UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2007

OR

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

SECURITIES EXCHANGE ACT OF 1934

Commission File Number

000-51981

ASIA TIME CORPORATION

(Exact name of small business issuer as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)	N/A (I.R.S. Employer Identification No.)
Room 1601-1604, 16/F., CRE Centre 889 Cheung Sha Wan Road, Kowloon, Hong Kong (Address of principal executive offices)	N/A  (Zip Code)

(852)-23100101

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x    Noo

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

Large accelerated filer o Accelerated filer o Non-accelerated filer x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o  No x

There were 23,156,629 shares outstanding of registrant’s common stock, par value $.0001 per share, as of August 14, 2007.

ASIA TIME CORPORATION.

FORM 10-Q QUARTERLY REPORT

TABLE OF CONTENTS

		Page
PART I - FINANCIAL INFORMATION		1
ITEM 1.	FINANCIAL STATEMENTS
	Condensed Consolidated Balance Sheet (Unaudited)	2
	Condensed Consolidated Income Statement (Unaudited)	4
	Condensed Consolidated Statement of Cash Flows (Unaudited)	5
	Notes to Condensed Consolidated Financial Statements (Unaudited)	7
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION	26
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK	31
ITEM 4.	CONTROLS AND PROCEDURES	32
PART II - OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	33
ITEM 1A.	RISK FACTORS	33
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	33
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	33
ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	33
ITEM 5.	OTHER INFORMATION	33
ITEM 6.	EXHIBITS	33
SIGNATURES		34

PART I - FINANCIAL INFORMATION

ITEM 1.FINANCIAL STATEMENTS

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The accompanying unaudited financial statements reflect all adjustments that, in the opinion of management, are considered necessary for a fair presentation of the financial position, results of operations, and cash flows for the periods presented. The results of operations for such periods are not necessarily indicative of the results expected for the full fiscal year or for any future period. The accompanying unaudited financial statements should be read in conjunction with the audited financial statements of Asia Time Corporation included in the Form 10-K for the fiscal year ended December 31, 2006 as filed with the Securities and Exchange Commission on April 17, 2007.

1

ASIA TIME CORPORATION

(Formerly SRKP 9, Inc.)

CONDENSED CONSOLIDATED BALANCE SHEET

AS OF JUNE 30, 2007 AND DECEMBER 31, 2006

(Stated in US Dollars)

	As of
	June 30,		December 31,
	2007		2006
	(Unaudited)		(Audited)
	$		$
ASSETS
Current Assets :
Cash and cash equivalents		74,710		316,621
Restricted cash		5,940,642		4,523,679
Accounts receivable		14,463,214		8,188,985
Prepaid expenses and other receivables - Note 10		6,044,193		2,101,133
Tax prepayment		-		767
Inventories, net - Note 11		4,229,168		6,620,361
Prepaid lease payments - Note 13		22,840		22,958
Total Current Assets		30,774,767		21,774,504
Deferred tax assets - Note 7		13,920		14,042
Plant and equipment, net - Note 12		754,958		890,258
Leasehold lands - Note 13		879,219		895,322
Held-to-maturity investments - Note 14		299,654		301,196
Intangible assets - Note 15		274,210		337,836
Restricted cash		255,984		257,301
TOTAL ASSETS		33,252,712		24,470,459
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES
Current Liabilities :
Accounts payable		1,514,350		770,360
Other payables and accrued liabilities - Note 16		51,232		190,358
Advance from a related party - Note 17		23,938		-
Income tax payable		2,093,132		1,453,051
Bank borrowings - Note 18		15,608,181		13,205,167
Total Current Liabilities		19,290,833		15,618,936
Deferred tax liabilities - Note 7		31,498		31,711
TOTAL LIABILITIES		19,322,331		15,650,647

COMMITMENTS AND CONTINGENCIES - Note 21

2

ASIA TIME CORPORATION

(Formerly SRKP 9, Inc.)

CONDENSED CONSOLIDATED BALANCE SHEET (Cont’d)

AS OF JUNE 30, 2007 AND DECEMBER 31, 2006

(Stated in US Dollars)

	As of
	June 30,			December 31,
	2007			2006
	(Unaudited)			(Audited)
	$			$
STOCKHOLDERS’ EQUITY
Preferred stock - Note 19
Par value : 2007 - US$0.0001 (2006 - US$0.0001)
Authorized: 2007 - 10,000,000 shares (2006 - 10,000,000)
Issued and outstanding: 2007 - 2,250,348 shares (2006 - none)		225			-
Common stock - Note 19
Par value : 2007 - US$0.0001 (2006 - US$0.0001)
Authorized: 2007 - 100,000,000 shares (2006 - 100,000,000)
Issued and outstanding: 2007 - 23,156,629 shares (2006 - 3,702,209)		2,316			370
Additional paid-in capital		2,970,386			655,874
Accumulated other comprehensive income		(40,672	)		7,470
Retained earnings		10,998,126			8,156,098
TOTAL STOCKHOLDERS’ EQUITY		13,930,381			8,819,812
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		33,252,712			24,470,459

See notes to condensed consolidated financial statements

3

ASIA TIME CORPORATION

(Formerly SRKP 9, Inc.)

CONDENSED CONSOLIDATED INCOME STATEMENT

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2007 AND 2006

(Stated in US Dollars)

	Three months ended						Six months ended
	June 30,			June 30,			June 30,			June 30,
	2007			2006			2007			2006
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
	$			$			$			$
Net sales		20,869,437			22,924,095			41,987,579			43,227,186
Cost of sales		(18,288,887	)		(21,700,076	)		(36,544,870	)		(39,780,894	)
Gross profit		2,580,550			1,224,019			5,442,709			3,446,292
Other income - Note 5		48,281			41,875			96,778			83,780
Depreciation		(63,433	)		(95,935	)		(128,864	)		(159,366	)
Administrative and other operating expenses		(518,215	)		(298,113	)		(953,058	)		(612,245	)
Income from operations		2,047,183			871,846			4,457,565			2,758,461
Professional expenses related to Restructuring and Share Exchange		-			-			(419,197	)		-
Other income - Note 5		48,452			67,383			78,381			110,296
Interest expenses - Note 6		(274,990	)		(297,298	)		(514,419	)		(497,854	)
Income before taxes		1,820,645			641,931			3,602,330			2,370,903
Income taxes - Note 7		(354,630	)		(122,159	)		(760,302	)		(419,309	)
Net income		1,466,015			519,772			2,842,028			1,951,594
Earnings per share of common stock (cents) - Note 9
- Basic		6.33			2.24			12.27			8.42
- Diluted		5.77			2.24			11.33			8.42
Weighted average number of common stock - Note 9
- Basic		23,156,629			23,156,629			23,156,629			23,156,629
- Diluted		25,406,977			23,156,629			25,086,369			23,156,629

See notes to condensed consolidated financial statements

4

ASIA TIME CORPORATION

(Formerly SRKP 9, Inc.)

