-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RjADYTix857AkS7uAn1xwgW9iQKiIbvNN7FQb70RuUUwfZtU41tcMwO/CNanD9Yt gHDXu7aVisbEIJMvJvqb5A== 0001104659-07-077018.txt : 20071025 0001104659-07-077018.hdr.sgml : 20071025 20071025155740 ACCESSION NUMBER: 0001104659-07-077018 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20071019 ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20071025 DATE AS OF CHANGE: 20071025 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STONE TAN CHINA ACQUISITION CORP. CENTRAL INDEX KEY: 0001390332 STANDARD INDUSTRIAL CLASSIFICATION: BLANK CHECKS [6770] IRS NUMBER: 208387484 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-52857 FILM NUMBER: 071190883 BUSINESS ADDRESS: STREET 1: 9191 TOWNE CENTER DRIVE STREET 2: SUITE 410 CITY: SAN DIEGO STATE: CA ZIP: 92122 BUSINESS PHONE: 858-450-1505 MAIL ADDRESS: STREET 1: 9191 TOWNE CENTER DRIVE STREET 2: SUITE 410 CITY: SAN DIEGO STATE: CA ZIP: 92122 8-K 1 a07-27482_18k.htm 8-K

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

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): October 19, 2007

STONE TAN CHINA ACQUISITION CORP.

(Exact Name of Registrant as Specified in Charter)

Delaware	000-52857	20-8387484
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

Suite 1A, 11^th Floor, Tower 1 China Hong Kong City 33 Canton Road Kowloon, Hong Kong
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: 852-27355493

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 8.01. Other Events

On October 19, 2007, the initial public offering (“IPO”) of 30,000,000 units of Stone Tan China Acquisition Corp. (the “Company”) was consummated. Each unit issued in the IPO (the “Units”) consists of one share of common stock, $.0001 par value per share (the “Common Stock”), and one warrant, each warrant to purchase one share of Common Stock at an exercise price of $5.50 per share. The Units were sold at an offering price of $8.00 per Unit, generating gross proceeds of $240,000,000. Prior to the consummation of the IPO, the Company completed a private placement of 6,200,000 warrants to the Company’s founding stockholders generating gross proceeds of $6,200,000. The audited financial statements as of October 19, 2007 reflecting receipt of the proceeds of the IPO and the private placement are included as Exhibit 99.2 to this Current Report on Form 8-K.

Item 9.01. Financial Statements and Exhibits

Exhibits:

Exhibit No.		Description

10.5		Securities Escrow Agreement among the Registrant, Continental Stock Transfer & Trust Company and the initial stockholders

99.1		Press release dated October 25, 2007

99.2		Audited Financial Statements

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: October 25, 2007	STONE TAN CHINA ACQUISITION CORP.


	By:	/s/ Richard Tan
		Name: Richard Tan
		Title: Chief Executive Officer

EXHIBIT INDEX

Exhibit No.		Description

10.5		Securities Escrow Agreement among the Registrant, Continental Stock Transfer & Trust Company and the initial stockholders

99.1		Press release dated October 25, 2007

99.2		Audited Financial Statements

EX-10.5 2 a07-27482_1ex10d5.htm EX-10.5

Exhibit 10.5

SECURITIES ESCROW AGREEMENT

SECURITIES ESCROW AGREEMENT, dated as of October 15, 2007 (“Agreement”) by and among Stone Tan China Acquisition Corp., a Delaware corporation (“Company”), the undersigned parties listed as Initial Stockholders on the signature page hereto (collectively, the “Initial Stockholders”) and Continental Stock Transfer & Trust Company, a New York corporation (“Escrow Agent”).

WHEREAS, the Company has entered into an Underwriting Agreement, dated October 15, 2007 (“Underwriting Agreement”) with Morgan Joseph & Co., Inc. (“Morgan Joseph”), as representative of the underwriters named therein (collectively, “Underwriters”), pursuant to which, among other matters, the Underwriters have agreed to purchase 30,000,000 units (“Units”) of the Company. Each Unit consists of one share of the Company’s common stock, par value $.0001 per share (“Common Stock”), and one warrant, each warrant to purchase one share of Common Stock, all as more fully described in the Company’s definitive Prospectus, dated October 15, 2007 (“Prospectus”) comprising part of the Company’s Registration Statements on Form S-1 (File Nos. 333-142729 and 333-146772) under the Securities Act of 1933, as amended (collectively, the “Registration Statement”), declared effective on October 15, 2007 (“Effective Date”); and

WHEREAS, the Initial Stockholders have agreed, as a condition of the Underwriters’ obligation to purchase the Units pursuant to the Underwriting Agreement and to offer them to the public, to deposit all of their shares of Common Stock as set forth opposite their respective names in Schedule A attached hereto (collectively “Escrow Shares”), in escrow as hereinafter provided;

WHEREAS, certain of the Initial Stockholders have agreed to purchase warrants (the “Founders’ Warrants”) in a private placement prior to the consummation of the offering, and to deposit all of their Founders’ Warrants in escrow in the amounts set forth opposite their respective names in Schedule B attached hereto the (the “Escrow Warrants” and together with the Escrow Shares, the “Escrow Securities”); and

WHEREAS, the Company and the Initial Stockholders desire that the Escrow Agent accept the Escrow Securities, in escrow, to be held and disbursed as hereinafter provided.

NOW, THEREFORE, IT IS AGREED:

1. Appointment of Escrow Agent. The Company and the Initial Stockholders hereby appoint the Escrow Agent to act in accordance with and subject to the terms of this Agreement and the Escrow Agent hereby accepts such appointment and agrees to act in accordance with and subject to such terms.

