termination of the services rendered by ARC. No shares were issu

On August 11, 2009, we entered into a Securities Purchase Agreement with ARC China, Inc. (“ARC”). Pursuant to the terms of the Securities
Purchase Agreement, ARC agreed that it will purchase up to an aggregate of 4,768,877 Units at a purchase price of $1.75 per Unit for an
aggregate purchase price of $8,345,535. Each "Unit" consists of (i) one share of the Company's newly-designated Series A preferred stock, par
value $0.01 per share (" Series A Preferred Stock "), and (ii) one-half warrant (" Warrant ") to purchase one share of the Company's common
stock, par value $0.00001 per share (" Common Stock "), at a price of $2.75 per share, pursuant to one or more closings on such dates and in
such amounts as determined by ARC upon three days notice provided to the Company (the " Series A Purchase Transaction "). We expect that
the issuance of shares of Series A Preferred Stock and the Warrants pursuant to the terms of the Securities Purchase Agreement will be exempt
from registration under Section 4(2) of the Securities Act of 1933, as amended (the " Securities Act "), and Regulation D promulgated
thereunder, based upon our compliance with such rules and regulations.
The Securities Purchase Agreement was cancelled due to the termination of the services rendered by ARC. No shares were issued pursuant to
this Securities Purchase Agreement.