<SEC-DOCUMENT>0001144204-12-024678.txt : 20120430
<SEC-HEADER>0001144204-12-024678.hdr.sgml : 20120430
<ACCEPTANCE-DATETIME>20120430121443
ACCESSION NUMBER:		0001144204-12-024678
CONFORMED SUBMISSION TYPE:	DEF 14A
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20120528
FILED AS OF DATE:		20120430
DATE AS OF CHANGE:		20120430
EFFECTIVENESS DATE:		20120430

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CHINA RECYCLING ENERGY CORP
		CENTRAL INDEX KEY:			0000721693
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-BUSINESS SERVICES, NEC [7389]
		IRS NUMBER:				900093373
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		DEF 14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-34625
		FILM NUMBER:		12793225

	BUSINESS ADDRESS:	
		STREET 1:		12TH FLOOR, TOWER A, CHANG AN INTL BLDG
		STREET 2:		NO. 88 NAN GUAN ZHENG XIE
		CITY:			XI AN CITY, SHAN XI PROVINCE
		STATE:			F4
		ZIP:			710068
		BUSINESS PHONE:		86-29-8765-1097

	MAIL ADDRESS:	
		STREET 1:		12TH FLOOR, TOWER A, CHANG AN INTL BLDG
		STREET 2:		NO. 88 NAN GUAN ZHENG XIE
		CITY:			XI AN CITY, SHAN XI PROVINCE
		STATE:			F4
		ZIP:			710068

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	CHINA DIGITAL WIRELESS INC
		DATE OF NAME CHANGE:	20040810

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	BOULDER ACQUISITIONS  INC
		DATE OF NAME CHANGE:	20020430

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	BOULDER BREWING CO
		DATE OF NAME CHANGE:	19920703
</SEC-HEADER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>v311092_def14a.htm
<DESCRIPTION>FORM DEF 14A
<TEXT>
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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-weight: normal">Washington,
D.C. 20549</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">SCHEDULE
14A</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-weight: normal">Proxy
Statement Pursuant to Section&nbsp;14(a) of the<BR>
Securities Exchange Act of 1934<BR>
(Amendment No. ____)</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 11.5pt; text-indent: -11.5pt">Filed by the Registrant <FONT STYLE="font-family: Wingdings">x</FONT>
&nbsp;&nbsp;Filed by a Party other than the Registrant <FONT STYLE="font-family: Wingdings">&uml;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 11.5pt; text-indent: -11.5pt">Check the appropriate box:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&uml;</FONT></TD><TD>Preliminary Proxy Statement</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&uml;</FONT></TD><TD>Confidential, for Use of the Commission Only&nbsp;(as permitted by Rule 14a&ndash;6(e)(2))</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">x</FONT></TD><TD>Definitive Proxy Statement</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&uml;</FONT></TD><TD>Definitive Additional Materials</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&uml;</FONT></TD><TD>Soliciting Material Pursuant to &sect;240.14a&ndash;12</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: center; text-indent: -0.25in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>China Recycling Energy Corporation</B></P>

<!-- Field: Rule-Page --><DIV ALIGN="LEFT"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(Name of Registrant as Specified In Its
Charter)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0; border-top: Black 0.5pt solid"><B>(Name
of Person(s) Filing Proxy Statement, if other than the Registrant)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 11.5pt; text-indent: -11.5pt">Payment of Filing Fee (Check
the appropriate box):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">x</FONT></TD><TD>No fee required.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&uml;</FONT></TD><TD>Fee computed on table below per Exchange Act Rules 14a&ndash;6(i)(1) and 0&ndash;11.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(1)</TD><TD>Title of each class of securities to which transaction applies:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(2)</TD><TD>Aggregate number of securities to which transaction applies:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(3)</TD><TD>Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0&ndash;11 (set forth the amount
on which the filing fee is calculated and state how it was determined):</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(4)</TD><TD>Proposed maximum aggregate value of transaction:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(5)</TD><TD>Total fee paid:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&uml;</FONT></TD><TD>Fee paid previously with preliminary materials.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&uml;</FONT></TD><TD>Check box if any part of the fee is offset as provided by Exchange Act Rule 0&ndash;11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule
and the date of its filing.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(1)</TD><TD>Amount Previously Paid:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(2)</TD><TD>Form, Schedule or Registration Statement No.:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(3)</TD><TD>Filing Party:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(4)</TD><TD>Date Filed:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CHINA RECYCLING ENERGY CORPORATION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>12/F, Tower A</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Chang An International Building</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>No. 88 Nan Guan Zheng Jie</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Xi&rsquo;an City, Shaanxi Province</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>China 710068</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">May 28, 2012</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Dear Stockholder:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">You are cordially
invited to attend the 2012 Annual Meeting of Stockholders of China Recycling Energy Corporation, a Nevada corporation, to be held
at our principal executive offices, located at 12/F, Tower A, Chang An International Building, No. 88 Nan Guang Zheng Jie, Xi&rsquo;an
City, Shaanxi Province, 710068 China on May 28, 2012, at 10:00 a.m. local time.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">The attached Notice
of Annual Meeting of Stockholders and Proxy Statement describe the formal business to be transacted at the annual meeting. Our
directors, officers, and representatives of our independent registered public accounting firm will be present to respond to appropriate
questions from stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">Please mark, date,
sign and return your proxy card in the enclosed envelope by following the instructions on the proxy card at your earliest convenience.
