We are continuing our higher-end mobile phone business through our subsidiary Qiao Xing Mobile Communication Co., Ltd
Qiao Xing Mobile Communication Co., Ltd. is a domestic manufacturer of mobile handsets in China. It operates its business primarily through CEC Telecom Co., Ltd., or CECT, its 96.6%-owned subsidiary in China. In 2008, Qiao Xing Mobile introduced the VEVA series mobile phones and began to open its own retail stores to target mid-income consumers in major cities throughout China. Through its manufacturing facility in Huizhou, Guangdong Province, China, and two research and development centers in Huizhou and Beijing, the Company develops, produces and markets a wide range of mobile handsets, with increasing focus on differentiated products that generally generate higher profit margins. For more information, please visit http://www.qxmc.com.

The management of the Company has proposed to distribute the shares it owns in Qiao Xing Mobile Communication Co., Ltd to XING’s shareholders in the future, subject to board approval.