Nasdaq Proposes New Rules for Reverse Mergers

In a filing with the Securites and Exchange Commission last week, the NASDAQ Stock Market proposed additional requirements for Reverse Merger companies that want to apply for a Nasdaq listing. According to the filing, the purpose of this rule change is to enhance investor protection, as this group of companies has "raised regulatory concerns."

A previously unlisted private company that becomes a public company by merging with a public shell must file a Form 8-K with the SEC, within four days of completing this reverse merger. This filing must contain audited financial statements and most of the information that is usually provided in a Form 10. I am using SinoCoking (SCOK) as an example for this procedure: The operating business of this coal company merged into a shell company named "Ableauctions.com, Inc." (AAC) on February 5, 2010. The Form 8-K was filed three days later, and the new entity was quoted on the Over-the-Counter Bulletin Board under the new ticker "SCOK" on February 8, 2010. SinoCoking amended this 8-K filing on March 5, 2010 to include the required audited financial statements.

Nasdaq proposes now "to prohibit a company going public via a reverse merger from applying to list until six months after the combined entity submits audited financial statements to the SEC." In SinoCoking's case that would have meant that the company was not allowed to apply for a Nasdaq listing earlier than September 5, 2010. But Nasdaq was very eager to approve SCOK for an initial listing. The stock started trading on the NASDAQ Stock Market on February 18, 2010, or more than two weeks before the company even filed its first audited financials with the SEC.

The second proposed rule change calls for a company to maintain a bid price of $4 per share or higher on at least 30 of the 60 trading days immediately preceding the filing of the initial listing application, while trading in the over-the-counter market, on another national securities exchange, or on a listed foreign market. SinoCoking was trading on the OTC market for just eight sessions before it was allowed to move up to the big board.

An additional requirement for a reverse merger uplisting to NASDAQ should be the "timely filing" of at least two required periodic financial reports with the SEC for domestic issuers (10-Q or 10-K), or in the case of a Foreign Private Issuer, one or more reports including financial statements for a period not less than six months (6-K or 20-F). SinoCoking filed its second such report (10-K) on September 29, 2009, which - had the proposed new rules been already in place then - would have marked the day the company were allowed to apply for a Nasdaq listing. That is, if we interpret the requirement for "timely filing" only loosely. SCOK has submitted a Form NT-10, "Notification of inability to timely file Form 10-K or 10-Q", for three of the four reporting periods since it became a public company. With a strict interpretation of this rule, the company would still not be allowed to apply for a Nasdaq listing today, more than 14 months after the reverse merger completed.

Nasdaq elaborates in its SEC filing what prompted the proposed rule changes:

• extraordinary level of public attention to reverse merger companies
• financial press and short sellers raised allegations of widespread fraudulent behavior
• certain individuals who aggressively promote these transactions have significant regulatory histories
• RTO promoters have engaged in transactions that are disproportionately beneficial to them at the expense of public shareholders
• PCAOB identified issues with the audits of these companies
• the SEC recently took an enforcement action based on a firm's audit of a reverse merger company
• promoters manipulate prices higher to satisfy Nasdaq's initial listing bid price requirement
• companies have gifted stock to artificially satisfy the 300 round lot public holder requirement

Nasdaq believes the additional listing requirements would help "to discourage inappropriate behavior on the part of companies, promoters and others." Heightened review procedures for reverse merger applicants had already been adopted over the past year, but new rules would result in "significant investor protection benefits." We have seen only two reverse merger uplistings since September 2010, NFEC and KEYP (currently halted), and the only Chinese small cap stock that has been approved to move from the OTC market to Nasdaq this year is Asia Pacific Wire & Cable (AWRCF), but this is not a reverse merger company.

