” of China. Such classification will likely result in unfavorable tax consequences to us and our non-PRC shareholders.

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

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

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

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

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

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

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

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

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

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

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

USE OF PROCEEDS

MARKET PRICE AND DIVIDENDS ON OUR COMMON EQUITYAND RELATED SHAREHOLDER MATTERS

Market Information

Holders

DIVIDEND POLICY

CAPITALIZATION

DILUTION

EXCHANGE RATE INFORMATION

SELECTED CONSOLIDATED FINANCIAL DATA

U.S. dollars, except shares

Quarterly Financial Results

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

Overview

Principal Factors Affecting Our Financial Performance

Taxation

Cayman Islands

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

AMENDMENT NO. 10
TO
FORM S-1

REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933

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

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

CHINA OUMEI REAL ESTATE INC.

TABLE OF CONTENTS

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

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

CHINA OUMEI REAL ESTATE INC. S-1/A