1407437--3/27/2008--ASIA_SPECIAL_SITUATION_ACQUISITION

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Risks Associated With Our Business We are a newly formed 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 dissolve and liquidate before a business combination our warrants will expire worthless. You will not be entitled to protections normally afforded to investors of blank check companies including the ability to receive all interest earned on the amount held in trust. Because there are numerous companies with a business plan similar to ours seeking to effectuate a business combination, including companies seeking to consummate a business combination with companies in China, it may be more difficult for us to do so. We will proceed with a business combination only if public shareholders owning one share less than 35% of the shares sold in our offering exercise their redemption rights, which is a lower threshold than that of a traditional blank check company and will make it easier for us to proceed with a proposed acquisition. Exercise of redemption rights must be effected pursuant to a specific process which may take time to complete and may result in the expenditure of funds by shareholders seeking redemption. The terms on which we may effect a business combination can be expected to become less favorable as we approach our 18 and 24 month deadlines. If third parties bring claims against us, the proceeds held in trust could be reduced and the per-share liquidation price received by shareholders from the trust account as part of our dissolution and liquidation may be less than $10.00 per share. Although our disinterested directors will bring claims on our behalf to enforce the joint and several indemnification obligations of our Sponsor, Noble Investment Fund Limited and Allius Ltd., there is no assurance that such claims would be successful, resulting in a reduction in the amount of funds in the trust account available for distribution to our public shareholders. We will have only limited ability to evaluate the management of the target business. Although our current officers and directors intend to resign upon consummation of a business combination, under certain circumstances they may receive ongoing compensation following such business combination. Our officers and directors are or may in the future become affiliated with entities engaged in business activities similar to those intended to be conducted by us and accordingly, may have conflicts of interest in determining which entity a particular business opportunity should be presented to. Our officers and directors may have other conflicts of interest. Although we initially intend to focus our efforts on acquiring an operating business in the leisure and hospitality or financial services industries that is located in, invests in, or provides products or services to consumers located in China, we will not be limited to a particular industry or area in Asia and may acquire control of a business operating in a particular industry and in a country in Asia that is beyond the expertise of our management. Our shareholders may be held liable for claims by third parties against us to the extent of distributions received by them. We will dissolve and liquidate if we do not consummate a business combination. We may choose to redeem our outstanding warrants at a time that is disadvantageous to our warrant holders. Although we are required to use our best efforts to have an effective registration statement covering the issuance of the shares underlying the warrants at the time that our warrant holders exercise their warrants, we cannot guarantee that a registration statement will be effective, in which case our warrant holders may not be able to exercise our warrants and sell the underlying shares. 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. We may have insufficient resources to cover our operating expenses and the expenses of consummating a business combination. None of our officers or directors has ever been associated with a blank check company which could adversely affect our ability to consummate a business combination. Our officers and directors 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. All of our officers and directors own ordinary shares, and our Sponsor, an affiliate of our chairman of the board of directors, own insider warrants, which will not participate in the liquidation of the trust account in the event of our automatic dissolution and liquidation; therefore such persons may have a conflict of interest in determining whether a particular target business is appropriate for a business combination. Our initial shareholders will not receive reimbursement for any out-of-pocket expenses incurred by them to the extent that such expenses exceed the amount available outside the trust account unless the business combination is consummated and therefore they may have a conflict of 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 probable our initial business combination will be with a single target business, which may cause us to be solely dependent on a single business and a limited number of products or services. Additionally, we may face obstacles to completing simultaneous acquisitions. The ability of our shareholders to exercise their redemption rights may not allow us to effectuate the most desirable business combination or optimize our capital structure. We will not be required to obtain an opinion from an investment banking firm as to the fair market value of a proposed business combination if our board of directors independently determines that the target business has sufficient fair market value. 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 initial shareholders, including our officers and directors, control a substantial interest in us and thus may influence certain actions requiring shareholder vote. Since our initial shareholders will lose their entire investment in us if a business combination is not consummated and may be required to pay costs associated with our liquidation, our initial shareholders may purchase ordinary shares from shareholders who would otherwise choose to vote against a proposed business combination or exercise their redemption rights in connection with such business combination. We will be dependent upon interest earned on the trust account to fund our search for a target company and consummation of a business combination. The number of potential target businesses that we may seek to acquire may be limited by the fact that any selected target business will be required to provide audited financial statements prepared in accordance with and reconciled to United States generally accepted accounting principles. Our outstanding warrants may have an adverse effect on the market price of ordinary shares and make it more difficult to effect a business combination. If our initial shareholders (including our Sponsor who purchased the insider warrants) exercise their registration rights, it may have an adverse effect on the market price of our ordinary shares and the existence of these rights may make it more difficult to effect a business combination. A market for our securities has only existed since January 16, 2008 and a market for our securities may not develop, which could adversely affect the liquidity and price of our securities. The American Stock Exchange may delist our securities, 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. Currently, only one member of our board of directors is considered independent under the rules of the American Stock Exchange and, if we are unable to recruit additional independent directors within the timeframe specified in such rules, our securities may be delisted. Since we have not currently selected a prospective target business with which to complete a business combination, investors in our offering are unable to currently ascertain the merits or risks of the target business operations. Since we are not an operating company, the pricing of the units in our offering is relatively arbitrary. The