Filed pursuant to Rule 424(b)(3)
Registration No. 333-185759

PROSPECTUS SUPPLEMENT
(To prospectus dated March 27, 2013)

ASIA ENTERTAINMENT & RESOURCES LTD.

SUBSCRIPTION RIGHTS TO PURCHASE UP TO 20,225,582 ORDINARY SHARES
ISSUABLE UPON EXERCISE OF SUBSCRIPTION RIGHTS

 

Asia Entertainment & Resources Ltd. is granting at no charge to the holders of its ordinary shares, par value $0.0001 per share, transferable subscription rights to purchase an aggregate of 20,225,582 ordinary shares at a subscription price of $3.00 per share. Each holder will receive one subscription right for each two ordinary shares owned on June 3, 2013, the record date. Each subscription right will entitle its holder to purchase one ordinary share at the subscription price. Fractional rights or shares of our ordinary shares will not be issued in this rights offering.

The purpose of this rights offering is to raise equity capital in a cost-effective manner that allows holders of our ordinary shares on the record date to participate. The net proceeds of the rights offering will be used to pay off outstanding indebtedness owed to certain of our shareholders. See “Use of Proceeds.” We expect the total gross proceeds of this rights offering and the standby purchase, described below, to be $63.5 million. Although we are only issuing 20,225,582 rights in this rights offering (for total gross proceeds of approximately $60.7 million if all of the rights were exercised), as a result of (i) the Standby Purchasers (as defined below) having agreed with us not to exercise any rights issued to them in this rights offering, and (ii) certain Standby Purchasers agreeing to purchase 34% of the shares sold to them pursuant to the standby purchase at a price of $4.50 per share, as more fully described below, the total gross proceeds of this rights offering and the standby purchase is expected to be $63.5 million.

We have entered into a standby purchase agreement with certain persons, including Lam Man Pou, our chairman, Vong Hon Kun, our chief operating officer, Lam Chou In, Zheng An Ting, So Kam Tai, Au Chun Yin, Chan Fok Hoi, Chan Kai Ian, Sin Kam Chan, Leong Wai Meng and Cheung Mee Mo (the “Standby Purchasers”), whereby the Standby Purchasers have agreed to purchase from us a number of ordinary shares having a value equal to the aggregate subscription price we would have received with respect to the shares underlying all rights not exercised by all holders in the rights offering, which we refer to as the standby purchase, upon the same terms as the other holders, except the subscription price for such shares with respect to purchases made by Messrs. Lam Man Pou and Vong Hon Kun will be $4.50 per share. The Standby Purchasers have agreed not to exercise any rights granted to them in this rights offering. Messrs. Lam and Vong have also agreed not to sell, assign or transfer the ordinary shares purchased pursuant to the standby purchase agreement for a period of two years following the purchase date without our prior written consent. Consummation of the standby purchase is subject to usual and customary closing conditions. The Standby Purchasers collectively own approximately 40.1% (16,580,622 total shares) of our outstanding ordinary shares as of the date hereof.

The subscription rights will be granted and exercisable beginning on or about June 6, 2013. The subscription rights will expire and will have no value if they are not exercised prior to 5:00 p.m., New York City time, on June 21, 2013, the expiration date of this rights offering. We have the option to extend this rights offering and the period for exercising your subscription rights for any reason, including if we determine that changes in the market price of our ordinary shares warrant an extension or if we decide to give investors more time to exercise their subscription rights in this rights offering, although we do not presently intend to do so. All exercises of subscription rights shall be irrevocable. You should carefully consider whether or not to exercise your subscription rights before the expiration date and in doing so you should consider all of the information about us and this rights offering contained or incorporated by reference in this prospectus supplement and the accompanying prospectus, including the risk factors set forth or incorporated herein and therein. Neither we nor the dealer manager is making any recommendations as to whether or not you should exercise, sell or let lapse your subscription rights. We reserve the right to cancel the rights offering at any time before the expiration of the rights offering, for any reason. In the event the rights offering is cancelled, all subscription payments received by the subscription agent will be returned promptly, without interest or penalty, and the sale to the standby purchaser will not be completed. Continental Stock Transfer & Trust Company will serve as the subscription agent in the rights offering.

There is no minimum number of shares that we must sell in order to complete the rights offering. Holders who do not participate in the rights offering will continue to own the same number of shares. Holders who do not subscribe for the greatest number of shares permitted in the rights offering will own a smaller percentage of the total ordinary shares outstanding if and to the extent other holders fully exercise their subscription rights. Rights that are not exercised by the expiration date will expire and have no value. The subscription rights may be sold or transferred.

We have retained Sterne, Agee & Leach, Inc., or Sterne Agee, to act as sole dealer manager in connection with this rights offering. Sterne Agee has no obligation to purchase, or procure purchases for, our ordinary shares offered hereby and is not acting as an underwriter in this rights offering. We have agreed to pay Sterne Agee a fee equal to 2.5% of the gross proceeds received in connection with this rights offering upon successful completion of this rights offering. See “ Plan of Distribution ” for a discussion of our agreement with Sterne Agee.

Our ordinary shares are traded on the Nasdaq Global Market under the symbol “AERL”. The closing price of our ordinary shares on Nasdaq on June 3, 2013 was $4.20 per share. You are urged to obtain current market quotations of our ordinary shares before purchasing any of the shares underlying the rights being offered pursuant to this prospectus supplement and accompanying prospectus. The subscription rights have been approved to be listed on the Nasdaq Global Market under the symbol “AERLR”; however, we cannot assure you that a market for the rights will develop.

Our principal offices are located at Unit 605, East Town Building 16 Fenwick Street Wanchai, Hong Kong. Our telephone number at that address is (852) 2110-9133.

INVESTING IN OUR SECURITIES INVOLVES RISKS. YOU SHOULD CONSIDER CAREFULLY THE RISK FACTORS REFERRED TO IN THIS PROSPECTUS SUPPLEMENT ON PAGE S- 13 , IN THE PROSPECTUS ON PAGE 7 AND IN ITEM 3.D. OF OUR ANNUAL REPORT ON FORM 20-F FOR THE FISCAL YEAR ENDED DECEMBER 31, 2012, WHICH IS INCORPORATED BY REFERENCE HEREIN, BEFORE EXERCISING YOUR SUBSCRIPTION RIGHTS. OUR BOARD OF DIRECTORS AND THE DEALER MANAGER ARE NOT MAKING ANY RECOMMENDATION REGARDING YOUR EXERCISE OF SUBSCRIPTION RIGHTS.

Neither the Securities and Exchange Commission nor any state or other securities commission has approved or disapproved of these securities or determined if this prospectus supplement or the accompanying prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

Per Share		Per Share				Total (1)
Public offering price		$	3.00			$	60,676,746
Dealer Manager Fee		$	0.075			$	1,516,919
Proceeds, before expenses, to Asia Entertainment & Resources Ltd.		$	2.925			$	59,159,827

 

STERNE AGEE

 

Prospectus Supplement dated June 4, 2013

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Prospectus Supplement

		Page
ABOUT THIS PROSPECTUS SUPPLEMENT			S-ii
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS			S-iii
PROSPECTUS SUPPLEMENT SUMMARY			S-1
THE RIGHTS OFFERING			S-3
QUESTIONS AND ANSWERS ABOUT THE RIGHTS OFFERING			S-8
RISK FACTORS			S-13
USE OF PROCEEDS			S-16
THE RIGHTS OFFERING			S-17
CAPITALIZATION			S-25
MARKET PRICE OF AND DIVIDENDS ON OUR ORDINARY SHARES			S-26
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT			S-27
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES			S-28
PLAN OF DISTRIBUTION			S-30
LEGAL MATTERS			S-31
EXPERTS			S-31
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE			S-31
WHERE YOU CAN FIND MORE INFORMATION			S-32

Prospectus

		Page
ABOUT THIS PROSPECTUS			1
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS			2
PROSPECTUS SUMMARY			3
RISK FACTORS			7
RATIO OF EARNINGS TO FIXED CHARGES			8
USE OF PROCEEDS			8
CAPITALIZATION AND INDEBTEDNESS			8
DESCRIPTION OF ORDINARY SHARES			9
DESCRIPTION OF PREFERRED SHARES			9
DESCRIPTION OF SUBSCRIPTION RIGHTS			10
DESCRIPTION OF DEBT SECURITIES			11
DESCRIPTION OF THE 2011 INCENTIVE PLAN			20
SELLING SHAREHOLDERS			25
PLAN OF DISTRIBUTION			29
EXPENSES			33
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE			34
INDEMNIFICATION			35
LEGAL MATTERS			36
EXPERTS			36
WHERE YOU CAN FIND MORE INFORMATION			36
ENFORCEMENT OF CIVIL LIABILITIES			36

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PROSPECTUS SUPPLEMENT SUMMARY

This summary highlights certain information appearing elsewhere in this prospectus supplement or incorporated by reference into this prospectus supplement. For a more complete understanding of this offering and before making an investment decision, you should read the entire prospectus supplement, the accompanying prospectus carefully and the documents incorporated by reference herein, including the risk factors referred to in this prospectus supplement on page S- 13 and in the prospectus on page 7 , as well as the risk factors set forth in our Annual Report on Form 20-F filed on April 5, 2013 and the financial statements and notes thereto incorporated into this prospectus supplement by reference. Unless otherwise stated in this prospectus supplement or the accompanying prospectus or the context otherwise indicates:

Overview

Asia Entertainment & Resources Ltd. is a Cayman Islands exempted holding company that operates, through its subsidiaries and related VIP gaming promoters, four VIP gaming rooms in Macau (including the recently acquired Bao Li Gaming Promotion Limited (“Bao Li Gaming”) VIP gaming room on the Cotai strip in Macau). VIP gaming rooms are well appointed suites generally located within a large casino that provide luxury accommodations and privacy exclusively for gambling by high-tier gaming patrons. VIP gaming patrons are typically high-stakes gaming patrons who play VIP baccarat almost exclusively in dedicated VIP gaming rooms or designated casino areas. We generate revenue by receiving a percentage of net gaming wins. Prior to September 1, 2012, we generated revenue by receiving a commission of 1.25% of Rolling Chip Turnover.

The Company

Asia Entertainment & Resources Ltd. is a Cayman Islands exempted company incorporated on September 24, 2007 under the name “CS China Acquisition Corp.” We were incorporated for the purpose of acquiring an operating business that had its principal operations located in the People’s Republic of China, the Hong Kong Special Administrative Region and the Macau Special Administrative Region. On February 2, 2010, we consummated a business combination pursuant to which we acquired all of the outstanding capital stock of Asia Gaming & Resort Limited (“AGRL”), a Hong Kong corporation incorporated on May 2, 2007. AGRL is an investment holding company of subsidiaries that, through profit interest agreements with affiliated companies known as VIP gaming promoters, are entitled to receive all of the profits of the VIP gaming promoters from VIP gaming rooms operated by them in casinos at major hotels in Macau. As a result of the acquisition, AGRL is now our direct wholly owned subsidiary and its subsidiaries are our indirect wholly owned subsidiaries. We have no operations other than those of AGRL and its subsidiaries. Prior to the acquisition of AGRL, we had no operating business. At the time of the acquisition, we changed our name to “Asia Entertainment & Resources Ltd.”

Our principal executive offices are located at Unit 605, East Town Building, 16 Fenwick Street, Wanchai, Hong Kong and our telephone number is 852-2110-9133. The address of our registered office is PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands, and our registered office provider, Maples Corporate Services Limited, is located at the same address. Our website, which contains additional information about our company, can be accessed at: http://ir.aerlf.com/index.cfm , but that information or information that may be accessed through such website is not part of, or incorporated by reference into, this prospectus supplement or the accompanying prospectus.

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Recent Developments

On May 16, 2013, we entered into a non-binding memorandum of understanding whereby we intend to acquire all of the outstanding interests and operations of the VIP gaming room at Level 1 of Le Royal Arc Casino located in NAPE, Downtown Macau, promoted and operated by Mr. Wong Wing Yim (the “Seller”). The Seller promotes and operates the VIP gaming room which has six tables and is served by at least 500 agents. The VIP gaming room is operated under the Sociedade de Jogos de Macau S.A.’s concession. Subject to due diligence and customary closing conditions, we expect to close the transaction by June 30, 2013.

The purchase price to be paid by us to the Seller shall be equal to US$20 million in cash, US$10 million of which will be paid upon the closing of the acquisition and the remaining US$10 million to be paid upon the renewal or extension of the existing collaborator agreements to promote the VIP gaming room through at least December 31, 2014. Additionally, if the Seller and his network of agents achieve a rolling chip turnover of at least US$2.5 billion (the “Earnout Threshold”) in each of the twelve-month periods ending June 30, 2014, 2015 and 2016, the Seller would receive additional purchase consideration of US$13 million and 625,000 of our ordinary shares for each twelve month period that such rolling chip turnover minimum was met. In addition, for each incremental US$25 million in rolling chip turnover above the Earnout Threshold, the Seller shall be entitled to receive payment from us of US$130,000 in cash and 6,250 of our ordinary shares; provided, however, that in no event will the Seller be entitled to any additional payments in the event that the rolling chip turnover exceeds $5 billion. In addition, should the Seller achieve a Rolling Chip Turnover of at least $15 billion during the 36 month period ending June 30, 2016, then we will pay an additional $2,500,000 for every $1 billion in excess of $15 billion, up to a maximum of $12,500,000. Until June 30, 2016, the Seller shall provide a personal guarantee for any bad loans associated with the Seller’s operations prior to the closing of the acquisition. Should the acquisition be completed on or before June 15, 2013, then we will be entitled to all of the profits generated during the month of June 2013. Assuming we close the acquisition, which we cannot guarantee, we will have 40 tables in five VIP rooms.

Rolling chip turnover is used by casinos to measure the volume of VIP gaming room business transacted and represents the aggregate amount of bets gaming patrons make. Bets are wagered with “non-negotiable chips” and winning bets are paid out by casinos in so-called “cash” chips. “Non-negotiable chips” are specifically designed for VIP gaming patrons to allow casinos to calculate the commission payable to VIP gaming promoters. Commissions are paid based on the total amount of “non-negotiable chips” purchased by each gaming patron. VIP gaming promoters therefore require the gaming patrons to “roll,” from time to time, their “cash chips” into “non-negotiable” chips for further betting so that they may receive their commissions (hence the term “rolling chip turnover”). Through the VIP gaming promoters “non-negotiable chips” can be converted back into cash at any time. Betting using rolling chips, as opposed to using cash chips, is also used by the Macau Gaming Inspection and Coordination Bureau to distinguish between VIP table revenue and mass market table revenue.

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QUESTIONS AND ANSWERS ABOUT THE RIGHTS OFFERING

In order to properly exercise your subscription right, you must deliver the subscription payment and a properly completed rights certificate, or if you hold your rights through a broker, dealer, custodian bank or other nominee, complete and return to your record holder the form entitled “Beneficial Owner Election Form” or such other appropriate documents as are provided by your record holder related to your subscription right prior to the expiration of the rights offering. If you hold your shares in the name of a broker, custodian bank, dealer or other nominee who uses the services of the Depository Trust Company, or “DTC,” DTC will issue a number of subscription rights to which you are entitled to your nominee for each ordinary share you own on the record date.

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If delivering by Hand/Mail/Overnight Courier:
 
Continental Stock Transfer & Trust Company
17 Battery Place, 8 ^th Floor
New York, NY 10004
Attn: Corporate Actions Department
(917) 262-2378

Your delivery other than in the manner or to the address listed above will not constitute valid delivery.

FOR A MORE COMPLETE DESCRIPTION OF THE RIGHTS OFFERING, SEE “THE RIGHTS OFFERING” BEGINNING ON PAGE S- 17 .

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or other nominee with ordinary shares, electronically in registered, book-entry form only on our records or on the records of our transfer agent, Continental Stock Transfer & Trust Company, that you purchased pursuant to your subscription rights as soon as practicable after the rights offering has expired and all proration calculations, reductions, and additions contemplated by the terms of the rights offering have been effected.

If the rights offering is not fully subscribed, Messrs. Lam and Vong, along with the other Standby Purchasers, will increase their ownership percentage.

On June 3, 2013, the last practicable date before the filing of this prospectus supplement, Messrs. Lam and Vong, along with the other Standby Purchasers, collectively owned approximately 40.1% of our outstanding ordinary shares. As shareholders as of the record date, Messrs. Lam and Vong will have the right to subscribe for and purchase ordinary shares under the rights offering. In accordance with the proposed standby purchase agreement, Messrs. Lam and Vong, along with the other Standby Purchasers, agreed to purchase from us a number of ordinary shares having a value equal to the aggregate subscription price we would have received with respect to the shares underlying all rights not exercised by all holders in the rights offering. To the extent Messrs. Lam and Vong participate along with the other Standby Purchasers in the rights offering and other shareholders do not, they will increase their percentage of ownership in us.