2. Deposit of Escrow Securities. With respect to the Escrow Securities, each of the Initial Stockholders shall deliver on or prior to the Effective Date to the Escrow Agent certificates representing his or her respective Escrow Securities that have been

issued as of such date, to be held and disbursed subject to the terms and conditions of this Agreement. Each Initial Stockholder acknowledges and agrees that the certificates representing his or her Escrow Securities is legended to reflect the deposit of such Escrow Securities under this Agreement.

3. Disbursement of the Escrow Securities. The Escrow Agent shall hold the Escrow Securities until, with respect to the Escrow Shares, one year from the closing date of a Business Combination, and with respect to the Escrow Warrants, 30 days from the closing date of a Business Combination (as applicable, the “Escrow Period”), on which dates it shall, upon written instructions from the Chief Executive Officer of the Company, disburse each of the Initial Stockholders’ applicable Escrow Securities to such Initial Stockholder; provided, however, that if the Underwriters do not exercise their over-allotment option in full, up to 1,125,000 of Escrow Shares shall be released to the Company upon written instruction from the Company; provided, further, that if the Escrow Agent is notified by the Company pursuant to Section 6.6 hereof that the Company is being liquidated at any time during the applicable Escrow Period, then the Escrow Agent shall promptly destroy the certificates representing the Escrow Securities; provided further, that if, after the Company consummates a Business Combination, it (or the surviving entity) subsequently consummates a liquidation, merger, stock exchange or other similar transaction which results in all of its stockholders of such entity having the right to exchange their shares of Common Stock for cash, securities or other property, then the Escrow Agent will, upon receipt of a certificate, executed by the Chairman, Chief Executive Officer or Chief Financial Officer of the Company, in form reasonably acceptable to the Escrow Agent, that such transaction is then being consummated, release the Escrow Securities to the Initial Stockholders upon consummation of such transaction so that they can similarly participate. Upon written instructions from the Company advising that a Business Combination has been consummated and that public stockholders holding in excess of 20% of the shares of Common Stock issued pursuant to the Registration Statement exercise the right to redeem their shares for cash as described in the Registration Statement, the Escrow Agent will release and deliver to the Company for cancellation on a pro rata basis certificates representing that number of Escrow Shares (up to a maximum of 937,500) which results in the Initial Stockholders collectively owning no more then 23.81% of the Company’s outstanding Common Stock immediately prior to the consummation of the Business Combination after giving effect to the redemption. Such instructions shall be set forth both the number of shares the Company is redeeming and the number of Escrow Securities to be delivered to the Company for cancellation. The Escrow Agent shall have no further duties hereunder after the disbursement or destruction of the Escrow Securities in accordance with this Section 3.

4. Rights of Initial Stockholders in Escrow Securities.

4.1 Voting Rights as a Stockholder. Subject to the terms of the Insider Letter described in Section 4.4 hereof and except as herein provided, the Initial Stockholders shall retain all of their rights as stockholders of the Company with respect to the Escrow Shares during the applicable Escrow Period, including, without limitation, the right to vote such shares.

4.2 Dividends and Other Distributions in Respect of the Escrow Shares. During the applicable Escrow Period, all dividends payable in cash with respect to the Escrow Shares shall be paid to the Initial Stockholders, but all dividends payable in stock or other non-cash property (“Non-Cash Dividends”) shall be delivered to the Escrow Agent to hold in accordance with the terms hereof. As used herein, the term “Escrow Shares” shall be deemed to include the Non-Cash Dividends distributed thereon, if any.

4.3 Restrictions on Transfer. During the applicable Escrow Period, no sale, transfer or other disposition may be made of the Escrow Securities except (i) in transfers resulting from death, (ii) by operation of law, (iii) for estate planning purposes to persons immediately related to the transferor by blood, marriage or adoption, or (iv) to any trust solely for the benefit of such transferor and/or the persons described in the preceding clause; provided, however, that such permissive transfers may be implemented only upon the respective transferee’s written agreement to be bound by the terms and conditions of this Agreement and of the Insider Letter signed by the Initial Stockholder transferring the Escrow Securities. During the applicable Escrow Period, the Initial Stockholders shall not pledge or grant a security interest in the Escrow Securities or grant a security interest in their rights under this Agreement.

4.4 Insider Letters. Each of the Initial Stockholders has executed a letter agreement with Morgan Joseph and the Company, dated as indicated on Schedule A hereto, and which is filed as an exhibit to the Registration Statement (“Insider Letter”), respecting the rights and obligations of such Initial Stockholder in certain events, including but not limited to the liquidation of the Company.

5. Concerning the Escrow Agent.

5.1 Good Faith Reliance. The Escrow Agent shall not be liable for any action taken or omitted by it in good faith and in the exercise of its own best judgment, and may rely conclusively and shall be protected in acting upon any order, notice, demand, certificate, opinion or advice of counsel (including counsel chosen by the Escrow Agent), statement, instrument, report or other paper or document (not only as to its due execution and the validity and effectiveness of its provisions, but also as to the truth and acceptability of any information therein contained) which is believed by the Escrow Agent to be genuine and to be signed or presented by the proper person or persons. The Escrow Agent shall not be bound by any notice or demand, or any waiver, modification, termination or rescission of this Agreement unless evidenced by a writing delivered to the Escrow Agent signed by the proper party or parties and, if the duties or rights of the Escrow Agent are affected, unless it shall have given its prior written consent thereto.