inability of the sellers of companies we may acquire to fulfill their indemnification obligations to us under our acquisition agreements could increase our liabilities and adversely affect our results of operations and financial position. Risks of Doing Business in China and Vietnam If we acquire control of a target business through contractual arrangements with one or more operating businesses in China or Vietnam, such contracts may not be as effective in providing operational control as direct ownership of such businesses and may be difficult to enforce. Contractual arrangements we enter into with potential future subsidiaries and affiliated entities or acquisitions of offshore entities that conduct PRC or Vietnamese operations through affiliates in China or Vietnam may be subject to a high level of scrutiny by the PRC tax authorities. If the PRC or Vietnamese government finds that the agreements in which we acquire control through contractual arrangements by establishing the structure for operating our China or Vietnamese businesses do not comply with PRC or Vietnamese governmental restrictions on foreign investment, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to significant penalties or be forced to relinquish our interests in those operations. Potential future PRC or Vietnamese targets or strategic partners may have previously engaged or may engage in activities without appropriate licenses or approvals or outside the authorized scope of their business licenses or permitted activities. This could subject those companies to fines and other penalties, which could have a material adverse effect on our business. As a result of merger and acquisition regulations which became effective on September 8, 2006 relating to acquisitions of assets and equity interests of Chinese companies by foreign persons, it is expected that acquisitions will take longer and be subject to economic scrutiny by the PRC government authorities such that we may not be able to complete a transaction, negotiate a transaction that is acceptable to our stockholders, or sufficiently protect shareholder s interests in a transaction. If the PRC or Vietnam do not continue their policy of economic reforms, it could, among other things, result in an increase in tariffs and trade restrictions on products we ultimately produce or sell following a business combination. If relations between the United States and the PRC or Vietnam deteriorate, it could cause potential target businesses or their goods or services to become less attractive. If the PRC or Vietnam impose restrictions to reduce inflation, future economic growth in the PRC or Vietnam could be severely curtailed, which could lead to a significant decrease in our profitability following a business combination. Any devaluation of currencies used in the PRC or Vietnam could negatively impact our target business results of operations and could cause the cost of a target business as measured in dollars to increase. Because Chinese or Vietnamese law will govern almost all of any target business material agreements, we may not be able to enforce our rights within the PRC or Vietnam, or elsewhere, which could result in a significant loss of business, business opportunities or capital. Many industries in China and Vietnam, including the leisure and hospitality and financial services industries, are subject to government regulations that limit or prohibit foreign investments in such industries, which may limit the potential number of acquisition candidates or our ability to grow and sustain such business which may require us to seek additional financing. Exchange controls that exist in the PRC may limit our ability to utilize our cash flow effectively following a business combination. If certain exemptions within the PRC regarding withholding taxes are removed, we may be required to deduct Chinese corporate withholding taxes from dividends we may pay to our shareholders following a business combination. If the United States imposes trade sanctions on the PRC due to its current currency policies, our target business ability to succeed in the international markets may be diminished. Doing business in China or Vietnam involves various risks including internal and international political risks, evolving national economic policies as well as financial accounting standards, expropriation and the potential for a reversal in economic conditions. Fluctuations in the exchange rate between the Chinese or Vietnamese currency and the United States dollar could adversely affect our operating results. The Chinese currency, Renminbi , is not a freely convertible currency, which could limit our ability to obtain sufficient foreign currency to support our business operations in the future. Risks of Doing Business in Japan, South Korea, Australia and New Zealand Any devaluation of currencies used in Japan, South Korea, Australia or New Zealand could negatively impact our target business results of operations and could cause the cost of a target business as measured in dollars to increase. Because Japanese, South Korean, Australian or New Zealand law will govern almost all of any target business material agreements, we may not be able to enforce our rights within Japan, South Korea, Australia or New Zealand, or elsewhere, which could result in a significant loss of business, business opportunities or capital. Fluctuations in the exchange rate between the Japanese, South Korean, Australian or New Zealand currency and the United States dollar could adversely affect our operating results. Risks Related to the Leisure, Hospitality, Real Estate and Related Industries Acts of terrorism and war could have an adverse effect on our target industries, which in turn could adversely affect our business. We will be subject to all the operating risks common to the hospitality industry. The hospitality industry is highly competitive, both for acquisitions of new hotels and other properties, for related amenity and service companies and for consumers. If we acquire control of a target business in the gaming industry and are unable to comply with governmental regulations affecting the gaming industry, it could negatively affect our operations. We may be subject to risks relating to real estate investments. Our operations could be negatively affected if we are unable to manage the timing, budgeting and other risks associated with hotel, resort or golf course development or conversion of properties. Our financial condition could be negatively affected if we fail to maintain satisfactory labor relations. We will be subject to the risks associated with trends in consumer and business travel. Risks Related to the Financial Services Industry We may be subject to significant regulatory requirements in connection with our efforts to consummate a business combination with a financial services firm, which may result in our failure to consummate our initial business combination within the required time frame and may force us to liquidate. The financial services industry faces substantial regulatory and litigation risks and conflicts of interest, and, after the consummation of a business combination with a company in the financial services industry, we may face legal liability and reduced revenues and profitability if our services are not regarded as compliant or for other reasons. After the consummation of our initial business combination, if such combination is with a company in the financial services industry, we will face strong competition from financial services firms, many of whom have the ability to offer clients a wider range of products and services than we may be able to offer, which could lead to pricing pressures that could materially adversely affect our revenue and profitability. The financial services industry has inherent risks, which may affect our net income and revenues. Many financial services firms face credit risks which, if not properly managed, could cause revenues and net income to decrease.

Full 10-K form ▸

1407437--3/27/2008--ASIA_SPECIAL_SITUATION_ACQUISITION_CORP