Because we may terminate the offering at any time prior to the expiration date, your participation in the rights offering is not assured.

We do not intend, but have the right, to terminate the offering at any time prior to the expiration date. If we determine to terminate the offering, we will not have any obligation with respect to the subscription rights except to return any money received from subscribing shareholders promptly, without interest or deduction.

You will need to act promptly and to carefully follow the subscription instructions, or your exercise of rights may be rejected.

Shareholders who desire to purchase shares in the rights offering must act promptly to ensure that all required forms and payments are actually received by the subscription agent prior to 5:00 pm, New York City time, on June 21, 2013, the expiration date. If you are a beneficial owner of shares, you must act promptly to ensure that your broker, custodian bank or other nominee acts for you and that all required forms and payments are actually received by the subscription agent prior to the expiration date. We shall not be responsible if your broker, custodian or nominee fails to ensure that all required forms and payments are actually received by the subscription agent prior to the expiration date. If you fail to complete and sign the required subscription forms, send an incorrect payment amount, or otherwise fail to follow the subscription procedures that apply to your desired transaction the subscription agent may, depending on the circumstances, reject your subscription or accept it to the extent of the payment received. Neither we nor our subscription agent will undertake to contact you concerning, or attempt to correct, an incomplete or incorrect subscription form or payment. We have the sole discretion to determine whether a subscription exercise properly follows the subscription procedures.

You will not receive interest on subscription funds, including any funds ultimately returned to you promptly.

You will not earn any interest on your subscription funds while they are being held by the subscription agent pending the closing of this rights offering. In addition, if we cancel the rights offering, neither we nor the subscription agent will have any obligation with respect to the subscription rights except to return, without interest, any subscription payments to you.

No prior market exists for the subscription rights.

Although we expect the subscription rights will be traded on the Nasdaq Global Market under the symbol “AERLR”, the subscription rights are a new issue of securities with no prior trading market, and we cannot provide you any assurances as to the liquidity of the trading market for the subscription rights.

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You may not be able to resell any ordinary shares that you purchase pursuant to the exercise of subscription rights immediately upon expiration of this rights offering or be able to sell your shares at a price equal to or greater than the subscription price.

If you exercise subscription rights, you may not be able to resell the ordinary shares purchased by exercising your subscription rights until you (or your broker, custodian bank or other nominee) have received those shares. Also, you will have no rights as a shareholder of the shares you purchased in this rights offering until we issue you such shares. Although we will endeavor to issue the shares as soon as practicable after completion of this rights offering, including the guaranteed delivery period and after all necessary calculations have been completed, there may be a delay between the expiration date of the rights offering and the time that the shares are issued. Moreover, whenever you sell your ordinary shares, you may be unable to sell them at a price equal to or greater than the subscription price you paid for such shares.

If you do not fully exercise your subscription right and this rights offering is completed, your interest in us will be significantly diluted. In addition, if you do not exercise your subscription right in full and the subscription price is less than the fair value of our ordinary shares, then you would experience an immediate dilution of the aggregate fair value of your shares, which could be substantial.

If you do not choose to fully exercise your subscription right, your percentage ownership interest in us will decrease if this rights offering is completed, and if you do not exercise your subscription right at all, your percentage ownership in us could decrease significantly. For example, if you own 1,000,000 ordinary shares before this rights offering, or approximately 2.5% of our ordinary shares, and you do not exercise your subscription rights, then your percentage ownership could be reduced to approximately 1.7%. In addition, if you do not exercise your subscription right in full and the subscription price is less than the fair value of our ordinary shares, you would experience immediate dilution of the value of your shares relative to what your value would have been had our ordinary shares been issued at fair value. This dilution could be substantial.

In the event our proposed acquisition of the VIP gaming room at Level 1 of Le Royal Arc Casino pursuant to the memorandum of understanding entered into on May 16, 2013 is not consummated, the market price of our ordinary shares could decline.

On May 16, 2013, we entered into a non-binding memorandum of understanding pursuant to which we expressed our intention to acquire all of the outstanding interests and operations of the VIP gaming room at Level 1 of Le Royal Arc Casino located in NAPE, Downtown Macau. The transaction is conditioned on satisfaction of due diligence and customary closing conditions. In the event the proposed acquisition with the Seller is not consummated for any reason, including, without limitation, if we are not satisfied with our due diligence investigation or closing conditions are not satisfied, the market price of our ordinary shares could decline. Accordingly, whenever you sell your ordinary shares, you may be unable to sell them at a price equal to or greater than the subscription price you paid for such shares.

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THE RIGHTS OFFERING

Subscription Rights

We are distributing to holders of our ordinary shares on the record date, which is June 3, 2013, at no charge, one transferable subscription right for each two ordinary shares owned as of the record date. As of the record date, an aggregate of 40,451,164 of our ordinary shares were outstanding.

Subscription Rights

The subscription rights are evidenced by transferable rights certificates. Each subscription right entitles the holder to purchase one ordinary share upon delivery of the required subscription documents and payment of the subscription price of $3.00 per share prior to the expiration of the rights offering. You may exercise all or a portion of your subscription right or you may choose not to exercise your rights. In order to properly exercise your subscription right, you must deliver the subscription payment and a properly completed rights certificate, or if you hold your rights through a broker, dealer, custodian bank or other nominee, complete and return to your record holder the form entitled “Beneficial Owner Election Form” or such other appropriate documents as are provided by your record holder.

Only whole subscription rights are exercisable. Fractional subscription rights remaining after aggregating all of the rights distributed to you will be rounded down to the nearest whole number to ensure we do not issue fractional rights or shares in the rights offering. The purpose of such rounding is to save us the expense and inconvenience of issuing fractional subscription rights and shares, and not to give any particular group of shareholders an increased interest in our assets or earnings and profits. Any excess subscription payment received by the subscription agent will be returned, without interest, as soon as practicable. If you hold shares in certificated form, we will deliver certificates representing our ordinary shares purchased with the subscription right as soon as practicable following the expiration of the rights offering. If you hold your shares electronically, we will credit your account at your broker, custodian bank or other nominee with ordinary shares, electronically in registered, book-entry form only on our records or on the records of our transfer agent as soon as practicable following the expiration of the rights offering.

Missing or Incomplete Subscription Information

If you do not indicate the number of subscription rights being exercised, or the subscription agent does not receive the full subscription payment for the number of subscription rights that you indicate are being exercised, then you will be deemed to have exercised the maximum number of subscription rights that may be exercised with the aggregate subscription payment you delivered to the subscription agent. If we do not apply your full subscription payment to your purchase of ordinary shares, any excess subscription payment received by the subscription agent will be returned, without interest or deduction, as soon as practicable.

Expiration of the Rights Offering and Amendments, Termination and Extension

You may exercise your subscription rights at any time prior to 5:00 p.m., New York City time, on June 21, 2013, the expiration date for the rights offering. If you do not exercise your subscription rights before the expiration date of the rights offering, your subscription rights will expire and will have no value. We will not be required to issue our ordinary shares to you if the subscription agent receives your rights certificate or payment, after the expiration date, regardless of when you sent the rights certificate and payment, unless you send the documents in compliance with the guaranteed delivery procedures described below.

We reserve the right, in our sole discretion, to amend or modify the terms of the rights offering. We also reserve the right to terminate the rights offering at any time prior to the expiration date for any reason, in which event all funds received in connection with the rights offering will be returned promptly to you without interest or deduction to those persons who exercised their subscription.

We have the option to extend this rights offering and the period for exercising your subscription rights for any reason, including if we determine that changes in the market price of our ordinary shares warrant an extension or if we decide to give investors more time to exercise their subscription rights in this rights offering, although we do not presently intend to do so.

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Conditions to and Cancellation of the Rights Offering

The completion of the rights offering is not subject to the satisfaction of any conditions. However, we reserve the right to amend, cancel, terminate, extend or otherwise modify the rights offering at any time before completion of the rights offering for any reason. In the event that we terminate the rights offering prior to the expiration date, all affected subscription rights will expire without value and all subscription payments received by the subscription agent will be promptly returned, without interest or deduction. See also “—  Expiration of the Rights Offering and Amendments and Termination. ”

Method of Exercising Subscription Rights

The exercise of subscription rights is irrevocable and may not be cancelled or modified. Your subscription rights will not be considered exercised unless the subscription agent receives from you, your broker, custodian or nominee, as the case may be, all of the required documents properly completed and executed and your full subscription price payment in cash prior to 5:00 p.m., New York City time, on June 21, 2013, the expiration date of the rights offering. Rights holders may exercise their rights as follows:

Subscription by Record Holders

Rights holders who are record holders of our ordinary shares may exercise their subscription rights by properly completing and executing the rights certificate together with any required signature guarantees and forwarding it, together with payment in full in cash of the subscription price for each ordinary share for which they subscribe, to the subscription agent at the address set forth under the subsection entitled “—  Delivery of Subscription Materials and Payment ,” on or prior to the expiration date.

Subscription by Beneficial Owners

Rights holders who are beneficial owners of our ordinary shares and whose shares are registered in the name of a broker, custodian bank or other nominee, and rights holders who hold share certificates and would prefer to have an institution conduct the transaction relating to the rights on their behalf, should instruct their broker, custodian bank or other nominee to exercise their rights and deliver all documents and payment on their behalf, prior to the expiration date. A rights holder’s subscription rights will not be considered exercised unless the subscription agent receives from such rights holder, its broker, custodian, nominee or institution, as the case may be, all of the required documents and such holder’s full subscription price payment.

Subscription by DTC Participants

Banks, trust companies, securities dealers and brokers that hold our ordinary shares on the rights offering record date as nominee for more than one beneficial owner may, upon proper showing to the subscription agent, exercise their subscription rights on the same basis as if the beneficial owners were record holders on the rights offering record date through the Depository Trust Company, or “DTC.” Such holders may exercise these rights through DTC’s PSOP Function on the “agents subscription over PTS” procedure and instruct DTC to charge their applicable DTC account for the subscription payment for the new shares or indicating to DTC that such holder intends to pay for such rights through the delivery to the Company by the holder of an equivalent amount of principal and accrued and unpaid interest of indebtedness owed by the Company to such holder, or a combination thereof, and deliver such amount to the subscription agent. DTC must receive the subscription instructions and payment for the new shares by the rights expiration date. Except as described under the subsection titled “—  Guaranteed Delivery Procedures ,” subscriptions accepted by the subscription agent via a Notice of Guaranteed Delivery must be delivered to the subscription agent with payment before the expiration of the subscription period.

Method of Payment

Payments must be made in full in U.S. currency by:

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Except if you follow the guaranteed delivery procedures described below, rights certificates received after 5:00 p.m., New York City time, on June 21, 2013, the expiration date of the rights offering, will not be honored, and we will return your payment to you promptly, without interest or deduction.

The subscription agent will be deemed to receive payment upon:

You should read the instruction letter accompanying the rights certificate carefully and strictly follow it. DO NOT SEND RIGHTS CERTIFICATES OR PAYMENTS TO US. Except as described below under “—  Guaranteed Delivery Procedures ,” we will not consider your subscription received until the subscription agent has received delivery of a properly completed and duly executed rights certificate and payment of the full subscription amount. The risk of delivery of all documents and payments is on you or your broker, custodian bank or other nominee, not us or the subscription agent.

The method of delivery of rights certificates and payment of the subscription amount to the subscription agent will be at the risk of the holders of rights, but, if sent by mail, we recommend that you send those certificates and payments by overnight courier or by registered mail, properly insured, with return receipt requested, and that a sufficient number of days be allowed to ensure delivery to the subscription agent and clearance of payment before the expiration of the subscription period.

Unless a rights certificate provides that the ordinary shares are to be delivered to the record holder of such rights or such certificate is submitted for the account of a bank or a broker, signatures on such rights certificate must be guaranteed by an “Eligible Guarantor Institution,” as such term is defined in Rule 17Ad-15 of the Exchange Act, subject to any standards and procedures adopted by the subscription agent. See “—  Medallion Guarantee May be Required .”

Payment Adjustments

If you send a payment that is insufficient to purchase the number of shares requested, or if the number of shares requested is not specified in the rights certificate, the payment received will be applied to exercise your subscription rights to the extent of the payment. If the payment exceeds the amount necessary for the full exercise of your subscription rights, the excess will be returned to you promptly in cash. You will not receive interest or a deduction on any payments refunded to you under the rights offering.

Medallion Guarantee May Be Required

Your signature on each subscription rights certificate must be guaranteed by an eligible institution, such as a member firm of a registered national securities exchange or a member of the Financial Industry Regulatory Authority, Inc., or a commercial bank or trust company having an office or correspondent in the United States, subject to standards and procedures adopted by the subscription agent, unless:

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Subscription Agent

The subscription agent for this rights offering is Continental Stock Transfer & Trust Company. We will pay all fees and expenses of the subscription agent related to the rights offering and have also agreed to indemnify the subscription agent from certain liabilities that it may incur in connection with the rights offering.

Information Agent

The information agent for this rights offering is Georgeson Inc. We will pay all fees and expenses of the information agent related to the rights offering and have also agreed to indemnify the information agent from certain liabilities that it may incur in connection with the rights offering. The information agent can be contacted at the following address and telephone number:

480 Washington Boulevard, 26 ^th Floor
Jersey City, New Jersey 07310
(877) 278-4774 (toll free) or (212) 440-9800

Delivery of Subscription Materials and Payment

If your shares are held in the name of a broker, custodian bank or other nominee, then you should send your subscription documents, rights certificate, such other documents requested by your nominee and payment of the subscription price to your broker, custodian bank or other nominee. If you are the record holder of your shares, then you should deliver your subscription rights certificate and payment of the subscription price in cash, as provided in this prospectus supplement or, if applicable, notice of guaranteed delivery, to the subscription agent by one of the methods described below:

If delivering by Hand/Mail/Overnight Courier:

Continental Stock Transfer & Trust Company
17 Battery Place, 8 ^th Floor
New York, NY 10004
Attn: Corporate Actions Department
(917) 262-2378

Your delivery other than in the manner or to the address listed above will not constitute valid delivery.

You should direct any questions or requests for assistance concerning the method of subscribing for the ordinary shares or for additional copies of this prospectus supplement and the accompanying prospectus to the information agent, whose contact information is provided above.

Guaranteed Delivery Procedures

The subscription agent will grant you three business days after the expiration date to deliver the rights certificate if you follow the following instructions for providing the subscription agent notice of guaranteed delivery. On or prior to the expiration date, the subscription agent must receive payment in full in cash, as provided herein, for all ordinary shares subscribed for through the exercise of the subscription right, together with a properly completed and duly executed notice of guaranteed delivery substantially in the form accompanying this prospectus supplement either by mail or overnight carrier, that specifies the name of the holder of the rights and the number of ordinary shares subscribed for. A member firm of a registered national securities exchange, a member of the Financial Industry Regulatory Authority, Inc., or a commercial bank or trust company having an office or correspondent in the United States must guarantee that the properly completed and executed subscription rights certificate for all ordinary shares subscribed for will be delivered to the subscription agent within three business days after the expiration date. The subscription agent will then conditionally accept the exercise of the rights and will withhold the certificates for ordinary shares until it receives the properly completed and duly executed rights certificate within that three-business-day time period.

In the case of holders of rights that are held of record through DTC, those rights may be exercised by instructing DTC to transfer rights from that holder’s DTC account to the subscription agent’s DTC account, together with payment of the full subscription price. The notice of guaranteed delivery must be guaranteed by a commercial bank, trust company or credit union having an office, branch or agency in the United States or by a member of a Stock Transfer Association approved medallion program such as STAMP, SEMP or MSP.

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Notices of guaranteed delivery and payments should be mailed or delivered to the appropriate addresses set forth under “—  Delivery of Subscription Materials and Payment .”

Escrow Arrangements

The subscription agent will hold funds received in payment of the subscription price or evidence of our indebtedness in a segregated account until the rights offering is completed or withdrawn and terminated.