Nasdaq sees the following investor protection benefits:

• FINRA will have more time to view trading patterns and uncover potentially manipulative trading
• a more bona fide shareholder base
• assure that the $4 bid price was not satisfied through a quick manipulative scheme
• improve the reliability of the reported financial results
• auditors and the company's audit committee will have reviewed several quarters, at least, of the public company's operating results
• new internal controls, adopted at the time of the merger, will have been in place for a while

China Stocks Smashed in the First Quarter

Here is an overview of the First Quarter highlights:

Trading China Main Index
- 759.17 (down 17.27% for the First Quarter)
- 10 stocks are up, 30 are down

Top Five

• BitAuto Holdings (BITA) +35.18%
• AutoChina International (AUTC) +25.86%
• Harbin Electric (HRBN) +19.25%
• Bona Film Group (BONA) +17.21%
• Funtalk China Holdings (FTLK) +14.63%

Bottom Five

• China Integrated Energy (CBEH) -65.22%
• China Valves Technology (CVVT) -55.73%
• Duoyuan Global Water (DGW) -52.78%
• China-Biotics (CHBT) -45.38%
• China Xiniya Fashion (XNY) -44.11%

Trading China OTC Index
- 596.88 (down 34.81% for the First Quarter)
- 3 stocks are up, 37 are down

Top Five

• Sen Yu International (CSWG.OB) +14.94%
• China Carbon Graphite (CHGI.OB) +6.32%
• Rodobo International (RDBO.OB) +1.61%
• SOKO Fitness & Spa (SOKF.OB) -2.47%
• China Clean Energy (CCGY.OB) -3.89%

Bottom Five

• Home System Group (HSYT.PK) -94.00%
• Energroup Holdings (ENHD.PK) -90.00%
• BioPharm Asia (BFAR.PK) -87.16%
• China Redstone Group (CGPI.OB) -59.16%
• Lotus Pharmaceuticals (LTUS.OB) -58.31%

Quarterly Revision (First Quarter)

Both China indexes are revised at the beginning of each quarter. Stocks that do no longer meet the requirements are being removed. Reasons could be posting a loss in the most recent quarter, uplisting to a higher exchange or just a huge decline in share price. Following is a list of all changes for both indexes.

Trading China Main Index

Additions

• Ambow Education Holding (AMBO)
• Camelot Information Systems (CIS)
• China New Borun (BORN)
• China Techfaith Wireless (CNTF)
• China XD Plastics (CXDC)
• eLong (LONG)
• Noah Holdings (NOAH)
• Sky-mobi Limited (MOBI)
• SouFun Holdings (SFUN)
• TAL Education Group (XRS)

Removals

• China-Biotics (CHBT)
• China Integrated Energy (CBEH)
• China MediaExpress (CCME)
• China Valves Technology (CVVT)
• Deer Consumer Products (DEER)
• Duoyuan Global Water (DGW)
• Global Education & Technology (GEDU)
• Gulf Resources (GFRE)
• L&L Energy (LLEN)
• Longwei Petroleum (LPH)

Trading China OTC Index

Additions

• China Energy Recovery (CGYV.PK)
• China Executive Education (CECX.OB)
• China Internet Cafe Holdings (CICC.OB)
• China Pharmaceuticals (CFMI.OB)
• Eastern Environment Solutions (EESC.PK)
• Fuqi International (FUQI.PK)
• Sino Agro Food (SIAF.PK)
• Sinobiopharma (SNBP.OB)
• Yasheng Group (YHGG.PK)

Removals

• American Jianye Greentech (AJGH.PK)
• BioPharm Asia (BFAR.PK)
• China Infrastructure Construction (CHNC.OB)
• China Redstone Group (CGPI.OB)
• China TMK Battery Systems (DFEL.OB)
• Energroup Holdings (ENHD.PK)
• Gold Horse International (GHII.OB)
• Home System Group (HSYT.PK)
• Yayi International (YYIN.OB)

Chinese 10-K Season Shake-Out

Long Delay (more than 15 Calendar Days)

China Automotive Systems (CAAS) - The Company announced that it expects to restate its previously issued financial statements for fiscal year 2009 and the first three quarters of fiscal year 2010 to reflect non-cash gains or losses related to the accounting treatment for the Company's convertible notes issued on February 15, 2008 based on the guidance outlined in Accounting Standard Codification (ASC) 815. The Company undertook a review to determine the total amount of the errors and the accounting periods in which the errors occurred. The Company's review was overseen by the audit committee of the board of directors of the Company. The Audit Committee concluded on March 12, 2011 that the Company's previously issued audited consolidated financial statements as of and for the fiscal year ended December 31, 2009 and unaudited interim consolidated financial statements as of and for the quarterly periods ended March 31, June 30 and September 30, 2010 should no longer be relied upon because of these errors in the financial statements. The Company's board of directors agreed with the Audit Committee's conclusions. The Company intends to restate these financial statements. Because of the nature and timing of the review, the Company is unable to file its Annual Report on Form 10-K for the fiscal year ended December 31, 2010 with the SEC on March 16, 2011, the prescribed due date. The Company does not expect that such filing will be made within the extension period provided for under Rule 12b-25. The delay could not be eliminated without unreasonable effort or expense. The Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2010 will be filed as soon as practicable after the Company has completed the restatement process.

