UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________
 
FORM 10-Q
_______________
 
xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended March 31,June 30, 2008
 
oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the transition period from ______to______.
 
Chinese Manufacturers Online Corp.
 (Exact name of registrant as specified in Charter
 
Delaware 000-51884  
(State or other jurisdiction of
incorporation or organization)
 (Commission File No.) (IRS Employee Identification No.)

115 Route 46 West, Suite B-12
Mountain Lakes, NJ 07046
 (Address of Principal Executive Offices)
 _______________
 
(973) 299-9888
 (Issuer Telephone number)
_______________


 (Former Name or Former Address if Changed Since Last Report)
 
Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2)has been subject to such filing requirements for the past 90 days. Yes x  No o
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company filer.  See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act (Check one):
 
Large Accelerated Filer o     Accelerated Filer o     Non-Accelerated Filer o     Smaller Reporting Company x
 
Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act. Yes x  No o
 
State the number of shares outstanding of each of the issuer’s classes of common equity, as of MayAugust 19, 2008: 10,100,00010,080,000 shares of common stock.
 

 
Chinese Manufacturers Online Corp.
 
FORM 10-Q
 
March 31,June 30, 2008
 
INDEX
 
PART I-- FINANCIAL INFORMATION
 
Item 1.Financial Statements
Item 2.Management’s Discussion and Analysis of Financial Condition
Item 3Quantitative and Qualitative Disclosures About Market Risk
Item 4.Control and Procedures
 
PART II-- OTHER INFORMATION
 
 Item 1Legal Proceedings
 Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
 Item 3.Defaults Upon Senior Securities
 Item 4.Submission of Matters to a Vote of Security Holders
 Item 5.Other Information
 Item 6.Exhibits and Reports on Form 8-K
 
SIGNATURE
 
 
 
 
ITEM 1. FINANCIAL INFORMATION

 


CHINESE MANUFACTURERS ONLINE CORP.CORP. AND SUBSIDIARIES
 (A DEVELOPMENT STAGE COMPANY)



CONTENTS

 

   
PAGE1CONDENSED CONSOLIDATED BALANCE SHEETS AS OF MARCH 31,JUNE 30, 2008 (Unaudited)(UNAUDITED) AND DECEMBER 31, 20072007.
   
PAGE2CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDING MARCH 31,ENDED JUNE 30, 2008 CONSOLIDATED AND 2007 AND THE PERIOD FROM DECEMBER 9, 2005 (INCEPTION) TO MARCH 31, 2008 (Unaudited)(UNAUDITED).
   
PAGESPAGE3CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIENCYEQUITY FOR THE PERIOD FROM DECEMBER 9, 2005 (INCEPTION) TO MARCH 31,SIX MONTHS ENDED JUNE 30, 2008 (Unaudited)(UNAUDITED).
   
PAGE4CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREESIX MONTHS ENDING MARCH 31,ENDED JUNE 30, 2008 CONSOLIDATED AND 2007 AND PERIOD FROM DECEMBER 9, 2005  (INCEPTION) TO MARCH 31, 2008 (Unaudited)(UNAUDITED)
   
PAGES5 - 11– 10NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS (Unaudited)
   

 
 
Chinese Manufacturers Online Corp. 
(A Development Stage Company) 
Chinese Manufacturers Online Corp. and SubsidiariesChinese Manufacturers Online Corp. and Subsidiaries 
Condensed Consolidated Balance SheetsCondensed Consolidated Balance Sheets Condensed Consolidated Balance Sheets 
    
    
    
            
ASSETSASSETS ASSETS 
            
 March 31, 2008  December 31,  June 30, 2008  December 31, 
 (Unaudited)  2007  (Unaudited)  2007 
            
Current Assets $   $        
Cash 390,428   557,033  $92,383  $557,033 
Accounts receivable, net 4,287   - 
Prepaid expenses and other current assets 12,257   10,505  38,793   10,505 
Due from related party 50,015   79,052  50,015   79,052 
        
Total Current Assets 452,700   646,590 
Inventory, net  20,979     
Total current assets
 206,457   646,590 
                
Property and Equipment, net  15,567   16,429   18,555   16,429 
        
Goodwill  13,887     
Deposits  8,551   - 
Total other assets
  22,438   - 
        
                
Total Assets $468,267  $663,019  $247,450  $663,019 
                
LIABILITIES AND STOCKHOLDERS' EQUITYLIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES AND STOCKHOLDERS' EQUITY 
                
Current Liabilities                
Accounts payable and accrued expenses $126,250  $53,970  $143,190  $53,970��
                
Total Liabilities  126,250   53,970   143,190   53,970 
                
Commitments and Contingencies                
                
Stockholders' Equity                
Preferred stock, $0.001 par value; 10,000,000 shares authorized,                
no shares issued and outstanding  -   -   -   - 
Common stock, $0.001 par value; 100,000,000 shares authorized,                
10,100,000 and 10,100,000 shares issued and outstanding, respectively  10,100   10,100 
10,080,000 and 10,100,000 shares issued and outstanding, respectively  10,080   10,100 
Additional Paid in Capital  2,918,500   2,918,500   2,908,520   2,918,500 
Deferred Stock compensation  (108,333)  (358,199)  -   (358,199)
Subscriptions receivable  (10,000)  (10,000)  -   (10,000)
Accumulated deficit during development stage  (2,468,250)  (1,951,352)
Accumulated deficit  (2,814,340)  (1,951,352)
                
Total Stockholders' Equity  342,017   609,049   104,260   609,049 
                
Total Liabilities and Stockholders' Equity $468,267  $663,019  $247,450  $663,019 
                
 
See accompanying notes to condensed unaudited financial statements.
 