Notice to Beneficial Holders

If you are a broker, a trustee or a depositary for securities who holds ordinary shares for the account of others as of the record date, you should notify the respective beneficial owners of such shares of the rights offering as soon as possible to find out their intentions with respect to exercising their subscription rights. You should obtain instructions from the beneficial owners with respect to their subscription rights, as set forth in the instructions we have provided to you for your distribution to beneficial owners. If a beneficial owner so instructs, you should complete the appropriate subscription rights certificates and submit them to the subscription agent with the proper payment. If you hold our ordinary shares for the account(s) of more than one beneficial owner, you may exercise the number of subscription rights to which all such beneficial owners in the aggregate otherwise would have been entitled had they been direct record holders of our ordinary shares on the record date, provided that you, as a nominee record holder, make a proper showing to the subscription agent by submitting the form entitled “Nominee Holder Certification” that we will provide to you with your rights offering materials. If you did not receive this form, you should contact the information agent to request a copy.

Beneficial Owners

If you are a beneficial owner of our ordinary shares or will receive subscription rights through a broker, custodian bank or other nominee, we will ask your broker, custodian bank or other nominee to notify you of the rights offering. If you wish to exercise your subscription rights, you will need to have your broker, custodian bank or other nominee act for you. If you hold certificates of our ordinary shares directly and would prefer to have your broker, custodian bank or other nominee act for you, you should contact your broker, custodian bank or other nominee and request it to effect the transactions for you. To indicate your decision with respect to your subscription rights, you should complete and return to your broker, custodian bank or other nominee the form entitled “Beneficial Owners Election Form.” You should receive the “Beneficial Owners Election Form” from your broker, custodian bank or other nominee with the other rights offering materials. If you wish to obtain a separate subscription rights certificate, you should contact the nominee as soon as possible and request that a separate subscription rights certificate be issued to you. You should contact your broker, custodian bank or other nominee if you do not receive this form but you believe you are entitled to participate in the rights offering. We are not responsible if you do not receive this form from your broker, custodian bank or nominee or if you receive it without sufficient time to respond.

Subscription Price

The subscription price was determined by a pricing committee appointed by our board of directors. In determining the subscription price for the rights, the pricing committee considered, among other things, the likely cost and relative difficulty of obtaining capital from other sources, the size and timing of the rights offering, the price at which our shareholders might be willing to participate in the rights offering, and current and historical trading prices of our ordinary shares, including the volume weighted average price over various time periods. The pricing committee also received and considered an analysis from the dealer manager concerning prior rights offerings of similar sizes by other companies and the range of discounts that the subscription prices represented to then prevailing and historical trading prices for those offerings.

The subscription price does not necessarily bear any relationship to the book value of our assets, net worth, past operations, cash flows, losses, financial condition, or any other established criteria for valuing the Company. You should not consider the subscription price as an indication of the value of the Company or our ordinary shares or of our ordinary shares to be offered in the rights offering. You should not assume or expect that, after the rights offering, our ordinary shares will trade at or above the subscription price. We also cannot assure you that the market price of our ordinary shares will not decline during or after the rights offering.

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We also cannot assure you that you will be able to sell ordinary shares purchased during the rights offering at a price equal to or greater than the subscription price. We urge you to obtain a current quote for our ordinary shares before exercising your subscription rights.

Determinations Regarding the Exercise of Your Subscription Rights

We will decide all questions concerning the timeliness, validity, form and eligibility of the exercise of your subscription rights and any such determinations by us will be final and binding. We, in our sole discretion, may waive, in any particular instance, any defect or irregularity, or permit, in any particular instance, a defect or irregularity to be corrected within such time as we may determine. We will not be required to make uniform determinations in all cases. We may reject the exercise of any of your subscription rights because of any defect or irregularity. We will not accept any exercise of subscription rights until all irregularities have been waived by us or cured by you within such time as we decide, in our sole discretion. Our interpretations of the terms and conditions of the rights offering will be final and binding.

Neither we, nor the subscription agent, will be under any duty to notify you of any defect or irregularity in connection with your submission of subscription rights certificates and we will not be liable for failure to notify you of any defect or irregularity. We reserve the right to reject your exercise of subscription rights if your exercise is not in accordance with the terms of the rights offering or in proper form. We will also not accept the exercise of your subscription rights if our issuance of our ordinary shares to you could be deemed unlawful under applicable law.

No Revocation or Change

Once you submit the form of rights certificate to exercise any subscription rights, you may not revoke, change or cancel your exercise or request a refund of monies paid. All exercises of subscription rights are irrevocable, even if you subsequently learn information about us that you consider to be unfavorable. You should not exercise your subscription rights unless you are certain that you wish to purchase additional ordinary shares at the subscription price.

Transferability of the Rights

The subscription rights granted to you are transferable and, therefore, may be assigned, gifted, purchased, sold or otherwise transferred to anyone else. If the rights are transferred, evidence satisfactory to us that the transfer was proper must be received by us prior to the expiration date. The subscription rights have been approved to be listed on the Nasdaq Global Market under the symbol “AERLR” and will continue to trade until June 21, 2013; however, we cannot assure you that a market for the rights will develop.

Rights of Subscribers

You will have no rights as a shareholder with respect to shares you subscribe for in the rights offering until certificates representing ordinary shares are issued to you or your account at your broker, custodian bank or other nominee is credited with such shares. You will have no right to revoke your subscriptions after you deliver your completed rights certificate, payment in cash, as provided in this prospectus supplement, and any other required documents to the subscription agent.

Regulatory Limitation

We will not be required to issue to you ordinary shares pursuant to this rights offering if, in our opinion, you would be required to obtain prior clearance or approval from any state or federal regulatory authorities to purchase, own or control such shares if, at the expiration date of this rights offering, you have not obtained such clearance or approval.

Foreign Shareholders

The subscription agent will mail this prospectus supplement, the accompanying prospectus and rights certificates to you if you are a shareholder whose address is outside the United States or if you have an Army Post Office or a Fleet Post Office address.

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Standby Purchase Agreement

We have entered into a standby purchase agreement with certain persons, including Lam Man Pou, our chairman, Vong Hon Kun, our chief operating officer, Lam Chou In, Zheng An Ting, So Kam Tai, Au Chun Yin, Chan Fok Hoi, Chan Kai Ian, Sin Kam Chan, Leong Wai Meng and Cheung Mee Mo (the “Standby Purchasers”). Messrs. Lam and Vong,, along with the other Standby Purchasers, collectively own 16,580,622 of our ordinary shares, representing approximately 40.1% of our outstanding ordinary shares as of the date hereof. The following description summarizes the material terms of the standby purchase agreement. The standby purchase agreement is filed as an exhibit to our Form 6-K filed with the SEC on June 4, 2013. We urge you to carefully read the entire document.

Pursuant to the standby purchase agreement, the Standby Purchasers agreed to purchase from us a number of ordinary shares having a value equal to the aggregate subscription price we would have received with respect to the shares underlying all rights not exercised by all holders in the rights offering upon the same terms as the other holders, except the subscription price for such shares with respect to purchases made by Messrs. Lam Man Pou and Vong Hon Kun will be $4.50 per share. The Standby Purchasers have agreed not to exercise any rights granted to them in this rights offering. Messrs. Lam and Vong have also agreed not to sell, assign or transfer the ordinary shares purchased pursuant to the standby purchase agreement for a period of two years following the purchase date without our prior written consent.

The obligations of the Standby Purchasers to consummate the transactions contemplated by the standby purchase agreement is subject to satisfaction or waiver of the following conditions:

Under the standby purchase agreement a “material adverse effect” means the occurrence, either individually or in the aggregate, of any material adverse effect on the earnings, business, management, properties, assets, rights, operations or condition (financial or otherwise) of the Company and of its subsidiaries taken as a whole.

The obligations of the Company and the Standby Purchasers to consummate the transactions contemplated by the standby purchase agreement is subject to satisfaction or waiver of the following conditions:

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The standby purchase agreement may be terminated at any time prior to the closing date by the Standby Purchasers if (i) any condition to the obligations of the Standby Purchasers is not satisfied, or because of any refusal, inability or failure of the Company to perform any agreement in, or comply with any provision of, the standby purchase agreement other than by reason of a default by the Standby Purchasers, (ii) the rights offering shall have been cancelled, terminated or withdrawn on or prior to the closing date or (iii) if the rights offering shall not have been consummated on or before June 30, 2013, unless the failure of the closing to occur by such date shall be due to a default by the Standby Purchasers.

The standby purchase agreement may be terminated by the Company or by the Standby Purchasers by written notice to the other party:

The standby purchase agreement may be terminated by the Company in the event it determines that it is not in the best interests of the Company and its shareholders to go forward with the rights offering.

No Recommendation

An investment in our ordinary shares must be made according to your evaluation of your own best interests and after considering all of the information herein, including the “ Risk Factors ” section of this prospectus supplement and the accompanying prospectus. Neither we nor our board of directors nor the dealer manager is making any recommendation regarding whether you should exercise your subscription rights.

Ordinary Shares Outstanding After the Rights Offering

Based on the 40,451,164 of our ordinary shares currently outstanding, and the potential that we may issue as many as 20,143,117 shares pursuant to this rights offering and the standby purchase, up to 60,594,281 of our ordinary shares may be issued and outstanding following the rights offering, which represents an increase in the number of currently outstanding ordinary shares of approximately 33%.

Fees and Expenses

Neither we nor the subscription agent will charge a brokerage commission or a fee to subscription rights holders for exercising their rights. However, if you exercise your subscription rights through a broker, dealer or nominee, you will be responsible for any fees charged by your broker, dealer or nominee.

Other Matters

We are not making this rights offering in any state or other jurisdiction in which it is unlawful to do so, nor are we distributing or accepting any offers to purchase any ordinary shares from subscription rights holders who are residents of those states or other jurisdictions or who are otherwise prohibited by federal or state laws or regulations from accepting or exercising the subscription rights. We may delay the commencement of this rights offering in those states or other jurisdictions, or change the terms of this rights offering, in whole or in part, in order to comply with the securities laws or other legal requirements of those states or other jurisdictions. Subject to state securities laws and regulations, we also have the discretion to delay allocation and distribution of any shares you may elect to purchase by exercise of your subscription privileges in order to comply with state securities laws. We may decline to make modifications to the terms of this rights offering requested by those states or other jurisdictions, in which case, if you are a resident in those states or jurisdictions or if you are otherwise prohibited by federal or state laws or regulations from accepting or exercising the subscription rights, you will not be eligible to participate in this rights offering. However, we are not currently aware of any states or jurisdictions that would preclude participation in this rights offering.

Questions About Exercising Subscription Rights

If you have any questions or require assistance regarding the method of exercising your subscription rights or requests for additional copies of this document or any document mentioned herein, you should contact the information agent at the address and telephone number set forth above under “—  Information Agent .”

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CAPITALIZATION

The following table sets forth our cash and cash equivalents and capitalization as of March 31, 2013:

•

on an actual basis; and

•

on an as adjusted basis to give effect to (i) the sale of ordinary shares underlying the subscription rights and sold pursuant to the standby purchase obligation assuming that 40% of the rights remain unexercised and 100% of the rights remain unexercised, and (ii) the application of net proceeds as described in “Use of Proceeds.”

The information below is not necessarily indicative of what our capitalization would have been had these transactions been completed on March 31, 2013. As-adjusted balances are subject to change based upon final participation in the rights offering. This table should be read in conjunction with our consolidated financial statements and the related notes thereto included in each of our Annual Report on Form 20-F for the fiscal year ended December 31, 2012 and our Report of Foreign Private Issuer on Form 6-K relating to the quarter ended March 31, 2013, which are incorporated by reference herein. The capitalization table below is not necessarily indicative of our future capitalization or financial condition.

		Actual				As Adjusted
						40% Unexercised				100% Unexercised
Cash and cash equivalents			24,038,336				24,472,570				24,472,570
Line of Credit Payable			66,594,533				66,594,533				66,594,533
Shareholder Loans (current portion) (1)			958,266				0				0
Shareholder Loans (long term portion) (2)			60,000,000				0				0
Total Debt			127,552,799				66,594,533				66,594,533
Shareholders’ equity:
Ordinary Shares, $0.0001 par value Authorized 200,000,000 shares; Actual 40,451,164 shares, As Adjusted 40% Unexercised 60,594,281 shares, and As Adjusted 100% Unexercised 59,218,942 shares			4,045				6,059				5,922
Additional paid in capital			66,942,083				128,332,569				128,332,706
Retained Earnings			152,781,965				152,781,965				152,781,965
Accumulated Comprehensive Income (Loss)			190,802				190,802				190,802
Total shareholders’ equity			219,918,895				281,311,395				281,311,395
Total capitalization and indebtedness			347,471,694				347,905,928				347,905,928

(1)

Shareholder loan, current portion is unsecured and non-interest bearing and due on demand.

(2)

Shareholder loan, long term portion is fixed, non-interest bearing and due on April 18, 2014. The loans are convertible at the option of the lenders at a rate of $20 per ordinary share or an aggregate of 3,000,000 ordinary shares. Additionally, should the closing price of the ordinary shares as reported by the Nasdaq Stock Market for any ten (10) consecutive trading days equals or exceeds $25, the Company shall have the right to convert all of the loans at a rate of $20 per ordinary shares, or an aggregate of 3,000,000 ordinary shares.

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MARKET PRICE OF AND DIVIDENDS ON OUR ORDINARY SHARES

Market Information

Our ordinary shares are listed on the Nasdaq Global Market under the symbol “AERL.” The number of ordinary shares issued and outstanding as of June 3, 2013 was 40,451,164. The closing price per share of our ordinary shares on June 3, 2013, the last full trading day prior to the date of this prospectus supplement, was $4.20. The following table sets forth the high and low intraday sale prices for our ordinary shares for the periods indicated, as reported by the Nasdaq Global Market.

		High				Low
Year ended December 31, 2011
First Quarter		$	12.41			$	8.32
Second Quarter		$	10.75			$	5.50
Third Quarter		$	10.87			$	5.39
Fourth Quarter		$	7.49			$	4.72
Year ended December 31, 2012
First Quarter		$	7.24			$	5.47
Second Quarter		$	6.80			$	3.66
Third Quarter		$	4.45			$	2.40
Fourth Quarter		$	4.37			$	2.70
Year ended December 31, 2013
First Quarter		$	5.00			$	2.98
Second Quarter (through (June 3, 2013)		$	5.18			$	3.90

Holders

According to Continental Stock Transfer & Trust Company, there were approximately 33 holders of record of our ordinary shares at May 30, 2013.

Dividends

The Company’s board of directors authorized a regular semi-annual cash dividend of $0.12 per outstanding ordinary share each year after the release of the Company’s financial results for the six months ending June 30, and, for each year after the release of the Company’s year-end financial results, an amount per outstanding ordinary share equal to (i) 15% of the Company’s non-GAAP net income for the most recently completed fiscal year less the amount paid pursuant to the immediately previous six-month dividend, divided by (ii) the number of ordinary shares outstanding on the record date for such dividend. The aggregate cash dividend paid after the Company’s release of the December 31, 2012 financial results was $4,142,199.17.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information regarding the beneficial ownership of our ordinary shares as of June 3, 2013 by:

•

each person known by us to be the beneficial owner of more than 5% of our outstanding ordinary shares;

•

each of our current executive officers and directors; and

•

all of our current executive officers and directors as a group.

Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all ordinary shares beneficially owned by them. Our major shareholders do not have different voting rights than our non-majority shareholders. Percentages of ownership are based on 40,451,164 ordinary shares outstanding as of June 3, 2013. Ordinary shares which an individual or group has a right to acquire within 60 days pursuant to the exercise or conversion of options, warrants or other convertible securities are deemed to be outstanding for the purpose of computing the percentage ownership of such individual or group, but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person shown in the table.

Name and Address of Beneficial Owner		Amount and Nature of Beneficial Ownership				Percent of Class
Chien Lee (1)			1,957,382	(2)			4.8 %
Sylvia Lee (1)			1,957,382	(2)			4.8 %
Vong Hon Kun (3)			6,620,242				16.4 %
Lam Chou In (3)			5,018,135				12.4 %
Lam Man Pou (3)			4,942,245				12.2 %
Chui Vai Hou, George (3)			5,164				*
James R. Preissler (4)			305,557				*
Leong Siak Hung (5)			873,078				2.2 %
Li Chun Ming, Raymond (3)			5,790				*
Peter Li			168				*
Joao Manuel Santos Ferreira (3)			5,164				*
Yeung Lun, Allan (3)			5,164				*
All of our directors and executive officers as a group (10 individuals)			14,795,844				36.6 %

*

Less than 1%.

(1)

The business address of Mr. and Mrs. Lee is 4100 N.E. Second Avenue, Suite 318, Miami, Florida 33137.

(2)

Represents 103,700 ordinary shares owned jointly by Mr. and Mrs. Lee, 5,790 ordinary shares owned by Mrs. Lee and 1,847,892 ordinary shares held by CS Capital USA, LLC, an affiliate of Mr. and Mrs. Lee.