China Agritech (CAGC, trading halted since 03/14/2011) - The Company could not complete the filing of its Annual Report on Form 10-K for the year ended December 31, 2010 due to a delay in obtaining and compiling information required to be included in the Company's Form 10-K, which delay could not be eliminated by the Company without unreasonable effort and expense. In addition, the Company has dismissed its auditors and is in the process of finding a new independent registered public accounting firm to audit the financial statements for the year ended December 31, 2010.

China MediaExpress (CCME, trading halted since 03/11/2011) - The Company cannot at this time estimate when the internal investigation of the relevant issues will conclude. The Company intends to file the Form 10-K as soon as reasonably practicable.

China Century Dragon Media (CDM, trading halted since 03/21/2011) - The Registrant's Annual Report on Form 10-K for the year ended December 31, 2010 cannot be filed within the prescribed time period due to the resignation of the Registrant's auditor. As previously reported by the Registrant, on March 22, 2011 MaloneBailey resigned as the Registrant's independent auditor and provided the Registrant with a notice of resignation, which indicated that due to discrepancies noted on customer confirmations and the auditor's inability to directly verify the Registrant's bank records, MaloneBailey believes these irregularities may be an indication that the accounting records have been falsified, which would constitute an illegal act. MaloneBailey stated in its Resignation Letter that the Registrant's management had not provided a satisfactory explanation of the discrepancies noted on the customer confirmations and was unwilling to provide authorization to the bank so that the auditor could obtain official bank records directly from the bank's record keeping system. The Board of Directors of the Registrant has formed a Special Investigation Committee. The Special Investigation Committee will investigate, review and analyze the facts, circumstances and issues related MaloneBailey's resignation as independent auditor and the Registrant's accounting records. The Registrant will file its Annual Report on Form 10-K for the year ended December 31, 2010 as soon as it is able; however, the Registrant is not able to provide a reasonable estimate as to such filing at this time, which will not occur within the fifteenth calendar day after the prescribed due date for such report.

China Electric Motors (CELM, trading halted since 03/31/2011) - The registrant is unable to file its Annual Report on Form 10-K for the year ended December 31, 2010, within the prescribed time period due to possible discrepancies concerning the Company's banking statements that were very recently identified by the Company's auditors in the course of their audit of the Company's consolidated financial statements for the fiscal year ended December 31, 2010. The Company and its advisors are working expeditiously to resolve the issues discovered during the audit, but the Company, at this time, is unable to determine when it will file its Annual Report on Form 10-K for the year ended December 31, 2010.

China Medicine (CHME) - As previously disclosed in the Current Report on Form 8-K filed by China Medicine Corporation with the Securities and Exchange Commission (SEC) on March 23, 2011, the Company announced that it expects to restate its previously issued financial statements for fiscal years 2008 and 2009, and the quarters within the fiscal years 2008, 2009 and 2010 in order to correct certain accounting and reporting errors that impact the accuracy of the previously issued financial statements (as defined below). The Board of Directors of the Company, after consultation with and upon recommendation of the management of the Company and its Audit Committee, concluded that the Company's previously issued financial statements contained in its Annual Report on Form 10-K for the fiscal years 2008 and 2009, and the Quarterly Reports on Form 10-Q for the periods within the fiscal years 2008, 2009 and 2010 should no longer be relied upon. The Company intends to restate the previously issued financial statements. Because of the nature and timing of the review, the Company will be unable to file its Annual Report on Form 10-K for the fiscal year ended December 31, 2010 with the SEC by March 31, 2011, the prescribed due date. The Company does not expect that such filing will be made within the extension period provided for under Rule 12b-25 of the Securities Exchange Act of 1934, as amended. The delay could not be eliminated without unreasonable effort or expense. The Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2010 will be filed as soon as practicable after the Company has completed the restatement process.