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(Stated in US Dollars)

	Six months ended June 30,
	2007			2006
	(Unaudited)			(Unaudited)
	$			$
Cash flows from operating activities
Net income		2,842,028			1,951,594
Adjustments to reconcile net income to net cash flows
provided by operating activities :
Amortization of intangible assets		61,907			77,413
Amortization of leasehold lands		11,522			9,294
Depreciation		128,864			159,366
Loss on disposal of plant and equipment		5,404			7,735
Income taxes		760,302			419,309
Professional expenses related to Restructuring and Share Exchange		419,197			-
Changes in operating assets and liabilities :
Accounts receivable		(6,317,232	)		(3,528,823	)
Prepaid expenses and other receivables		(3,929,492	)		(963,219	)
Inventories		2,357,702			2,628,448
Accounts payable		748,048			68,807
Other payables and accrued liabilities		(138,176	)		(20,293	)
Income tax payable		(111,908	)		(33,977	)
Unearned income		-			(1,597,305	)
Net cash flows used in operating activities		(3,161,834	)		(821,651	)
Cash flows from investing activities
Cash acquired in connection with reverse acquisition		3,193			-
Acquisition of plant and equipment		(3,824	)		(1,164,127	)
Proceeds from disposal of plant and equipment		320			2,037
Net cash flows used in investing activities		(311	)		(1,162,090	)
Cash flows from financing activities
Proceeds from issuance of Series A convertible preferred stock		2,641,683			-
Repayment of short-term bank loans		(28,187,384	)		(27,682,224	)
Net advancement of other bank borrowings		30,725,349			31,314,380
Increase in restricted cash		(1,440,370	)		(1,172,601	)
Advance (from) / to related parties		(9,057	)		541,978
Decrease / (increase) in bank overdrafts		(66,923	)		167,638
Dividends paid		-			(1,608,572	)
Recapitalization costs		(739,390	)		-
Net cash flows provided by financing activities		2,923,908			1,560,599
Net decrease in cash and cash equivalents		(238,237	)		(423,142	)
Effect of foreign currency translation on cash and cash equivalents		(3,674	)		(3,449	)
Cash and cash equivalents - beginning of period		316,621			780,090
Cash and cash equivalents - end of period		74,710			353,499

5

ASIA TIME CORPORATION

(Formerly SRKP 9, Inc.)

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Cont’d)

(Stated in US Dollars)

	Six months ended June 30,
	2007		2006
	(Unaudited)		(Unaudited)
	$		$
Supplemental disclosures for cash flow information:
Cash paid for:
Interest		514,419		497,854
Income taxes		111,908		33,977

See notes to condensed consolidated financial statements

6

ASIA TIME CORPORATION

(Formerly SRKP 9, Inc.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Stated in US Dollars)

1. Change of company name

Effective from January 23, 2007, the Company changed its name from SRKP 9, Inc. to Asia Time Corporation (the “Company”).

2. Corporation informationand reorganization

Asia Time Corporation (the “Company”) (formerly SRKP 9, Inc.) was incorporated in the State of Delaware on January 3, 2006.

Recapitalization

The Company entered into an Exchange Agreement dated December 15, 2006 (the “Exchange Agreement”) with Times Manufacture & E-Commerce Corporation Limited, a British Virgin Islands corporation (“Times Manufacture”) and Mr. Kwong Kai Shun, the sole shareholder of the 100% of the capital shares of Times Manufacture, (“Original Shareholder”). The closing of the Exchange Agreement occurred on January 23, 2007.

The Company effectuated a 1.371188519-for-one stock reverse split in the course of the share exchange process such that there were 3,702,209 shares of common stock outstanding immediately prior to the closing of the Exchange Agreement. These financial statements give retroactive effect to this share split.

At the closing of the Exchange Agreement, the Company acquired all of Times Manufacture’s capital shares (the “Times Manufacture Shares”) from the Original Shareholder, and the Original Shareholder transferred and contributed all of his Times Manufacture Shares to the Company. In exchange, the Company issued 19,454,420 shares of its Common Stock to the Original Shareholder.

The former stockholders of Times Manufacture acquired 84% of the Company’s issued and outstanding common stock as a result of completion of the share exchange transaction. Therefore, although Times Manufacture became the Company’s wholly-owned subsidiary, the transaction was accounted for as a recapitalization of the Company, whereby Times Manufacture is deemed to be the accounting acquirer and is deemed to have adopted the Company’s capital structure. Since the Merger was accounted for as a reverse acquisition, the accompanying consolidated financial statements reflect the historical financial statements of Times Manufacture, the accounting acquirer, as adjusted for the effects of the exchange of shares on its equity accounts, the inclusion of net liabilities of the accounting subsidiary as of the date of the merger on their historical basis and the inclusion of the accounting subsidiary’s results of operations from that date. Although the Company is the legal acquirer, Times Manufacture will be treated as having acquired the Company for accounting purposes and all of the operations reported represent the historical financial statements of Times Manufacture.

7

ASIA TIME CORPORATION

(Formerly SRKP 9, Inc.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Stated in US Dollars)

2. Corporation informationand reorganization (Cont’d)

The net deficits of the Company at the completion date on January 23, 2007 are as follows:

	(Unaudited)
	$
Current assets
Cash and cash equivalents		3,193
Prepaid expenses		25,000
		28,193
Current liabilities
Advance from related parties		(33,000	)
Net deficits acquired		(4,807	)

3. Description of business

The Company and its subsidiaries are engaged in trading of completed watches and watch components.

Name of company	Place and date of incorporation	Issued and fully  paid capital	Principal activities
Times Manufacture & E-Commerce Corporation Ltd	British Virgin Islands March 21, 2002	US$20,002 Ordinary	Investment holding
Times Manufacturing & E-Commerce Corporation Ltd(“TMEHK”)	British Virgin Islands January 2, 2002	US$20,000 Ordinary	Investment holding
Billion Win International Enterprise Ltd (“BW”)	Hong Kong March 5, 2001	HK$5,000,000 Ordinary	Trading of watch components
Goldcome Industrial Ltd (“GI”)	Hong Kong March 2, 2001	HK$10,000 Ordinary	Trading of watch components
Citibond Industrial Ltd (“CI”)	Hong Kong February 28, 2003	HK$1,000 Ordinary	Trading of watch components
Megamooch International Ltd (“MI”)	Hong Kong April 2, 2001	HK$100 Ordinary	Trading of watches and watch components
TME Enterprise Ltd	British Virgin Islands November 28, 2003	US$2 Ordinary	Investment holding
Citibond Design Ltd	British Virgin Islands August 1, 2003	US$2 Ordinary	Inactive
Megamooch Online Ltd	British Virgin Islands June 6, 2003	US$2 Ordinary	Trading of watches and watch components

8

ASIA TIME CORPORATION

(Formerly SRKP 9, Inc.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Stated in US Dollars)

4. Summary of significant accounting policies

Basis of presentation and consolidation

The accompanying condensed consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with generally accepted accounting principles in the United States of America for interim consolidated financial information. Accordingly, they do not include all the information and notes necessary for comprehensive consolidated financial statements.

In the opinion of the management of the Company, all adjustments, which are of a normal recurring nature, necessary for a fair statement of the results for the three-month periods have been made. Results for the interim period presented are not necessarily indicative of the results that might be expected for the entire fiscal year. These condensed financial statements should be read in conjunction with the consolidated financial statements of Times Manufacture & E-Commerce Corporation Ltd and the notes for the year ended December 31, 2006.

The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant inter-company accounts and transactions have been eliminated in consolidation.

Use of estimates

In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. These accounts and estimates include, but are not limited to, the valuation of accounts receivable, inventories, deferred income taxes and the estimation on useful lives of plant and equipment and intangible assets. Actual results could differ from those estimates.

Restricted cash

Deposits in banks for securities of bank overdrafts and borrowings that are restricted in use are classified as restricted cash.

9

ASIA TIME CORPORATION

(Formerly SRKP 9, Inc.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Stated in US Dollars)

4. Summary of significant accounting policies (Cont’d)

Accounts receivable

Accounts receivable are stated at original amount less allowance made for doubtful receivables, if any, based on a review of all outstanding amounts at the period end. An allowance is also made when there is objective evidence that the Group will not be able to collect all amounts due according to original terms of receivables. Bad debts are written off when identified. The Group extends unsecured credit to customers in the normal course of business and believes all accounts receivable in excess of the allowances for doubtful receivables to be fully collectible. The Group does not accrue interest on trade accounts receivable.

During the reporting period, the Group had no bad debt experienced and, accordingly, did not make any allowance for doubtful debts.

Rebate receivable

Rebate receivables are recognized as a reduction of cost of sales at fair value, less provision for impairment. A provision for impairment of rebate receivables is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of receivables. The amount of provision is recognized in the income statement.

