1326710--4/19/2007--SHANGHAI_CENTURY_ACQUISITION

related topics

{interest, director, officer}

{operation, international, foreign}

{regulation, change, law}

{stock, price, share}

{acquisition, growth, future}

{tax, income, asset}

{investment, property, distribution}

{control, financial, internal}

{provision, law, control}

{stock, price, operating}

Risk associated with our business We are a development stage company with no operating history and, accordingly, you will not have any basis on which to evaluate our ability to achieve our business objective. If we are forced to liquidate before a business combination, our public shareholders will receive less than $8.00 per share upon distribution of the trust account and our redeemable warrants will expire worthless. Under Cayman Islands law, the requirements and restrictions relating to our initial public offering contained in our amended and restated articles of association may be amended, which could reduce or eliminate the protection afforded to our shareholders by such requirements and restrictions. You will not be entitled to protections normally afforded to investors of blank check companies under the United States securities laws. If third parties bring claims against us, the proceeds held in trust could be reduced and the per-share liquidation price received by shareholders could be less than $7.60 per share. Since we may consummate a business combination with a company in any industry we choose and are not limited to any particular industry or type of business, you have no current basis to ascertain the merits or risks of the industry or target business in which we may ultimately operate. Because there are numerous companies with a business plan similar to ours seeking to effectuate a business combination, it may be more difficult for us to do so. We may issue shares of our capital stock or debt securities to complete a business combination, which would reduce the equity interest of our shareholders and likely cause a change in control of our ownership. Our ability to successfully effect a business combination and to be successful afterwards will be totally dependent upon the efforts of our key personnel, some of whom may join us following a business combination and whom we would have only a limited ability to evaluate. Our officers, directors and advisor may allocate their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This could have a negative impact on our ability to consummate a business combination. Our officers, directors and advisor may be involved or in the future may become affiliated with other businesses, including other blank check companies, which could cause a conflict of interest as to which business they may present a viable acquisition opportunity. All of our officers, directors and advisor own ordinary shares which will not participate in liquidation distributions and therefore they may have a conflict of interest in determining whether a particular target business is appropriate for a business combination. Our officers , directors and advisor s interests in obtaining reimbursement for any out-of-pocket expenses incurred by them may lead to a conflict of interest in determining whether a particular target business is appropriate for a business combination and in the public shareholders best interest. If our ordinary shares become subject to the SEC s penny stock rules, broker-dealers may experience difficulty in completing customer transactions and trading activity in our securities may be adversely affected. It is possible that we will only be able to complete one business combination with the proceeds of our initial public offering, which will cause us to be solely dependent on a single business. We are dependent upon interest earned on the trust account to fund our search for a target company and consummation of a business combination. Because of our limited resources and the significant competition for business combination opportunities, we may not be able to consummate an attractive business combination. We may be unable to obtain additional financing, if required, to complete a business combination or to fund the operations and growth of the target business, which could compel us to restructure the transaction or abandon a particular business combination. Our officers, directors and advisor control a substantial interest in us and thus may influence certain actions requiring shareholder vote. Our outstanding redeemable warrants and options may have an adverse effect on the market price of our ordinary shares and make it more difficult to effect a business combination. If our officers, directors and advisor exercise their registration rights, it may have an adverse effect on the market price our ordinary shares and the existence of these rights may make it more difficult to effect a business combination. The American Stock Exchange may delist our securities from quotation on its exchange which could limit investors ability to make transactions in our securities and subject us to additional trading restrictions. If we are deemed to be an investment company, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete a business combination. Because we may be deemed to have no independent directors, actions taken and expenses incurred by our officers and directors on our behalf will generally not be subject to independent review. Risks associated with our acquisition of a target business in the PRC After a business combination, substantially all of our assets could be located in China and substantially all of our revenue will be derived from our operations in China. Accordingly, our results of operations and prospects will be subject, to a significant extent, to the economic, political and legal developments in China. If we acquire a target business through contractual arrangements with one or more operating businesses in China, such contracts may not be as effective in providing operational control as direct ownership of such businesses and may be difficult to enforce. Deterioration of China s political relations with the United States, Europe, or other Asian nations could make PRC businesses less attractive to Western investors. If the PRC imposes restrictions to reduce inflation, future economic growth in the PRC could be severely curtailed which could lead to a significant decrease in our profitability following a business combination. Because PRC law will govern almost all of any target business material agreements, we may not be able to enforce our rights within the PRC or elsewhere, which could result in a significant loss of business, business opportunities or capital. Because most of our directors and officers reside outside of the United States, it may be difficult for you to enforce your rights against them or enforce U.S. court judgments against them in the PRC. Because any target business with which we attempt to complete a business combination will be required to provide our shareholders with financial statements prepared in accordance with or reconciled to United States generally accepted accounting principles, prospective target businesses may be limited. Restrictions on currency exchange may limit our ability to utilize our cash flow effectively following a business combination. If any dividend is declared in the future and paid in a foreign currency, you may be taxed on a larger amount in U.S. dollars than the U.S. dollar amount that you will ultimately receive. Fluctuations in the value of the Renminbi relative to foreign currencies could affect our operating results. Regulations relating to offshore investment activities by PRC residents may increase the administrative burden we face and create regulatory uncertainties that may limit or adversely effect our ability to acquire PRC companies. The PRC government recently adopted a new M A regulation which establishes more complex procedures for acquisitions conducted by foreign investors which could make it more difficult for us to implement our acquisition strategy. After we consummate a business combination, our operating company in China will be subject to restrictions on dividend payments. Additional risk related to our company You may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. federal courts may be limited, because we are incorporated under Cayman Islands law We may become a passive foreign investment company, which could result in adverse U.S. tax consequences to U.S. investors

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1326710--4/19/2007--SHANGHAI_CENTURY_ACQUISITION_CORP