(3)

Each of these persons maintains a business address at Unit 1004 East Town Building, 16 Fenwick Street, Wanchai, Hong Kong.

(4)

The business address of James R. Preissler is 50 Old Route 25A, Fort Salonga, NY 11768.

(5)

867,288 of such shares are held by Legend Global International Limited, of which Leong Siak Hung, director, has sole voting and dispositive power over the shares owned by it, which shares constitute all of the shares beneficially owned by Mr. Leong. The business address of Legend Global International Limited is Flat G, 37/F, Block 3, Island Harbourview, Tai Kok Tsui, Kowloon, Hong Kong.

As of May 30, 2013, we believe that 10 holders of record of approximately 48% of our outstanding ordinary shares reside in the United States.

We are not aware of any arrangements that may, at a subsequent date, result in a change of control of our company.

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MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES

The following discussion sets forth the material U.S. federal income tax consequences of the rights offering to holders of our ordinary shares. This discussion assumes that the holders of our ordinary shares hold such ordinary shares and will hold the rights as capital assets, and we will not be treated as a passive foreign investment company with respect to any such holders, for U.S. federal income tax purposes. This discussion is based on the Internal Revenue Code of 1986, as amended (the “Code”), Treasury Regulations promulgated thereunder, Internal Revenue Service rulings and pronouncements and judicial decisions in effect on the date hereof, all of which are subject to change (possibly with retroactive effect) and to differing interpretations. The following discussion does not purport to be a complete analysis of all of the potential U.S. federal income tax considerations, applies only to holders that are U.S. holders (as defined below) and does not address all aspects of U.S. federal income taxation that may be relevant to holders in light of their particular circumstances or to holders that may be subject to special tax treatment under the Code, including, without limitation, dealers in securities or foreign currency, traders in securities that elect to mark their positions to market, non-U.S. holders (as defined below), insurance companies, tax-exempt organizations, banks, financial institutions, broker-dealers, or partnerships, or holders that hold our ordinary shares as part of a hedge, straddle, conversion or other risk reduction transaction, holders whose functional currency is not the U.S. dollar or holders that acquired our ordinary shares pursuant to the exercise of compensatory stock options or otherwise as compensation.

As used in this discussion, the term “U.S. holder” means a beneficial owner of our ordinary shares that is, for U.S. federal income tax purposes, (i) an individual citizen or resident of the United States, (ii) a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized in the United States or under the laws of the United States, any state thereof, or the District of Columbia, (iii) an estate the income of which is subject to U.S. federal income taxation regardless of its source, or (iv) a trust if (a) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust, or (b) it has in effect a valid election to be treated as a U.S. person. As used in this discussion, the term “non-U.S. holder” means a beneficial owner of our ordinary shares (other than an entity treated as a partnership or other pass-through entity for U.S. federal income tax purposes) that is not described as a U.S. holder.

The tax treatment of a partnership and each partner thereof will generally depend upon the status and activities of the partnership and such partner. A holder of our ordinary shares that is treated as a partnership for U.S. federal income tax purposes should consult its own tax advisor regarding the U.S. federal income tax considerations applicable to it and its partners.

This discussion is not intended to constitute a complete analysis with respect to any particular holder of all tax consequences relating to the receipt, exercise, disposition and expiration of the subscription rights and does not discuss the tax consequences of the ownership and disposition of our ordinary shares with respect to that holder. The following discussion does not address the tax consequences of the rights offering or the related share issuance under estate, gift, foreign, state, or local tax laws. Furthermore, it does not address the Medicare tax on net investment income. ACCORDINGLY, EACH HOLDER OF OUR ORDINARY SHARES SHOULD CONSULT ITS TAX ADVISOR WITH RESPECT TO THE PARTICULAR TAX CONSEQUENCES OF THE RIGHTS OFFERING AND THE RELATED SHARE ISSUANCE TO SUCH HOLDER.

The receipt and exercise of the subscription rights distributed in this rights offering is intended to be nontaxable to U.S. holders. If, however, this rights offering does not qualify as nontaxable, U.S. holders would be treated as receiving a taxable distribution equal to the fair market value of the subscription rights on their distribution date. The distribution would be taxed as a dividend to the extent made out of our current or accumulated earnings and profits. Any excess would be treated first as a return of the holder’s basis (investment) in such holder’s ordinary shares and then as a capital gain. The following summary assumes that U.S. holders will qualify for such nontaxable treatment. However, there can be no assurance that the Internal Revenue Service will take a similar view or would agree with the tax consequences described below. We have not sought, and will not seek, a ruling from the Internal Revenue Service or an opinion of counsel regarding the U.S. federal income tax consequences of the rights offering or the related share issuance.

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The U.S. federal income tax consequences to a U.S. holder of our ordinary shares of the receipt, exercise, disposition and expiration of subscription rights under the rights offering will be as follows:

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PROSPECTUS

$150,000,000

ASIA ENTERTAINMENT & RESOURCES LTD.

Ordinary Shares
Preferred Shares
Warrants
Subscription Rights
Debt Securities
Units

7,800,400 Ordinary Shares For Resale Offered by
the Selling Shareholders Named Herein

We may offer ordinary shares, par value $0.0001 per share, preferred shares, par value $0.0001 per share, warrants, subscription rights, debt securities and/or units from time to time. When we decide to sell securities, we will provide specific terms of the offered securities, including the offering prices of the securities, in a prospectus supplement. The securities offered by the Registrant pursuant to this prospectus will have an aggregate public offering price of up to $150,000,000. The securities covered by this prospectus may be offered and sold from time to time in one or more offerings, which may be through one or more underwriters, dealers and agents, or directly to the purchasers. The names of any underwriters, dealers or agents, if any, will be included in a supplement to this prospectus. This prospectus describes some of the general terms that may apply to these securities and the general manner in which they may be offered. The specific terms of any securities to be offered, and the specific manner in which they may be offered, will be described in one or more supplements to this prospectus. A prospectus supplement may also add, update or change information contained in this prospectus.

This prospectus also relates to 7,800,400 of our ordinary shares that may be sold from time to time by the selling shareholders named herein (the “Selling Shareholders”). The ordinary shares are being registered to permit the Selling Shareholders to sell the securities from time to time in the public market at prices determined by the prevailing market prices or in privately negotiated transactions. We will not receive any proceeds from the sale of such ordinary shares under this prospectus. We do not know when or in what amount the Selling Shareholders may offer the securities for sale. The Selling Shareholders may sell any, all or none of the securities offered by this prospectus.

Our ordinary shares are traded on the Nasdaq Global Market under the symbol “AERL”. The closing price of our ordinary shares on Nasdaq on December 28, 2012 was $2.85 per share. You are urged to obtain current market quotations of our ordinary shares before purchasing any of the shares being offered for sale pursuant to this prospectus.

Our principal offices are located at Unit 605, East Town Building 16 Fenwick Street Wanchai, Hong Kong. Our telephone number at that address is (852) 2110-9133.

INVESTING IN OUR SECURITIES INVOLVES RISKS. YOU SHOULD CONSIDER CAREFULLY THE RISK FACTORS REFERRED TO IN THIS PROSPECTUS ON PAGE 7 AND IN THE APPLICABLE SUPPLEMENT TO THIS PROSPECTUS BEFORE INVESTING IN ANY SECURITIES THAT MAY BE OFFERED.

Neither the Securities and Exchange Commission nor any state or other securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

Prospectus dated March 27, 2013

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		Page
ABOUT THIS PROSPECTUS			1
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS			2
PROSPECTUS SUMMARY			3
RISK FACTORS			7
RATIO OF EARNINGS TO FIXED CHARGES			8
USE OF PROCEEDS			8
CAPITALIZATION AND INDEBTEDNESS			8
DESCRIPTION OF ORDINARY SHARES			9
DESCRIPTION OF PREFERRED SHARES			9
DESCRIPTION OF SUBSCRIPTION RIGHTS			10
DESCRIPTION OF DEBT SECURITIES			11
DESCRIPTION OF THE 2011 INCENTIVE PLAN			20
SELLING SHAREHOLDERS			25
PLAN OF DISTRIBUTION			29
EXPENSES			33
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE			34
INDEMNIFICATION			35
LEGAL MATTERS			36
EXPERTS			36
WHERE YOU CAN FIND MORE INFORMATION			36
ENFORCEMENT OF CIVIL LIABILITIES			36

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ABOUT THIS PROSPECTUS

This prospectus is part of a registration statement that we filed with the United States Securities and Exchange Commission (the “SEC”) utilizing a shelf registration process. Under this shelf registration process, we may sell from time to time up to $150,000,000 of any combination of the securities described in this prospectus and the Selling Shareholders named herein may offer and sell up to 7,800,400 of our ordinary shares owned by such Selling Shareholders under this prospectus.

This prospectus provides you with a general description of the securities we may offer. Each time we sell securities, we will provide a prospectus supplement that will contain specific information about the terms of that offering. The prospectus supplement may also add, update or change information contained in this prospectus. If there is any inconsistency between the information contained in this prospectus and any prospectus supplement, you should rely on the information contained in that particular prospectus supplement. You should read both this prospectus and any prospectus supplement together with additional information described under the heading “Where You Can Find More Information.”

You should rely only on the information provided in this prospectus and the prospectus supplement, as well as the information incorporated by reference. We have not authorized anyone to provide you with additional or different information. We are not making an offer of these securities in any jurisdiction or state where the offer is not permitted. You should not assume that the information in this prospectus, any prospectus supplement or any documents incorporated by reference herein or therein is accurate as of any date other than the date of the applicable document.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

We believe that some of the information in this prospectus constitutes forward-looking statements. You can identify these statements by forward-looking words such as “may,” “expect,” “anticipate,” “contemplate,” “believe,” “estimate,” “intends,” and “continue” or similar words. You should read statements that contain these words carefully because they:

We believe it is important to communicate our expectations to our securityholders. However, there may be events in the future that we are not able to predict accurately or over which we have no control. The risk factors and cautionary language discussed in this prospectus provide examples of risks, uncertainties and events that may cause actual results to differ materially from the expectations described by us in such forward-looking statements, including among other things:

The forward-looking statements contained in this prospectus are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors.” Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this prospectus. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

All forward-looking statements included herein attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Except to the extent required by applicable laws and regulations, we undertake no obligations to update these forward-looking statements to reflect events or circumstances after the date of this prospectus or to reflect the occurrence of unanticipated events.

Before investing in any of our securities, you should be aware that the occurrence of the events described in the “Risk Factors” section and elsewhere in this prospectus may adversely affect us.

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PROSPECTUS SUMMARY

This summary highlights certain information appearing elsewhere in this prospectus. For a more complete understanding of this offering and before making an investment decision, you should read the entire prospectus carefully, including the risk factors referred to in this prospectus on page 7 and in the applicable supplement to this prospectus, as well as the risk factors set forth in our Annual Report on Form 20-F filed on March 16, 2012 and the financial statements incorporated into this prospectus by reference. Unless otherwise stated in this prospectus:

Overview

Asia Entertainment & Resources Ltd. is a Cayman Islands exempted company that operates, through its subsidiaries and related VIP gaming promoter companies, four VIP gaming rooms in Macau (including the recently acquired Bao Li Gaming Promotion Limited (“Bao Li Gaming”) VIP gaming room on the Cotai strip in Macau). VIP gaming rooms are well appointed suites generally located within a large casino that provide luxury accommodations and privacy exclusively for gambling by high-tier gaming patrons. VIP gaming patrons are typically high-stakes gaming patrons who play VIP baccarat almost exclusively in dedicated VIP gaming rooms or designated casino areas. We generate revenue by receiving a percentage of net gaming wins. Prior to September 1, 2012, we generated revenue by receiving a commission of 1.25% Rolling Chip Turnover.

Macau is a part of the territory of the People’s Republic of China, located on China’s southeast coast to the west of the Pearl River delta. The Macau Special Administrative Region (the “MSAR”) was established on December 20, 1999, after Macau was administered by Portugal for more than 400 years. Macau consists of the Macau peninsula and the islands of Taipa and Coloane. Three bridges link the peninsula to Taipa while the two islands are connected by the land reclamation area known as Cotai.

The gaming industry and tourism comprise the largest components of, and are the major growth drivers of Macau’s economy. The gaming industry is the most important contributor to the economy, with almost 40.9% of Macau’s gross domestic product in 2010, 82.3% of Macau’s public revenues in 2011 and 91.8% of public revenues in the first 10 months of 2012 being derived from gaming and gaming-related industries. The sector contributed $11.03 billion in direct tax to the MSAR in the first ten months of 2012, up 15.6% when compared to the same period in 2011.

Although Macau was affected by the 1997 Asian financial crisis, the global financial downturn in 2001 and the impact of SARS in 2003, the economy rebounded and the Gross Domestic Product (“GDP”) grew at an annual growth rate of 27.3% in 2004, 6.9% in 2005, 16.5% in 2006, 26.0% in 2007 and 12.9% in 2008. Due, in part, to the impact of the global financial crisis of 2008 and a resulting slow-down in the Chinese economy, for 2009, Macau’s GDP recorded negative growth for the first two quarters. However, Macau’s GDP returned to positive growth in the third quarter and ended up 1.3% year-over-year. We believe that this growth was largely driven by the liberalization of Macau’s gaming industry, the significant investments associated with the expansion and development of the gaming industry, a rapid rise in the number of visitors from mainland China and an increase in Macau’s spending on public infrastructure projects. GDP was $27.2 billion and $34.1 billion for 2010 and for 2011, respectively, and the GDP real growth rate was 27.1% for 2010, 20.7% for 2011 and 18.4%, 7.3%, and 5.1% for the first, second and third quarters of 2012, respectively.

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The most material risks to our business are (i) Mainland China’s governmental policies toward Macau, such as its visa policy for Chinese citizens visiting Macau, and (ii) weakness in the global economy or in China’s economy. A continued weakening of the Chinese economy could negatively affect our gaming patrons’ discretionary income, which may in turn reduce the frequency that such patrons visit VIP gaming rooms, or the amount of money that they spend in the VIP gaming rooms. The issuance of ordinary shares to certain of our shareholders as earnout payments will increase the number of shares available for resale, result in dilution and reduced voting power to the current shareholders of the Company and a decrease in the share of any future dividends, and, as a result, could have an adverse effect upon the market price of the ordinary shares.

The Company

We are a Cayman Islands exempted company incorporated on September 24, 2007 under the name “CS China Acquisition Corp.” We were incorporated for the purpose of acquiring an operating business that had its principal operations located in the People’s Republic of China, the Hong Kong Special Administrative Region or the Macau Special Administrative Region. On February 2, 2010, we consummated a business combination pursuant to which we acquired all of the outstanding capital stock of Asia Gaming & Resort Limited (“AGRL”), a Hong Kong corporation incorporated on May 2, 2007. AGRL is an investment holding company of subsidiaries that, through profit interest agreements with affiliated companies known as VIP gaming promoters, are entitled to receive all of the profits of the VIP gaming promoters from VIP gaming rooms operated by them in casinos at major hotels in Macau. As a result of the acquisition, AGRL is now our direct wholly owned subsidiary and its subsidiaries are our indirect wholly owned subsidiaries. We have no operations other than those of AGRL and its subsidiaries. Prior to the acquisition of AGRL, we had no operating business. At the time of the acquisition, we changed our name to “Asia Entertainment & Resources Ltd.”

On November 15, 2010, we consummated the transactions contemplated by that certain Profit Interest Purchase Agreement dated as of November 10, 2010 (the “King’s Gaming Purchase Agreement”) among us, King’s Gaming Promotion Limited (“King’s Gaming”), Mr. Mok Chi Hung and Mr. Wong Hon Meng (collectively, the “King’s Gaming Seller”), who collectively owned 100% of the equity interests of King’s Gaming, pursuant to which the Company acquired 100% of the profit interest in King’s Gaming. Mr. Wong is the brother of Vong Hon Kun, our Chief Operating Officer, and owned 4% of King’s Gaming immediately prior to the acquisition. Pursuant to the King’s Gaming Purchase Agreement, King’s Gaming sold to us the King’s Gaming Profit Interest (as defined below) pursuant to a separate Profit Interest Agreement entered into between King’s Gaming and Billion Boom International Limited, a company incorporated in the British Virgin Islands and our wholly owned subsidiary. The King’s Gaming Profit Interest was assigned to us at the closing as of November 1, 2010. For purposes of the King’s Gaming Purchase Agreement, “King’s Gaming Profit Interest” means the right, title, interest and benefits in and to 100% of the net operating profit generated by King’s Gaming at the VIP gaming room located at the Venetian Macao-Resort-Hotel located in Cotai, Macao.