Inventories

Inventories are stated at the lower of cost or market. Cost is determined on a first-in, first-out basis and includes only purchase costs. There are no significant freight charges, inspection costs and warehousing costs incurred for any of the periods presented. In assessing the ultimate realization of inventories, the management makes judgments as to future demand requirements compared to current or committed inventory levels. The Group’s reserve requirements generally increase as the management projected demand requirements; decrease due to market conditions, product life cycle changes. During the reporting period, the Company did not make any allowance for slow-moving or defective inventories.

Leasehold land

Leasehold lands, representing upfront payment for land use rights, are capitalized at their acquisition cost and amortized using the straight-line method over the lease terms.

10

ASIA TIME CORPORATION

(Formerly SRKP 9, Inc.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Stated in US Dollars)

4. Summary of significant accounting policies (Cont’d)

Intangible assets

Intangible assets with limited useful lives are stated at cost less accumulated amortization and accumulated impairment losses.

Amortization of intangible assets is provided using the straight-line method over their estimated useful lives at the following annual rates :-

Trademarks	20	%
Websites	20	%

Held-to-maturity investments

The company’s policies for investments in debt and equity securities are as follows:

Non-derivative financial assets with fixed or determinable payments and fixed maturities that the company has the positive ability and intention to hold to maturity are classified as held-to-maturity securities. Held-to-maturity securities are initially recognized in the balance sheet at fair value plus transaction costs. Subsequently, they are stated in the balance sheet at amortized cost using the effective interest method less any identified impairment losses.

Investments are recognized / derecognized on the date the company commits to purchase / sell the investments or they expire.

Plant and equipment

Plant and equipment are stated at cost less accumulated depreciation. Cost represents the purchase price of the asset and other costs incurred to bring the asset into its existing use. Maintenance, repairs and betterments, including replacement of minor items, are charged to expense; major additions to physical properties are capitalized.

Depreciation of plant and equipment is provided using the straight-line method over their estimated useful lives at the following annual rates :-

Buildings	over the unexpired lease term
Furniture and fixtures		20 - 25	%
Office equipment		25 - 33	%
Machinery and equipment		25 - 33	%
Moulds		33	%
Motor vehicles		25 - 33	%

Upon sale or disposition, the applicable amounts of asset cost and accumulated depreciation are removed from the accounts and the net amount less proceeds from disposal is charged or credited to income.

11

ASIA TIME CORPORATION

(Formerly SRKP 9, Inc.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Stated in US Dollars)

4. Summary of significant accounting policies (Cont’d)

Impairment of long-lived assets

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. The Group recognizes impairment of long-lived assets in the event that the net book values of such assets exceed the future undiscounted cashflows attributable to such assets.

No impairment of long-lived assets was recognized for any of the periods presented.

Revenue recognition

Revenue from sales of the Group’s products is recognized when the significant risks and rewards of ownership have been transferred to the buyer at the time of delivery and the sales price is fixed or determinable and collection is reasonably assured.

Basic and diluted earnings per share

The Company reports basic earnings or loss per share in accordance with SFAS No. 128, “Earnings Per Share”. Basic earnings per share is computed using the weighted average number of shares outstanding during the periods presented. The weighted average number of shares of the Company represents the common stock outstanding during the years.

Recent accounting pronouncements

In July 2006, the FASB issued FIN 48 “Accounting for Uncertainty in Income Taxes.” This interpretation requires that we recognize in our financial statements, the impact of a tax position, if that position is more likely than not of being sustained on audit, based on the technical merits of the position. The provisions of FIN 48 are effective as of the beginning of our 2007 fiscal year, with the cumulative effect of the change in accounting principle recorded as an adjustment to opening retained earnings, if any, adoption of FIN 48 did not have an effect on our results of operations or financial condition. We did not have any material unrecognized tax benefits as of January 1, 2007 or June 30, 2007.

12

ASIA TIME CORPORATION

(Formerly SRKP 9, Inc.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Stated in US Dollars)

4. Summary of significant accounting policies (Cont’d)

Recent accounting pronouncements (Cont’d)

In September 2006, the FASB issued SFAS No. 157 “Fair Value Measurement” (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. This Statement shall be effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Earlier application is encouraged, provided that the reporting entity has not yet issued financial statements for that fiscal year, including any financial statements for an interim period within that fiscal year. The provisions of this statement should be applied prospectively as of the beginning of the fiscal year in which this Statement is initially applied, except in some circumstances where the statement shall be applied retrospectively. The Company is currently evaluating the effect, if any, of SFAS 157 on its financial statements. Although we will continue to evaluate the provisions of SFAS No.157, management currently does not believe the adoption of SFAS No. 157 will have a material impact on our consolidated financial statements.

In September 2006, the SEC issued SAB No. 108, which provides guidance on the process of quantifying financial statement misstatements. In SAB No. 108, the SEC staff establishes an approach that requires quantification of financial statement errors, under both the iron-curtain and the roll-over methods, based on the effects of the error on each of the Company’s financial statements and the related financial statement disclosures. SAB No. 108 is generally effective for annual financial statements in the first fiscal year ending after November 15, 2006. The transaction provisions of SAB No.108 permits existing public companies to record the cumulative effect in the first year ending after November 15, 2006 by recording correcting adjustments to the carrying values of assets and liabilities as of the beginning of that year with the offsetting adjustment recorded to the opening balance of retained earnings. The adoption of SAB No. 10 has no material effect on our financial statement.

On February 15, 2007, the FASB issued SFAS No. 159, “ The Fair Value Option for Financial Assets and Financial Liabilities - Including an Amendment of SFAS No. 115.” The fair value option established by SFAS No. 159 permits all entities to choose to measure eligible items at fair value at specified election dates. A business entity will report unrealized gains and losses on items for which the fair value option has been elected in earnings (or another performance indicator if the business entity does not report earnings) at each subsequent reporting date. The fair value option: (a) may be applied instrument by instrument, with a few exceptions, such as investments otherwise accounted for by the equity method; (b) is irrevocable (unless a new election date occurs); and (c) is applied only to entire instruments and not to portions of instruments. SFAS No. 159 is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007. Early adoption is permitted as of the beginning of the previous fiscal year provided that the entity makes that choice in the first 120 days of that fiscal year and also elects to apply the provisions of SFAS. No.157. The Company does not early adopt this statement. Although we will continue to evaluate the provisions of SFAS No.159, management currently does not believe the adoption of SFAS No. 159 will have a material impact on our consolidated financial statements.

13

ASIA TIME CORPORATION

(Formerly SRKP 9, Inc.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Stated in US Dollars)

5. Other income

	Three months ended				Six months ended
	June 30,		June 30,		June 30,		June 30,
	2007		2006		2007		2006
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
	$		$		$		$
Operating income
License fee of intangible assets		32,571		41,875		65,287		83,780
Rental income		15,710		-		31,491		-
		48,281		41,875		96,778		83,780
Non-operating income
Bank interest income		47,904		57,661		76,906		94,004
Net exchange gains		548		189		1,475		298
Other interest income		-		9,506		-		15,967
Sundry		-		27		-		27
		48,452		67,383		78,381		110,296
		96,733		109,258		175,159		194,076

6. Interest expenses

	Three months ended				Six months ended
	June 30,		June 30,		June 30,		June 30,
	2007		2006		2007		2006
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
	$		$		$		$
Interest on bank trust receipts		248,538		277,748		468,040		457,302
Interest on short-term bank loans		7,181		3,199		16,764		8,374
Interest on bank overdrafts		10,847		16,351		21,191		32,178
Interest on other loans		8,424		-		8,424		-
		274,990		297,298		514,419		497,854

14

ASIA TIME CORPORATION

(Formerly SRKP 9, Inc.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Stated in US Dollars)

7. Income taxes

	Three months ended				Six months ended
	June 30,		June 30,		June 30,		June 30,
	2007		2006		2007		2006
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
	$		$		$		$
Hong Kong profits tax
Current period		354,630		122,159		760,302		419,309

The Company’s subsidiaries operating in Hong Kong are subject to profits tax of 17.5% on the estimated assessable profits during the periods.