5.2 Indemnification. The Escrow Agent shall be indemnified and held harmless by the Company from and against any expenses, including counsel fees and disbursements, or loss suffered by the Escrow Agent in connection with any action, suit or other proceeding involving any claim which in any way, directly or indirectly, arises out of or relates to this Agreement, the services of the Escrow Agent hereunder, or the

Escrow Securities held by it hereunder, other than expenses or losses arising from the gross negligence or willful misconduct of the Escrow Agent. Promptly after the receipt by the Escrow Agent of notice of any demand or claim or the commencement of any action, suit or proceeding, the Escrow Agent shall notify the other parties hereto in writing. In the event of the receipt of such notice, the Escrow Agent, in its sole discretion, may commence an action in the nature of interpleader in an appropriate court to determine ownership or disposition of the Escrow Securities or it may deposit the Escrow Securities with the clerk of any appropriate court or it may retain the Escrow Securities pending receipt of a final, non appealable order of a court having jurisdiction over all of the parties hereto directing to whom and under what circumstances the Escrow Securities are to be disbursed and delivered. The provisions of this Section 5.2 shall survive in the event the Escrow Agent resigns or is discharged pursuant to Sections 5.5 or 5.6 below.

5.3 Compensation. The Escrow Agent shall be entitled to reasonable compensation from the Company for all services rendered by it hereunder, as set forth on Exhibit A hereto. The Escrow Agent shall also be entitled to reimbursement from the Company for all expenses paid or incurred by it in the administration of its duties hereunder including, but not limited to, all counsel, advisors’ and agents’ fees and disbursements and all taxes or other governmental charges. The Escrow Agent shall bill the Company on a monthly basis for services rendered.

5.4 Further Assurances. From time to time on and after the date hereof, the Company and the Initial Stockholders shall deliver or cause to be delivered to the Escrow Agent such further documents and instruments and shall do or cause to be done such further acts as the Escrow Agent shall reasonably request to carry out more effectively the provisions and purposes of this Agreement, to evidence compliance herewith or to assure itself that it is protected in acting hereunder.

5.5 Resignation. The Escrow Agent may resign at any time and be discharged from its duties as escrow agent hereunder by its giving the other parties hereto written notice and such resignation shall become effective as hereinafter provided. Such resignation shall become effective at such time that the Escrow Agent shall turn over to a successor escrow agent appointed by the Company and approved by Morgan Joseph, the Escrow Securities held hereunder. If no new escrow agent is so appointed within the 60 day period following the giving of such notice of resignation, the Escrow Agent may deposit the Escrow Securities with any court it deems appropriate.

5.6 Discharge of Escrow Agent. The Escrow Agent shall resign and be discharged from its duties as escrow agent hereunder if so requested in writing at any time by the Company and a majority of the Initial Stockholders, jointly, provided, however, that such resignation shall become effective only upon acceptance of appointment by a successor escrow agent as provided in Section 5.5.

5.7 Liability. Notwithstanding anything herein to the contrary, the Escrow Agent shall not be relieved from liability hereunder for its own gross negligence or its own willful misconduct.

6. Miscellaneous.

6.1 Governing Law. This Agreement shall for all purposes be deemed to be made under and shall be construed in accordance with the laws of the State of New York. Each of the parties hereby agrees that any action, proceeding or claim against it arising out of or relating in any way to this Agreement shall be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York (each, a “New York court”), and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. Each of the parties hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.

6.2 Third-Party Beneficiaries. Each of the Initial Shareholders hereby acknowledges that Morgan Joseph is a third-party beneficiary of this Agreement and this Agreement may not be modified or changed without the prior written consent of Morgan Joseph.

6.3 Entire Agreement. This Agreement contains the entire agreement of the parties hereto with respect to the subject matter hereof and, except as expressly provided herein, may not be changed or modified except by an instrument in writing signed by the party to the charged.

6.4 Headings. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation thereof.

6.5 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the respective parties hereto and their legal representatives, successors and assigns.

6.6 Notices. Any notice or other communication required or which may be given hereunder shall be in writing and either be delivered personally or by private national courier service, or be mailed, certified or registered mail, return receipt requested, postage prepaid, and shall be deemed given when so delivered personally or, if sent by private national courier service, on the next business day after delivery to the courier, or, if mailed, two business days after the date of mailing, as follows:

If to the Company, to:

Stone Tan China Acquisition Corp.
Suite 1A, 11^th Floor, Tower 1

China Hong Kong City

33 Canton Road

Kowloon, Hong Kong
Attn: Richard Tan, President and Chief Executive Officer

If to a Stockholder, to his address set forth in Exhibit A.

and if to the Escrow Agent, to:

Continental Stock Transfer & Trust Company
17 Battery Place
New York, New York 10004
Attn: Felix Orihuela, Vice President and Senior Account Executive

A copy of any notice sent hereunder shall be sent to:

Loeb & Loeb LLP
345 Park Avenue
New York, New York 10154
Attn: Fran Stoller, Esq.

and:

Morgan Joseph & Co., Inc.
600 Fifth Avenue
19^th Floor
New York, New York 10020
Attn: Tina Pappas

and:

DLA Piper LLP
1251 Avenue of the Americas
New York, New York 10020
Attn: Jonathan Klein, Esq.

The parties may change the persons and addresses to which the notices or other communications are to be sent by giving written notice to any such change in the manner provided herein for giving notice.

6.7 Liquidation of Company. The Company shall give the Escrow Agent written notification of the liquidation and dissolution of the Company in the event that the Company fails to consummate a Business Combination within the time period(s) specified in the Prospectus.

6.8 Counterparts. This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original and all such counterparts shall together constitute one and the same instrument.