On September 12, 2012, we consummated the transactions contemplated by that certain Profit Interest Purchase Agreement dated as of September 5, 2012 (the “Bao Li Gaming Purchase Agreement”) among us, Bao Li Gaming, Mr. Lou Kan Kuong and Mr. Lei Kam Keong (collectively, the “Bao Li Gaming Seller”), who collectively owned 100% of the equity interests of Bao Li Gaming, pursuant to which the Company acquired 100% of the profit interest in Bao Li Gaming. Pursuant to the Bao Li Gaming Purchase Agreement, Bao Li Gaming sold to us the Bao Li Gaming Profit Interest (as defined below) pursuant to a separate Profit Interest Agreement entered into between Bao Li Gaming and Jubilee Dynasty Ltd., a company incorporated in the British Virgin Islands and our wholly owned subsidiary. The Bao Li Gaming Profit Interest was assigned to us at the closing as of September 1, 2012. For purposes of the Bao Li Gaming Purchase Agreement, “Bao Li Gaming Profit Interest” means the right, title, interest and benefits in and to 100% of the net operating profit generated by Bao Li Gaming at the VIP gaming room located at the City of Dreams Macau at Crown Towers, City of Dreams, Estrada do Istmo, Cotai, Macau.

Beginning in September 2012, we changed our remuneration model from a fixed commission of 1.25% of Rolling Chip Turnover to a revenue sharing model. Under the revenue sharing model, we share in the gaming wins and losses of the VIP gaming rooms we promote. Our share of the gaming wins and losses ranges from 42.5% to 45% in our four VIP gaming rooms. The decision to change to the revenue sharing model was made

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as a result of our expansion to four VIP gaming rooms, which enhances our ability to spread the risk of fluctuations surrounding gaming wins and losses. Also in September 2012, we implemented a new program for large VIP agents who do not require credit from us (“non-credit agents”). We now provide these non-credit agents with an option to share in our wins/losses under the revenue sharing model based on their proportionate contribution of total Rolling Chip Turnover. The decision to implement this program for non-credit agents was made in order to reignite growth in Rolling Chip Turnover by attracting more non-credit agents. Even though we no longer use the fixed commission Rolling Chip Turnover operating model, increase in Rolling Chip Turnover should result in higher monthly revenue from casino operators and ultimately allow us to negotiate a higher revenue sharing percentage on the revenue sharing model discussed above. In addition, the increase in Rolling Chip Turnover will help to mitigate the volatility of the revenue sharing model.

Our principal executive offices are located at Unit 605, East Town Building, 16 Fenwick Street, Wanchai, Hong Kong and our telephone number is 852-2110-9133. The address of our registered office is PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands, and our registered office provider, Maples Corporate Services Limited, is located at the same address. Our website, which contains additional information about our company, can be accessed at: http://ir.aerlf.com/index.cfm , but that information is not part of this prospectus.

The Securities We May Offer

We may use this prospectus to offer up to $150,000,000 of:

We may also offer securities of the types listed above that are convertible or exchangeable into one or more of the securities listed above.

Each time we sell securities under this prospectus, we will provide a prospectus supplement that will contain specific information about the terms of that offering.

The Securities That May Be Offered by the Selling Shareholders

This prospectus may also be used by the Selling Shareholders named herein to offer up to 7,800,400 ordinary shares.

In connection with our acquisition of King’s Gaming, we issued 1,500,000 of our ordinary shares to the King’s Gaming Seller. In addition, we are required to issue to the King’s Gaming Seller (i) up to an aggregate of 1,500,000 Ordinary Shares in the event certain gross profit targets are achieved for each of the three years following the closing date, (ii) up to an aggregate of 700,000 Ordinary Shares in the event certain gross profit targets are achieved for each of the seven years following the third anniversary of the closing date, and (iii) additional Ordinary Shares in the event the gross profit targets for each of the ten years following the closing date are exceeded by at least $1,000,000 (the “King’s Gaming Additional Incentive Shares”). For each $1,000,000 in which the gross profit target for such year is exceeded, 10,000 King’s Gaming Additional Incentive Shares will be issued. The King’s Gaming Seller is not entitled to any King’s Gaming Additional Incentive Shares on a pro rata basis for multiples of less or greater than $1,000,000. King’s Gaming achieved approximately $8.2 million of gross profit for the year ended December 31, 2011, and, accordingly, the King’s Gaming Seller received an aggregate of 520,000 King’s Gaming Earnout Shares and King’s Gaming Additional Incentive Shares. This prospectus provides for the resale of (i) the 1,500,000 shares issued to King’s Gaming Seller, and (ii) of up to 2,500,000 of such additional earnout shares.

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In connection with our acquisition of Bao Li Gaming, we are required to issue to the Bao Li Gaming Seller (i) up to 625,000 Ordinary Shares per year in the event Bao Li Gaming achieves a rolling chip turnover of $2.5 billion (the “Base Rolling Chip Turnover Target”) in any of the three years ended December 31, 2013, 2014 and 2015 and (ii) in any of the three years ended December 31, 2013, 2014 and 2015, for each $25,000,000 in which the Base Rolling Chip Turnover Target in any year is exceeded, 6,250 Ordinary Shares, up to a maximum of 625,000 Ordinary Shares in any particular year (the “Bao Li Gaming Additional Earnout Shares”). The Bao Li Gaming Seller is not entitled to any Bao Li Gaming Additional Earnout Shares on a pro rata basis for multiples of less or greater than $25,000,000.

In addition, this prospectus provides for the resale of up to 50,400 ordinary shares issued to certain of our officers and directors under our Asia Entertainment & Resources Ltd. 2011 Omnibus Securities and Incentive Plan (the “2011 Incentive Plan”).

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USE OF PROCEEDS

Unless any applicable prospectus supplement states otherwise, the net proceeds from the sale of securities offered by the Company will be used for general corporate purposes, which may include additions to working capital, capital expenditures, financing of acquisitions and other business combinations, investments in or extensions of credit to our subsidiaries and the repayment of indebtedness.

We will not receive any portion of the net proceeds by the Selling Shareholders from the sale of their shares.

CAPITALIZATION AND INDEBTEDNESS

The following table sets forth our capitalization and indebtedness at September 30, 2012:

Line of Credit Payable (1)		$	54,812,330
Shareholder Loans (current portion) (2)			6,234,512
Total short-term debt			61,046,842
Shareholder Loans (long term portion) (3)			60,000,000
Total long-term debt			60,000,000
Shareholders’ equity
Share capital			4,219
Additional Paid-in Capital			72,875,073
Other Equity			136,185,948
Total shareholders’ equity			209,065,240
Total capitalization and indebtedness		$	330,112,082

(1)

The lines of credit are guaranteed by Mr. Lam or Mr. Vong or Mr. Lou and are secured by their personal checks and a deposit paid by Mr. Lam.

(2)

Shareholder loan, current portion is unsecured and non-interest bearing and due on demand.

(3)

Shareholder loan, long term portion is fixed, non-interest bearing and due on April 18, 2014. The loans are convertible at the option of the lenders at a rate of $20 per Ordinary Share or an aggregate of 3,000,000 Ordinary Shares. Additionally, should the closing price of the Ordinary Shares as reported by the Nasdaq Stock Market for any ten (10) consecutive Trading Days following the date of amendment equals or exceeds $25, the Company shall have the right to convert all of the loans at a rate of $20 per Ordinary Shares, or an aggregate of 3,000,000 Ordinary Shares.

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Amendments and Supplements to Warrant Agreement

We and the warrant agent may amend or supplement the warrant agreement for a series of warrants without the consent of the holders of the warrants issued thereunder to effect changes that are not inconsistent with the provisions of the warrants and that do not materially and adversely affect the interests of the holders of the warrants.

DESCRIPTION OF SUBSCRIPTION RIGHTS

The following summary of certain provisions of the subscription rights does not purport to be complete and is subject to, and qualified in its entirety by reference to, the provisions of the certificate evidencing the subscription rights that will be filed with the SEC in connection with the offering of such subscription rights.

General

We may issue subscription rights to purchase ordinary shares. Subscription rights may be issued independently or together with any other offered security and may or may not be transferable by the person purchasing or receiving the subscription rights. In connection with any subscription rights offering to our shareholders, we may enter into a standby underwriting arrangement with one or more underwriters pursuant to which such underwriters will purchase any offered securities remaining unsubscribed for after such subscription rights offering. In connection with a subscription rights offering to our shareholders, we will distribute certificates evidencing the subscription rights and a prospectus supplement to our shareholders on the record date that we set for receiving subscription rights in such subscription rights offering.

The applicable prospectus supplement will describe the following terms of subscription rights in respect of which this prospectus is being delivered:

Exercise of Subscription Rights

Each subscription right will entitle the holder of the subscription right to purchase for cash such amount of ordinary shares at such exercise price as shall be set forth in, or be determinable as set forth in, the prospectus supplement relating to the subscription rights offered thereby. Subscription rights may be exercised

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at any time up to the close of business on the expiration date for such subscription rights set forth in the prospectus supplement. After the close of business on the expiration date, all unexercised subscription rights will become void.

Subscription rights may be exercised as set forth in the prospectus supplement relating to the subscription rights offered thereby. Upon receipt of payment and the subscription rights certificate properly completed and duly executed at the corporate trust office of the subscription rights agent or any other office indicated in the prospectus supplement, we will forward, as soon as practicable, the ordinary shares purchasable upon such exercise. We may determine to offer any unsubscribed offered securities directly to persons other than shareholders, to or through agents, underwriters or dealers or through a combination of such methods, including pursuant to standby underwriting arrangements, as set forth in the applicable prospectus supplement.

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Subsequent filings may include additional terms not listed above. Unless otherwise indicated in subsequent filings with the Commission relating to the indenture, principal, premium and interest will be payable and the debt securities will be transferable at the corporate trust office of the applicable trustee. Unless other arrangements are made or set forth in subsequent filings or a supplemental indenture, principal, premium and interest will be paid by checks mailed to the holders at their registered addresses.

Unless otherwise indicated in subsequent filings with the Commission, the debt securities will be issued only in fully registered form without coupons, in denominations of $1,000 or any integral multiple thereof. No service charge will be made for any transfer or exchange of the debt securities, but we may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with these debt securities.

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Some or all of the debt securities may be issued as discounted debt securities to be sold at a substantial discount below the stated principal amount. Macau, Hong Kong S.A.R., or United States federal income tax consequences and other special considerations applicable to any discounted securities will be described in subsequent filings with the Commission relating to those securities.

We refer you to applicable subsequent filings with respect to any deletions or additions or modifications from the description contained in this prospectus.

Senior Debt

We may issue senior debt securities under the senior debt indenture. These senior debt securities will rank on an equal basis with all our other unsecured debt except subordinated debt.

Subordinated Debt

We may issue subordinated debt securities under the subordinated debt indenture. Subordinated debt will rank subordinate and junior in right of payment, to the extent set forth in the subordinated debt indenture, to all our senior debt (both secured and unsecured).

In general, the holders of all senior debt are first entitled to receive payment of the full amount unpaid on senior debt before the holders of any of the subordinated debt securities are entitled to receive a payment on account of the principal or interest on the indebtedness evidenced by the subordinated debt securities in certain events.

If we default in the payment of any principal of, or premium, if any, or interest on any senior debt when it becomes due and payable after any applicable grace period, then, unless and until the default is cured or waived or ceases to exist, we cannot make a payment on account of or redeem or otherwise acquire the subordinated debt securities.

If there is any insolvency, bankruptcy, liquidation or other similar proceeding relating to us, then all senior debt must be paid in full before any payment may be made to any holders of subordinated debt securities.

Furthermore, if we default in the payment of the principal of and accrued interest on any subordinated debt securities that is declared due and payable upon an event of default under the subordinated debt indenture, holders of all our senior debt will first be entitled to receive payment in full in cash before holders of such subordinated debt can receive any payments.

Senior debt means:

but senior debt does not include:

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Covenants

Under the terms of the indenture, we covenant, among other things:

Any series of offered debt securities may have covenants in addition to or differing from those included in the applicable indenture which will be described in subsequent filings prepared in connection with the offering of such securities, limiting or restricting, among other things:

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Modification of the Indentures

Each indenture and the rights of the respective holders may be modified by us only with the consent of holders of not less than a majority in aggregate principal amount of the outstanding debt securities of all series under the respective indenture affected by the modification, taken together as a class. But no modification that:

will be effective against any holder without his consent. Other terms as specified in subsequent filings may be modified without the consent of the holders.

Events of Default

Each indenture defines an event of default for the debt securities of any series as being any one of the following events:

An event of default of one series of debt securities does not necessarily constitute an event of default with respect to any other series of debt securities.

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There may be such other or different events of default as described in an applicable subsequent filing with respect to any class or series of offered debt securities.

In case an event of default occurs and continues for the debt securities of any series, the applicable trustee or the holders of not less than 25% in aggregate principal amount of the debt securities then outstanding of that series may declare the principal and accrued but unpaid interest of the debt securities of that series to be due and payable. Any event of default for the debt securities of any series which has been cured may be waived by the holders of a majority in aggregate principal amount of the debt securities of that series then outstanding.

Each indenture requires us to file annually after debt securities are issued under that indenture with the applicable trustee a written statement signed by two of our officers as to the absence of material defaults under the terms of that indenture. Each indenture provides that the applicable trustee may withhold notice to the holders of any default if it considers it in the interest of the holders to do so, except notice of a default in payment of principal, premium or interest.

Subject to the duties of the trustee in case an event of default occurs and continues, each indenture provides that the trustee is under no obligation to exercise any of its rights or powers under that indenture at the request, order or direction of holders unless the holders have offered to the trustee reasonable indemnity. Subject to these provisions for indemnification and the rights of the trustee, each indenture provides that the holders of a majority in principal amount of the debt securities of any series then outstanding have the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee or exercising any trust or power conferred on the trustee as long as the exercise of that right does not conflict with any law or the indenture.

Defeasance and Discharge

The terms of each indenture provide us with the option to be discharged from any and all obligations in respect of the debt securities issued thereunder upon the deposit with the trustee, in trust, of money or U.S. government obligations, or both, which through the payment of interest and principal in accordance with their terms will provide money in an amount sufficient to pay any installment of principal, premium and interest on, and any mandatory sinking fund payments in respect of, the debt securities on the stated maturity of the payments in accordance with the terms of the debt securities and the indenture governing the debt securities. This right may only be exercised if, among other things, we have received from, or there has been published by, the United States Internal Revenue Service a ruling to the effect that such a discharge will not be deemed, or result in, a taxable event with respect to holders. This discharge would not apply to our obligations to register the transfer or exchange of debt securities, to replace stolen, lost or mutilated debt securities, to maintain paying agencies and hold moneys for payment in trust.

Defeasance of Certain Covenants

The terms of the debt securities provide us with the right not to comply with specified covenants and that specified events of default described in a subsequent filing will not apply. In order to exercise this right, we will be required to deposit with the trustee money or U.S. government obligations, or both, which through the payment of interest and principal will provide money in an amount sufficient to pay principal, premium, if any, and interest on, and any mandatory sinking fund payments in respect of, the debt securities on the stated maturity of such payments in accordance with the terms of the debt securities and the indenture governing such debt securities. We will also be required to deliver to the trustee an opinion of counsel to the effect that the deposit and related covenant defeasance will not cause the holders of such series to recognize income, gain or loss for federal income tax purposes.

A subsequent filing may further describe the provisions, if any, of any particular series of offered debt securities permitting a discharge defeasance.

Global Securities

The debt securities of a series may be issued in whole or in part in the form of one or more global securities that will be deposited with, or on behalf of, a depository identified in an applicable subsequent filing and registered in the name of the depository or a nominee for the depository. In such a case, one or more global securities will be issued in a denomination or aggregate denominations equal to the portion of the

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aggregate principal amount of outstanding debt securities of the series to be represented by the global security or securities. Unless and until it is exchanged in whole or in part for debt securities in definitive certificated form, a global security may not be transferred except as a whole by the depository for the global security to a nominee of the depository or by a nominee of the depository to the depository or another nominee of the depository or by the depository or any nominee to a successor depository for that series or a nominee of the successor depository and except in the circumstances described in an applicable subsequent filing.

We expect that the following provisions will apply to depository arrangements for any portion of a series of debt securities to be represented by a global security. Any additional or different terms of the depository arrangement will be described in an applicable subsequent filing.