This will ensure that your shares will be represented and voted at the meeting, even if you do not attend. If you attend the meeting,
you may revoke your proxy and personally cast your vote. <FONT STYLE="color: black">Attendance at the meeting does not of itself
revoke your proxy.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 311pt; text-indent: -11.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 60%">&nbsp;</TD>
    <TD STYLE="width: 40%">Sincerely,</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>/s/ Guohua Ku</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Guohua Ku</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Chief Executive Officer and</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Chairman of the Board of Directors</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 311pt; text-indent: -11.5pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CHINA RECYCLING ENERGY CORPORATION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>12/F, Tower A</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Chang An International Building</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>No. 88 Nan Guan Zheng Jie</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Xi&rsquo;an City, Shaanxi Province</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>China 710068</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">NOTICE OF ANNUAL MEETING OF STOCKHOLDERS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>To Be Held May 28, 2012</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">NOTICE HEREBY IS
GIVEN that the 2012 Annual Meeting of Stockholders of China Recycling Energy Corporation, a Nevada corporation, will be held at
our principal executive officers, located at 12/F, Tower A, Chang An International Building, No. 88 Nan Guran Zheng Jie, Xi&rsquo;an
City, Shaanxi Province, 710068 China on May 28, 2012, at 10:00a.m. local time, to consider and act upon the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">1.</TD><TD STYLE="text-align: justify"><FONT STYLE="color: black">To elect seven directors, each to serve until the 2013 Annual Meeting
of Stockholders;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">2.</TD><TD STYLE="text-align: justify"><FONT STYLE="color: black">To ratify the appointment of </FONT>Goldman Kurland Mohidin, LLP<FONT STYLE="color: black">
as our independent registered public accounting firm for the fiscal year ending December&nbsp;31, 2012; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">3.</TD><TD STYLE="text-align: justify">To transact such other business as properly may come before the annual meeting or any adjournments
thereof. The Board of Directors is not aware of any other business to be presented to a vote of the stockholders at the annual
meeting.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">Information relating
to the above matters is set forth in the attached Proxy Statement. Stockholders of record at the close of business on May 11, 2012
are entitled to receive notice of and to vote at the 2012 Annual Meeting and any adjournments thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 311pt; text-indent: -11.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 65%">&nbsp;</TD>
    <TD STYLE="width: 35%">By Order of the Board of Directors.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>/s/ David Chong</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>David Chong</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Chief Financial Officer and Secretary</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Xi&rsquo;an City, Shaanxi Province, China</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>April 30, 2012</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 11.5pt; text-indent: -11.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>Important Notice Regarding
the Availability of Proxy Materials for the </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>Annual Meeting of Stockholders
to be held on May 28, 2012:</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>This Notice, the Proxy
Statement, including the Proxy Card, and our Annual Report on Form 10-K for fiscal year ended December 31, 2011 are available online
at www.shareholdervote.info/.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-transform: uppercase"><B>Whether
or not you plan to attend OUR 2012 annual meeting of STOCKHOLDERS, your vote is important. </B></FONT><B>PLEASE READ THE ATTACHED
PROXY STATEMENT AND PROMPTLY COMPLETE, EXECUTE AND RETURN THE ENCLOSED PROXY CARD IN THE ACCOMPANYING POSTAGE&ndash;PAID ENVELOPE
BY FOLLOWING THE INSTRUCTIONS ON THE ENCLOSED PROXY CARD. IF&nbsp;YOU ATTEND OUR 2012 ANNUAL MEETING<FONT STYLE="font-family: Times New Roman, Times, Serif; text-transform: uppercase">
of STOCKHOLDERS</FONT>, YOU MAY REVOKE YOUR PROXY AND VOTE IN PERSON IF YOU SO DESIRE.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CHINA RECYCLING ENERGY CORPORATION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>12/F, Tower A</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Chang An International Building</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>No. 88 Nan Guan Zheng Jie</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Xi&rsquo;an City, Shaanxi Province</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>China 710068</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">PROXY STATEMENT</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">FOR THE ANNUAL MEETING OF STOCKHOLDERS</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">To Be Held May 28, 2012</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">We are furnishing
this Proxy Statement to the stockholders of China Recycling Energy Corporation in connection with the solicitation, by the Board
of Directors of China Recycling Energy Corporation (the &ldquo;Board&rdquo;),of proxies to be voted at our 2012 Annual Meeting
of Stockholders to be held at our principal executive officers, located at 12/F, Tower A, Chang An International Building, No.