[remainder of page intentionally left blank]

WITNESS the execution of this Agreement as of the date first above written.

	STONE TAN CHINA ACQUISITION CORP.


	By:	/s/ Richard Tan
		Richard Tan, President and Chief Executive Officer


	CONTINENTAL STOCK TRANSFER &
	TRUST COMPANY


	By:	/s/ John W. Comer, Jr.
	Name:	John W. Comer, Jr., Vice President

- Signature page of Initial Stockholders immediately follows -

WITNESS the execution of this Agreement as of the date first above written.

	INITIAL STOCKHOLDERS:


	SPAC TRUST


	By:	/s/ Richard Tan
		Richard Tan, Trustee


	STONE 2007 FAMILY TRUST


	By:	/s/ Susan Stone
		Susan Stone, Trustee


	/s/ Roger W. Stone
	Roger W. Stone

SCHEDULE A

Name and Address of Initial Stockholder	Number of Common Shares	Number of Warrants
Roger W. Stone c/o Stone Tan China Acquisition Corp. Suite 1A, 11th Floor, Tower 1 China Hong Kong City 33 Canton Road Kowloon, Hong Kong	450,000	2,480,000

Stone 2007 Family Trust c/o Stone Tan China Acquisition Corp. Suite 1A, 11th Floor, Tower 1 China Hong Kong City 33 Canton Road
Kowloon, Hong Kong	3,000,000	0

SPAC Trust c/o Stone Tan China Acquisition Corp. Suite 1A, 11th Floor, Tower 1 China Hong Kong City 33 Canton Road
Kowloon, Hong Kong	5,175,000	3,720,000

EXHIBIT A

Escrow Agent Fees

SCHEDULE B

Escrow Warrants

Name		Number of Warrants

SPAC Trust		3,720,000

Roger W. Stone		2,480,000

EX-99.1 3 a07-27482_1ex99d1.htm EX-99.1

Exhibit 99.1

STONE TAN CHINA ACQUISITION CORP.
(a corporation in the development stage)

FINANCIAL STATEMENTS
AND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

CONTENTS

Report of Independent Registered Public Accounting Firm		F-2

Financial Statements

Balance Sheet as of October 19, 2007		F-3

Statement of Operations for the period from January 24, 2007 (inception) to October 19, 2007		F-4

Statement of Stockholders’ Equity for the period from January 24, 2007 (inception) to October 19, 2007		F-5

Statement of Cash Flows for the period from January 24, 2007 (inception) to October 19, 2007		F-6

Notes to Financial Statements		F-7

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders
Stone Tan China Acquisition Corp.

We have audited the accompanying balance sheet of Stone Tan China Acquisition Corp. (a corporation in the development stage) as of October 19, 2007, and the related statements of operations, stockholders’ equity and cash flows for the period from January 24, 2007 (inception) to October 19, 2007. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Stone Tan China Acquisition Corp. as of October 19, 2007, and the results of its operations and its cash flows for the period from January 24, 2007 (inception) to October 19, 2007, in conformity with United States generally accepted accounting principles.

/s/ GUMBINER SAVETT INC.

GUMBINER SAVETT INC.
Santa Monica, California
October 24, 2007

F-2

STONE TAN CHINA ACQUISITION CORP.
(a corporation in the development stage)

BALANCE SHEET

OCTOBER 19, 2007

ASSETS
Current assets:
Cash and cash equivalents	$	121,104
Cash held in trust	236,815,000
Prepaid expenses	43,137
Total current assets	236,979,241
Total assets	$	236,979,241

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	156,414
Deferred underwriting fees payable	8,400,000
Total current liabilities	8,556,414
Common stock subject to possible redemption – 8,999,999 shares at redemption value	68,524,192
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.0001 par value; authorized—1,000,000 shares; issued—none	—
Common stock, $0.0001 par value; authorized—139,000,000 shares; issued and outstanding—38,625,000 shares, inclusive of 8,999,999 shares subject to possible redemption	3,863
Additional paid-in capital	159,915,684
Deficit accumulated during the development stage	(20,812		)
	159,898,735
Less receivable from sale of unit purchase option to underwriters	(100		)
Total stockholders’ equity	159,898,635
Total liabilities and stockholders’ equity	$	236,979,241

See accompanying notes to financial statements.

F-3

STONE TAN CHINA ACQUISITION CORP.
(a corporation in the development stage)

STATEMENT OF OPERATIONS

PERIOD FROM JANUARY 24, 2007 (INCEPTION) TO OCTOBER 19, 2007

Operating expenses	$	(15,019	)
Interest income	7,194
Interest expense—stockholder	(12,987		)
Net loss	$	(20,812	)
Net loss per common share—basic and diluted	$	(0.00	)
Weighted average number of common shares outstanding—basic and diluted	8,736,524

See accompanying notes to financial statements.

F-4

STONE TAN CHINA ACQUISITION CORP.
(a corporation in the development stage)

STATEMENT OF STOCKHOLDERS’ EQUITY

PERIOD FROM JANUARY 24, 2007 (INCEPTION) TO OCTOBER 19, 2007

										Receivable
							Deficit			from Sale
							Accumulated			of Unit
				Additional			During the			Purchase			Total
	Common Stock			Paid-in			Development			Option to			Stockholders’
	Shares	Amount		Capital			Stage			Underwriters			Equity
Balance, January 24, 2007 (Inception)	—	$	—	$	—		$	—		$	—		$	—
Sale of common shares to initial stockholders at $0.003 per share	8,625,000	863		24,137			—			—			25,000
Sale of shares and warrants in private placement and public offering, net of cash offering costs of $17,781,361	30,000,000	3,000		228,415,639			—			—			228,418,639
Sale of unit purchase option to underwriters	—	—		100			—			(100		)	—
Shares reclassified to “Common stock subject to possible redemption”	—	—		(68,524,192		)	—			—			(68,524,192		)
Net loss for the period from January 24, 2007 (inception) to October 19, 2007	—	—		—			(20,812		)	—			(20,812		)
Balance, October 19, 2007	38,625,000	$	3,863	$	159,915,684		$	(20,812	)	$	(100	)	$	159,898,635

See accompanying notes to financial statements.