Upon the issuance of any global security, and the deposit of that global security with or on behalf of the depository for the global security, the depository will credit, on its book-entry registration and transfer system, the principal amounts of the debt securities represented by that global security to the accounts of institutions that have accounts with the depository or its nominee. The accounts to be credited will be designated by the underwriters or agents engaging in the distribution of the debt securities or by us, if the debt securities are offered and sold directly by us. Ownership of beneficial interests in a global security will be limited to participating institutions or persons that may hold interests through such participating institutions. Ownership of beneficial interests by participating institutions in the global security will be shown on, and the transfer of the beneficial interests will be effected only through, records maintained by the depository for the global security or by its nominee. Ownership of beneficial interests in the global security by persons that hold through participating institutions will be shown on, and the transfer of the beneficial interests within the participating institutions will be effected only through, records maintained by those participating institutions. The laws of some jurisdictions may require that purchasers of securities take physical delivery of the securities in certificated form. The foregoing limitations and such laws may impair the ability to transfer beneficial interests in the global securities.

So long as the depository for a global security, or its nominee, is the registered owner of that global security, the depository or its nominee, as the case may be, will be considered the sole owner or holder of the debt securities represented by the global security for all purposes under the applicable indenture. Unless otherwise specified in an applicable subsequent filing and except as specified below, owners of beneficial interests in the global security will not be entitled to have debt securities of the series represented by the global security registered in their names, will not receive or be entitled to receive physical delivery of debt securities of the series in certificated form and will not be considered the holders thereof for any purposes under the indenture. Accordingly, each person owning a beneficial interest in the global security must rely on the procedures of the depository and, if such person is not a participating institution, on the procedures of the participating institution through which the person owns its interest, to exercise any rights of a holder under the indenture.

The depository may grant proxies and otherwise authorize participating institutions to give or take any request, demand, authorization, direction, notice, consent, waiver or other action which a holder is entitled to give or take under the applicable indenture. We understand that, under existing industry practices, if we request any action of holders or any owner of a beneficial interest in the global security desires to give any notice or take any action a holder is entitled to give or take under the applicable indenture, the depository would authorize the participating institutions to give the notice or take the action, and participating institutions would authorize beneficial owners owning through such participating institutions to give the notice or take the action or would otherwise act upon the instructions of beneficial owners owning through them.

Unless otherwise specified in applicable subsequent filings, payments of principal, premium and interest on debt securities represented by a global security registered in the name of a depository or its nominee will be made by us to the depository or its nominee, as the case may be, as the registered owner of the global security.

We expect that the depository for any debt securities represented by a global security, upon receipt of any payment of principal, premium or interest, will credit participating institutions’ accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of the global security as shown on the records of the depository. We also expect that payments by participating institutions to owners

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of beneficial interests in the global security held through those participating institutions will be governed by standing instructions and customary practices, as is now the case with the securities held for the accounts of customers registered in street name, and will be the responsibility of those participating institutions. None of us, the trustees or any agent of ours or the trustees will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial interests in a global security, or for maintaining, supervising or reviewing any records relating to those beneficial interests.

Unless otherwise specified in the applicable subsequent filings, a global security of any series will be exchangeable for certificated debt securities of the same series only if:

Upon any exchange, owners of beneficial interests in the global security or securities will be entitled to physical delivery of individual debt securities in certificated form of like tenor and terms equal in principal amount to their beneficial interests, and to have the debt securities in certificated form registered in the names of the beneficial owners, which names are expected to be provided by the depository’s relevant participating institutions to the applicable trustee.

In the event that the Depository Trust Company, or DTC, acts as depository for the global securities of any series, the global securities will be issued as fully registered securities registered in the name of Cede & Co., DTC’s partnership nominee.

The Depository Trust Company (“DTC”) is a member of the U.S. Federal Reserve System, a limited-purpose trust company under New York State banking law and a registered clearing agency with the U.S Securities and Exchange Commission. Established in 1973, DTC was created to reduce costs and provide clearing and settlement efficiencies by immobilizing securities and making “book-entry” changes to ownership of the securities. DTC provides securities movements for the net settlements of the National Securities Clearing Corporation’s (“NSCC”), and settlement for institutional trades (which typically involve money and securities transfers between custodian banks and broker/dealers), as well as money market instruments.

DTC is a subsidiary of The Depository Trust & Clearing Company (“DTCC”). DTCC is a holding company established in 1999 to combine DTC and NSCC. DTCC, through its subsidiaries, provides clearing, settlement and information services for equities, corporate and municipal bonds, government and mortgage backed securities, money market instruments and over the-counter derivatives. In addition, DTCC is a leading processor of mutual funds and insurance transactions, linking funds and carriers with their distribution networks. DTCC’s customer base extends to thousands of companies within the global financial services industry. DTCC serves brokers, dealers, institutional investors, banks, trust companies, mutual fund companies, insurance carriers, hedge funds and other financial intermediaries — either directly or through correspondent relationships.

To facilitate subsequent transfers, the debt securities may be registered in the name of DTC’s nominee, Cede & Co. The deposit of the debt securities with DTC and their registration in the name of Cede & Co. will effect no change in beneficial ownership. DTC has no knowledge of the actual beneficial owners of the debt securities. DTC’s records reflect only the identity of the direct participating institutions to whose accounts debt securities are credited, which may or may not be the beneficial owners. The participating institutions remain responsible for keeping account of their holdings on behalf of their customers.

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Delivery of notices and other communications by DTC to direct participating institutions, by direct participating institutions to indirect participating institutions, and by direct participating institutions and indirect participating institutions to beneficial owners of debt securities are governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect.

Neither DTC nor Cede & Co. consents or votes with respect to the debt securities. Under its usual procedures, DTC mails a proxy to the issuer as soon as possible after the record date. The proxy assigns Cede & Co.’s consenting or voting rights to those direct participating institutions to whose accounts the debt securities are credited on the record date.

If applicable, redemption notices shall be sent to Cede & Co. If less than all of the debt securities of a series represented by global securities are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each direct participating institution in that issue to be redeemed.

To the extent that any debt securities provide for repayment or repurchase at the option of the holders thereof, a beneficial owner shall give notice of any option to elect to have its interest in the global security repaid by us, through its participating institution, to the applicable trustee, and shall effect delivery of the interest in a global security by causing the direct participating institution to transfer the direct participating institution’s interest in the global security or securities representing the interest, on DTC’s records, to the applicable trustee. The requirement for physical delivery of debt securities in connection with a demand for repayment or repurchase will be deemed satisfied when the ownership rights in the global security or securities representing the debt securities are transferred by direct participating institutions on DTC’s records.

DTC may discontinue providing its services as securities depository for the debt securities at any time. Under such circumstances, in the event that a successor securities depository is not appointed, debt security certificates are required to be printed and delivered as described above.

We may decide to discontinue use of the system of book-entry transfers through the securities depository. In that event, debt security certificates will be printed and delivered as described above.

DTCC is industry-owned by its customers who are members of the financial community, such as banks, broker/dealers, mutual funds and other financial institutions. DTCC operates on an at-cost basis, returning excess revenue from transaction fees to its member firms. All services provided by DTC are regulated by the U.S. Securities and Exchange Commission.

The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that we believe to be reliable, but we take no responsibility for its accuracy.

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DESCRIPTION OF THE 2011 INCENTIVE PLAN

The purpose of the 2011 Incentive Plan is to assist the Company to attract, retain and provide incentives to key management employees and nonemployee directors of, and nonemployee consultants, to the Company and its affiliates, and to align the interests of such employees, nonemployee directors and nonemployee consultants with those of the Company’s shareholders. Awards under the 2011 Incentive Plan are limited in the aggregate to 200,000 ordinary shares.

General Description of the 2011 Incentive Plan

The following is a summary of the material provisions of the 2011 Incentive Plan and is qualified in its entirety by reference to the complete text of the 2011 Incentive Plan, a copy of which is included as an exhibit to this registration statement.

Administration .  The 2011 Incentive Plan is administered by a committee (the “Committee”) designated by the Board of Directors, which shall consist solely of three (3) or more Directors who are each (i) “outside directors” (“Outside Directors”) within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), (ii) “non-employee directors” within the meaning of Rule 16b-3 (“Non-Employee Directors”) and (iii) “independent” for purposes of any applicable listing requirements; provided, however, that the Board of Directors or the Committee may delegate to a committee of one or more members of the Board of Directors who are not (x) Outside Directors, the authority to grant awards to eligible persons who are not (A) then “covered employees” within the meaning of Section 162(m) of the Code and are not expected to be “covered employees” at the time of recognition of income resulting from such award, or (B) persons with respect to whom the Company wishes to comply with the requirements of Section 162(m) of the Code, and/or (y) Non-Employee Directors, the authority to grant awards to eligible persons who are not then subject to the requirements of Section 16 of the Exchange Act. The Board of Directors has determined that the Company’s Compensation Committee shall act as the Committee to administer the 2011 Incentive Plan. If a member of the Committee shall be eligible to receive an award under the Plan, such Committee member shall have no authority hereunder with respect to his or her own award. Among other things, the Committee has complete discretion, subject to the terms of the 2011 Incentive Plan, to determine the employees, non-employee directors and non-employee consultants to be granted an award under the 2011 Incentive Plan, the type of award to be granted, the number of ordinary shares subject to each award, the exercise price under each option and base price for each SAR (as defined below), the term of each award, the vesting schedule for an award, whether to accelerate vesting, the value of the ordinary shares underlying the award, and the required withholdings, if any. The Committee is also authorized to construe the award agreements, and may prescribe rules relating to the 2011 Incentive Plan.

Grant of Awards; Shares Available for Awards .  The 2011 Incentive Plan provides for the grant of awards which are distribution equivalent rights, incentive share options, non-qualified share options, performance shares, performance units, restricted shares, restricted share units, share appreciation rights (“SARs”), tandem share appreciation rights, unrestricted shares or any combination of the foregoing, to key management employees and nonemployee directors of, and nonemployee consultants of, the Company or any of its subsidiaries (each a “participant”) (however, solely employees of the Company or its subsidiaries are eligible for awards which are incentive share options). The Company has reserved a total of 200,000 shares for issuance as or under awards to be made under the 2011 Incentive Plan. To the extent that an award lapses, expires, is canceled, is terminated unexercised or ceases to be exercisable for any reason, or the rights of its holder terminate, any shares subject to such award shall again be available for the grant of a new award. The 2011 Incentive Plan shall continue in effect, unless sooner terminated, until the tenth (10 ^th ) anniversary of the date on which it is adopted by the Board of Directors (except as to awards outstanding on that date). The Board of Directors in its discretion may terminate the 2011 Incentive Plan at any time with respect to any shares for which awards have not theretofore been granted; provided, however, that the 2011 Incentive Plan’s termination shall not materially and adversely impair the rights of a holder with respect to any award theretofore granted without the consent of the holder. The number of shares for which awards which are options or SARs may be granted to a participant under the 2011 Incentive Plan during any calendar year is limited to 10,000.

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Future new hires, non-employee directors and additional non-employee consultants would be eligible to participate in the 2011 Incentive Plan as well. The number of awards to be granted to officers, non-employee directors, employees and non-employee consultants cannot be determined at this time as the grant of awards is dependent upon various factors such as hiring requirements and job performance.

As of December 28, 2012, an aggregate of 50,400 unrestricted ordinary shares have been granted and issued to our current and former directors and officers during 2010 and 2011 for their services during 2010 and 2011, and 149,600 remain available for issuance.

Options .  The term of each option shall be as specified in the option agreement; provided, however, that except for options which are incentive share options (“ISOs”) granted to an employee who owns or is deemed to own (by reason of the attribution rules applicable under Code Section 424(d)) more than 10% of the combined voting power of all classes of stock of the Company or the parent or a subsidiary of the Company (a “ten percent shareholder”), no option shall be exercisable after the expiration of ten (10) years from the date of its grant.

The price at which an ordinary share may be purchased upon exercise of an option shall be determined by the Committee; provided, however, that such option price (i) shall not be less than the fair market value of an ordinary Share on the date such option is granted, and (ii) shall be subject to adjustment as provided in the 2011 Incentive Plan. The Committee or the Board of Directors shall determine the time or times at which or the circumstances under which an option may be exercised in whole or in part, the time or times at which options shall cease to be or become exercisable following termination of the option holder’s employment or upon other conditions, the methods by which such exercise price may be paid or deemed to be paid, the form of such payment, and the methods by or forms in which ordinary shares will be delivered or deemed to be delivered to participants who exercise options.

Options which are ISOs shall comply in all respects with Section 422 of the Code. In the case of ISOs granted to a ten percent shareholder, the per share exercise price under such ISO (to the extent required by the Code at the time of grant) shall be no less than 110% of the fair market value of a Share on the date such ISO is granted. The term of an ISO may not exceed 10 years (5 years in the case of an ISO granted to a ten percent shareholder). ISOs may solely be granted to employees. In addition, the aggregate fair market value of the Shares subject to an ISO (determined at the time of grant) which are exercisable for the first time by an employee during any calendar year may not exceed $100,000.

Restricted Share Awards .  A restricted share award is a grant or sale of ordinary shares to the participant, subject to such restrictions on transferability, risk of forfeiture and other restrictions, if any, as the Committee or the Board may impose, which restrictions may lapse separately or in combination at such times, under such circumstances (including based on achievement of performance goals and/or future service requirements), in such installments or otherwise, as the Committee or the Board of Directors may determine at the date of grant or purchase or thereafter. Except to the extent restricted under the terms of the 2011 Incentive Plan and any agreement relating to the restricted share award, a participant who is granted or has purchased restricted shares shall have all of the rights of a shareholder, including the right to vote the restricted shares and the right to receive dividends thereon (subject to any mandatory reinvestment or other requirement imposed by the Committee or the Board of Directors). During the restricted period applicable to the restricted shares, subject to certain exceptions, the restricted shares may not be sold, transferred, pledged, hypothecated, or otherwise disposed of by the participant.

Unrestricted Share Awards .  Pursuant to the terms of the applicable unrestricted share award agreement, a holder may be awarded (or sold) ordinary shares which are not subject to restrictions, in consideration for past services rendered thereby to the Company or an affiliate or for other valid consideration.

Restricted Share Units Awards .  The Committee shall set forth in the applicable restricted share unit award agreement the individual service-based or performance-based vesting requirement which the holder would be required to satisfy before the holder would become entitled to payment and the number of units awarded to the Holder. Such payment shall be subject to a “substantial risk of forfeiture” under Section 409A of the Code. At the time of such award, the Committee may, in its sole discretion, prescribe additional terms and conditions or restrictions. The holder of a restricted share unit shall be entitled to receive a cash payment

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equal to the fair market value of an ordinary share, or one (1) ordinary share, as determined in the sole discretion of the Committee and as set forth in the restricted share unit award agreement, for each restricted share unit subject to such restricted share unit award, if and to the extent the applicable vesting requirement is satisfied. Such payment shall be made no later than by the fifteenth (15 ^th ) day of the third (3 ^rd ) calendar month next following the end of the calendar year in which the restricted share unit first becomes vested.

Performance Unit Awards .  The Committee shall set forth in the applicable performance unit award agreement the performance goals and objectives (and the period of time to which such goals and objectives shall apply) which the holder and/or the Company would be required to satisfy before the holder would become entitled to payment, the number of units awarded to the holder and the dollar value assigned to each such unit. Such payment shall be subject to a “substantial risk of forfeiture” under Section 409A of the Code. At the time of such award, the Committee may, in its sole discretion, prescribe additional terms and conditions or restrictions. The holder of a performance unit shall be entitled to receive a cash payment equal to the dollar value assigned to such unit under the applicable performance unit award agreement if the holder and/or the Company satisfy (or partially satisfy, if applicable under the applicable performance unit award agreement) the performance goals and objectives set forth in such performance unit award agreement. If achieved, such payment shall be made no later than by the fifteenth (15 ^th ) day of the third (3 ^rd ) calendar month next following the end of the Company’s fiscal year to which such performance goals and objectives relate.

Performance Share Awards .  The Committee shall set forth in the applicable performance share award agreement the performance goals and objectives (and the period of time to which such goals and objectives shall apply) which the holder and/or the Company would be required to satisfy before the holder would become entitled to the receipt of ordinary shares pursuant to such holder’s performance share award and the number of ordinary shares subject to such performance share award. Such payment shall be subject to a “substantial risk of forfeiture” under Section 409A of the Code and, if such goals and objectives are achieved, the distribution of such ordinary shares shall be made no later than by the fifteenth (15 ^th ) day of the third (3 ^rd ) calendar month next following the end of the Company’s fiscal year to which such goals and objectives relate. At the time of such award, the Committee may, in its sole discretion, prescribe additional terms and conditions or restrictions. The holder of a performance share award shall have no rights as a shareholder of the Company until such time, if any, as the holder actually receives ordinary shares pursuant to the performance share award.