Deferred tax (assets) liabilities as of June 30, 2007 and December 31, 2006 are composed of the following:

	As of
	June 30,			December 31,
	2007			2006
	(Unaudited)			(Audited)
	$			$
Temporary difference on accelerated tax depreciation on plant and equipment		17,578			17,669
Deferred tax liabilities, net		17,578			17,669
Recognized in the balance sheet:
Net deferred tax assets		(13,920	)		(14,042	)
Net deferred tax liabilities		31,498			31,711
		17,578			17,669

8. Comprehensive income

	Three months ended				Six months ended
	June 30,		June 30,		June 30,			June 30,
	2007		2006		2007			2006
	(Unaudited)		(Unaudited)		(Unaudited)			(Unaudited)
	$		$		$			$
Net income		1,466,015		519,772		2,842,028			1,951,594
Foreign currency translation adjustment		3,935		6,206		(48,142	)		(10,273	)
Total comprehensive income		1,469,950		525,978		2,793,886			1,941,321

15

ASIA TIME CORPORATION

(Formerly SRKP 9, Inc.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Stated in US Dollars)

9. Earnings per share

As per Note 19, the Company has placed 1,749,028 and 501,320 shares of Convertible preferred stock on January 23, 2007 and February 9, 2007 respectively. These 2,250,348 shares of convertible preferred stock are issued at $1.29 and being eligible to be converted in the ratio of 1:1 into each share of common stock. The Earnings Per Share on a dilutive basis has been calculated with the assumption that all such convertible preferred stock have been fully converted into common stock on the day of issue as if in the periods presented that form the basis for the number of common stock being outstanding on a dilutive earnings per share calculation.

10. Prepaid expenses and other receivables

	As of
	June 30,		December 31,
	2007		2006
	(Unaudited)		(Audited)
	$		$
Rebate receivable		1,365,746		-
Interest receivable		-		20,218
Rental receivable		-		46,314
Other receivable		14,932		-
Purchase deposits paid		2,543,961		1,530,372
Sales proceeds of intangible assets receivable		299,501		301,042
Other deposits and prepayments		1,820,053		203,187
		6,044,193		2,101,133

11. Inventories

	As of
	June 30,		December 31,
	2007		2006
	(Unaudited)		(Audited)
	$		$
Merchandises, at cost - completed watches		311,051		1,745,648
Merchandises, at cost - watch movements		3,918,117		4,874,713
		4,229,168		6,620,361

16

ASIA TIME CORPORATION

(Formerly SRKP 9, Inc.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Stated in US Dollars)

12. Plant and equipment

	As of
	June 30,		December 31,
	2007		2006
	(Unaudited)		(Audited)
	$		$
Cost
Buildings		241,109		242,350
Furniture and fixtures		487,642		492,866
Office equipment		145,047		145,911
Machinery and equipment		319,980		321,626
Moulds		382,696		384,665
Motor vehicles		44,092		45,928
		1,620,566		1,633,346
Accumulated depreciation
Buildings		11,339		8,441
Furniture and fixtures		283,042		237,508
Office equipment		114,810		100,612
Machinery and equipment		124,994		93,475
Moulds		302,387		276,936
Motor vehicles		29,036		26,116
		865,608		743,088
Net
Buildings		229,770		233,909
Furniture and fixtures		204,600		255,358
Office equipment		30,237		45,299
Machinery and equipment		194,986		228,151
Moulds		80,309		107,729
Motor vehicles		15,056		19,812
		754,958		890,258

Depreciation expenses included in administrative and other operating expenses for the six months ended June 30, 2007 and June 30, 2006 are $128,864 (unaudited) and $159,366 (unaudited) respectively.

As at June 30, 2007 and December 31, 2006, the carrying amount of buildings pledged as security for the Group’s banking facilities amounted to $229,770 (unaudited) and $233,909 (audited) respectively.

17

ASIA TIME CORPORATION

(Formerly SRKP 9, Inc.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Stated in US Dollars)

13. Leasehold lands

	As of
	June 30,		December 31,
	2007		2006
	(Unaudited)		(Audited)
	$		$
Cost		944,653		949,514
Accumulated amortization		42,594		31,234
Net		902,059		918,280
Analyzed for reporting purposes as:
Current asset		22,840		22,958
Non-current asset		879,219		895,322
		902,059		918,280

Amortization expenses included in administrative and other operating expenses for the six months ended June 30, 2007 and June 30, 2006 are $11,522 (unaudited) and $9,294 (unaudited) respectively.

As at June 30, 2007 and December 31, 2006, the carrying amount of leasehold lands pledged as security for the Group’s banking facilities amounted to $902,059 (unaudited) and $919,280 (audited) respectively.

14. Held-to-maturity investments

	As of
	June 30,		December 31,
	2007		2006
	(Unaudited)		(Audited)
	$		$
Hang Seng Capital Guarantee Investment Fund
- 30,000 units at $10 each, interest rate at 10.5% in 3.75 years
Cost		299,654		301,196

As at June 30, 2007 and December 31, 2006, the carrying amount of held-to-maturity investments pledged as security for the Group’s banking facilities amounted to $299,654 (unaudited) and $301,196 (audited) respectively.

18

ASIA TIME CORPORATION

(Formerly SRKP 9, Inc.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Stated in US Dollars)

15. Intangible assets

	As of
	June 30,		December 31,
	2007		2006
	(Unaudited)		(Audited)
	$		$
Cost
Trademarks		199,667		200,695
Websites		419,301		421,459
		618,968		622,154
Accumulated amortization
Trademarks		131,780		112,389
Websites		212,978		171,929
		344,758		284,318
Net
Trademarks		67,887		88,306
Websites		206,323		249,530
		274,210		337,836

Amortization expenses included in administrative and other operating expenses for the six months ended June 30, 2007 and June 30, 2006 are $61,907 (unaudited) and $77,413 (unaudited) respectively.

16. Other payables and accrued liabilities

	As of
	June 30,		December 31,
	2007		2006
	(Unaudited)		(Audited)
	$		$
Accrued expenses		42,273		181,352
Sales deposits received		8,959		9,006
		51,232		190,358

19

ASIA TIME CORPORATION

(Formerly SRKP 9, Inc.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Stated in US Dollars)

17. Advance from a related party

Advance from a related party for working capital is as follows:

	As of
	June 30,		December 31,
	2007		2006
	(Unaudited)		(Audited)
	$		$
Advance from a director		23,938		-

The above advance is interest-free, unsecured and the has no fixed repayment terms.

18. Bank borrowings

	As of
	June 30,		December 31,
	2007		2006
	(Unaudited)		(Audited)
	$		$
Secured:
Bank overdrafts repayable on demand		481,978		551,714
Repayable within one year
Non-recurring bank loans		2,030,973		1,469,866
Other bank borrowings		13,095,230		11,183,587
		15,608,181		13,205,167

As of June 30, 2007, the above banking borrowings were secured by the following:

(a) first fixed legal charge over leasehold land and buildings with carrying amounts of $1,131,829 (note 12 and 13);

(b) charge over bank deposits of $6,196,626;

(c) charge over held-to-maturity investments of $299,654 (note 14);and

(d) personal guarantee executed by a director of the Company;

One of the subsidiaries, Billion Win International Enterprise Limited, should maintain a minimum net worth of $3,839,754.

20

ASIA TIME CORPORATION

(Formerly SRKP 9, Inc.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Stated in US Dollars)

19. Common stock and convertible preferred stock

	Common stock				Series A				Additional paid in
	No. of shares		Amount		No. of shares		Amount		capital
			$				$		$
Balance, January 1, 2007		3,702,209		370		-		-		655,874
Recapitalization		19,454,420		1,946		-		-		(9,946	)
Payment to shareholders		-		-		-		-		(317,000	)
Issuance of Series A convertible preferred stock		-		-		2,250,348		225		2,641,458
		23,156,629		2,316		2,250,348		225		2,970,386

The Company entered into two subscription agreements (the “Subscription Agreement”) with certain investors pursuant to which the Company sold an aggregate of 2,250,348 shares of Series A Convertible Preferred Stock (“Series A Preferred Stock”) at $1.29 per share for an aggregate gross proceeds of $2,952,946

At the initial closing of the Subscription Agreement on January 23, 2007, the Company sold an aggregate of 1,749,028 shares of Series A Preferred Stock. At the second and final closing of the Subscription Agreement on February 9, 2007, the Company sold an aggregate of 501,320 shares of Series A Preferred Stock.