F-5

STONE TAN CHINA ACQUISITION CORP.
(a corporation in the development stage)

STATEMENT OF CASH FLOWS

PERIOD FROM JANUARY 24, 2007 (INCEPTION) TO OCTOBER 19, 2007

Cash flows from operating activities:
Net loss	$	(20,812	)
Adjustments to reconcile net loss to net cash used in operating activities:
Increase in—
Prepaid expenses	(43,137		)
Accounts payable and accrued expenses	165
Net cash used in operating activities	(63,784		)

Cash flows from investing activities:
Increase in cash held in trust	(236,815,000		)
Net cash used in investing activities	(236,815,000		)

Cash flows from financing activities:
Proceeds from initial sale of common stock	25,000
Gross proceeds from private placement	6,200,000
Gross proceeds from public offering	240,000,000
Payment of offering costs	(9,225,112		)
Proceeds from stockholder loan	500,000
Repayment of stockholder loan	(500,000		)
Net cash provided by financing activities	236,999,888

Net increase in cash and cash equivalents	121,104
Cash and cash equivalents at beginning of period	—
Cash and cash equivalents at end of period	$	121,104

Cash paid for:
Interest	$	12,821
Income taxes	$	—

Supplemental schedule of non-cash investing and financing activities:
Deferred underwriting fees payable	$	8,400,000
Offering costs payable	$	156,249
Common stock subject to possible redemption	$	68,524,192
Sale of unit purchase option to underwriters	$	100
Fair value of unit purchase option issued to underwriters	$	7,689,369

See accompanying notes to financial statements.

F-6

STONE TAN CHINA ACQUISITION CORP.
(a corporation in the development stage)

NOTES TO FINANCIAL STATEMENTS

OCTOBER 19, 2007

1. Organization and Proposed Business Operations

Stone Tan China Acquisition Corp. (the “Company”) was incorporated in Delaware on January 24, 2007 as a blank check company formed for the purpose of acquiring, through a merger, stock exchange, asset acquisition or other similar business combination, or control through contractual arrangements, an operating business having its primary operations in the People’s Republic of China.

At October 19, 2007, the Company had not yet commenced any business operations and is therefore considered a “corporation in the development stage.” All activity through October 19, 2007 relates to the Company’s formation and the initial public offering and private placement, as described below. The Company is subject to the risks associated with development stage companies. The Company has selected December 31 as its fiscal year-end.

The Company’s ability to acquire an operating business was contingent upon obtaining adequate financial resources through a private placement in accordance with Regulation D under the Securities Act of 1933, as amended (the “Private Placement”), and an initial public offering (the “Public Offering”, and together with the Private Placement, the “Offerings”), which are discussed in Note 3. The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Offerings, although substantially all of the net proceeds of the Offerings are intended to be generally applied toward consummating a business combination with an operating company. As used herein, a “target business” shall include one or more operating businesses or assets with primary operations in the People’s Republic of China, and a “business combination” shall mean the acquisition by the Company of such a target business. There can be no assurances that the Company will be able to successfully effect a business combination.

2. Summary of Significant Accounting Policies

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Such cash and equivalents, at times, may exceed federally insured limits. The Company maintains its accounts with financial institutions with high credit ratings.

Income Taxes

The Company accounts for income taxes pursuant to Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes” (“SFAS 109”), which establishes financial accounting and reporting standards for the effects of income taxes that result from an enterprise’s activities during the current and preceding years. SFAS 109 requires an asset and liability approach for financial accounting and reporting for income taxes.

In July 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109” (“FIN 48”), which provides criteria for the recognition, measurement, presentation and disclosure of uncertain tax positions. A tax benefit from an uncertain position may be recognized only if it is “more likely than not” that the position is sustainable based on its technical merits. The provisions of FIN 48 are effective for fiscal years beginning after December 15, 2006. The adoption of FIN 48 on January 24, 2007 (inception) did not have a material effect on the Company’s financial statements.

Loss Per Common Share

Loss per common share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Basic and diluted loss per common share are the same because all warrants and options outstanding are anti-dilutive. As of October 19, 2007, 41,200,000 shares of common stock issuable under outstanding options and warrants were excluded from such calculation.

F-7

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

Fair Value of Financial Instruments

The carrying amounts of cash and cash equivalents, cash held in trust, accounts payable and accrued expenses, and deferred underwriting fees payable approximate their respective fair values, due to the short-term nature of these items.

Share-Based Payments

The Company accounts for share-based payments pursuant to Statement of Financial Accounting Standards No. 123R, “Share-Based Payments” (“SFAS 123R”). SFAS 123R requires all share-based payments, including grants of employee stock options to employees, to be recognized in the financial statements based on their fair values. The Company adopted SFAS 123R on January 24, 2007 (inception) and expects that it could have a material impact on the Company’s financial statements to the extent that the Company grants stock-based compensation in future periods.

Recent Accounting Pronouncements

Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.