Distribution Equivalent Rights .  The Committee shall set forth in the applicable distribution equivalent rights award agreement the terms and conditions, if any, including whether the holder is to receive credits currently in cash, is to have such credits reinvested (at fair market value determined as of the date of reinvestment) in additional ordinary shares or is to be entitled to choose among such alternatives. Such receipt shall be subject to a “substantial risk of forfeiture” under Section 409A of the Code and, if such award becomes vested, the distribution of such cash or ordinary shares shall be made no later than by the fifteenth (15 ^th ) day of the third (3 ^rd ) calendar month next following the end of the Company’s fiscal year in which the holder’s interest in the award vests. Distribution equivalent rights awards may be settled in cash or in ordinary shares, as set forth in the applicable distribution equivalent rights award agreement. A distribution equivalent rights award may, but need not be, awarded in tandem with another award, whereby, if so awarded, such distribution equivalent rights award shall expire, terminate or be forfeited by the holder, as applicable, under the same conditions as under such other award. The distribution equivalent rights award agreement for a distribution equivalent rights award may provide for the crediting of interest on a distribution rights award to be settled in cash at a future date (but in no event later than by the fifteenth (15 ^th ) day of the third (3 ^rd ) calendar month next following the end of the Company’s fiscal year in which such interest was credited), at a rate set forth in the applicable distribution equivalent rights award agreement, on the amount of cash payable thereunder.

Share Appreciation Rights .  A SAR provides the participant to whom it is granted the right to receive, upon its exercise, the excess of (A) the fair market value of the number of ordinary shares subject to the SAR on the date of exercise, over (B) the product of the number of ordinary shares subject to the SAR multiplied by the base value under the SAR, as determined by the Committee or the Board. The base value of a SAR shall not be less than the fair market value of an ordinary share on the date of grant. If the Committee grants a share appreciation right which is intended to be a tandem SAR, additional restrictions apply.

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Reorganization .  Subject to certain restrictions, the 2011 Incentive Plan provides for the adjustment of ordinary shares underlying awards previously granted if, and whenever, prior to the expiration or distribution to the holder of ordinary shares underlying an award theretofore granted, the Company shall effect a subdivision or consolidation of the ordinary shares or the payment of an ordinary share dividend on ordinary shares without receipt of consideration by the Company. If the Company recapitalizes or otherwise changes its capital structure, thereafter upon any exercise or satisfaction, as applicable, of a previously granted award, the holder shall be entitled to receive (or entitled to purchase, if applicable) under such award, in lieu of the number of ordinary shares then covered by such award, the number and class of shares and securities to which the holder would have been entitled pursuant to the terms of the recapitalization if, immediately prior to such recapitalization, the holder had been the holder of record of the number of ordinary shares then covered by such award. The 2011 Incentive Plan also provides for the adjustment of shares underlying awards previously granted by the Board of Directors in the event of changes to the outstanding ordinary shares by reason of extraordinary cash dividend, reorganization, mergers, consolidations, combinations, split ups, spin offs, exchanges or other relevant changes in capitalization occurring after the date of the grant of any award, subject to certain restrictions.

Amendment and Termination .  The 2011 Incentive Plan shall continue in effect, unless sooner terminated pursuant to its terms, until the tenth (10 ^th ) anniversary of the date on which it is adopted by the Board of Directors (except as to awards outstanding on that date). The Board of Directors may terminate the 2011 Incentive Plan at any time with respect to any shares for which awards have not theretofore been granted; provided, however, that the 2011 Incentive Plan’s termination shall not materially and adversely impair the rights of a holder with respect to any award theretofore granted without the consent of the holder. The Board of Directors shall have the right to alter or amend the 2011 Incentive Plan or any part hereof from time to time; provided, however, that without the approval by a majority of the votes cast at a meeting of shareholders at which a quorum representing a majority of the ordinary shares of the Company entitled to vote generally in the election of directors is present in person or by proxy, no amendment or modification of the 2011 Incentive Plan may (i) materially increase the benefits accruing to holders, (ii) except as otherwise expressly provided in the 2011 Incentive Plan, materially increase the number of ordinary shares subject to the 2011 Incentive Plan or the individual award agreements, (iii) materially modify the requirements for participation, or (iv) amend, modify or suspend certain repricing prohibitions or amendment and termination provisions as specified therein. In addition, no change in any award theretofore granted may be made which would materially and adversely impair the rights of a holder with respect to such award without the consent of the holder (unless such change is required in order to cause the benefits under the 2011 Incentive Plan to qualify as “performance-based” compensation within the meaning of Section 162(m) of the Code or to exempt the 2011 Incentive Plan or any Award from Section 409A of the Code).

Certain U.S. Federal Income Tax Consequences of the 2011 Incentive Plan

The following is a general summary of the U.S. federal income tax consequences under current tax law to the Company, were it subject to U.S. federal income taxation, and to participants under the 2011 Incentive Plan who are individual citizens or residents of the United States for U.S. federal income tax purposes (“U.S. participants”) of options, which include ISOs and non-qualified share options, SARs, restricted shares, performance shares, performance units, restricted share units, dividend equivalent rights and unrestricted shares. It does not purport to cover all of the special rules that may apply, including special rules relating to limitations on the ability of the Company, were it subject to U.S. federal income taxation, to deduct certain compensation for U.S. federal income tax purposes, special rules relating to deferred compensation, golden parachutes, participants subject to Section 16(b) of the Exchange Act and the exercise of a share option with previously-acquired ordinary shares of the Company. This summary assumes that U.S. participants will hold their ordinary shares as capital assets within the meaning of Section 1221 of the Code. This summary does not address the application of the passive foreign investment company rules of the Code to U.S. participants, which are discussed generally in the Company’s most recent Form 20-F as filed with the Securities and Exchange Commission. In addition, this summary does not address the foreign, state or local income or other tax consequences, or any U.S. federal non-income tax consequences, inherent in the acquisition, ownership, vesting, exercise, termination or disposition of an award under the 2011 Incentive Plan or ordinary shares issued pursuant thereto. Participants are urged to consult their own tax advisors concerning the tax consequences to them of an award under the 2011 Incentive Plan or ordinary shares issued pursuant thereto.

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A U.S. participant generally does not recognize taxable income upon the grant of an option. Upon the exercise of a non-qualified share option, the participant generally recognizes ordinary income in an amount equal to the excess, if any, of the fair market value of the ordinary shares acquired on the date of exercise over the exercise price therefor, and the Company would be entitled to a deduction for such amount at that time. If the U.S. participant later disposes the ordinary shares acquired under a non-qualified share option, the U.S. participant generally recognizes a long-term or short-term gain or loss, depending upon the period for which the ordinary shares were held thereby. A long-term capital gain generally is subject to more favorable tax treatment than ordinary income or a short-term capital gain. The deductibility of capital losses is subject to certain limitations. Upon the exercise of an ISO, a U.S. participant generally does not recognize taxable income. If the U.S. participant disposes of the ordinary shares acquired pursuant to the exercise of an ISO more than two years after the date of grant and more than one year after the transfer of the shares to the U.S. participant, the U.S. participant generally recognizes a long-term capital gain or loss, and the Company would not be entitled to a deduction. However, if the U.S. participant disposes of such ordinary shares prior to the end of the required holding period, all or a portion of the gain is treated as ordinary income, and the Company, were it subject to U.S. federal income taxation, generally would be entitled to deduct such amount.

In addition to the U.S. federal income tax consequences described above, the U.S. participant may be subject to the alternative minimum tax (“AMT”), which is payable to the extent it exceeds the U.S. participant’s regular income tax. For this purpose, upon the exercise of an ISO, the excess of the fair market value of the ordinary shares for which the ISO is exercised over the exercise price for such ordinary shares is a preference item for purposes of the AMT. In addition, the U.S. participant’s basis in such ordinary shares is increased by such excess for purposes of computing the gain or loss on the disposition of the ordinary shares for AMT purposes. If a U.S. participant is required to pay any AMT, the amount of such tax which is attributable to deferral preferences (including any ISO adjustment) generally may be allowed as a credit against the participant’s regular income tax liability (and, in certain cases, may be refunded to the participant) in subsequent years. To the extent the credit is not used, it may be carried forward.

A U.S. participant who receives a grant of restricted ordinary shares or who purchases restricted ordinary shares, which ordinary shares, in either case, are subject to a substantial risk of forfeiture and certain transfer restrictions, generally does not recognize income on the receipt of the grant or the purchased restricted ordinary shares and generally recognizes ordinary compensation income at the time the restrictions lapse in an amount equal to the excess, if any, of the fair market value of the shares at such time over any amount paid by the U.S. participant for the ordinary shares. Alternatively, the U.S. participant may elect to be taxed upon receipt of the restricted ordinary shares based on the value of the ordinary shares at the time of receipt. The Company generally would be entitled to deduct such amount at the same time as ordinary compensation income is required to be included by the U.S. participant and in the same amount. Dividends received with respect to restricted ordinary shares generally are treated as compensation, unless the U.S. participant elects to be taxed on the receipt (rather than the vesting) of the restricted ordinary shares.

A U.S. participant generally does not recognize income upon the grant of an SAR. The U.S. participant recognizes ordinary compensation income upon the exercise of the SAR equal to the increase in the value of the underlying ordinary shares, and the Company generally would be entitled to a deduction for such amount.

A U.S. participant generally does not recognize income on the receipt of a performance shares award, performance units award, restricted share units award, unrestricted shares award, or dividend equivalent right award until a payment is received under the award. At such time, the U.S. participant recognizes ordinary compensation income equal to the amount of any cash payments and the fair market value of any ordinary shares received, and the Company generally would be entitled to deduct such amount at such time.

Additional Information

Participants may obtain additional information about the 2011 Incentive Plan and its administrators by directing inquiries in writing to Asia Entertainment & Resources Ltd., Compensation Committee, Unit 605, East Town Building, 16 Fenwick Street, Wanchai, Hong Kong.

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The King’s Gaming Earnout Shares, the King’s Gaming Incentive Shares and the King’s Gaming Additional Incentive Shares have been and shall be released and issued to the King’s Gaming Seller as follows:

Year		Gross Profit Target For King’s Gaming Earnout/ Incentive Shares				King’s Gaming Earnout/ Incentive Shares				King’s Gaming Additional Incentive Shares
2011		$	6,150,000				500,000				*
2012		$	7,380,000				500,000				*
2013		$	8,860,000				500,000				*
2014		$	9,740,000				100,000				*
2015		$	10,720,000				100,000				*
2016		$	11,790,000				100,000				*
2017		$	12,970,000				100,000				*
2018		$	14,260,000				100,000				*
2019		$	15,690,000				100,000				*
2020		$	17,260,000				100,000				*
TOTAL:							2,200,000

King’s Gaming achieved approximately $8.2 million of gross profit for the year ended December 31, 2011, and, accordingly, and the King’s Gaming Seller received an aggregate of 520,000 King’s Gaming Earnout Shares and King’s Gaming Additional Incentive Shares.

Additionally, Mr. Mok has agreed to provide a personal guaranty, for so long as he is employed by the Company or King’s Gaming providing for the guaranty of all obligations of King’s Gaming and the Seller pursuant to the Purchase Agreement, including, but not limited to any bad debts the Seller network of agents may have incurred or may incur in the future.

On September 12, 2012, we entered into the Bao Li Gaming Purchase Agreement to acquire the right to 100% of the profit derived by Bao Li Gaming, effective September 1, 2012, from the promotion of the City of Dreams VIP Room at the City of Dreams Macau at Crown Towers in Macau for $15,000,000.

In addition, as more fully set forth below, the Company will pay or issue to the Bao Li Gaming Seller (i) $13,000,000 in cash and 625,000 Ordinary Shares per year (the “Bao Li Gaming Earnout Shares”) in the event Bao Li Gaming achieves a base rolling chip turnover of $2.5 billion (the “Base Rolling Chip Turnover Target”) in any of the three years ended December 31, 2013, 2014 and 2015 and (ii) in any of the three years ended December 31, 2013, 2014 and 2015, for each $25,000,000 in which the Base Rolling Chip Turnover Target in any year is exceeded an additional $130,000 in cash and 6,250 Ordinary Shares (the “Bao Li Gaming Additional Earnout Shares”), up to a maximum of $13,000,000 in cash and 625,000 Bao Li Gaming Additional Earnout Shares in any particular year. The Bao Li Gaming Seller is not entitled to any Bao Li Gaming Additional Earnout Shares on a pro rata basis for multiples of less or greater than $25,000,000. This prospectus provides for the resale of up to 3,750,000 shares issuable to the Bao Li Gaming Seller (the aggregate of the maximum number of Ordinary Shares that may be issued to the Bao Li Gaming Seller.

For purposes of the Bao Li Gaming Purchase Agreement, rolling chip turnover means the amount of non-negotiable chips that the Seller’s network of agents purchase from Bao Li Gaming and the Company’s VIP gaming rooms.

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The Bao Li Gaming Earnout Shares and Bao Li Gaming Additional Earnout Shares shall be released and issued to the Seller as follows:

Year		Rolling Chip Turnover Target For Bao Li Gaming Earnout Shares				Bao Li Gaming Earnout Shares				Bao Li Gaming Additional Earnout Shares
2013		$	2,500,000,000				625,000				*
2014		$	2,500,000,000				625,000				*
2015		$	2,500,000,000				625,000				*
TOTAL:							1,875,000

Additionally, each of Mr. lou and Mr. Lei has provided a personal guaranty, until December 31, 2015, providing for the guaranty of all obligations of Bao Li Gaming and the Bao Li Gaming Seller pursuant to the Purchase Agreement, including, but not limited to any bad debts the Bao Li Gaming Seller network of agents may have incurred or may incur in the future.

In addition, on April 24, 2012, we issued an aggregate of 50,400 restricted ordinary shares to certain of our officers and directors as compensation for their services during 2010 and/or 2011 under the 2011 Incentive Plan.

The following table sets forth the name of the Selling Shareholders, the number of ordinary shares owned by the Selling Shareholders immediately prior to the date of this prospectus and the number of Shares to be offered by the Selling Shareholders pursuant to this prospectus. Percentage of beneficial ownership before this offering is based on 42,188,817 of our ordinary shares outstanding as of December 28, 2012. Beneficial ownership is based on information furnished by the Selling Shareholders and our share ledger maintained by Continental Stock Transfer & Trust Company as transfer agent for our ordinary shares.

The Selling Shareholders may offer for sale all or part of the Shares from time to time. The table below assumes that the Selling Shareholders will sell all of the Shares offered for sale. The Selling Shareholders are under no obligation, however, to sell any ordinary shares pursuant to this prospectus.

Selling Shareholder		Beneficial Ownership Before Offering (1) Number				Number of Shares Offered				Beneficial Ownership After Offering
										Number				Percentage
Mok Chi Hung			700,000				1,866,667	(3)			0				—	%
Wong Hon Meng			200,000				533,333	(4)			0				—	%
Lei Chi Hin			400,000				1,066,667	(5)			0				—	%
Ng Soi Kuan			200,000				533,333	(6)			0				—	%
Lou Kan Kuong			0				2,625,000	(7)			0				—	%
Lei Kam Keong			0				1,125,000	(8)			0				—	%
Sylvia Lee			2,055,292	(2)			5,790	(9)			2,049,502				4.9	%
Lam Man Pou			4,486,455				5,790	(9)			4,480,665				10.6	%
Leong Siak Hung			851,288				5,790	(9)			845,498				2.0	%
Vong Hon Kun			6,034,452				5,790	(9)			6,028,662				14.3	%
Raymond Li Chun Ming			5,790				5,790	(9)			0				—	%
James Preissler			289,767				5,790	(9)			283,977				*%
Yeung Lun Allan			5,164				5,164	(9)			0				—	%
Joao Manuel Santos Ferreira			5,164				5,164	(9)			0				—	%
George Chui Vai Hou (8)			5,164				5,164	(9)			0				—	%
Peter Li			168				168	(9)			0				—	%
Total			15,238,704				7,800,400				13,688,304				32.22	%

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PLAN OF DISTRIBUTION

We may offer and sell, from time to time, some or all of the securities covered by this prospectus up to an aggregate public offering price of $150,000,000. The Selling Shareholders named herein may offer and sell up to 7,800,400 of our ordinary shares owned by such Selling Shareholders under this prospectus. We have registered the securities covered by this prospectus for offer and sale by us and/or the Selling Shareholders so that those securities may be freely sold to the public by us and/or the Selling Shareholders. Registration of the securities covered by this prospectus does not mean, however, that those securities necessarily will be offered or sold.