88 Nan Guang Zheng Jie, Xi&rsquo;an City, Shaanxi Province, 710068 China, on May 28, 2012, at 10:00 a.m. local time, and at any
adjournments or postponements of the meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">When used in this
Proxy Statement, the terms &ldquo;we,&rdquo; &ldquo;us,&rdquo; &ldquo;our,&rdquo; the &ldquo;Company&rdquo; and &ldquo;CREG&rdquo;
refer to China Recycling Energy Corporation, a Nevada corporation, and its wholly-owned subsidiary, Sifang Holdings Co., Ltd.,
and Sifang Holdings Co., Ltd.&rsquo;s wholly-owned subsidiary, Shanghai TCH Energy Technology Co., Ltd. and Shanghai TCH Energy
Technology Co., Ltd&rsquo;s wholly-owned subsidiary, Xi&rsquo;an TCH Energy Technology Co., Ltd.<I> &ldquo;</I>China&rdquo; and
the &ldquo;PRC&rdquo; refer to the People&rsquo;s Republic of China , excluding, for the purposes of this Proxy Statement, Hong
Kong, Macau and Taiwan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">The date on which
we are first sending this Proxy Statement and form of proxy card to our stockholders is on or about May 2, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">This Proxy Statement,
our Annual Report on Form 10-K, for fiscal year ended December 31, 2011, and other proxy materials, including the Proxy Card and
the Notice of Annual Meeting, are available online at www.shareholdervote.info/. Directions to our 2012 Annual Meeting of Stockholders
are available by calling +86-29-8769-1097.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">ABOUT THE <FONT STYLE="font-family: Times New Roman, Times, Serif; text-transform: uppercase">2012
Annual Meeting</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>General: Date, Time and Place</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are providing this
Proxy Statement to you in connection with the solicitation, on behalf of our Board, of proxies to be voted at our 2012 Annual Meeting
of Stockholders (the &ldquo;2012 Annual Meeting&rdquo;) or any postponement or adjournment of that meeting.&nbsp;The 2012 Annual
Meeting will held on May 28, 2012, at 10:00 a.m. local time at our principal executive officers, located at 12/F, Tower A, Chang
An International Building, No. 88 Nan Guang Zheng Jie, Xi&rsquo;an City, Shaanxi Province, 710068 China.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Matters to be Considered and Voted Upon</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">At the 2012 Annual
Meeting, stockholders will be asked to consider and vote (i)&nbsp;to elect the nominees named herein as directors and (ii)&nbsp;to
ratify the selection of our independent registered public accounting firm.&nbsp;The Board does not know of any matters to be brought
before the meeting other than as set forth in the notice of meeting.&nbsp;If any other matters properly come before the meeting,
the persons named in the enclosed form of proxy or their substitutes will vote in accordance with their best judgment on such matters.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Record Date; Stock Outstanding and Entitled to Vote</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our Board has established
May 11, 2012 as the record date.<FONT STYLE="font-family: Times New Roman, Times, Serif"> </FONT> Only holders of shares of the
Company&rsquo;s common stock, par value <FONT STYLE="font-family: Times New Roman, Times, Serif">$.001 per share, as of the record
date are entitled to notice of, and to vote at, the </FONT>2012 Annual Meeting. Each share of common stock entitles the holder
thereof to one vote per share on each matter presented to our stockholders for approval at the 2012 Annual Meeting. <FONT STYLE="font-family: Times New Roman, Times, Serif">At
the close of business on April 25, 2012, we had 46,474,350 shares of common stock outstanding. We expect the same number of shares
to be outstanding as of the record date.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Quorum; Required Vote</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A quorum of stockholders
is required for the transaction of business at the 2012 Annual Meeting. The presence of at least one-third of all of our shares
of common stock issued and outstanding and entitled to vote at the meeting, present in person or represented by proxy, will constitute
a quorum at the meeting. Votes cast by proxy or in person at the 2012 Annual Meeting will be tabulated by an election inspector
appointed for the meeting and will be taken into account in determining whether or not a quorum is present. Abstentions and broker
non-votes, which occur when a broker has not received customer instructions and indicates that it does not have the discretionary
authority to vote on a particular matter on the proxy card, will be included in determining the presence of a quorum at the 2012
Annual Meeting. However, neither abstentions nor broker non-votes will be counted, and therefore will have no effect on the outcome
on any of the proposals.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Assuming that a quorum
is present, our stockholders may take action at the annual meeting with the votes described below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48.95pt"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48.95pt"><I>Election of Directors.</I>&nbsp;Under
Nevada law and the Fourth Amended and Restated Bylaws of the Company (&ldquo;Bylaws&rdquo;), the affirmative vote of a plurality
of the votes cast by the holders of our shares of common stock is required to elect each director.&nbsp;Consequently, only shares
that are voted in favor of a particular nominee will be counted toward such nominee&rsquo;s achievement of a plurality. Stockholders