 
1
 
Chinese Manufacturers Online Corp. 
(A Development Stage Company) 
Chinese Manufacturers Online Corp. and Subsidiaries
Chinese Manufacturers Online Corp. and Subsidiaries
 
Condensed Statements of OperationsCondensed Statements of Operations Condensed Statements of Operations 
(Unaudited)(Unaudited) (Unaudited) 
       For the period from             
 For the three months  For the three  December 9, 2005  For the three months  For the three months  For the six months  For the six months 
 
Ended
March 31,
  
months
Ended
  
(Inception)
to March 31,
  Ended June 30, 2008  Ended June 30,  Ended June 30, 2008  Ended June 30, 
 2008 (Consolidated)  
March 31,
2007
  2008 (Consolidated)  (CONSOLIDATED)  2007  (CONSOLIDATED)  2007 
                      
Revenue $2,154   $-   $3,228  $72,062  $-  $74,216  $- 
                            
Cost of Goods Sold  (103,239)    -   (112,914)    - 
                
Gross Loss  (31,177)    -   (38,698)    - 
                
Operating Expenses                            
General and administrative 55,667  250  93,580  52,165  250  107,832  750 
Computer and Internet expense 12,081  -  25,155  1,404  -  13,485  - 
Advisory Services 249,866  -  1,866,667  108,333  -  358,199  - 
Salary expense 175,068  -  355,261  139,040  -  314,108  - 
Professional fees 20,877  -  118,372   14,971   -   35,848   - 
Research and Development  9,675   -   19,030 
Total Operating Expenses  523,234   250   2,478,065   315,913   250   829,472   750 
                            
Net loss from Operations (521,080) (250) (2,474,837) (347,090) (250) (868,170) (750)
                            
Other Income (Expense)                            
Interest Income 4,121  -  6,358  546  -  4,667  - 
Other Income  61   -   229   454   -   515   - 
Total Other Income (Expense)  4,182   -   6,587   1,000   -   5,182   - 
                            
Loss from Operations before Provision for Income Taxes  (516,898)  (250)  (2,468,250) (346,090) (250) (862,988) (750)
                            
Provision for Income Taxes -  -  -   -   -   -   - 
                            
Net Loss  $(516,898)  $(250)  $(2,468,250) $(346,090) $(250) $(862,988) $(750)
                            
Loss per Common Share - Basic and Diluted  $-   $-      $(0.03) $(0.00) $(0.09) $(0.01)
                            
Weighted average number of shares outstanding                            
during the period - Basic and Diluted  8,800,000   100,000       10,081,778   100,000   10,090,989   100,000 
                            
 
See accompanying notes to condensed unaudited financial statements.
 
 
2
 
Chniese Manufacturers Online Corp 
(A Development Stage Company) 
Statement of Changes in Stockholders Equity 
For the period from December 9, 2005 (Inception) to March 31, 2008 
                            
              Additional  Deficit accumulated during  Deferred     
Total
Stockholder's
 
  Preferred Stock  Common Stock  Paid In  development  Stock  Subscription  Equity 
  Shares  Par  Shares  Par  Capital  stage  Compensation  Receivable  (Deficiency) 
                            
                            
 Common Stock issued for Incorporation expenses ($0.001 per share)  -  $-   100,000  $100  $-  $-  $-  $-  $100 
                                     
 Net Loss  -   -   -   -   -   (400)  -   -   (400)
                                     
 December 31, 2005  -   -   100,000   100   -   (400)  -   -   (300)
                                     
 Net Loss  -   -   -   -   -   (1,450)  -   -   (1,450)
                                     
 December 31, 2006  -   -   100,000   100   -   (1,850)  -   -   (1,750)
                                     
 Common Stock issued for cash, Net                                    
 ($0.25 per share)  -   -   626,000   626   155,874   -   -   -   156,500 
                                     
 Common Stock issued for cash, Net                                    
 ($0.50 per share)  -   -   1,474,000   1,474   728,026   -   -   (10,000)  719,500 
                                     
 Common Stock issued for services  -   -   7,900,000   7,900   1,967,100   -   (358,199)  -   1,616,801 
 ($0.25 per share)                                    
                                     
 Capital Contribution  -   -   -   -   67,500   -   -   -   67,500 
                                     
 Net Loss  -   -   -   -   -   (1,949,502)  -   -   610,799 
                                     
 December 31, 2007 (Consolidated)  -   -   10,100,000   10,100   2,918,500   (1,951,352)  (358,199)  (10,000)  609,049 
                                     
 Accretion of deferred  compensation  -   -   -   -   -   -   249,866   -   249,866 
                                     
 Net Loss  -   -   -   -   -   (516,898)  -   -   (516,898)
                                     
 Balance, March 31, 2008 (Consolidated)  -  $-  $10,100,000  $10,100  $2,918,500  $(2,468,250) $(108,333) $(10,000) $342,017 
                                     
Chinese Manufacturers Online Corp. and Subsidiaries 
Condensed Consolidated Statement of Changes in Stockholders Equity 
For the period from December 9, 2005 (Inception) to June 30, 2008 
                            
              Additional     Deferred     Total 
  Preferred Stock  Common Stock  Paid In  Accumulated  Stock  Subscription  Stockholder's 
  Shares  Par  Shares  Par  Capital  Deficit  Compensation  Receivable  Equity 
                            
 December 31, 2007  -  $-   10,100,000  $10,100  $2,918,500  $(1,951,352) $(358,199) $(10,000) $609,049 
                                     
 Common Stock subscription return ($0.50 per share)  -   -   (20,000)  (20)  (9,980)  -   -   10,000   - 
                                     
 Accretion of deferred  compensation  -   -   -   -   -   -   358,199   -   358,199 
                                     
 Net Loss  -   -   -   -   -   (862,988)  -   -   (862,988)
                                     
 Balance, June 30, 2008  -  $-   10,080,000  $10,080  $2,908,520  $(2,814,340) $-  $-  $104,260 
                                     
 
See accompanying notes to condensed unaudited financial statements.
 