Securities covered by this prospectus may be sold from time to time, in one or more transactions, at market prices prevailing at the time of sale, at prices related to market prices, at a fixed price or prices subject to change, at varying prices determined at the time of sale or at negotiated prices. The securities being offered by this prospectus may be sold:

At any time a particular offer of the securities covered by this prospectus is made, a revised prospectus or prospectus supplement, if required, will be distributed which will set forth the aggregate amount of securities covered by this prospectus being offered and the terms of the offering, including the name or names of any underwriters, dealers, brokers or agents, any discounts, commissions, concessions and other items constituting compensation from us and the Selling Shareholders and any discounts, commissions or concessions allowed or reallowed or paid to dealers. Such prospectus supplement, and, if necessary, a post-effective amendment to the registration statement of which this prospectus is a part, will be filed with the SEC to reflect the disclosure of additional information with respect to the distribution of the securities covered by this prospectus. In order to comply with the securities laws of certain states, if applicable, the securities sold under this prospectus may only be sold through registered or licensed broker-dealers. In addition, in some states the securities may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from registration or qualification requirements is available and is complied with.

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Any public offering price and any discounts or concessions allowed or reallowed or paid to dealers may be changed from time to time. Pursuant to a requirement by the Financial Industry Regulatory Authority, which we refer to as FINRA, the maximum commission or discount to be received by any FINRA member or independent broker/dealer may not be greater than 8% of the gross proceeds received by us for the sale of any securities being registered pursuant to SEC Rule 415 under the Securities Act.

The distribution of securities may be effected from time to time in one or more transactions, including block transactions and transactions on the Nasdaq Stock Market or any other organized market where the securities may be traded. The securities may be sold at a fixed price or prices, which may be changed, or at market prices prevailing at the time of sale, at prices relating to the prevailing market prices or at negotiated prices. The consideration may be cash or another form negotiated by the parties. Agents, underwriters or broker-dealers may be paid compensation for offering and selling the securities. That compensation may be in the form of discounts, concessions or commissions to be received from us or from the purchasers of the securities. Any dealers and agents participating in the distribution of the securities may be deemed to be underwriters, and compensation received by them on resale of the securities may be deemed to be underwriting discounts. If any such dealers or agents were deemed to be underwriters, they may be subject to statutory liabilities under the Securities Act.

Agents may from time to time solicit offers to purchase the securities. If required, we will name in the applicable prospectus supplement any agent involved in the offer or sale of the securities and set forth any compensation payable to the agent. Unless otherwise indicated in the prospectus supplement, any agent will be acting on a best efforts basis for the period of its appointment. Any agent selling the securities covered by this prospectus may be deemed to be an underwriter, as that term is defined in the Securities Act, of the securities.

If underwriters are used in a sale, securities will be acquired by the underwriters for their own account and may be resold from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale, or under delayed delivery contracts or other contractual commitments. Securities may be offered to the public either through underwriting syndicates represented by one or more managing underwriters or directly by one or more firms acting as underwriters. If an underwriter or underwriters are used in the sale of securities, an underwriting agreement will be executed with the underwriter or underwriters, as well as any other underwriter or underwriters, with respect to a particular underwritten offering of securities, and will set forth the terms of the transactions, including compensation of the underwriters and dealers and the public offering price, if applicable. The prospectus and prospectus supplement will be used by the underwriters to resell the securities.

If a dealer is used in the sale of the securities, we or an underwriter will sell the securities to the dealer, as principal. The dealer may then resell the securities to the public at varying prices to be determined by the dealer at the time of resale. To the extent required, we will set forth in the prospectus supplement the name of the dealer and the terms of the transactions.

We and the Selling Shareholders may directly solicit offers to purchase the securities and may make sales of securities directly to institutional investors or others. These persons may be deemed to be underwriters within the meaning of the Securities Act with respect to any resale of the securities. To the extent required, the prospectus supplement will describe the terms of any such sales, including the terms of any bidding or auction process, if used.

Agents, underwriters and dealers may be entitled under agreements which may be entered into with us and the Selling Shareholders to indemnification by us and the Selling Shareholders against specified liabilities, including liabilities incurred under the Securities Act, or to contribution by us and the Selling Shareholders to payments they may be required to make in respect of such liabilities. If required, the prospectus supplement will describe the terms and conditions of the indemnification or contribution. Some of the agents, underwriters or dealers, or their affiliates may be customers of, engage in transactions with or perform services for us, our subsidiaries, the Selling Shareholders or their affiliates.

The Selling Shareholders may also sell such securities under Rule 144 under the Securities Act, if available, rather than under this prospectus.

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Broker-dealers engaged by the Selling Shareholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the Selling Shareholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the purchaser) in amounts to be negotiated. The Selling Shareholders do not expect these commissions and discounts to exceed what is customary in the types of transactions involved.

Under the securities laws of some jurisdictions, the securities offered by this prospectus may be sold in those jurisdictions only through registered or licensed brokers or dealers.

Any person participating in the distribution of securities registered under the registration statement that includes this prospectus will be subject to applicable provisions of the Exchange Act, and the applicable SEC rules and regulations, including, among others, Regulation M, which may limit the timing of purchases and sales of any of our securities by that person. Furthermore, Regulation M may restrict the ability of any person engaged in the distribution of our securities to engage in market-making activities with respect to our securities. These restrictions may affect the marketability of our securities and the ability of any person or entity to engage in market-making activities with respect to our securities.

Certain persons participating in an offering may engage in over-allotment, stabilizing transactions, short-covering transactions and penalty bids that stabilize, maintain or otherwise affect the price of the offered securities. These activities may maintain the price of the offered securities at levels above those that might otherwise prevail in the open market, including by entering stabilizing bids, effecting syndicate covering transactions or imposing penalty bids, each of which is described below.

These transactions may be effected on an exchange or automated quotation system, if the securities are listed on that exchange or admitted for trading on that automated quotation system, or in the over-the-counter market or otherwise.

If so indicated in the applicable prospectus supplement, we and the Selling Shareholders will authorize agents, underwriters or dealers to solicit offers from certain types of institutions to purchase offered securities from us and the Selling Shareholders at the public offering price set forth in such prospectus supplement pursuant to delayed delivery contracts providing for payment and delivery on a specified date in the future. Such contracts will be subject only to those conditions set forth in the prospectus supplement and the prospectus supplement will set forth the commission payable for solicitation of such contracts.

In addition, ordinary shares may be issued upon conversion of or in exchange for debt securities or other securities.

Each series of offered securities, other than the ordinary shares which are listed on the Nasdaq Stock Market, will be a new issue of securities and will have no established trading market. Any underwriters to whom offered securities are sold for public offering and sale may make a market in such offered securities, but such underwriters will not be obligated to do so and may discontinue any market making at any time without notice. The offered securities may or may not be listed on a national securities exchange. No assurance can be given that there will be a market for the offered securities.

Any securities that qualify for sale pursuant to Rule 144 or Regulation S under the Securities Act may be sold under Rule 144 or Regulation S rather than pursuant to this prospectus.

To the extent that we and the Selling Shareholders make sales to or through one or more underwriters or agents in at-the-market offerings, we and the Selling Shareholders will do so pursuant to the terms of a

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distribution agreement between us, the Selling Shareholders and the underwriters or agents. If we engage in at-the-market sales pursuant to a distribution agreement, we and the Selling Shareholders will offer and sell our ordinary shares to or through one or more underwriters or agents, which may act on an agency basis or on a principal basis. During the term of any such agreement, we and the Selling Shareholders may sell ordinary shares on a daily basis in exchange transactions or otherwise as we and the Selling Shareholders agree with the underwriters or agents. The distribution agreement will provide that any ordinary shares sold will be sold at prices related to the then prevailing market prices for our ordinary shares. Therefore, exact figures regarding proceeds that will be raised or commissions to be paid cannot be determined at this time and will be described in a prospectus supplement. Pursuant to the terms of the distribution agreement, we and the Selling Shareholders also may agree to sell, and the relevant underwriters or agents may agree to solicit offers to purchase, blocks of our ordinary shares or other securities. The terms of each such distribution agreement will be set forth in more detail in a prospectus supplement to this prospectus.

In connection with offerings made through underwriters or agents, we and the Selling Shareholders may enter into agreements with such underwriters or agents pursuant to which we and the Selling Shareholders receive our outstanding securities in consideration for the securities being offered to the public for cash. In connection with these arrangements, the underwriters or agents may also sell securities covered by this prospectus to hedge their positions in these outstanding securities, including in short sale transactions. If so, the underwriters or agents may use the securities received from us and the Selling Shareholders under these arrangements to close out any related open borrowings of securities.

One or more firms, referred to as “remarketing firms,” may also offer or sell the securities, if the prospectus supplement so indicates, in connection with a remarketing arrangement upon their purchase. Remarketing firms will act as principals for their own accounts or as agents for us and the Selling Shareholders. These remarketing firms will offer or sell the securities in accordance with a redemption or repayment pursuant to the terms of the securities. The prospectus supplement will identify any remarketing firm and the terms of its agreement, if any, with us and the Selling Shareholders and will describe the remarketing firm’s compensation. Remarketing firms may be deemed to be underwriters in connection with the securities they remarket. Remarketing firms may be entitled under agreements that may be entered into with us and the Selling Shareholders to indemnification by us and the Selling Shareholders against certain civil liabilities, including liabilities under the Securities Act and may be customers of, engage in transactions with or perform services for us in the ordinary course of business.

We and the Selling Shareholders may enter into derivative transactions with third parties or sell securities not covered by this prospectus to third parties in privately negotiated transactions. If the applicable prospectus supplement indicates, in connection with those derivatives, such third parties (or affiliates of such third parties) may sell securities covered by this prospectus and the applicable prospectus supplement, including in short sale transactions. If so, such third parties (or affiliates of such third parties) may use securities pledged by us and the Selling Shareholders or borrowed from us and the Selling Shareholders or others to settle those sales or to close out any related open borrowings of shares, and may use securities received from us and the Selling Shareholders in settlement of those derivatives to close out any related open borrowings of shares. The third parties (or affiliates of such third parties) in such sale transactions will be underwriters and, if not identified in this prospectus, will be identified in the applicable prospectus supplement (or a post-effective amendment).

We and the Selling Shareholders may loan or pledge securities to a financial institution or other third party that in turn may sell the securities using this prospectus. Such financial institution or third party may transfer its short position to investors in our securities or in connection with a simultaneous offering of other securities offered by this prospectus or in connection with a simultaneous offering of other securities offered by this prospectus.

We may suspend the use of this prospectus on a limited basis if we learn of any event that causes this prospectus to include an untrue statement of material fact or omit to state a material fact required to be stated in the prospectus or necessary to make the statements in the prospectus not misleading in light of the circumstances then existing. If this type of event occurs, a prospectus supplement or post-effective amendment, if required, will be distributed to each Selling Shareholder.

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EXPENSES

The following table sets forth an estimate of the fees and expenses relating to the issuance and distribution of the securities being registered hereby, all of which shall be borne by the Company. All of such fees and expenses, except for the SEC registration fee, are estimated.

SEC registration fee		$	23,651.93
FINRA fees		$	*
Transfer agent’s fees and expenses		$	*
Legal fees and expenses		$	*
Printing fees and expenses		$	*
Accounting fees and expenses		$	*
Miscellaneous fees and expenses		$	*
Total		$	23,651.93*

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INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

We incorporate by reference the filed documents listed below, except as superseded, supplemented or modified by this prospectus:

Each person, including any beneficial owner, to whom a prospectus is delivered may obtain a copy of any of our SEC filings incorporated by reference herein (including any exhibits specifically incorporated by reference therein) without charge by written or oral request directed to Raymond Li Chun Ming, Chief Financial Officer; Unit 605, East Town Building; 16 Fenwick Street; Wanchai, Hong Kong. The telephone number at our executive office is 852-2110-9133.

You should rely only on the information incorporated by reference or provided in this prospectus or any prospectus supplement. We have not authorized anyone else to provide you with different information. We are not making an offer of these securities in any state where the offer is not permitted. You should not assume that the information in this prospectus or any prospectus supplement is accurate as of any date other than the date on the front of those documents.

Any statement contained in a document incorporated by reference herein shall be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained herein, or in a subsequently filed document incorporated by reference herein, modifies or supersedes that statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute part of this prospectus.

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LEGAL MATTERS

Loeb & Loeb LLP, 345 Park Ave., New York NY 10154, acts as our United States counsel. Maples and Calder, PO Box 309, Ugland House, South Church Street, George Town, Grand Cayman KY1-1104, Cayman Islands, acts as our Cayman Islands counsel. Ip Shing Hing, J.P., Room 601, 6/F, Tower 1, Admiralty Centre, 18 Harcourt Road, Hong Kong, acts as our Hong Kong counsel.

EXPERTS

The audited consolidated financial statements of Asia Entertainment & Resources Ltd. (formerly CS China Acquisition Corp.) as of December 31, 2010 and 2011 and the related consolidated statements of operations, comprehensive income (loss), changes in shareholders’ equity and cash flows for the years then ended included in this prospectus have been so included in the reliance on a report of UHY LLP, an independent registered public accounting firm, appearing elsewhere herein given on the authority of said firm, as experts in auditing and accounting.

The audited combined statements of operations and comprehensive income (loss), changes in shareholders' and owners' equity (deficit), and cash flows of the Operations of Sang Heng Gaming Promotion Company Limited, Spring Gaming Promotion Company Limited, Iao Pou Gaming Promotion Limited, Doowell Limited (the “Promoter Companies”) and Asia Gaming & Resort Limited (collectively known as “Asia Entertainment & Resources Ltd.” or the “Company”) for the year ended December 31, 2009, before the effect of retrospective changes to the earnings per share calculation and the number of ordinary shares outstanding described in Note 1 included in this prospectus have been so included in the reliance on a report of AJ. Robbins, PC, an independent registered public accounting firm, appearing elsewhere herein given on the authority of said firm, as experts in auditing and accounting.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a registration statement on Form F-3 under the Securities Act with respect to the offer and sale of securities pursuant to this prospectus. This prospectus, filed as a part of the registration statement, does not contain all of the information set forth in the registration statement or the exhibits and schedules thereto in accordance with the rules and regulations of the SEC and no reference is hereby made to such omitted information. Statements made in this prospectus concerning the contents of any contract, agreement or other document filed as an exhibit to the registration statement are summaries of all of the material terms of such contract, agreement or document, but do not repeat all of their terms. Reference is made to each such exhibit for a more complete description of the matters involved and such statements shall be deemed qualified in their entirety by such reference. The registration statement and the exhibits and schedules thereto filed with the SEC may be inspected, without charge, and copies may be obtained at prescribed rates, at the public reference facility maintained by the SEC at its principal office at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the public reference facility by calling 1-800-SEC-0330. The SEC also maintains a website that contains reports, proxy and information statements and other information regarding registrants that file electronically through the SEC’s Electronic Data Gathering, Analysis and Retrieval (“EDGAR”) system, including the Company, which can be accessed at http://www.sec.gov. For further information pertaining to the securities offered by this prospectus and Asia Entertainment & Resources Ltd., reference is made to the registration statement. We are subject to certain of the reporting requirements of the Exchange Act and we will file reports and other information with the SEC, including Annual Reports on Form 20-F and Reports of Foreign Issuers on Form 6-K.

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outside the United States, judgments you may obtain in U.S. courts against Asia Entertainment & Resources Ltd. or these persons in any action, including actions based upon the civil liability provisions of U.S. federal or state securities laws.

Furthermore, there is substantial doubt that the courts of the Cayman Islands or the People’s Republic of China, including Hong Kong and Macau, would enter judgments in original actions brought in those courts predicated on U.S. federal or state securities laws.

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$150,000,000

ASIA ENTERTAINMENT & RESOURCES LTD.

Ordinary Shares
Preferred Shares
Warrants
Subscription Rights
Debt Securities
Units

7,800,400 Ordinary Shares Offered For Resale by
the Selling Shareholders Named Herein

 

PROSPECTUS

 

March 27, 2013

No dealer, salesperson or any other person is authorized to give any information or make any representations in connection with this offering other than those contained in this prospectus and, if given or made, the information or representations must not be relied upon as having been authorized by us. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any security other than the securities offered by this prospectus, or an offer to sell or a solicitation of an offer to buy any securities by anyone in any jurisdiction in which the offer or solicitation is not authorized or is unlawful.