China Intelligent Lighting (CIL, trading halted since 03/24/2011) - The Registrant's Annual Report on Form 10-K for the year ended December 31, 2010 cannot be filed within the prescribed time period due to the termination of engagement with MaloneBailey as the Registrant's independent registered public accounting firm. As previously reported by the Registrant in the Current Report on Form 8-K filed with the Securities and Exchange Commission on March 29, 2011, the Registrant terminated the engagement of MaloneBailey as its independent auditor on March 23, 2011, and on March 24, 2011, MaloneBailey provided a letter of resignation as the Registrant's independent auditor. In the Resignation Letter, MaloneBailey indicated that the resignation was due to accounting fraud involving forging of the Registrant's accounting records and forging bank statements, in addition to other discrepancies identified during its testing of the Registrant's accounts receivable. The Registrant will file its Annual Report on Form 10-K for the year ended December 31, 2010 as soon as it is able. However, the Registrant is not able to provide a reasonable estimate as to such filing at this time, which will not occur within the fifteenth calendar day after the prescribed due date for such report.

Keyuan Petrochemicals (KEYP, trading halted since 04/01/2011) - In connection with the Registrant's financial statements as at December 31, 2010 and for the fiscal year then ended, issues were raised by the Registrant's independent auditor, primarily relating to unexplained issues regarding certain cash transactions and recorded sales. The independent auditor reported these issues to the Registrant's Audit Committee. The Registrant's Audit Committee has engaged independent legal counsel and commenced an investigation of the issues raised by the Registrant's auditors. In as much as completion of Registrant's 2010 financial statements is dependent, following completion of the Audit Committee's investigation, upon a satisfactory resolution of the issues raised and any other matters that may come to light as a result of further audit procedures, the Registrant was not able to complete its Form 10-K Annual Report by March 31, 2011. Although the Registrant believes that the Audit Committee shall undertake to complete its investigation as soon as practicable, and the Registrant shall use its best efforts to file the Annual Report by April 15, 2011, there can be no assurance that it will be able to do so by such date.

NIVS IntelliMedia Technology (NIV, trading halted since 03/24/2011) - On March 27, 2011, the Company's Board of Directors appointed a Special Committee ... to investigate certain allegations of the Company's former auditor, Malone Bailey, in connection with which Malone Bailey withdrew its audit opinion related to the Company's audited financial statements for the year ended December 31, 2009, and to take remedial action if appropriate. On the same day, the Special Committee engaged Sidley Austin LLP as independent counsel in connection with the investigation, and on March 30, 2011, Sidley retained Deloitte to serve as its forensic accounting advisor. The Company has also separately retained a new independent registered public accounting firm, BDO China Li Xin Da Hua CPAs, to audit its financial statements for the 2009 year, as well as for the year ended December 31, 2010. At this time, the Company is unable to predict when it will be in a position to file its annual report on Form 10-K for the year ended December 31, 2010, however, the Company intends to submit such filing as soon as practicable after completion of the work that will be performed by the Special Committee and by BDO China Li Xin Da Hua CPAs.

ShengdaTech (SDTH, trading halted since 03/15/2011) - On March 15, 2011, Shengdatech announced that it had appointed a special committee of the Board of Directors to investigate potentially serious discrepancies and unexplained issues relating to the Company and its subsidiaries' financial records identified by the Company's auditors in the course of their audit of the consolidated financial statements for the fiscal year ended December 31, 2010. The special committee is composed of the independent directors comprising the Company's audit committee. The audit committee retained O'Melveny & Myers LLP as independent outside counsel, which has initiated an internal investigation. The outside counsel to the committee has notified the Staff of the Securities and Exchange Commission of the commencement of the internal investigation. Given that the investigation only recently commenced, the Company cannot predict at this time whether that investigation will require any adjustments to its financial statements, and if so whether such adjustments will be material. Due to the pendency of the internal investigation, the Company will not be able to file its Annual Report on Form 10-K in a timely manner. The Company cannot at this time estimate when the internal investigation of the relevant issues will conclude. The Company intends to file the Form 10-K as soon as reasonably practicable.