3. Private Placement and Public Offering

On October 19, 2007, the Company completed its Public Offering of 30,000,000 units at a price of $8.00 per unit. Each unit consisted of one share of the Company’s common stock, $0.0001 par value, and one redeemable common stock purchase warrant. An additional 4,500,000 units may be issued on exercise of a 45-day option granted to the underwriters to cover any over-allotments. Each warrant entitles the holder to purchase from the Company one share of common stock at an exercise price of $5.50 per share commencing the later of the completion of a business combination with a target business, or October 15, 2008, and expires on October 15, 2011. The warrants will be redeemable at a price of $0.01 per warrant upon 30 days notice after the warrants become exercisable, only in the event that the last sale price of the common stock is at least $11.50 per share for any 20 trading days within a 30 trading day period ending on the third day prior to date on which notice of redemption is given.

F-8

The Company paid the underwriters in the Public Offering an underwriting discount of 3.5% of the gross proceeds and upon the consummation of a business combination, the underwriters will receive an additional underwriting discount equal to 3.5% of the gross proceeds. In the event of the exercise of the over-allotment option, the underwriters will receive with respect to the over-allotment units, an underwriting discount of 3.5% of the gross proceeds and upon the consummation of a business combination the underwriters will receive an additional underwriting discount equal to 3.5% of the gross proceeds. The Company also issued a unit purchase option, for $100, upon consummation of the Public Offering, to Morgan Joseph & Co. Inc. (“Morgan”) , the representative of the underwriters, to purchase up to a total of 2,500,000 units at $10.00 per unit. The units issuable upon exercise of this option are otherwise identical to those sold in the Public Offering, except that the exercise price of the warrants underlying the units is $7.00. This option is exercisable for cash, or on a cashless basis, commencing October 15, 2007 and expiring October 15, 2012. Since the warrants underlying the option are the same as the units sold in the Public Offering and expire October 15, 2011, if the option is exercised after such date, the holders of the option will only receive the common stock component of the units. The estimated fair value of this unit purchase option on the grant date was determined to be approximately $7,689,369 ($3.08 per unit) using a Black-Scholes option-pricing model with the following assumptions: (1) expected volatility of 45.3%, (2) risk-free interest rate of 4.2%, (3) expected life of 5 years, and (4) dividend rate of zero. The Company accounted for the fair value of the unit purchase option as a cost of the Public Offering, resulting in a charge directly to additional paid-in capital, offset by an equal amount credited directly to additional paid-in capital. As a result, the net increase in shareholders’ equity from the issuance of the unit purchase option will be the $100 cash payment to be received by the Company. The option and warrants could expire worthless if there is no effective registration statement.

On October 19, 2007, the closing date of the Offerings, $236,815,000 ($7.89 per unit) of the proceeds of the Offerings, including $8,400,000 of contingent underwriting compensation which will be paid to Morgan if a business combination is consummated, but which will be forfeited in part if the public stockholders elect to have their shares redeemed for cash and in full if a business combination is not consummated, was placed in a trust account (the “Trust Account”) at JPMorgan Chase NY Bank maintained by Continental Stock Transfer & Trust Company, and invested until the earlier of (i) the consummation of the Company’s first business combination or (ii) the liquidation of the Company. However, up to $3,300,000 of the interest earned on the Trust Account will be released to the Company to fund working capital requirements as set forth in the Investment Management Trust Agreement. Therefore, unless and until a business combination is consummated, the proceeds held in the Trust Account (other than up to $3,300,000 of the interest earned and amounts necessary to pay taxes) will not be available for the Company’s use for any expenses related to the Offerings or expenses which may be incurred related to the investigation and selection of a target business and the negotiation of an agreement to acquire a target business. The expenses that the Company may incur prior to consummation of a business combination may only be paid from the net proceeds of the Offerings not held in the Trust Account.

F-9

On October 19, 2007, prior to the consummation of the Public Offering, the Company’s founding stockholders purchased from the Company an aggregate of 6,200,000 warrants (the “Founder Warrants”) at $1.00 per warrant in a Private Placement. All Founder Warrants issued in the Private Placement were substantially identical to the warrants in the units sold in the Public Offering, except that: (i) subject to certain limited exceptions, none of the Founder Warrants were transferable or salable until after the Company completes a business combination; and (ii) the Founder Warrants are not subject to redemption and are not exercisable on a cashless basis if held by the initial holders thereof. The $6,200,000 of proceeds from the sale of the Founder Warrants were added to the portion of the proceeds from the Public Offering held in the Trust Account pending completion of the Company’s initial business combination. The Company has determined, based on a review of the trading price of the public warrants of other blank check companies similar to the Company, that the purchase price of $1.00 per Founder Warrant was not less than the approximate fair value of such warrants on the date of issuance. Therefore, the Company did not record compensation expense upon the sale of the Founder Warrants.

After the Company signs a definitive agreement for the acquisition of a target business, it will submit such transaction for stockholder approval. In the event that holders of the shares sold in the Public Offering (the “Public Stockholders”) owning 30% or more of the outstanding stock sold in the Public Offering vote against the business combination and elect to have the Company redeem their shares for cash, the business combination will not be consummated. All of the Company’s stockholders prior to the Offerings, including the officer and directors of the Company (the “Initial Stockholders”), have agreed to vote their 8,625,000 founding shares of common stock in accordance with the vote of the majority of shares purchased in the Public Offering with respect to any business combination and to vote any shares they acquire in the Public Offering, or in the aftermarket, in favor of the business combination. After consummation of the Company’s first business combination, all of these voting safeguards will no longer be applicable.