 
3
 
Chinese Manufacturers Online Corp.Chinese Manufacturers Online Corp. Chinese Manufacturers Online Corp. 
(A Development Stage Company) 
Condensed Statements of Cash Flows 
Condensed statements of Cash FlowsCondensed statements of Cash Flows 
(Unaudited)(Unaudited) (Unaudited) 
         
       For the Period from       
 For the three months  For the three  December 9, 2005  
For the six months
  For the six months 
 
Ended
March 31,
  
months
Ended 
  
(Inception) to
March 31,
  
Ended June 30,
2008
  Ended June 30, 
 2008 (Consolidated)  
March 31,
2007
  2008 (Consolidated)  (CONSOLIDATED)  2007 
Cash Flows From Operating Activities:               
Net Loss $(516,898) $(250) $(2,468,250) $(862,988) $(750)
                    
Adjustments to reconcile net loss to net cash used in operations                    
Issuances of shares for services rendered  249,866   -  1,866,667   358,199   - 
In-kind contribution  -   -  100 
Depreciation  862   -  1,937   1,724   - 
Changes in operating assets and liabilities:                    
Increase in prepaid expenses  (1,752)  -  (12,257)
Accounts receivable  (699)  - 
Prepaid expenses  (28,288)  - 
Inventory  (18,304)  - 
Security deposits  (8,551)  - 
Due from related party  29,037   -  (50,015)  29,037   - 
Increase in accounts payable  72,280   250   126,250 
Increase in accounts payable and accrued expenses  89,220   750 
Net Cash Used In Operating Activities  (166,605)  -   (535,568)  (440,650)  - 
                    
Cash Flows From Investing Activities:                    
Purchase of Proprty and Equipment  -   -   (17,504)
Cash paid for asset purchase  (24,000)  - 
Net Cash used in Investing Activities:  -   -   (17,504)  (24,000)  - 
                    
Cash Flows From Financing Activities:                    
Stock issued for cash, Net  -   -  876,000   -   - 
Capital Contribution  -   -   67,500 
Net Cash Provided by Financing Activities  -   -   943,500   -   - 
                    
Net Increase (Decrease) in Cash  (166,605)  -  390,428 
Net (Decrease) Increase in Cash  (464,650)  - 
                    
Cash at Beginning of Period  557,033   -   -   557,033   - 
                    
Cash at End of Period $390,428  $-  $390,428  $92,383  $- 
                    
Supplemental disclosure of cash flow information:                    
                    
Cash paid for interest $-  $-  $-  $-  $- 
Cash paid for taxes $-  $-  $-  $-  $- 
                    
 
See accompanying notes to condensed unaudited financial statements.
 
4
 
CHINESE MANUFACTURERS ONLINE CORP.
(A DEVELOPMENT STAGE COMPANY)
MARCH 31, 2008AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2008
(Unaudited)
 
NOTE 1SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
 
(A) Organization
 
The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in The United States of America and the rules and regulations of the Securities and Exchange Commission for interim financial information.  Accordingly, they do not include all the information necessary for a comprehensive presentation of financial position and results of operations.
 
It is management's opinion, however that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statements presentation.  The results for the interim period are not necessarily indicative of the results to be expected for the year.
 
Chinese Manufacturers Online Corp. (hereinafter “the Company”) was incorporated on December 9, 2005 under the laws of the State of Delaware to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. TheDuring the six months ended June 30, 2008, the Company began its principle operations and has been inexited the development stage since its formation and has not realized any revenue from operations.stage. The Company’s year end is December 31.
 
On July 2, 2007, pursuant to a Stock Purchase Agreement and Share Exchange between Guoyou Lin and Michael Raleigh, the sole shareholder of 4308, Inc. (the "Agreement"), Mr. Lin obtained all of the issued and outstanding shares of 4308, Inc. Pursuant to the Agreement, Mr. Lin changed our name to Chinese Manufacturers Online Corp. (“CMO”) to better reflect our new business plan.
 
We are currently located in New Jersey and expect to open an office in the Los Angeles area. CMO provides high-level expertise in promoting online business for Chinese manufacturers and international buyers, business related channel development, distribution strategies, and marketing of Chinese-manufactured products.  On May 16, 2008, CMO developed a distribution network through its 100% owned subsidiary, Chinese Manufacturers Online (Caribbean) Limited (TCMP-CMO), in Trinidad and Tobago. On April 1, 2008, CMO purchased a sign store to promote its local distribution business.
 
(B) Principles of Consolidation
 
The accompanying 2008 condensed consolidated financial statements include the accounts of Chinese Manufacturers Online Corp. and its 100% owned subsidiaries Chinese manufacturers Group (USA) Corp. (from August 22, 2007, date of incorporation) and United Industries Group (USA) Corp. (from August 23, 2007, date of incorporation), and Chinese Manufacturers Online (Caribbean) Ltd (TCMP-CMO) (established on May 16, 2008 in the Republic of Trinidad and Tobago). The 2007 condensed financial statements include the accounts of Chinese Manufacturers Online Corp.  All intercompany accounts have been eliminated in the consolidation.
5
CHINESE MANUFACTURERS ONLINE CORP.
(A DEVELOPMENT STAGE COMPANY)
MARCH 31, 2008
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

(C) Use of Estimates
 
In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period.  Actual results could differ from those estimates.
 
(C)(D) Cash and Cash Equivalents
 
For purposes of the cash flow statements, the Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents.

(D)
5
CHINESE MANUFACTURERS ONLINE CORP.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2008
(Unaudited)
 (E) Basic and Diluted Earnings (Loss) Per Share
 
The Company adopted Statement of Financial Accounting Standards No. 128, which provides for calculation of "basic" and "diluted" earnings per share.  Basic earnings (loss) per share includes no dilution and is computed by dividing net income (loss) available to common shareholders by the weighted average common shares outstanding for the period.  Diluted earnings (loss) per share reflect the potential dilution of securities that could share in the earnings of an entity similar to fully diluted earnings per share.  For the periods reported, diluted net income (loss) per share is the same as basic net income (loss) per share as there were no common stock equivalents outstanding.outstanding.
 
(E)(F) Research and Development Costs
 
The Company expenses all research and development costs as incurred for which there is no alternative future use. These costs also include the expensing of employee compensation and employee stock based compensation.
 