Each share of the Company’s Series A Preferred Stock is convertible into shares of common stock at a conversion price equal to the share purchase price, subject to adjustments.

However, if the Company at any time prior to the first trading day on which the common stock is quoted on the American Stock Exchange, the Nasdaq Capital Market, the Nasdaq Global Market or the New York Stock Exchange (each a “Trading Market”) sells or issues any shares of common stock in one or a series of transactions at an effective price less than such conversion price where the aggregate gross proceeds to the Company are at least $1.0 million, then the aforementioned conversion price shall be reduced to such effective price. Each share of Series A Convertible Preferred Stock shall automatically convert into shares of common stock if (i) the closing price of the common stock on the Trading Market for any 10 consecutive trading day period exceeds $3.00 per share, (ii) the shares of common stock underlying the Series A Convertible Preferred Stock are subject to an effective registration statement, and (iii) the daily trading volume of the common stock on a Trading Market exceeds 25,000 shares per day for 10 out of 20 prior trading days.

21

ASIA TIME CORPORATION

(Formerly SRKP 9, Inc.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Stated in US Dollars)

19. Common stock and convertible preferred stock (continued)

If the Company pays a stock dividend on the shares of common stock, subdivide outstanding shares of common stock into a larger number of shares, combine, through a reverse stock split, outstanding shares of the common stock into a smaller number of shares or issues, in the event of a reclassification of shares of the common stock, any shares of the capital stock, then the conversion price of the Series A Preferred Stock will be adjusted as follows: the conversion price will be multiplied by a fraction, of which (i) the numerator will be the number of shares of common stock outstanding immediately before one of the events described above and (ii) the denominator will be the number of shares of common stock outstanding immediately after such event.

Holder of the Series A Convertible Preferred Stock have the right to one vote per share of common stock issuable upon conversion of the shares underlying any shares of Preferred Stock outstanding as of the record date for purposes of determining which holders have the right to vote with respect to any matters brought to a vote before the Company’s holders of common stock.

In the event of any liquidation, dissolution or winding up of our company, the holders of the Series A Convertible Preferred Stock are entitled to receive in preference to the holders of common stock an amount per share of $1.29 plus any accrued but unpaid dividends. If the Company’s assets are insufficient to pay the above amounts in full, then all of the Company’s assets will be ratably distributed among the holders of the Series A Convertible Preferred Stock in accordance with the respective amounts that would be payable on such shares if all amounts payable were paid in full.

There are no additional specific dividend rights or redemption rights of holders of the Series A Convertible Preferred Stock.

If the Company redeems or acquired any shares of the Series A Convertible Preferred Stock are converted, those shares will resume the status of authorized but unissued shares of preferred stock and will no longer be designated as Series A Convertible Preferred Stock.

As long as any shares of Series A Convertible Preferred Stock are outstanding, the Company cannot alter or adversely change the powers, preference or rights given to the Series A Convertible Preferred Stock holders, without the affirmative vote of those holders.

22

ASIA TIME CORPORATION

(Formerly SRKP 9, Inc.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Stated in US Dollars)

20. Pension plans

The Group participates in a defined contribution pension scheme under the Mandatory Provident Fund Schemes Ordinance “MPF Scheme” for all its eligible employees in Hong Kong.

The MPF Scheme is available to all employees aged 18 to 64 with at least 60 days of service in the employment in Hong Kong. Contributions are made by the Group’s subsidiary operating in Hong Kong at 5% of the participants’ relevant income with a ceiling of HK$20,000. The participants are entitled to 100% of the Group’s contributions together with accrued returns irrespective of their length of service with the Group, but the benefits are required by law to be preserved until the retirement age of 65. The only obligation of the Group with respect to MPF Scheme is to make the required contributions under the plan.

The assets of the schemes are controlled by trustees and held separately from those of the Group. Total pension cost was $7,623 and $4,274 for the three months ended June 30, 2007 and 2006 respectively.

21. Commitments and contingencies

Operating leases commitments

The Group leases office premises under various non-cancelable operating lease agreements that expire at various dates through years 2007 to 2008,with an option to renew the lease. All leases are on a fixed repayment basis. None of the leases includes contingent rentals. Minimum future commitments under these agreements payable as of June 30, 2007 are as follows :-

Period ending June 30	$
2007 - 2008		82,412
2008 - 2009		31,778
		114,190

Rental expenses for the years six months ended June 30, 2007 and 2006 were $50,302 and $38,403 respectively.

23

ASIA TIME CORPORATION

(Formerly SRKP 9, Inc.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Stated in US Dollars)

22. Segment Information

For management purposes, the Group is currently organized into two major principal activities - trading of watch movements (components) and trading of completed watches. These principal activities are the basis on which the Group reports its primary segment information.

	Watch			Completed
	Movements			Watches			Total
Six months ended June 30, 2007	(unaudited)			(unaudited)			(unaudited)
	$			$			$
Sales		38,234,543			3,753,036			41,987,579
Cost of sales		(34,535,028	)		(2,009,842	)		(36,544,870	)
Segment result		3,699,515			1,743,194			5,442,709

	Watch			Completed
	Movements			Watches			Total
Six months ended June 30, 2006	(unaudited)			(unaudited)			(unaudited)
	$			$			$
Sales		37,877,213			5,349,973			43,227,186
Cost of sales		(36,997,634	)		(2,783,260	)		(39,780,894	)
Segment result		879,579			2,566,713			3,446,292

	Watch			Completed
	Movements			Watches			Total
Three months ended June 30, 2007	(unaudited)			(unaudited)			(unaudited)
	$			$			$
Sales		19,010,476			1,858,961			20,869,437
Cost of sales		(17,255,898	)		(1,032,989	)		(18,288,887	)
Segment result		1,754,578			825,972			2,580,550

	Watch			Completed
	Movements			Watches			Total
Three months ended June 30, 2006	(unaudited)			(unaudited)			(unaudited)
	$			$			$
Sales		19,692,462			3,231,633			22,924,095
Cost of sales		(20,031,834	)		(1,668,242	)		(21,700,076	)
Segment result		(339,372	)		1,563,391			1,224,019

24

ASIA TIME CORPORATION

(Formerly SRKP 9, Inc.)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Stated in US Dollars)

22. Segment Information (continued)

The Group’s operations are primarily in Hong Kong and China and the Group’s sales, gross profit and total assets attributable to other geographical areas are less than10% of the Group’s corresponding consolidated totals for the six months ended June 30, 2007 and 2006. Consequently, no segment information by geographical areas is presented.

25

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

The following discussion should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this quarterly report. This report contains forward-looking statements. The words “anticipated,” “believe,” “expect, “plan,” “intend,” “seek,” “estimate,” “project,” “could,” “may,” and similar expressions are intended to identify forward-looking statements. These statements include, among others, information regarding future operations, future capital expenditures, and future net cash flow. Such statements reflect our management’s current views with respect to future events and financial performance and involve risks and uncertainties, including, without limitation, general economic and business conditions, changes in foreign, political, social, and economic conditions, regulatory initiatives and compliance with governmental regulations, the ability to achieve further market penetration and additional customers, and various other matters, many of which are beyond our control. Should one or more of these risks or uncertainties occur, or should underlying assumptions prove to be incorrect, actual results may vary materially and adversely from those anticipated, believed, estimated or otherwise indicated. Consequently, all of the forward-looking statements made in this quarterly report are qualified by these cautionary statements and there can be no assurance of the actual results or developments.