With respect to the first business combination which is approved and consummated, any Public Stockholders who voted against the business combination may demand that the Company redeem their shares for a pro rata share of the Trust Account (inclusive of a pro rata portion of the contingent underwriting compensation of $0.28 per share). Accordingly, Public Stockholders holding approximately 29.99% of the aggregate number of shares sold in the offerings may seek redemption of their shares in the event of a business combination.

The Company’s Amended and Restated Certificate of Incorporation provide for mandatory liquidation of the Company on October 15, 2009, twenty-four months from the effective date of the Public Offering, without stockholder approval, unless the duration is extended or made permanent by an amendment to the Certificate of Incorporation authorized by the vote of holders of a majority of all outstanding shares entitled to vote.

F-10

4. Deferred Offering Costs

Deferred offering costs, which consist principally of legal fees and other fees and costs incurred through the balance sheet date in connection with the Offerings, were charged to additional paid-in capital upon the receipt of the capital raised.

5. Note Payable to Stockholder

On February 27, 2007, the Company issued an unsecured promissory note of $500,000 to one of its Initial Stockholders. The note bore interest at the rate of 4% per annum and was due and payable at the earlier of: (i) February 26, 2008; or (ii) the date on which the Company consummated an initial public offering of its securities. The note, including related accrued interest of $12,821, was paid on October 19, 2007.

6. Common Stock

The Company was initially authorized to issue 39,000,000 shares of its common stock with a par value $0.0001 per share. On October 15, 2007, the authorized common shares were increased to 139,000,000 shares.

In February 2007, the Company’s Initial Stockholders subscribed to 1,562,500 shares of common stock for a total of $25,000. In April 2007, the Company effected a two-for-one stock split in the form of a stock distribution, which resulted in the issuance of an additional 1,562,500 shares to its Initial Stockholders. In May 2007, the Company effected a 1.15-for-one stock split in the form of a stock distribution, which resulted in the issuance of an additional 468,750 shares to its Initial Stockholders. In July 2007, the Company effected a three-for-one stock split in the form of a stock distribution, which resulted in the issuance of an additional 7,187,500 shares to its Initial Stockholders. In October 2007, the Company effected a two-for-three reverse stock split, which resulted in the reduction of 3,593,750 shares held by its Initial Stockholders. Also in October 2007, the Company effected a 1.2-for-one stock split in the form of a stock distribution, which resulted in the issuance of an additional 1,437,500 shares to its Initial Stockholders. The Company’s financial statements give retroactive effect to such stock splits.

The Initial Stockholders have agreed to forfeit, for no consideration, that number of shares, up to a maximum of 1,125,000 shares, necessary to ensure that the number of shares they hold prior to the Public Offering, exclusive of shares underlying the Founder Warrants, equals 20% of the outstanding shares of common stock after the Public Offering and the exercise, if any, of the underwriters’ over-allotment option.

In the event that holders of more than 20% of the shares of common stock sold in the Public Offering elect to redeem their shares, the Company’s Initial Stockholders have agreed to forfeit that number of shares (up to a maximum of 937,500 shares) that will result in them owning collectively no more than 23.81% of the Company’s outstanding common stock immediately prior to the consummation of such business combination after giving effect to the redemption (without regard to any open market or co-investment unit purchases by the Company’s Initial Stockholders as described in Note 9).

F-11

7. Preferred Stock

The Company is authorized to issue 1,000,000 shares of preferred stock with a par value $0.0001 per share, with such designations, voting and other rights and preferences, as may be determined from time to time by the Board of Directors.

8. Income Taxes

As of October 19, 2007, the Company recorded a deferred income tax asset of $7,076 for the period from January 24, 2007 (inception) to October 19, 2007. In recognition of the uncertainty regarding the ultimate amount of income tax benefits to be derived, the Company has recorded a full valuation allowance.

The effective tax rate differs from the statutory rate of 34% due to the increase in the valuation allowance.

9. Commitments and Contingencies

The Company will not proceed with a business combination if Public Stockholders owning 30% or more of the shares sold in the Public Offering vote against the business combination and exercise their redemption rights. Accordingly, the Company may effect a business combination if Public Stockholders owning up to approximately 29.99% of the aggregate shares sold in the Public Offering exercise their redemption rights. If this occurred, the Company would be required to redeem for cash up to approximately 29.99% of the 30,000,000 shares of common stock included in the units, or 8,999,999 shares of common stock, at an expected initial per share redemption price of $7.89. However, the ability of stockholders to receive $7.89 per unit is subject to any valid claims by the Company’s creditors which are not covered by amounts held in the Trust Account or the indemnities provided by the Company’s officers and directors. The expected redemption price per share is greater than each stockholder’s initial pro rata share of the Trust Account of approximately $7.61 per share. Of the excess redemption price, approximately $0.28 per share represents a portion of the underwriters’ contingent fee, which they have agreed to forego for each share that is redeemed. Accordingly, the total deferred underwriting compensation payable to the underwriters in the event of a business combination will be reduced by approximately $0.28 for each share that is redeemed. The balance will be paid from proceeds held in the Trust Account, which are payable to the Company upon consummation of a business combination. Even if less than 30% of the stockholders exercise their redemption rights, the Company may be unable to consummate a business combination if such redemption leaves the Company with funds insufficient to acquire or merge with a business with a fair market value greater than 80% of the Company’s net assets at the time of such acquisition, which would be in violation of a condition to the consummation of the Company’s initial business combination, and as a consequence, the Company may be forced to find additional financing to consummate such a business combination, consummate a different business combination or liquidate.