Wonder Auto Technology (WATG) - As previously announced on February 23, 2011, in connection with the preparation of its consolidated financial statements for the fiscal year ended December 31, 2010, Wonder Auto Technology concluded, that its financial statements as of and for the years ended December 31, 2008 and 2009, included in its Annual Report on Form 10-K for the year ended December 31, 2009, as well as the financial statements included in its Quarterly Reports on Form 10-Q for the quarters ended March 31, June 30 and September 30 during each of the years 2008 and 2009 should no longer be relied upon due to a cutoff error regarding timing of revenue in such periods. Additionally, the Company is still evaluating the impact of the cutoff-errors on its financial results for the year ended December 31, 2010 and on its internal control over financial reporting as of December 31, 2010. As a result, the Company is unable to complete its Form 10-K within the prescribed time period. The Company remains committed to completing its Form 10-K at the earliest possible time, but does not currently anticipate its completion within the fifteen calendars following the prescribed due date.

Unspecified Delay

Asia Cork (AKRK) - The Registrant is unable to file its 10-K for year ended December 31, 2010 in a timely manner because the Registrant is not able to complete its financial statements without unreasonable effort or expense.

China Electronics Holdings (CEHD) - The compilation, dissemination and review of the information required to be presented in the registrant's Form 10-K for the fiscal year ended December 31, 2010 has imposed time constraints that have rendered timely filing of the Form 10-K impracticable without unreasonable effort and expense.

China 3C Group (CHCG) - The annual report of China 3C Group on Form 10-K could not be filed within the prescribed time period due to the fact that the Company was unable to finalize its audited financial results as well as the disclosure requirements of Form 10-K without unreasonable expense or effort. As a result, the Company could not solicit and obtain the necessary review of the Form 10-K and signatures thereto in a timely fashion prior to the due date of the report.

China Industrial Waste Mgmt (CIWT) - The Registrant has experienced delays in completing its financial statements for the year ended December 31, 2010, as its auditor has not had sufficient time to audit the financial statements for the year ended December 31, 2010. As a result, the filing of the Registrant's Form 10-K cannot be made within the prescribed time period.

China Ritar Power (CRTP) - Certain financial and other information necessary for an accurate and full completion of the Form 10-K could not be provided within the prescribed time period without unreasonable effort or expense.

China Solar & Clean Energy (CSOL) - Registrant did not obtain all information prior to filing date and attorney and accountant could not complete the required financial statements and management could not complete Management's Discussion and Analysis of such financial statements by March 31, 2011.

Emerald Dairy (EMDY) - We have not yet finalized our financial statements for the fiscal year ended December 31, 2010. Therefore, we are unable to quantify the anticipated changes in our results of operations at this time. However, based on information currently available to us, we anticipate that the earnings statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2010 will reflect increases in sales, cost of goods sold, gross profit, and operating expenses, and a decrease in net income, for the fiscal year ended December 31, 2010, as compared to the fiscal year ended December 31, 2009.

Fushi Copperweld (FSIN) - In the process of preparing our financial statements for the year ended December 31, 2010, management reevaluated the application of GAAP in certain past accounting treatments, which are non-cash and non-operating items. While it is unfortunate that these reconsiderations are causing a delay in our filing, we stress the fact that these are all non-cash adjustments related to various corporate-level account treatments and will not materially affect our non-GAAP, core operating results such as revenue, gross profit and operating income. The Company plans to file its Form 10-K for the year ended December 31, 2010 and publish financial fourth quarter and full year results as soon as practicable following the completion of this reevaluation. However, due to the time needed, we are not in a position to file our 10-K within the required time period. (UPDATE: 10-K filed on 04/05/2011)

Huifeng Bio-Pharma (HFGB) - Certain financial and other information necessary for an accurate and full completion of the Form 10-K could not be provided within the prescribed time period without unreasonable effort or expense.

Home System Group (HSYT) - Certain financial and other information necessary for an accurate and full completion of the Form 10-K could not be provided within the prescribed time period without unreasonable effort or expense.

North China Horticulture (IDCX) - Certain financial and other information necessary for an accurate and full completion of the Form 10-K could not be provided within the prescribed time period without unreasonable effort or expense.

Sino Clean Energy (SCEI) - The report of Sino Clean Energy Inc. on Form 10-K could not be filed within the prescribed time period due to the fact that the Company was unable to finalize its audited financial results as well as the disclosure requirements of Form 10-K without unreasonable expense or effort. As a result, the Company could not solicit and obtain the necessary review of the Form 10-K and signatures thereto in a timely fashion prior to the due date of the report. (UPDATE: 10-K filed on 04/05/2011)

Sunrise Real Estate (SRRE) - The Company will be delayed in the filing of its 10-K due to a delay in the preparation of its financial statements.