do not have any rights to cumulate their votes in the election of directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Ratification of
the selection of Goldman Kurland Mohidin LLP as our independent registered public accounting firm.</I>&nbsp;The affirmative vote
of the holders of a majority of the outstanding shares of our common stock entitled to vote at the annual meeting is required to
ratify the selection of Goldman Kurland Mohidin, LLP as our independent registered public accounting firm.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Abstentions and Broker Non-Votes</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under applicable regulations,
if a broker holds shares on your behalf, and you do not instruct your broker how to vote those shares on a matter considered &ldquo;routine,&rdquo;
the broker may generally vote your shares for you. A &ldquo;broker non-vote&rdquo; occurs when a broker has not received voting
instructions from you on a &ldquo;non-routine&rdquo; matter, in which case the broker does not have authority to vote your shares
with respect to such matter. Rules that govern how brokers vote your shares have recently changed. Unless you provide voting instructions
to a broker holding shares on your behalf, your broker may no longer use discretionary authority to vote your shares on any of
the matters to be considered at the 2012 Annual Meeting other than the ratification of our independent registered public accounting
firm. Please vote your proxy so your vote can be counted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Voting Procedure; Voting of Proxies;
Revocation of Proxies</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If your shares are
registered directly in your name with our transfer agent, Securities Transfer Corporation, you are considered the &ldquo;stockholder
of record&rdquo; with respect to those shares. As the stockholder of record, you may vote in person at the 2012 Annual Meeting,
or vote by proxy using the accompanying proxy card, which also is available at www.shareholdervote.info/. Whether or not you plan
to attend the annual meeting, we urge you to vote by proxy to ensure your vote is counted. You may still attend the 2012 Annual
Meeting and vote in person even if you have already voted by proxy. <U>Please note that the notice letter you received directing
you to the website at which the proxy materials are available is not the proxy card and should not be used to submit your vote</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.75in">1.&#9;To vote in person,
come to the 2012 Annual Meeting and we will give you a ballot when you arrive.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.75in">2.&#9;To vote using
the proxy card, simply print the proxy card, complete, sign and date it and return it promptly to Mr. Zhigang Wu, our Vice President
of Finance, at 12/F, Tower A, Chang An International Building, No. 88 Nan Guang Zheng Jie, Xi&rsquo;an City, Shaanxi Province,
710068 China. Our Board has selected each of Guohua Ku and Zhigang Wu to serve as proxies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If you do not return
a signed proxy card and do not attend the meeting and vote in person, your shares will not be voted. Shares of our common stock
represented by properly executed proxies that are received by us and are not revoked will be voted at the 2012 Annual Meeting in
accordance with the instructions contained therein.&nbsp;If you return a signed and dated proxy card and instructions are not given,
such proxies will be voted<B> FOR </B>election of each nominee for director named herein and<B> FOR</B> ratification of the selection
of Goldman Kurland Mohidin, LLP as our independent registered public accounting firm.&nbsp;In addition, we reserve the right to
exercise discretionary authority to vote proxies, in the manner determined by us, in our sole discretion, on any matters brought
before the 2012 Annual Meeting for which we did not receive adequate notice under the proxy rules promulgated by the Securities
and Exchange Commission (&ldquo;SEC&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If you hold your shares
in &ldquo;street name&rdquo; through a stockbroker, bank or other nominee rather than directly in your own name, you are considered
the &ldquo;beneficial owner&rdquo; of such shares. Because a beneficial owner is not a stockholder of record, you may not vote
these shares in person at the 2012 Annual Meeting unless you obtain a &ldquo;legal proxy&rdquo; from the broker, bank or nominee
that holds your shares, giving you the right to vote those shares at the meeting. If you wish to attend the 2012 Annual Meeting
and vote in person, you will need to contact your broker, bank or nominee to obtain a legal proxy.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Your proxy is revocable
at any time before it is voted at the 2012 Annual Meeting in any of the following three ways:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.75in">1.&#9;You may submit
another properly completed proxy bearing a later date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.75in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.75in">2.&#9;You may send
a written notice that you are revoking your proxy to Mr. Zhigang Wu, our Vice President of Finance, at 12/F, Tower A, Chang An
International Building, No. 88 Nan Guang Zheng Jie, Xi&rsquo;an City, Shaanxi Province, 710068 China.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.75in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.75in">3.&#9;You may attend
the annual meeting and vote in person. However, simply attending the annual meeting will not, by itself, revoke your proxy.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Proxy Solicitation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We will pay for the
