ChinaSecurities

Acorn is a leading integrated multi-platform marketing company in China, operating China's largest TV direct sales business in terms of revenues and TV air time and a nationwide off-TV distribution network. Acorn's TV direct sales platform consists of airtime purchased from both national and local channels. In addition to marketing and selling through its TV direct sales programs and its off-TV nationwide distribution network, Acorn also offers consumer products and services through catalogs, outbound telemarketing center and an ecommerce website. Both platforms sell featured product categories, such as electronic learning devices, consumer electronics, cell phones, cosmetics, and health and wellness products. Acorn International was founded in 1998.

Founded by Mr. Robert Roche and Mr. Don Yang in 1998, we were one of the first companies in China to use TV direct sales programs, often referred to as TV infomercials, in combination with a nationwide distribution network to market and sell products and services to consumers. Today we are China's largest TV direct sales operator both in air time purchased and revenues generated in 2006 according to Euromonitor.

Headquartered in Shanghai, we now operate two call centers and four warehouses in China and offer both proprietary and third party brands on our TV direct sales and ground distribution platforms. Over the years, we have also expanded into other forms of direct selling, such as catalogs and outbound calls, to further strengthen our promotional efforts and generate additional revenue opportunities from existing customer base. Leveraging our vertically integrated direct sales operations, which include product development, TV and other direct sales and marketing, call center operations, and order fulfillment and delivery, combined with a nationwide distribution network, we are able to effectively reach out to consumers and maximize sales throughout China. At the end of 2007, we generated $262.1 million in total revenues with $184.3 million coming from our TV direct sales platform and $77.8 million coming from our nationwide distribution platform.

In selecting new products and services, we seek to identify offerings in underserved market segments with potential national appeal for which we believe our sales platforms and marketing and branding expertise can create value. Our TV direct sales programs allow us to promote specific products and services by highlighting their unique value to consumers as well as creating brand awareness.

As China's TV direct sales only accounts for 0.1% of the Country's total retail sales and as China continues to exhibit healthy economic growth, we believe we are well positioned to capitalize on the growth in this area with both our on air and off air retail presence. Our leading market position makes us an ideal partner for the promotion and distribution of new products and services in China.

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