Xinyinhai Technology (XNYH) - Our Annual Report on Form 10-K could not be filed within the required time because there was a delay in completing the adjustments necessary to close the books for the year. (UPDATE: 10-K filed on 04/13/2011)

Filing Expected within Grace Period (15 Calendar Days)

American Jianye Greentech (AJGH) - The Registrant's financial statements could not be completed within the time provided without undue burden and expense. The Registrant expects to file within the period provided by the extension.

Artificial Life (ALIF) - Artificial Life is in the process of having its financial statements for the fiscal year ended December 31, 2010 audited by its independent accountants. The process of compiling and disseminating the information required to be included in its Annual Report on Form 10-K for Fiscal Year 2010, as well as the completion of the required audit of the Registrant's financial information, could not be completed by March 31, 2011 without incurring undue hardship and expense. The Company presently anticipates that such annual report will be filed no later than fifteen calendar days after its original due date.

UPDATE: On April 6, 2011, the Company announced the termination of its engagement with KPMG, its independent auditors. Such engagement was terminated effective March 30, 2011, though after such termination, the parties continued discussing the possibility of KPMG's engagement being extended in order for the audit to be completed within the timeframe of the 12b-25 extension. The Company is now in the process of assigning and evaluating new independent registered public accounting firms to audit its financial statements for Fiscal Year 2010. The Company will file its 2010 10-K at such time as its audit has been completed.

BioPharm Asia (BFAR) - BioPharm Asia is unable to timely file its Annual Report on Form 10-K for the fiscal year ended December 31, 2010 due to a delay in completing the financial statements, and the audit procedures related thereto, required by the Company's Form 10-K, which delay could not be eliminated by the Company without unreasonable effort and expense. In accordance with Rule 12b-25 of the Securities Exchange Act of 1934, the Company will file its Form 10-K no later than the fifteenth calendar day following the prescribed due date.

China Green Material (CAGM) - On March 23, 2011, the Registrant restated its financial statements as of and for the quarterly periods ended June 30, 2010 and September 30, 2010. Those quarterly financial statements were restated in response to an S.E.C. Staff comment relating to the Registrant's accounting for warrants issued by the Registrant during April and June 2010. Because of the restatements, the Registrant needs additional time to ensure that the principles applied in the restatements are consistently applied in the audited financial statements to be included in the annual report on Form 10-K for the fiscal year ended December 31, 2010. As a result, the Registrant is unable, without unreasonable effort and expense, to file its Annual Report on Form 10-K for the fiscal year ended December 31, 2010 by the prescribed filing date. The Registrant intends to file its Annual Report on Form 10-K for the fiscal year ended December 31, 2010 prior to April 15, 2011. (UPDATE: 10-K filed on 04/13/2011)

China Executive Education (CECX) - The Registrant is unable to file its Form 10-K within the prescribed time period without unreasonable effort or expense due to the fact that it has not completed the process of preparing and integrating operating information into statements for the fiscal year 2010. The Registrant anticipates that it will file its Form 10-K within the fifteen-day grace period provided by Exchange Act Rule 12b-25.

China Education Alliance (CEU) - The Company has encountered a delay in assembling the information, in particular its financial statements for the fiscal year ended December 31, 2010, required to be included in its December 31, 2010 Form 10-K Annual Report. The Company expects to file its December 31, 2010 Form 10-K Annual Report with the U.S. Securities and Exchange Commission within 15 calendar days of the prescribed due date.

China Pharmaceuticals (CFMI) - The Company has encountered a delay in assembling the information, in particular its financial statements for the fiscal year ended December 31, 2010, required to be included in its December 31, 2010 Form 10-K Annual Report. The Company expects to file its December 31, 2010 Form 10-K Annual Report with the U.S. Securities and Exchange Commission within 15 calendar days of the prescribed due date.

China Carbon Graphite (CHGI) - The compilation, dissemination and review of the information required to be presented in the Form 10-K for the fiscal year ended December 31, 2010 has imposed time constraints that have rendered timely filing of the Form 10-K impracticable without undue hardship and expense to the Registrant. The Registrant represents that the Form 10-K will be filed within the period described under Rule 12b-25(b)(2)(ii).