(F)(G) Income Taxes
 
Income taxes are provided based upon the liability method of accounting pursuant to Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes” (hereinafter “SFAS No. 109”).  Under this approach, deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end. A valuation allowance is recorded against the deferred tax asset if management does not believe the Company has met the “more likely than not” standard imposed by SFAS No. 109 to allow recognition of such an asset.
 
6
CHINESE MANUFACTURERS ONLINE CORP.
(A DEVELOPMENT STAGE COMPANY)
MARCH 31, 2008
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(G)(H) Stock-Based Compensation
 
The Company has adopted the provisions of SFAS No. 123R and related interpretations as provided by SAB 107.  As such, compensation cost is measured on the date of grant at their fair value.  Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant.
 
Common stock, stock options and common stock warrants issued to other than employees or directors are recorded on the basis of their fair value, as required by SFAS No. 123(R), which is measured as of the date required by EITF Issue 96-18, “Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services.” In accordance with EITF 96-18, the stock options or common stock warrants are valued using the Black-Scholes option pricing model on the basis of the market price of the underlying common stock on the “valuation date,” which for options and warrants related to contracts that have substantial disincentives to non-performance is the date of the contract, and for all other contracts is the vesting date. Expense related to the options and warrants is recognized on a straight-line basis over the shorter of the period over which services are to be received or the vesting period. Where expense must be recognized prior to a valuation date, the expense is computed under the Black-Scholes option pricing model on the basis of the market price of the underlying common stock at the end of the period, and any subsequent changes in the market price of the underlying common stock up through the valuation date is reflected in the expense recorded in the subsequent period in which that change occurs.

(H) Business Segments(I) Foreign Currency Translation

The financial statements of the Company's foreign subsidiary have been translated into U.S. dollars in accordance with SFAS No. 52, Foreign Currency Translation (SFAS 52). All balance sheet accounts have been translated using the exchange rate in effect at the balance sheet date. Income statement amounts have been translated using an appropriately weighted average exchange rate for the year. The translation gains and losses resulting from the changes in exchange rates during 2008 have been reported in accumulated other comprehensive income, except for gains and losses resulting from the translation of intercompany receivables and payables, which are included in earnings for the period.

 
The Company has two subsidiaries, Chinese Manufacturers Group and United Industries Group.  These two subsidiaries have no activities since inception.
6
 
(I)
CHINESE MANUFACTURERS ONLINE CORP.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2008
(Unaudited)
(J) Recent Accounting Pronouncements
 
In December 2007, the Financial Accounting Standards Board (FASB) issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements – an amendment of ARB No. 51”.  This statement improves the relevance, comparability, and transparency of the financial information that a reporting entity provides in its consolidated financial statements by establishing accounting and reporting standards that require; the ownership interests in subsidiaries held by parties other than the parent and the amount of consolidated net income attributable to the parent and to the noncontrolling interest be clearly identified and presented on the face of the consolidated statement of income, changes in a parent’s ownership interest while the parent retains its controlling financial interest in its subsidiary be accounted for consistently, when a subsidiary is deconsolidated, any retained noncontrolling equity investment in the former subsidiary be initially measured at fair value, entities provide sufficient disclosures that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners.  SFAS No. 160 affects those entities that have an outstanding noncontrolling interest in one or more subsidiaries or that deconsolidate a subsidiary.  SFAS No. 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. Early adoption is prohibited. The adoption of this statement is not expected to have a material effect on the Company's financial statements.
In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133” (SFAS (SFAS 161). This statement is intended to improve transparency in financial reporting by requiring enhanced disclosures of an entity’s derivative instruments and hedging activities and their effects on the entity’s financial position, financial performance, and cash flows. SFAS 161 applies to all derivative instruments within the scope of SFAS 133, “Accounting for Derivative Instruments and Hedging Activities” (SFAS 133) as well as related hedged items, bifurcated derivatives, and nonderivative instruments that are designated and qualify as hedging instruments. Entities with instruments subject to SFAS 161 must provide more robust qualitative disclosures and expanded quantitative disclosures. SFAS 161 is effective prospectively for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application permitted. We are currently evaluating the disclosure implications of this statement.

In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles.” SFAS No. 162 identifies the sources of accounting principles and provides entities with a framework for selecting the principles used in preparation of financial statements that are presented in conformity with GAAP. The current GAAP hierarchy has been criticized because it is directed to the auditor rather than the entity, it is complex, and it ranks FASB Statements of Financial Accounting Concepts, which are subject to the same level of due process as FASB Statements of Financial Accounting Standards, below industry practices that are widely recognized as generally accepted but that are not subject to due process. The Board believes the GAAP hierarchy should be directed to entities because it is the entity (not its auditors) that is responsible for selecting accounting principles for financial statements that are presented in conformity with GAAP. SFAS 162 is effective 60 days following the SEC’s approval of PCAOB Auditing Standard No. 6, Evaluating Consistency of Financial Statements (AS/6). The adoption of FASB 162 is not expected to have a material impact on the Company’s financial position.

In May 2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee Insurance Contracts-an interpretation of FASB Statement No. 60.” Diversity exists in practice in accounting for financial guarantee insurance contracts by insurance enterprises under FASB Statement No. 60, Accounting and Reporting by Insurance Enterprises. This results in inconsistencies in the recognition and measurement of claim liabilities. This Statement requires that an insurance enterprise recognize a claim liability prior to an event of default (insured event) when there is evidence that credit deterioration has occurred in an insured financial obligation. This Statement requires expanded disclosures about financial guarantee insurance contracts. The accounting and disclosure requirements of the Statement will improve the quality of information provided to users of financial statements.  SFAS 163 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. The adoption of FASB 163 is not expected to have a material impact on the Company’s financial position.
7
CHINESE MANUFACTURERS ONLINE CORP.
(A DEVELOPMENT STAGE COMPANY)
MARCH 31, 2008
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(J)(K) Revenue Recognition
 
The Company recognizes revenue from product sales when the products are shipped and title passes to customers.  Outbound shipping charges are included in net sales with the corresponding cost included in cost of sales.  Other service revenue is recognized when services are performed and billable.  Since the establishment of Chinese Manufacturers Online (Caribbean) Limited and the sign shop in Edison , New Jersey, revenue is also recognized from direct sales of products to CMO’s dealers and customers when the products are shipped and title passes and collectability is resonably assured.
 