entire cost of soliciting proxies. In addition to these proxy materials, our directors and employees may also solicit proxies in
person, by telephone or by other means of communication. Directors and employees will not be paid any additional compensation for
soliciting proxies. We may also reimburse brokerage firms, banks and other agents for the cost of forwarding proxy materials to
beneficial owners.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Householding </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48.95pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48.95pt">SEC rules permit
us to deliver a single proxy statement and annual report to one address shared by two or more of our stockholders. This delivery
method is referred to as &ldquo;householding&rdquo; and can result in significant cost savings. To take advantage of this opportunity,
we have delivered only one proxy statement and annual report to multiple stockholders who share an address, unless we received
contrary instructions from the impacted stockholders prior to the mailing date. We agree to deliver promptly, upon written or oral
request, a separate copy of this Proxy Statement and annual report to any stockholder at the shared address to which a single copy
of those documents were delivered. If you prefer to receive separate copies of the proxy statement and annual report, contact Mr.
Zhigang Wu, our Vice President of Finance, at 12/F, Tower A, Chang An International Building, No. 88 Nan Guang Zheng Jie, Xi&rsquo;an
City, Shaanxi Province, 710068 China.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 48.95pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Stockholder List</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For at least ten days
prior to the meeting, a list of stockholders entitled to vote at the 2012 Annual Meeting, arranged in alphabetical order, showing
the address of and number of shares registered in the name of each stockholder, will be open for examination by any stockholder,
for any purpose related to the 2012 Annual Meeting, during ordinary business hours at our principal executive offices. The list
will also be available for examination at the 2012 Annual Meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Other Business</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Board is not aware
of any other matters to be presented at the 2012 Annual Meeting other than those mentioned in this Proxy Statement and our accompanying
Notice of Annual Meeting of Stockholders. If, however, any other matters properly come before the 2012 Annual Meeting, the persons
named in the accompanying proxy will vote in accordance with their best judgment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Proposals of Stockholders for 2013 Annual Meeting </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Stockholders may present
proper proposals for inclusion in the proxy statement for our 2013 Annual Meeting by submitting their proposals to us in a timely
manner and in accordance with rules and regulations promulgated under our Bylaws and the Securities Exchange Act of 1934, as amended
(the &ldquo;Exchange Act&rdquo;). Our Bylaws provide that advance notice of a stockholder&rsquo;s proposal must be delivered to
our Secretary, David Chong, at our principal executive offices, located at 12/F, Tower A, Chang An International Building, No.
88 Nan Guang Zheng Jie, Xi&rsquo;an City, Shaanxi Province, 710068 China, not less than ninety (90) days nor more than one hundred
twenty (120) days prior to the one-year anniversary of the preceding year&rsquo;s annual meeting; provided, however, that if the
date of the annual meeting is more than thirty (30) days before or more than sixty (60) days after such anniversary date, notice
by the stockholder to be timely must be so delivered, or mailed and received, not earlier than the one hundred and twentieth (120th)
day prior to such annual meeting, and not later than the ninetieth (90th) day prior to such meeting or tenth (10th) day following
the day on which public disclosure of the date of such annual meeting was first made. Therefore, in order to be included in the
proxy statement for 2013 Annual Meeting, stockholder proposals must be received by us no earlier than January 28, 2013, but no
later than February 26, 2013, and must otherwise comply with the notice requirements set forth under our Bylaws and all applicable
Exchange Act and SEC rules.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Stockholder notice
shall set forth as to each matter the stockholder proposes to bring before the annual meeting: (i)&nbsp;a brief description of
the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting,
(ii)&nbsp;the name and address, as they appear on our books, of the stockholder proposing such business, (iii)&nbsp;the class and
number of shares of CREG, which are beneficially owned by the stockholder, (iv)&nbsp;any material interest of the stockholder in
such business and (v)&nbsp;any other information that is required to be provided by the stockholder pursuant to Regulation 14A
under the Exchange Act, in his capacity as a proponent to a stockholder proposal.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A stockholder&rsquo;s
notice relating to nomination for directors shall set forth as to each person, if any, whom the stockholder proposes to nominate
for election or re-election as a director: (i)&nbsp;the name, age, business address and residence address of such person, (ii)&nbsp;the
principal occupation or employment of such person, (iii)&nbsp;the class and number of shares of CREG, which are beneficially owned