Overview

We are a distributor of watch movements components used in the manufacture and assembly of watches to a wide variety of timepiece manufacturers. There are two categories of watch movements, quartz and mechanical. The main parts of an analog quartz watch movement are the battery; the oscillator, a piece of quartz that vibrates in response to the electric current; the integrated circuit, which divides the oscillations into seconds; the stepping motor, which drives the gear train; and the gear train itself, which makes the watch’s hands move. A digital watch movement has the same timing components as an analog quartz movement but has no stepping motor or gear train. To a lesser extent we also distribute complete analog-quartz and automatic watches with pricing between $20.00 to $50.00. Manufacturing for these watches is currently outsourced to third party factories in China.

Our core customer base consists primarily of large wholesalers, online retailers and small and medium-sized watch manufacturers that produce watches primarily for sale to customers in Hong Kong and China. To a lesser extent, we design watches for manufacturers and exporters of watches and manufacture and distribute complete watches primarily to online retailers and internet marketers.

We are mainly engaged in watch movement distribution business in Hong Kong and China which accounted for approximately 90% of our revenue for the year ended December 31, 2006 and 91% for the six months ended June 30, 2007. We have distribution centers and strategically located sales offices throughout Hong Kong and the People’s Republic of China (“China” or “PRC”). We distribute more than 350 products from over 30 vendors, including such market leaders as Citizen Group, Seiko Corporation and ETA SA Manufacture Horlogere Suisse, to a base of over 300 customers primarily through our direct sales force. To enhance our ability to distribute watch movements we provide a variety of value-added services, including automated inventory management services; integration, design and development, management, and extended and post-sale support services.

Corporate Structure

We were incorporated in the State of Delaware on January 3, 2006. We were originally organized as a “blank check” shell company to investigate and acquire a target company or business seeking the perceived advantages of being a publicly held corporation. On January 23, 2007, we closed a share exchange transaction (“Share Exchange”) pursuant to which we (i) issued 19,454,420 shares of our common stock to acquire 100% equity ownership of Times Manufacture & E-Commerce Corporation Limited, a British Virgin Islands corporation (“Times Manufacture”), which has eight wholly-owned subsidiaries, (ii) assumed the operations of Times Manufacture and its subsidiaries, and (iii) changed our name from SRKP 9, Inc. to Asia Time Corporation. Times Manufacture also paid an aggregate of $350,000 to the stockholders of SRKP 9, Inc. Times Manufacture was founded in January 2002 and is based in Hong Kong.

In 2005, we re-aligned the structure and business functions of our subsidiaries to clearly define the scopes our business objectives in order to strengthen our ability to effectively conduct our business operations. Billion Win International Enterprise Limited, or Billion Win, is our central sourcing component. Billion Win, which is held indirectly through Times Manufacture, procures and imports watch movements and distributes them to suppliers, volume users in China, and two of our subsidiaries, Goldcome Industrial Limited, or Goldcome, and Citibond Industrial Limited, or Citibond. Goldcome mainly focuses it distributions to wholesalers and large manufacturers and Citibond focuses on distributions to small to medium size manufacturers. Megamooch International Limited is a complete watch distributor and exporter targeting overseas buyers. Another two subsidiaries, TME Enterprise Ltd. and Citibond Design Ltd., are responsible for complete watch design for manufacturers and exporters and handles large volume watch movement transactions between buyers and sellers solely on a commission basis. Megamooch Online Ltd. operations are focused on complete watch marketing and distribution, with manufacturing being outsourced, and it concentrates on overseas markets.

26

Watch Movement Segment

Presently, Hong Kong does not generally have watch movement manufacturing. Watch movements are largely imported from Japan and Switzerland. The revenue for the watch movement segment of our business for the six months ended June 30, 2007 was $38.23 million, with a gross profit $3.70 million, a 0.9% and 320.6% increase, respectively, as compared to $37.87 million in revenue and $0.36 million in gross profit for the six months ended June 30, 2006. The gross profit margin increased to 9.7% for the six months ended June 30, 2007 from 2.3% for the same period in 2006, primarily due to more diversified products being promoted to customers and higher selling prices as a result of extended credit terms to our customers. We provide a wide product spectrum of products carrying major brands as well as middle-low end China movements. We believe carrying a wide product spectrum enables us to provide a convenient one-stop provider for our customers, which may result in higher sales per customer. We began to target small to medium manufacturers in mid-2005 and our customer base has expanded to more than 300 watch manufacturers. In addition, we have extended our credit period from an average to 30 days to 60 days to major customers that have maintained a history of timely settlement of receivables. We believe that this extension lead to an increase of purchase orders from those customers. We review the credit status of each customer and periodically adjust the credit period to specific customers in an attempt to maximize business with each customer without suffering significant credit risk.

Complete Watch Segment

Revenue of our complete watch segment was $3.75 million for the six months ended June 30, 2007, a 29.9% decrease compared to the same period in 2006 in which revenue was $5.35 million. This segment contributed approximately 8.9% of our revenue for the six months ended June 30, 2007, as compared to 12.4% of revenue for the period ended June 30, 2006. Our main market positioning in China is on the middle-class adult, daily, sporty and classy design.

Critical Accounting Policies and Estimates

Financial Reporting Release No. 60 recommends that all companies include a discussion of critical accounting policies used in the preparation of their financial statements. The Securities and Exchange Commission (“SEC”) defines critical accounting policies as those that are, in management's view, most important to the portrayal of our financial condition and results of operations and those that require significant judgments and estimates.

The preparation of these consolidated financial statements requires our management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, as well as the disclosure of contingent assets and liabilities at the date of our financial statements. We base our estimates on historical experience, actuarial valuations and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Some of those judgments can be subjective and complex and, consequently, actual results may differ from these estimates under different assumptions or conditions. While for any given estimate or assumption made by our management there may be other estimates or assumptions that are reasonable, we believe that, given the current facts and circumstances, it is unlikely that applying any such other reasonable estimate or assumption would materially impact the financial statements. The accounting principles we utilized in preparing our consolidated financial statements conform in all material respects to generally accepted accounting principles in the United States of America.

Accounting for the impairment of long-lived assets

The long-lived assets held and used by us are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable. It is reasonably possible that these assets could become impaired as a result of technology or other industry changes. Determination of recoverability of assets to be held and used is by comparing the carrying amount of an asset to future net undiscounted cash flows to be generated by the assets.

If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount of fair value less costs to sell.

Inventories

Our inventories are stated at the lower of cost and net realizable value. Cost is determined using the first-in, first-out (FIFO) method. It excludes borrowing costs. Net realizable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses.

27

We evaluate our inventories for excess, obsolescence or other factors rendering inventories as unsellable at normal gross profit margins. Write-downs are recorded so that inventories reflect the approximate market value and take into account our contractual provisions with our suppliers governing price protections and stock rotations. Due to the large number of transactions and complexity of managing the process around price protections and stock rotations, estimates are made regarding the valuation of inventory at market value.

In addition, assumptions about future demand, market conditions and decisions to discontinue certain product lines can impact the decision to write-down inventories. If assumptions about future demand change and/or actual market conditions are different than those projected by management, additional write-downs of inventories may be required. In any case, actual results may be different than those estimated.

Trade receivables

Trade and other receivables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method, less provision for impairment. A provision for impairment of trade and other receivables is established when there is objective evidence that we will not be able to collect all amounts due according to the original terms of receivables. The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate. The amount of the provision is recognized in the income statement.

Foreign currency translation

Our consolidated financial statements are presented in United States dollars. Our functional currency is the Hong Kong Dollar (HKD). Our consolidated financial statements are translated into United States dollars from HKD at period-end exchange rates as to assets and liabilities and average exchange rates as to revenues and expenses. Capital accounts are translated at their historical exchange rates when the capital transactions occurred.