(K)(L) Fair Value of Financial Instruments
 
The Company's financial instruments as defined by Statement of Financial Accounting Standards No. 107, "Disclosures about Fair Value of Financial Instruments," include cash, accounts payable and accrued expenses.  All such instruments are accounted for on a historical cost basis, which, due to the short maturity of these financial instruments, approximates fair value at SeptemberJune 30, 2007.2008.
 
(L)
7
CHINESE MANUFACTURERS ONLINE CORP.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2008
(Unaudited)
 (M) Property and Equipment
 
The Company values property and equipment at cost and depreciates these assets using the straight-line method over their expected useful life. The Company uses a three year life for software and five year life for computer equipment and a seven year life for furniture and equipment.
 
(M)(N) Concentration of Credit Risk
 
The Company at times has cash in banks in excess of FDIC insurance limits.  At March 31,June 30, 2008 and December 31, 2007, the Company had $281,980$0 and $451,551 in excess of FDIC insurance limits, respectively.

(O) Intangible Assets

The Company adopted SFAS No. 142, Goodwill and Other Intangible Assets and, as required, the Company does not amortize indefinite lived intangible assets. Intangible assets that do not have indefinite lives are amortized over the useful lives and reviewed for impairment in accordance with SFAS no. 144.
(P) Reclassification
Certain amounts from prior period have been reclassified to conform to the current period presentation.
NOTE 2 BUSINESS SEGMENTS
The Company, (CMO) has three subsidiaries, Chinese Manufacturers Group (CMG) and United Industries Group (UIG), and Chinese Manufacturers Online (Caribbean) Ltd. (TCMP-CMO).   Chinese Manufacturers Group and United Industries Group have had no activities since inception.  TCMP-CMO is an overseas subsidiary in the Republic of Trinidad and Tobago.  The TCMP-CMO began its operation on May 16, 2008.

The Company has changed their operating segments in 2008 as a result of a change of the internal organization structure by management.  Each segment operates exclusively.  The Company’s CMO segment provides online website B-to-B operational services to international buyers to reach manufacturers and their product information as well as other trading businesses.  The Company’s Sign Store segment provides regular signage and artistic designs to its customers while assisting the Company to expand its distribution business to local sign stores.  The Company’s (TCMP-CMO) segment provides importing and wholesale services to a distribution network within Trinidad and Tobago. The accounting policies of the segments are the same as described in the summary of significant accounting policies. There are no inter-segment sales. During 2007, the Company only had one segment, CMO.
For the Six Months Ended June 30, 2008 CMO  SIGN STORE  TCMP – CMO  Total 
Revenue   $23,251  $18,248  $32,717  $74,216 
Loss from operations  (793,218)   (23,020)   (46,750)   (862,988) 
Depreciation and amortization    1,724   -   -   1,724 
-Equipment and intangible assets  14,705   17,737   -   32,442 
-Deferred charges and debt discount  -   -   -   - 
Interest expense  -   -   -   - 
Assets    146,602   17,737   83,111   247,450 
Capital Expenditures    -   24,000   -   24,000 
                 

NOTE 3STOCKHOLDERS’ EQUITY
 
 
8
CHINESE MANUFACTURERS ONLINE CORP.
(A DEVELOPMENT STAGE COMPANY)
MARCH 31, 2008
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 2STOCKHOLDERS’ DEFICIT
(A) Common Stock Issued for Cash
For the twelve months ending December 31, 2007, the Company issued 626,000 shares of common stock for cash of $156,500 at the price of 0.25 per share and 1,474,000 shares of common stock for cash of $737,000 at the price of $0.50 per share.
(B) Common Stock Issued for Services
 
For the twelve months ending December 31, 2007, the Company issued 7,900,000 of common stock at a fair value of $0.25 per share to its board members for service valued at $1,975.000.  The value of the shares will be amortized over the service period of six months. As of December 31, 2007,For the Company has recognized $1,616,801 of stock compensation expense.  As of March 31,six months ended June 30, 2008, the Company has recognized $ 1,866,667$358,199 of stock compensation expense.
 
(D)Preferred Stock
8
 
The Company is authorized to issue 10,000,000 shares of $0.001 per value preferred stock.  As of March 31,CHINESE MANUFACTURERS ONLINE CORP.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2008 there are no shares of preferred stock outstanding.
(Unaudited)
 
(D) In-Kind Contribution(B) Cancellation of Subscription Receivable

On May 1, 2008, the Board of Directors accepted a cancellation of 20,000 share subscription from CMO’s former Chief Marketing Officer, Dr. Moritz, under the name of his wife, Ms. Ingrid Moritz.
 
During the twelve months ended December 31, 2007, the company recorded $67,500 of in-kind contribution by its principal stockholder.
NOTE 34  COMMITMENTS AND CONTINGENCIES
 
(A) Employment Agreement
 
On August 1, 2007, the Company entered into a one year employment agreement with its Chief Executive Officer.  The agreement calls for an annual salary of $135,000 in 2007 and an annual salary of $250,000 in 2008 plus all reasonable benefits as the company may offer to employees.  In addition, he will receive an annual bonus of 2% of the annual net profit during the term of the agreement.agreement
9
CHINESE MANUFACTURERS ONLINE CORP.
(A DEVELOPMENT STAGE COMPANY)
MARCH 31, 2008
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

On August 1, 2007, the Company entered into a one year employment agreement with its Chief Marketing Officer.  The agreement calls for an annual salary of $100,000 for the first four months and $200,000 for the last eight months plus all reasonable benefits as the company may offer to employees.  In addition, he will receive an annual bonus of 1% of the annual net profit during the term of the agreement.   The agreement was terminated on April 30, 2008 when the CMO resigned.
 