China New Energy Group (CNER) - The Registrant is unable to file its Form 10-K within the prescribed time period without unreasonable effort or expense due to the fact that it has not completed the process of preparing and integrating operating information into its financial statements for fiscal year 2010. The Registrant anticipates that it will file its Form 10-K within the fifteen-day grace period provided by Exchange Act Rule 12b-25.

China Organic Agriculture (CNOA) - China Organic Agriculture is unable to timely file its Annual Report on Form 10-K for the fiscal year ended December 31, 2010 due to a delay in completing the financial statements, and the audit procedures related thereto, required by the Company's Form 10-K, which delay could not be eliminated by the Company without unreasonable effort and expense. In accordance with Rule 12b-25 of the Securities Exchange Act of 1934, the Company will file its Form 10-K no later than the fifteenth calendar day following the prescribed due date.

China Shuangji Cement (CSGJ) - The Company has encountered a delay in assembling the information, in particular its financial statements for the fiscal year ended December 31, 2010, required to be included in its December 31, 2010 Form 10-K Annual Report. The Company expects to file its December 31, 2010 Form 10-K Annual Report with the U.S. Securities and Exchange Commission within 15 calendar days of the prescribed due date.

China Yongxin Pharma (CYXN) - The Registrant is in the process of completing its Annual Report on Form 10-K and providing the requisite information to its auditors. We expect to file the required report within the allotted extension.

Highpower International (HPJ) - Highpower International is still in the process of preparing documents to be filed as exhibits with the 10-K for the year ended December 31, 2010. Therefore, the Company is unable to file its Form 10-K for the year ended December 31, 2010 within the prescribed time period. The Company will file its Annual Report on Form 10-K as soon as possible, and in any event no later than the fifteenth calendar day following the prescribed due date for such report. (UPDATE: 10-K filed on 04/13/2011)

HQ Sustainable Maritime (HQS, trading halted since 04/01/2011) - HQ Sustainable Maritime Industries is unable to file its Report on Form 10-K for the year ended December 31, 2010 within the prescribed time period due to delays in compiling the information for the preparation of the financial statements. The Registrant fully expects to be able to file within the additional time allowed by this form.

Orsus Xelent Technologies (ORS) - The Registrant cannot file its Annual Report on Form 10-K for the period ended December 31, 2010 within the prescribed time period because of the delays in compiling the information for the preparation of the financial statements and management's discussion and analysis for the Form 10-K which could not be eliminated without unreasonable effort or expense. The Registrant is working diligently with its auditors to complete its Annual Report on Form 10-K and expects to file its Form 10-K no later than fifteen days following its prescribed due date.

Sino Agro Food (SIAF) - SIAF could not complete the filing of its Annual Report on Form 10-K for the year ended December 31, 2010 due to a delay in obtaining and compiling information required to be included in the Company's Form 10-K, which delay could not be eliminated by the Company without unreasonable effort and expense. In accordance with Rule 12b-25 of the Securities Exchange Act of 1934, as amended, the Company will file its Form 10-K no later than the fifteenth calendar day following the prescribed due date.

Skystar Bio-Pharmaceutical (SKBI) - The Company has experienced a delay in completing the information necessary for including in its December 31, 2010 Form 10-K Annual Report. The Company expects to file the Annual Report within the allotted extension period. (UPDATE: 10-K filed on 04/11/2011)

Universal Travel Group (UTA) - The Company has encountered a delay in assembling the information, in particular its financial statements for the fiscal year ended December 31, 2010, required to be included in its Annual Report on Form 10-K for the year ended December 31, 2010. The Company expects to file its Annual Report on Form 10-K for the year ended December 31, 2010 with the U.S. Securities and Exchange Commission within 15 calendar days of the prescribed due date. (UPDATE: Trading Halted since 04/12/2011)

Worldwide Energy and Mfg (WEMU) - The compilation, dissemination and review of the information required to be presented in the Form 10-K has imposed time constraints that have rendered timely filing of the Form 10-K impracticable without undue hardship and expense to the registrant. The registrant undertakes the responsibility to file such annual report no later than fifteen days after its original due date.

Wuhan General Group (WUHN) - Wuhan General Group is unable to file its Report on Form 10-K for the year ended December 31, 2010 within the prescribed time period due to delays in compiling the information for the preparation of the financial statements. The Registrant fully expects to be able to file within the additional time allowed by this form.