Revenue recognition

Sales of goods are recognized when a company has delivered goods to the customer, the customer has accepted the goods and collectibility of the related receivables is reasonably assured. Commission income is recognized in the accounting period in which the services are rendered, by reference to completion of the specific transaction assessed on the basis of the actual service provided as a proportion of the total services to be provided. Interest income is recognized on a time-proportion basis using the effective interest method. When a receivable is impaired, we reduce the carrying amount to our recoverable amount, being the estimated future cash flow discounted at original effective interest rate of the instrument, and continue unwinding the discount as interest income. Dividend income and insurance claims are recognized when the right to receive payment is established.

Deferred income tax

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, if the deferred income tax arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss, it is not accounted for. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax assets is realized or the deferred income tax liability is settled.

Deferred income tax assets are recognized to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized.

Income taxes

We account for income tax using an asset and liability approach and allow for recognition of deferred tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before we are able to realize its benefits, or that future realization is uncertain.

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Results of Operations

The following table sets forth certain items in our statement of operations as a percentage of net sales for the periods shown:

	Three months ended						Six months ended
	June 30, 2007			June 30, 2006			June 30, 2007			June 30, 2006
Net Sales		100.00	%		100.00	%		100.00	%		100.00	%
Cost of Sales		87.63	%		94.66	%		87.04	%		92.03	%
Gross Profit		12.37	%		5.34	%		12.96	%		7.97	%
Other income form operating		0.23	%		0.18	%		0.23	%		0.19	%
Depreciation		0.30	%		0.42	%		0.30	%		0.37	%
Administrative Expenses		2.48	%		1.29	%		2.27	%		1.42	%
Income from non-operating		9.82	%		3.81	%		10.62	%		6.37	%
Professional expenses related to Restructuring and Share Exchange								1.00	%
Other Income		0.23	%		0.29	%		0.19	%		0.26	%
Interest Expenses		1.32	%		1.30	%		1.23	%		1.15	%
Profit Before Tax		8.73	%		2.80	%		8.58	%		5.48	%
Taxation		1.70	%		0.53	%		1.81	%		0.97	%
Net Income		7.03	%		2.27	%		6.77	%		4.51	%

Comparison of the three months ended June 30, 2007 with the three months ended June 30, 2006

Net sales for the three months ended June 30, 2007 was $20.87 million as compared to $22.92 million for the same period in 2006, a decrease of $2.0 million, or 8.9%. This decrease was primarily due to the decreased sales of completed watches, which decreased from $3.23 million during the three months ended June 30, 2006 to $1.86 million for the comparable period in 2007. The watch movement segment remained almost the same from $19.69 million in net sales for the three months ended June 30, 2006 to $19.01 million for the three months ended June 30, 2007. The decrease in sales of completed watches was due to the delay in new product launches which affected new order placements during the period.

Cost of sales for the three months ended June 30, 2007 was $18.29 million, or 87.6% of net sales, as compared to $21.70 million, or 94.7% of net sales, for the same period in 2006. The decrease in cost of sales as a percentage of net sales was largely attributable to the rebate receivables for the three months ended June 30, 2007.

Gross profit for the three months ended June 30, 2007 was $2.58 million, or 12.4% of net sales, compared to $1.22 million, or 5.3% of net sales for the same period in 2006. The increase in our gross profit margin was primarily attributable to the decrease in cost as a result of rebate receivables for the three months ended June 30, 2007. Gross profit margins are usually a factor of product mix and demand for product. The gross profit of watch movements as a percentage of net sales increased from -1.7% for the three months ended June 30, 2006 to 9.2% of net sales for same period in 2007. There was a slight decrease of gross profit for completed watches for the three months ended June 30, 2007, which was 44.4% of net sales as compared to 48.4% of net sales for the same period in 2006, as the product mix had no significant change.

Administrative and other operating expenses were $0.58 million, or 2.8% of net sales for the three months ended June 30, 2007, as compared to $0.39 million, or 1.7% of net sales for comparable period in 2006. The increase was primarily due to increased professional fees related to company restructuring and reporting requirements as a public company.

Other income was $0.10 million, or 0.5% of net sales for the three months ended June 30, 2007, as compared to $0.11 million, or 0.5% of nets sales for the three months ended June 30, 2006. The slight decrease was primarily due to a decrease in income received from the license fees of intangible assets, which was $0.03 million for the three months ended June 30, 2007, and a decrease in bank interest income, which was $0.05 million for the three months ended June 30, 2007, partially offset by an increase in rental income, which was $0.02 million for the three months ended June 30, 2007.

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Income taxes for the three months ended June 30, 2007 were $0.35 million, or 1.7% of net sales, as compared to $0.12 million for the three months ended June 30, 2006, or 0.5% of net sales. The increase in incomes taxes is primarily due to an increase in the profit margin to 8.7% for the three months ended June 30, 2007 compared to a profit margin of only 2.8% for the three months ended June 30, 2006.

Interest expense for the three months ended June 30, 2007 was $0.27 million, or 1.3% of net sales, as compared to $0.30 million, or 1.3% of net sales, in 2006, which was consistent in the comparable period.

Net income for the three months ended June 30, 2007 was $1.47 million, or 7.0% of net sales, as compared to $0.52 million, or 2.3% of the net sales for the comparable period in 2006.

Comparison of the six months ended June 30, 2007 with the six months ended June 30, 2006

Net sales for the six months ended June 30, 2007 was $41.99 million as compared to $43.23 million for the comparable period in 2006, a decrease of $1.24 million, or 2.87%. This decrease was primarily due to the decreased sales of completed watches partially offset by the increase in sales of watch movements. The decrease in sales of completed watches was due to the delay in new product launch which affected new order placements in the period.

Cost of sales for the six months ended June 30, 2007 was $36.54 million, or 87.0% of net sales, as compared to $39.78 million, or 92.0% of net sales, for the same period in 2006. The decrease in cost of sales as a percentage of net sales was largely attributable to the improved economies of scale and rebate receivables for the six months ended June 30, 2007.

Gross profit for the six months ended June 30, 2007 was $5.42 million, or 13.0% of net sales, compared to $3.45 million, or 8.0% of net sales for the same period in 2006. The increase in our gross profit margin was primarily attributable to the increase in sales of higher-margin products as a result of diversification of products, a decrease in costs due to rebate receivables in the six months ended June 30, 2007 and improved economies of scale.

Administrative and other operating expenses were $1.08 million for the six months ended June 30, 2007, as compared to $0.77 million for the comparable period in 2006. The increase was primarily due to increased professional fees related to reporting requirements as a public company and additional employees and upgraded staff benefits.

Other income was $0.18 million, or 0.4% of net sales for the six months ended June 30, 2007, as compared to $0.19 million, or 0.5% of nets sales for the six months ended June 30, 2006. The slight decrease was primarily due to a decrease in income received from the license fees of intangible assets, which was $0.07 million for the six months ended June 30, 2007, and a decrease in bank interest income, which was $0.08 million for the six months ended June 30, 2007, partially offset by an increase in rental income, which was $0.03 million for the six months ended June 30, 2007.

Income taxes for the six months ended June 30, 2007 were $0.76 million, or 1.8% of net sales, as compared to $0.42 million for the six months ended June 30, 2006, or 1.0% of net sales. The increase in income taxes is primarily due to an increase in the profit margin to 8.58% for the six months ended June 30, 2007 compared to a profit margin of only 5.48% for the six months ended June 30, 2006.

Interest expense for the six months ended June 30, 2007 was $0.51 million, or 1.2% of net sales, as compared to $0.50 million, or 1.2% of net sales, in 2006 which was consistent in the comparable period.

Net income for the six months ended June 30, 2007 was $2.8 million, or 6.8% of net sales, as compared to $1.9 million, or 4.5% of the net sales for the comparable period in 2006.