(B) Operating Agreement
 
On July 9, 2007, the Company entered into a one-year lease agreement for office space.  The lease calls for monthly payment of $1,650 plus utilities.  On June 4, 2008 this lease was extended through July 8, 2009.

On April 1, 2008, the Company purchased a sign store and continues the lease at the existing store space for seventeen months, ending on August 30, 2009.  These lease calls for monthly payment of $1,800 plus utilities.

On May 15, 2008, the Company’s subsidiary in the Republic of Trinidad and Tobago entered into a one-year lease agreement for office space.  The lease calls for monthly payment of $2,300 plus utilities.
 

(C) Board of Directors Agreement
 
During the year ending December 31, 2007, the Company issued 7,900,000 of common stock at a fair value of $0.25 per share to its board members for service valued at $1,975.000.  The value of the shares will be amortized over the service period of six months and issuance of shares is contingent upon successfully completing a six month term.  As of December 31, 2007, the Company has recognized $1,616,801 of stock compensation expense asexpense. As of March 31,June 30, 2008, the Company has recognized $1,866,667$1,975,000 of stock compensation expense.
 
(D) Cooperate Business Contract
 
On February 15, 2008 CMO entered into a cooperative business contract with a consultant to conduct marketing and promotion sales activity in buying of Chinese manufactured products and marketing and selling them to both the private and public sectors in the Trinidad and Tobago market.  CMO will formformed a new business entity called TCMP – CMO in Trinidad.  CMO owns 100% of the newly formed business (TCMP-CMO) and the consultant holds no ownership interest.  The new entity will conduct all business under the joint effort with the consultant.  This agreement is effective until December 31, 2019.  CMO will receiveshare in 70% of the profit/loss associates with this contract.  The consultant will receiveshare in 30% of the profit /loss associates with this contract.

 
109
 
CHINESE MANUFACTURERS ONLINE CORP.
(A DEVELOPMENT STAGE COMPANY)
MARCH 31, 2008AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2008
(Unaudited)
 
(E) Contractor Agreements
On February 14, 2008 CMO entered into contractor agreements with two contractors to promote the Company’s trading, printing and website related businesses in the U.S.  The agreements call for an initial incentive of 30% commission paid to each contractor based on net profit created in the U.S. for the first three months from the effective date of the agreements.  After the first three months, CMO will pay commission based on the following schedule; 20% for monthly net profit between $1 and $5,000, 25% for monthly net profit between $5,001 and $10,000, 30% for monthly net profit between $10,001 and $20,000 and 35% for monthly net profit greater than $20,000.  For the six months ended June 30, 2008 no net profits were reported, therefore no commissions were accrued or paid.

NOTE 5   BUSINESS ACQUISITION

On April 1, 2008, the Company acquired a sign store located at Edison, NJ for cash of $24,000.

Purchase price$  24,000
Accounts receivable (net)$  3,588
Inventory2,675
Furniture and fixtures3,850
Goodwill13,387
   Net assets acquired$  24,000
NOTE 46   RELATED PARTY TRANSACTIONS
 
During 2007, the Company was engaged with a marketing and information technology support company in China.  One of the Company’s directors is also the president of this marketing and information technology support company. During 2007, the company and the related party agreed to terminate the agreement and the related party agreed to return $79,052.  A total of $116,000 was paid for services performed for the Company.  At year end it was determined that only $36,948 worth of services was earned due to related party conflicts.  At March 31,June 30, 2008 and December 31, 2007 $50,015 and $79,052 is recorded as a receivable from this marketing and information technology support company.
 
During 2007, the company advanced the Chief Marketing Officer $7,500 as part of a relocation package. As at March 31, 2008 $6,650 was outstanding. The balance was repaid when the CMO resigned on April 30, 2008.
 

NOTE 5  SUBSEQUENT EVENT7   GOING CONCERN

Purchase of A Sign Store
Effective May 9, 2008,As reflected in the accompanying condensed consolidated financial statements, the Company purchasedhas a net loss of $862,988 and used cash in operations of $440,650 for the assetssix months ended June 30, 2008. This raises substantial doubt about the Company’s ability to continue as a going concern. The ability of Accugraphic Sign, Inc.the Company to continue as a going concern is dependent upon the Company’s ability to increase revenue and paid $24,000 in cash for allraise additional capital. The financial statements do not include any adjustments that might be necessary if the tangible and intangible assets of Accugraphic Sign, Inc.
Company is unable to continue as a going concern.
 
 
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ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
Overview

We were founded December 9, 2005 by Michael Raleigh.  On July 2, 2007, all of the issued and outstanding shares were purchased by Mr. Guoyou Lin who became the Company’s Chairman and President and amended its business plan and began to focus its operations on an internet marketing website set up for the purpose of connecting Chinese manufacturers with international companies and intends to conduct business as a global internet communications company.  We have changed our name to Chinese Manufacturers Online, Inc. (“CMO”), to better reflect our new business plan.

Plan of Operation

Since January 2008, the leadership team has been focused on its business mission to use the company’s relationships and strength in manufacturing to promote its international trade record while offering members access to the website free of charge to increase its international influence.  Using the same business strategy, the company has also been monitoring the trading activities in Trinidad and Tobago.  Over the next six months, we expect trading revenue of $400,000.  If we meet our growth expectations, there will be no need for second round of financing.  However, if our expectations are not met, we will need additional cash to continue operating.  We do not know how we will obtain the needed financing but it may be in the form of a line of credit or a second round fund raising.

On April 1, 2008, we purchased a sign store to promote our distribution business in Trinidad and Tobago.  The sign store is located in Edison, New Jersey.  We paid $24,000 in cash for the sign business. A copy of the contract to purchase the sign store is attached as exhibit 10.1.