by such person, (iv)&nbsp;a description of all arrangements or understandings between the stockholder and each nominee and any
other person(s) (naming such person(s)) pursuant to which the nominations are to be made by the stockholder and (v)&nbsp;any other
information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or
is otherwise required, in each case pursuant to Regulation 14A under the Exchange Act (including without limitation such person&rsquo;s
written consent to being named in our Proxy Statement, if any, as a nominee and to serving as a director if elected).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The chairman of our
2013 Annual Meeting may refuse to allow the transaction of any business or acknowledge the nomination of any person not made in
compliance with the procedures set forth for such matters in our Bylaws.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A copy of the full
text of the provisions of our Bylaws, as amended, dealing with stockholder proposals is available to stockholders from our Secretary
upon written request and an electronic copy of is available at the SEC&rsquo;s website located at www.sec.gov.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Voting Results of 2012 Annual Meeting</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Voting results will
be published in a Current Report on Form 8-K issued by us within four (4) business days following the annual meeting.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">PROPOSAL 1&mdash; ELECTION OF DIRECTORS&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Nominees</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">Our Bylaws provide
that the Board shall consist of not less than three (3) nor more than eleven (11) directors. Our Board has fixed the number of
directors to be elected at the 2012 Annual Meeting at seven (7). Vacancies on the Board may be filled only by persons elected by
a majority of the remaining directors. A director elected by the Board to fill a vacancy (including a vacancy created by an increase
in the Board of Directors) will serve for the remainder of one year term in which the vacancy occurred and until the director&rsquo;s
successor is elected and qualified.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">Our Board currently
consists of nine members. All of the nominees were previously elected by our stockholders. Each of our current directors, with
the exception of Dr. Robert Chanson and Mr. Nicholas Shao, will stand for re-election at the 2012 Annual Meeting. As reported on
a current report on Form 8-K, filed April 17, 2012, each of Dr. Chanson and Mr. Shao advised the Company that his decision not
to stand for re-election was not due to any disagreement with the Company, its management or its other directors. Mr. Shao, in
accordance with the terms and conditions of that certain Amended and Restated Shareholders Agreement (the &ldquo;Shareholders Agreement&rdquo;)
among the Company, Carlyle Asia Growth Partners III, L.P, CAGP III Co-Investment, L.P , China Cinda (HK) Asset Management Co.,
Ltd. and Mr. Guohua Ku, dated August 18, 2010, shall continue to serve on the Board in a non-official, advisory capacity following
the 2012 Annual Meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">If elected as a director
at the 2012 Annual Meeting, each of the nominees would serve a one-year term expiring at the 2013 Annual Meeting of Stockholders
and until his successor has been duly elected and qualified. Biographical information regarding each of the nominees is set forth
below. No family relationships exist among any of our director nominees or executive officers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">Each of the nominees
has consented to serve as a director if elected. If any nominee should be unavailable to serve for any reason (which is not anticipated),
the Board may designate a substitute nominee or nominees (in which event the persons named on the enclosed proxy card will vote
the shares represented by all valid proxy cards for the election of such substitute nominee or nominees), allow the vacancies to
remain open until a suitable candidate or candidates are located, or by resolution provide for a lesser number of directors.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Executive Officers and Directors</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 37.45pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 37.45pt">The following table sets forth certain
information regarding our executive officers and director nominees as of April 25, 2012:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 37.45pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 45%; padding-left: 10pt; font-weight: bold; text-decoration: none; text-indent: -10pt; border-bottom: Black 1pt solid">Name</TD>
    <TD STYLE="width: 2%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 6%; font-weight: bold; text-decoration: none; text-align: center; border-bottom: Black 1pt solid">Age</TD>
    <TD STYLE="width: 2%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 45%; font-weight: bold; text-decoration: none; text-align: center; border-bottom: Black 1pt solid">Position</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Guohua Ku</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">50</TD>
    <TD>&nbsp;</TD>
    <TD>Chief Executive Officer and Chairman of the Board</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Lanwei Li</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30</TD>
    <TD>&nbsp;</TD>
    <TD>Chief Operating Officer, Vice President and Director of Business and Director</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>David Chong</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">49</TD>