Liquidity and Capital Resources

To provide liquidity and flexibility in funding our operations, we borrow amounts under bank facilities and other external sources of financing. As of June 30, 2007 we had general banking facilities amounted to $15.61 million for overdraft, letter of credit, trust receipt, invoice financing and export loans granted by nine banks. The amount increased by $2.40 million compared to $13.20 million as at June 30, 2006. Interest on the facilities ranged from minus 2.0 to 0.75% over the Bank’s Best Lending Rate of Hong Kong (Prime Rate) or Hong Kong Inter Bank Offered Rate (HIBOR). These banking facilities were secured by the leasehold properties, time deposits and held-to maturity investments of the group and personal guarantees executed by our Chairman of the Board.

On January 23, 2007, concurrently with the close of the Share Exchange, we conducted an initial closing of a private placement transaction pursuant to which we sold an aggregate of 1,749,028 shares of Series A Convertible Preferred Stock at $1.29 per share. On February 9, 2007, we conducted a second and final closing of the private placement pursuant to which we sold 501,320 shares of Series A Convertible Preferred Stock at $1.29 per share. Accordingly, a total of 2,250,348 shares of Series A Convertible Preferred Stock were sold in the private placement for an aggregate gross proceeds of $2,902,946 (the “Private Placement”). Of the gross proceeds, $50,000 is represented by a subscription receivable from one investor. WestPark Capital, Inc. (“WestPark”) acted as the placement agent for the Private Placement. For its services as placement agent, WestPark received an aggregate fee of approximately $261,265, which consisted of a commission equal to 9.0% of the gross proceeds from the financing. After commissions and expenses, we received net proceeds of approximately $2.3 million in the Private Placement.

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For the six months ended June 30, 2007, net cash used by operating activities was approximately $3.2 million, as compared to net cash used in operating activities of $0.8 million for the comparable period in 2006. The increase in net cash used by operating activities was primarily attributable to an increase in accounts receivable, an increase in prepaid expenses and other receivables and a decrease in advance from related parties, partially offset by the lack of unearned income. The increase in accounts receivable was due to an increase in sales and extended aging in the completed watches segment. The increase in prepaid expenses and other receivables was attributable to the deposit of potential acquisition of plant facilities. No acquisition was completed as of the date of this quarterly report.

Net cash used in investing activities was $311 for the six months ended June 30, 2007, compared to $1.2 million in the comparable period in 2006. The decrease in net cash used was primarily due to the decrease in expenditures for acquiring plant and equipment and no significant investment was made during the six months ended June 30, 2007.

Net cash provided by financing activities was $2.9 million for the six months ended June 30, 2007 and $1.6 million for the comparable period in 2006. The increase in net cash provided by financing activities for the six months ended June 30, 2007 was primarily attributable to an increase in our issuance of equity securities in a private placement in the amount of $2.6 million and the lack of dividends paid, partially offset by a an increase in recapitalization costs.

For the six months ended June 30, 2007 and the same period in 2006, our average inventory turnover was 27 days and 24 days, respectively. The average days outstanding of our accounts receivable for the six months ended June 30, 2007 was 49 days, as compared to 27 days for the same period in 2006. The increase in the average days outstanding of our accounts receivable was due to the change in our credit policy. Since January 2007, we have extended our credit terms from 30 days to 60 day to customers who have a good credit history in order to improve our profit margin and competitiveness. Inventory turnover and average days outstanding are key operating measures that management relies on to monitor our business.

In an attempt to reduce our reliance on third-party watch movement manufacturers, we have plans to manufacture our own brands of quartz movements and mechanical movements in-house. To manufacture our own brands of quartz and mechanical movements in-house, we would need to acquire watch movement facilities in China and invest in new equipments and research and development. We expect that up to $5.5 million will be required to obtain the equipment and facilities to manufacture branded proprietary watch movements. We will be required to raise the appropriate amount of capital needed for our future operations from future equity sales or through debt financings. Failure to obtain funding when needed may force us to delay, reduce, or eliminate our plans to manufacture our own watch movement parts. We may not be able to obtain additional financial resources when necessary or on terms favorable to us, if at all, and any available additional financing may not be adequate. Moreover, new equity securities issued in financings, including any shares of Series A Convertible Preferred Stock or any new series of preferred stock authorized by our Board of Directors, may have greater rights, preferences or privileges than our existing common stock. To the extent stock is issued or options and warrants are exercised, holders of our common stock will experience further dilution.

Based on our current plans, we believe that cash on hand, cash flow from operations and funds available under our bank facilities will be sufficient to fund our capital needs for the next 12 months. However, our ability to maintain sufficient liquidity depends partially on our ability to achieve anticipated levels of revenue, while continuing to control costs. If we did not have sufficient available cash, we would have to seek additional debt or equity financing through other external sources, which may not be available on acceptable terms, or at all. Failure to maintain financing arrangements on acceptable terms would have a material adverse effect on our business, results of operations and financial condition.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Credit Risk.We are exposed to credit risk from our cash at bank, fixed deposits and contract receivables. The credit risk on cash at bank and fixed deposits is limited because the counterparts are recognized financial institutions. Contract receivables are subject to credit evaluations. As we are getting more new customers and offering credit terms, financial efficiency, we believe that cash flow and controlling bad debt and late payment become more and more important. We carry out thorough research through public filing records available on our new customers, coupled with the employment of business intelligence information provider, before extending any credit to new customers. Different levels of credit periods and credit limits are granted to different customers according to their size, financial position, business position and payment history, among other factors, in order to offer the right credit terms to our customers to enhance competitiveness yet manage the risk. We have not recorded bad debt since inception.

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Foreign Currency Risk.The functional currency of our company is the Hong Kong Dollar (HKD). In the future, we expect Renminbi (RMB) also to be a functional currency. Substantially all of our operations are conducted in the PRC. Our sales and purchases are conducted within the PRC in HKD and in the future will include RMB. Conversion of RMB into foreign currencies is regulated by the People’s Bank of China through a unified floating exchange rate system. Although the PRC government has stated its intention to support the value of the RMB, there can be no assurance that such exchange rate will not again become volatile or that the RMB will not devalue significantly against the U.S. Dollar. Exchange rate fluctuations may adversely affect the value, in U.S. Dollar terms, of our net assets and income derived from its operations in the PRC. In addition, the RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions.

Country Risk.The substantial portion of our business, assets and operations are located and conducted in Hong Kong and China. While these economies have experienced significant growth in the past twenty years, growth has been uneven, both geographically and among various sectors of the economy. The Chinese government has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures benefit the overall economy of Hong Kong and China, but may also have a negative effect on us. For example, our operating results and financial condition may be adversely affected by government control over capital investments or changes in tax regulations applicable to us. If there are any changes in any policies by the Chinese government and our business is negatively affected as a result, then our financial results, including our ability to generate revenues and profits, will also be negatively affected.

ITEM 4.  CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures

As of June 30, 2007, our management, with the participation of our Chief Executive Officer, or “CEO,” and Chief Financial Officer, or “CFO,” performed an evaluation of the effectiveness and the operation of our disclosure controls and procedures as defined in Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the “Exchange Act.” Based on that evaluation, the CEO and CFO concluded that our disclosure controls and procedures were effective as of June 30, 2007.

(b) Changes in internal control over financial reporting

There have been no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) or Rule 15d-15(d) under the Exchange Act that occurred during the quarter ended June 30, 2007 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II-OTHER INFORMATION

ITEM 1.LEGAL PROCEEDINGS

We are not currently a party to any material legal proceedings.

ITEM 1A. RISK FACTORS

There have been no material changes from the risk factors disclosed in the “Risk Factors” section of our annual report on Form 10-K for the year ended December 31, 2006.

ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3.DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5.OTHER INFORMATION

None.

ITEM 6.EXHIBITS

(a) Exhibits

31.1	Certification of Principal Executive Officer and Principal Financial and Accounting Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002
32.1	Certification of Principal Executive Officer and Principal Financial and Accounting Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

* This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.

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SIGNATURES

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

	ASIA TIME CORPORATION (Registrant)
August 20, 2007	By:	/s/ Kwong Kai Shun
		Kwong Kai Shun
		Chief Executive Officer, Chief Financial Officer and Chairman of the Board

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