On May 16, 2008 we incorporated Chinese Manufacturers Online (Caribbean) Limited (TCMP-CMO), a wholly owned subsidiary, in Trinidad and Tobago.  This subsidiary will be used to develop a distribution network throughout Trinidad and Tobago to distribute electronic products to wholesale distributors. A copy of the certificate of incorporation of Chinese Manufacturers Online (Caribbean) Limited (TCMP-CMO) is attached as exhibit 3.1.

During the next twelve months, we expect to take the following steps in connection with the development of our business and the implementation of our plan of operations:
 
-        Focus our major business on international trade, especially in Trinidad and Tobago, South America, Europe and Canada;
-        Get involved in such wide area trading activities and improve our online business and increase the number of internet visitors;
-        Return to our primary business plan: to use our website to work with our offline trade show center to join international manufacturers and buyers together.

In
Results of Operations
Three months ended June 30, 2008 compared to three months ended June 30, 2007
Net Revenues and Cost of Goods Sold
Net Revenues increased from $0 for the near future,three months ended June 30, 2007 to $72,062 for the company has no planthree months ended June 30, 2008.  This is an increase of $72,062 from the previous years three months ended June 30.  This increase is due, in part, to purchase or sell any significant plantour acquisition of a sign store.  The sign store generated $18,248 of revenue.  The increase is also attributable to TCMP business in Trinidad and equipment.Tobago generating revenue of $32,717 and our efforts to grow our business generated revenue of an additional $23,251.
Cost of goods sold for the three months ended June 30, 2008 increased to $103,239 from $0 for the three months ended June 30, 2007. This increase is attributable to our increase in revenues and the acquisition of our sign store. Additionally, the incorporation of our wholly owned subsidiary in Trinidad and Tobago contributed to this increase in cost of goods sold.
Operating Expenses
Our Total Operating Expenses increased from $250 for the three months ended June 30, 2007 to $419,152 for the three months ended June 30, 2008.  This is an increase of $418,902 and was incurred based on the growth of the business and the increase in revenues during the three months ended June 30, 2008 compared to the same period in 2007.  The increase in operating expenses is because of the increase in revenues.
Net Loss
Our Net Loss for the period increased by $345,840 from a loss of $250 during the three months ended June 30, 2007 as compared to a loss of $346,090 for the three months ended June 30, 2008.  $108,333 of this net loss was attributable to non-cash stock-based compensation.  The remaining loss was due to us beginning to grow our business and acquiring the sign business that will enable us to further carry out our business plan.

 
1211
 
Other than one or two sales persons, the company is not planning to increase it employee base significantly in the next three months. However, after three months, the company may need to add some local employees under the company’s subsidiary in Trinidad and Tobago, Chinese Manufacturers Online (Caribbean), LLC.

In the next 12 months, the company is expected to get more involvementinvolved in trading with Trinidad and Tobago government and local business entities. In Europe and Canada, the company is expected to enlarge its printing and trading businesses significantly.  After periodically evaluations, the company may plan to operate its own American trade show centercenter.  These expansion plans require that we have cash to fund.  However, at this time, we only have sufficient cash on hand to fund the next two months of our operations.  If we are unable to generate sufficient revenue or raise the necessary cash we will be unable to pursue these plans of expansion and we may even be forced to cease operating.

Liquidity and Capital Resources
 
Our primary source of liquidity as of March 31,June 30, 2008 is our cash on hand.  Our cash on hand as of March 31,June 30, 2008 was $390,428.$92,383.  Our current assets totaled $468,267$206,457 on March 31,June 30, 2008.  Our current liabilities were $126,250$143,190 on MarchJune 30, 2008.  As of December 31, 2008.2007, we had $557,033 cash on hand, current assets of $646,590 and total liabilities of $53,970.

We currently do not have enough cash to satisfy our minimum cash requirements for the next twelve months.  This raises substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent on our ability to raise additional capital. The financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

We will continue to evaluate alternative sources of capital to meet our requirements, including other asset or debt financing, issuing equity securities and entering into financing arrangements.  There can be no assurance, however, that any of the contemplated financing arrangements described herein will be available and, if available, can be obtained on terms favorable to us.
 
Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as “special purpose entities” (SPEs).

Critical Accounting Policies
 
The Company’s financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States (“GAAP”). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenue and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use if estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.
 
While all these significant accounting policies impact its financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on our consolidated financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause effect on our results of operations, financial position or liquidity for the periods presented in this report.
 
The Company recognizes revenue from product sales on the net basis when the products are shipped from the manufacturer.  Other service revenue is recognized when services are performed and billable.

The Company has adopted the provisions of SFAS No. 123R and related interpretations as provided by SAB 107.  As such, compensation cost is measured on the date of grant at their fair value.  Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant.

Common stock, stock options and common stock warrants issued to other than employees or directors are recorded on the basis of their fair value, as required by SFAS No. 123(R), which is measured as of the date required by EITF Issue 96-18, “Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services.” In accordance with EITF 96-18, the stock options or common stock warrants are valued using the Black-Scholes option pricing model on the basis of the market price of the underlying common stock on the “valuation date,” which for options and warrants related to contracts that have substantial disincentives to non-performance is the date of the contract, and for all other contracts is the vesting date. Expense related to the options and warrants is recognized on a straight-line basis over the shorter of the period over which services are to be received or the vesting period. Where expense must be recognized prior to a valuation date, the expense is computed under the Black-Scholes option pricing model on the basis of the market price of the underlying common stock at the end of the period, and any subsequent changes in the market price of the underlying common stock up through the valuation date is reflected in the expense recorded in the subsequent period in which that change occurs.
 