    <TD>&nbsp;</TD>
    <TD>Chief Financial Officer and Secretary</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Zhigang Wu</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">40</TD>
    <TD>&nbsp;</TD>
    <TD>Vice President, Finance</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Xiaogang Zhu</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">58</TD>
    <TD>&nbsp;</TD>
    <TD>Vice President, Accounting</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Timothy Driscoll</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">68</TD>
    <TD>&nbsp;</TD>
    <TD>Director (Independent)</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Julian Ha</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">43</TD>
    <TD>&nbsp;</TD>
    <TD>Director (Independent)</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Chungui Shi</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">72</TD>
    <TD>&nbsp;</TD>
    <TD>Director (Independent)</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Yilin Ma</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">48</TD>
    <TD>&nbsp;</TD>
    <TD>Director</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Albert McLelland</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">53</TD>
    <TD>&nbsp;</TD>
    <TD>Director (Independent)</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Guohua Ku was appointed
as a director and Chief Executive Officer as of December 10, 2008.&nbsp;&nbsp;He was elected Chairman of the Board as of April
1, 2009.&nbsp;&nbsp;Prior to joining the Company, Mr. Ku served as a Senior Engineer for Yingfeng Technology from 2003 to 2007.&nbsp;&nbsp;From
1979 to 2003, Mr. Ku served in multiple capacities for Shaanxi Blast Air Blower (Group) Co., Ltd., with his last position serving
as a Senior Engineer. Mr. Ku&rsquo;s experience as our Chief Executive Officer, as well as Chairman of the Board, and extensive
scientific and operational knowledge and expertise qualifies him to serve as Chairman of the Board and led the Board to conclude
that he should be nominated to serve another term as a director.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Lanwei Li was appointed
as a director on April 1, 2009.&nbsp;&nbsp;He has worked for the Company and its predecessors since March 2005 and currently works
as Chief Operating Officer and the Vice President and Director of Business, supervising the departments of Business Development,
Investment Management and Strategy Development.&nbsp;&nbsp;He has a&nbsp;higher education background in investment economy management.
Mr. Li&rsquo;s experience as our Chief Operating Officer, Vice President and Director of Business and knowledge of current corporate
finance techniques and market activities qualifies him to serve on our Board and led the Board to conclude that he should be nominated
to serve another term as a director.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">David Chong, a citizen
of Singapore, was appointed as Chief Financial Officer and Secretary of the Company on December 30, 2010; prior to Mr. Chong&rsquo;s
appointment as Chief Financial Officer and Secretary of the Company, he served as a consultant with the Company since June 2010.
Prior to joining the Company, Mr. Chong served as CFO for Guangdong Yan Zhi Hong Shoes Manufacturing Co., Ltd (&ldquo;YZH&rdquo;)
from January, 2007 to December, 2010. From 1991 to 2007, Mr. Chong served as the Financial Controller for Amtek Engineering Limited,
where he managed the financial operations of six plants in China with annual revenues in excess of $250 million. Mr. Chong holds
the qualification in Professional Accountancy Studies from ACCA (the Association of Chartered Certified Accountants) and is fluent
in both English and Mandarin. Mr. Chong&rsquo;s experience working with large manufacturing companies, his familiarity navigating
China, US, Europe, Singapore and other capital markets and his expertise in international financial management and operations,
auditing, funding, business development, internal control maintenance, corporate governance and investor relations were leading
factors in his appointment as Chief Financial Officer and Secretary of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Zhigang Wu&nbsp;&nbsp;was
appointed as Vice President, Finance starting in October 2007 and is responsible for the securities and financing activities of
the Company.&nbsp;&nbsp;Before joining the Company, Mr. Wu worked for over a decade in the securities and investment industries
with Guotai-Junan Securities and Zhongzheng Investment.&nbsp;&nbsp;Mr. Wu received a bachelor degree from Inner-Mongolia Finance
&amp; Economy University in 1998, with a major in international finance.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Xiaogang Zhu joined
China Recycling Energy Corporation as Accounting Manager in December 2007. In April 2010, Mr. Zhu was appointed Vice President,
Accounting. From 2005 to joining us in 2007, Mr. Zhu was the Chief Financial Officer of China Natural Gas, Inc. From 2000 through
2005, Mr. Zhu was the Vice President of Xian Dapeng Biotechnology Company. While with Xian Dapeng Biotechnology Company, Mr. Zhu
served in various management roles, including time as head of accounting in which he established the accounting management and
internal control systems. Mr. Zhu received his bachelor degree in Accounting from Shaanxi Finance and Accounting Institute (now
Xian Jiaotong University Management School).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Timothy Driscoll was
appointed as a director of the Company on October 30, 2009, by the Board.&nbsp;&nbsp;Mr. Driscoll currently serves as president