F-12

The Company’s Initial Stockholders will enter into an agreement with Morgan pursuant to which they will place limit orders to purchase up to an aggregate of $10,000,000 of the Company’s common stock in the open market commencing 10 business days after the Company files its Current Report on Form 8-K announcing the execution of a definitive agreement for a business combination and ending on the business day immediately preceding the date of the meeting of stockholders at which a business combination is to be approved. Such open market purchases will be made in accordance with Rules 10b-18 and 10b5-1 under the Securities Exchange Act of 1934, as amended, at a price per share of not more than the per share amount held in the Trust Account (less taxes payable) as reported in such Form 8-K and will be made by a broker-dealer mutually agreed upon by the Company’s Initial Stockholders and Morgan in such amounts and at such times as such broker-dealer may determine, in its sole discretion, so long as the purchase price does not exceed the above-referenced per share purchase price. The Company’s Initial Stockholders have agreed to vote any such shares of common stock purchased in the open market in favor of the Company’s initial business combination, representing a possible maximum aggregate of 4.2% of the public shares entitled to vote on the business combination. They have agreed not to sell such shares unless a business combination is approved by the Company’s stockholders; however, they will be entitled to participate in any liquidating distributions with respect to the shares purchased in the open market if the business combination is not completed and the Company dissolves.

In the event purchases of $10,000,000 of the Company’s common stock cannot be completed through the open market purchases described above, the Company’s Initial Stockholders have agreed to purchase from the Company, in a private placement, units identical to the units offered hereby at a purchase price of $8.00 per unit until they have spent an aggregate of $10,000,000 in the open market purchases described above and this private purchase. The purchase of co-investment units will occur immediately prior to the Company’s consummation of a business combination, which will not occur until after the signing of a definitive business combination agreement and the approval of that business combination by a majority of the Company’s public stockholders. The warrants included in the co-investment units will be exercisable on a cashless basis.

The Company has agreed to pay Pacific Millennium Holdings Corporation, an affiliate of the Company’s Chief Executive Officer, $7,500 per month for 24 months, for office space and reimbursement of general and administrative expenses, commencing on the date of the Public Offering and terminating upon the date the Company consummates a business combination or liquidates.

F-13

10. Registration Rights

The holders of the Company’s 8,625,000 issued and outstanding shares immediately prior to the completion of the Public Offering, the holders of the warrants to purchase 6,200,000 shares of common stock underlying the Founder Warrants sold in the Private Placement, and the holders of co-investment units are entitled to registration rights covering the resale of their shares and the resale of their warrants and shares acquired upon exercise of their warrants. The holders of the majority of these shares are entitled to make up to two demands that the Company register their shares, warrants and shares that they are entitled to acquire upon the exercise of warrants. The holders of the majority of these shares can elect to exercise these registration rights at any time after one year from the date of the consummation of the Company’s initial business combination, subject to the transfer restrictions imposed by the lock-up agreements. The holders of the Founder Warrants are also entitled to require the Company to register for resale the shares underlying the Founder Warrants when such warrants become exercisable by their terms. In addition, these stockholders have certain “piggy-back” registration rights on registration statements filed subsequent to the date on which these securities are released from the restrictions imposed by the lock-up agreements. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

In the event that a registration statement is not effective at the time of exercise, the holder of such warrant shall not be entitled to exercise such warrant and in no event will the Company be required to net cash settle the warrant exercise. Consequently, the warrants may expire unexercised.

The unit purchase option and its underlying securities have been registered in the registration statement for the Public Offering; however, the option also grants holders demand and “piggy back” registration rights for periods of five and seven years, respectively, from the date of the Public Offering. These rights apply to all of the securities directly and indirectly issuable upon exercise of the option. The Company will bear all fees and expenses attendant to registering the securities issuable on exercise of the option, other than underwriting commissions incurred and payable by the holders.

F-14

EX-99.2 4 a07-27482_1ex99d2.htm EX-99.2

Exhibit 99.2

FOR IMMEDIATE RELEASE

Contact:	James Huang
	858-531-1591

STONE TAN CHINA ACQUISITION CORP.

COMPLETES INITIAL PUBLIC OFFERING

New York, New York, October 25, 2007 – Stone Tan China Acquisition Corp. (OTC Bulletin Board: STTAU) announced today that it consummated its initial public offering of 30,000,000 units on October 19, 2007. Each unit consists of one share of common stock and one warrant. The units were sold at an offering price of $8.00 per unit, generating gross proceeds of $240,000,000. In addition, the Company consummated a private placement of 6,200,000 warrants at $1.00 per warrant to its founding stockholders. The initial public offering and the private placement generated aggregate gross proceeds of $246,200,000. Morgan Joseph & Co. Inc. acted as the book running manager and Southwest Securities, Legend Merchant Group, GunnAllen Financial, Inc. and Maxim Group LLC acted as co-managers.

Of the proceeds received from the consummation of the initial public offering and the private placement of warrants, $236,815,000 (or approximately $7.89 per unit sold in the initial public offering) was placed in trust. Audited financial statements as of October 19, 2007 reflecting receipt of the proceeds of the initial public offering and the private placement have been issued by the Company and are included as Exhibit 99.1 to a Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission.

Stone Tan China Acquisition Corp. is a blank check company recently formed for the purpose of acquiring, through a merger, stock exchange, asset acquisition or other similar business combination, an unidentified operating business having its primary operations in the People’s Republic of China.

Information about this offering is available in the prospectus filed with the Securities and Exchange Commission, a copy of which may be obtained from Morgan Joseph & Co. Inc., 600 Fifth Avenue, New York, New York 10020.

A registration statement relating to these securities has been filed with and declared effective by the Securities and Exchange Commission. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities law of any such state. The offering of these securities will be made only by means of a prospectus.

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