 
1312
 
Recent Accounting Pronouncements

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”. The objective of SFAS 157 is to increase consistency and comparability in fair value measurements and to expand disclosures about fair value measurements.  SFAS 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS 157 applies under other accounting pronouncements that require or permit fair value measurements and does not require any new fair value measurements. The provisions of SFAS No. 157 are effective for fair value measurements made in fiscal years beginning after November 15, 2007.  The adoption of this statement is not expected to have a material effect on the Company's future reported financial position or results of operations.
In February 2007, the Financial Accounting Standards Board (FASB) issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities – Including an Amendment of FASB Statement No. 115”.  This statement permits entities to choose to measure many financial instruments and certain other items at fair value. Most of the provisions of SFAS No. 159 apply only to entities that elect the fair value option. However, the amendment to SFAS No. 115 “Accounting for Certain Investments in Debt and Equity Securities” applies to all entities with available-for-sale and trading securities. 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 a fiscal year that begins on or before November 15, 2007, provided the entity also elects to apply the provision of SFAS No. 157, “Fair Value Measurements”. The adoption of this statement is not expected to have a material effect on the Company's financial statements. 
 
In December 2007, the Financial Accounting Standards Board (FASB) issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements – an amendment of ARB No. 51”.  This statement improves the relevance, comparability, and transparency of the financial information that a reporting entity provides in its consolidated financial statements by establishing accounting and reporting standards that require; the ownership interests in subsidiaries held by parties other than the parent and the amount of consolidated net income attributable to the parent and to the noncontrolling interest be clearly identified and presented on the face of the consolidated statement of income, changes in a parent’s ownership interest while the parent retains its controlling financial interest in its subsidiary be accounted for consistently, when a subsidiary is deconsolidated, any retained noncontrolling equity investment in the former subsidiary be initially measured at fair value, entities provide sufficient disclosures that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners.  SFAS No. 160 affects those entities that have an outstanding noncontrolling interest in one or more subsidiaries or that deconsolidate a subsidiary.  SFAS No. 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. Early adoption is prohibited. The adoption of this statement is not expected to have a material effect on the Company's financial statements.

On March 19, 2008, the Financial Accounting Standards Board (FASB) issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities, an Amendment of FASB Statement No. 133 (“SFAS 161”).  SFAS 161 is intended to improve transparency in financial reporting by requiring enhanced disclosures of an entity’s derivative instruments and hedging activities and their effects on the entity’s financial position, financial performance and cash flows.  SFAS 161 was issued in response to constituents’ concerns regarding the adequacy of existing disclosures of derivative instruments and hedging activities.  SFAS 161 applies to all derivative instruments within the scope of SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities (“SFAS 133”).  It also applies to non-derivative hedging instruments and all hedged items designated and qualifying as hedges under SFAS 133.

In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles.” SFAS No. 162 identifies the sources of accounting principles and provides entities with a framework for selecting the principles used in preparation of financial statements that are presented in conformity with GAAP. The current GAAP hierarchy has been criticized because it is directed to the auditor rather than the entity, it is complex, and it ranks FASB Statements of Financial Accounting Concepts, which are subject to the same level of due process as FASB Statements of Financial Accounting Standards, below industry practices that are widely recognized as generally accepted but that are not subject to due process. The Board believes the GAAP hierarchy should be directed to entities because it is the entity (not its auditors) that is responsible for selecting accounting principles for financial statements that are presented in conformity with GAAP. SFAS 162 is effective 60 days following the SEC’s approval of PCAOB Auditing Standard No. 6, Evaluating Consistency of Financial Statements (AS/6). The adoption of FASB 162 is not expected to have a material impact on the Company’s financial position.
In May 2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee Insurance Contracts-an interpretation of FASB Statement No. 60.” Diversity exists in practice in accounting for financial guarantee insurance contracts by insurance enterprises under FASB Statement No. 60, Accounting and Reporting by Insurance Enterprises. This results in inconsistencies in the recognition and measurement of claim liabilities. This Statement requires that an insurance enterprise recognize a claim liability prior to an event of default (insured event) when there is evidence that credit deterioration has occurred in an insured financial obligation. This Statement requires expanded disclosures about financial guarantee insurance contracts. The accounting and disclosure requirements of the Statement will improve the quality of information provided to users of financial statements.  SFAS 163 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. The adoption of FASB 163 is not expected to have a material impact on the Company’s financial position.
ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicableSmaller Reporting Companies are not required to smaller reporting companies.
provide this information.

ITEM 4.  CONTROLS AND PROCEDURES

Within the 90 days prior to the date of this report, the Company’s management, including the Chief Executive Officer and the Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Exchange Act Rules 13a-14(c) and 15d-14(c).  Based upon the evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective, in all material respects, to ensure that the information required to be disclosed in the Company’s periodic SEC filings is recorded, processed, summarized and reported as and when required.

There have been no significant changes in the Company’s internal controls or in other factors that could significantly affect internal controls subsequent to the date the Chief Executive Officer and the Chief Financial Officer carried out this evaluation.
 
 
1413
 
 
PART II - OTHER INFORMATION
 
ITEM 1. LEGAL PROCEEDINGS.
 
Currently we are not aware of any litigation pending or threatened by or against the Company.
 
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.
 
The letter dated March 18, 2008, Mr. Guo resigned from the Board of Directors.  On April 30,1, 2008, we acquired a sign store in Edison, New Jersey for cash of $24,000.

On May 16, 2008, we incorporated Chinese Manufacturers Online (Caribbean) Limited (TCMP-CMO) in Trinidad and Tobago.  This is our wholly-owned subsidiary and it will facilitate the Boarddistribution of Directors approved his resignationour products to wholesale distributors in Trinidad and recorded it in the Board of Directors minutes.Tobago.
 
ITEM 6. EXHIBITS AND REPORTS OF FORM 8-K.
 
(a)           Exhibits
3.1 Certificate of incorporation of Chinese Manufacturers Online (Caribbean) Limited (TCMP-CMO)
10.1 Contract to purchase sign store
 
31.1 Certifications pursuant to Section 302 of Sarbanes Oxley Act of 2002
 
32.1 Certifications pursuant to Section 906 of Sarbanes Oxley Act of 2002
 
(b)          Reports of Form 8-K  
 
None. 
 
 
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SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 

 CHINESE MANUFACTURERS ONLINE CORP.
  
Date:  MayAugust 19, 2008 By:  /s/ Tyrol Tang
  Tyrol Tang
  
President, Chief Executive Officer
and Chief Financial Officer 

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