of MTD Ventures, and president and chief of executive officer of Driscoll Management Services. Mr. Driscoll also serves as a director
of American Oil and Supply International.&nbsp;&nbsp;From 1994 through 1999, Mr. Driscoll was the president and chief executive
officer of Agrevo Environmental Health and was the president and chief executive officer of Rouossel UCLAF Environmental Health
from 1991 to 1994.&nbsp;&nbsp;Mr. Driscoll received his MBA in Finance from Xavier University and B.S. in Economics from Villanova
University. Mr. Driscoll brings extensive financial structuring and managerial and operational expertise to the Board. These skills,
along with his knowledge of and deep genuine interest in our Company and his performance as a Board member of the Company, qualifies
him to serve on our Board and led the Board to conclude that he should be nominated to serve another term as a director.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Julian Ha was appointed
a director of the Company on October 30, 2009, by the Board.&nbsp;&nbsp;Since 2006, Mr. Ha has been a member of the Private Equity,
Financial Officers and Legal practice groups of Heidrick &amp; Struggles International, Inc.&nbsp;&nbsp;From 2005 through 2006,
Mr. Ha was a Director in the Corporate Finance group of Evolution Securities China Limited.&nbsp;&nbsp;From 2001 to 2005, Mr. Ha
was a Director of European Business Development for CapitalKey Advisors and Capital IQ.&nbsp;&nbsp;Mr. Ha was an Executive Vice
President with DDL from 2000 to 2001, where he was responsible for portfolio management.&nbsp;&nbsp;Mr. Ha trained as a corporate
lawyer and has practiced in New York, Washington, D.C., London, Singapore and Shanghai.&nbsp;&nbsp;Mr. Ha received his BA from
Cornell University, his Masters degrees from the London School of Economics and Harvard University and his JD from the NYU School
of Law. Mr. Ha&rsquo;s legal and financial expertise, as well as his management experience, qualifies him to serve on our Board
and led the Board to conclude that he should be nominated to serve another term as a director.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Chungui Shi was appointed
as a director of the Company on October 7, 2010, in accordance with the terms of the Shareholders Agreement. Since May 2007, Mr.
Shi has served, and continues to serve, as a non-executive director of Aluminum Corporation of China Limited, a China based aluminum
exploitation, development, production, processing, sale, research and development company traded on NYSE under trading symbol of
ACH, Hong Kong Stock Exchanges under stock code of 2600 and Shanghai Stock Exchange under stock code of 601600. Since April 2008,
Mr. Shi has served, and continues to serve, as an independent director of Intime Department Store (Group) Company Ltd., a Hong
Kong based company in department store business listed on Hong Kong Stock Exchange under stock code of 1833. In addition, Mr. Shi
serves, and has since December 2009, as an independent director of China National Materials Company Ltd., a China based company
mainly in cement equipment and engineering services, glass fiber, cement and high-tech materials business listed on Hong Kong Stock
Exchanges under stock code of 1893. Additionally, Mr. Shi serves as an independent director of Xi&rsquo;an City Commercial Bank,
a commercial bank in Xi&rsquo;an city, China, and has served as such since August 2010. Mr. Shi previously served as Vice Chairman
of the Board of Directors, Tianjin Steel Pipe (Group) Corporation from June 2001 to September 2003, Vice President, China Cinda
Asset Management Co. Ltd from April 1999 to June 2001, Vice President of the Investment Association of China from September 1995
to September 2000, and Deputy Governor of China Construction Bank from December 1993 to April 1999. Mr. Shi received his Bachelor
in Finance degree from Dongbei University of Finance and Economics in 1964 and is a senior economist in China. Mr. Shi&rsquo;s
leadership skills and extensive management experience, as well as his extensive financial structuring and operational expertise,
qualifies him to serve on our board and led the Board to conclude that he should be nominated to serve another term as a director.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Yilin Ma was appointed
as a director of the Company on October 7, 2010, in accordance with the terms of the Shareholders Agreement. Since October 2008,
Mr. Ma has served, and continues to serve, as an executive director of China Cinda (HK) Asset Management Co., Ltd. and since December
2007, Mr. Ma has served, and continues to serve as a non-executive director of Jiangsu Lianyungang Port, Co., Ltd., a China based
port company listed on Shanghai Stock Exchange under stock code 601008. Mr. Ma previously served as Chief Investment Officer of
Well Kent International Holding from October 2006 to October 2008, General Manager of Zhejiang Province Construction and Real Property
Development Company from January 2005 to October 2006, and manager of general administration office of Well Kent from January 2001
to January 2005. Mr. Ma received his bachelor in engineering from College of International Politics in 1988 in China and his mater
in law degree from China University of Political Science and Law in 1995. Mr. Ma&rsquo;s leadership skills and extensive management
experience, as well as his legal and engineering expertise, qualifies him to serve on our board and led the Board to conclude that
he should be nominated to serve another term as a director.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Albert McLelland
was elected as a director at the 2011 Annual Meeting. Presently, he is a Senior Managing Director for AmPac Strategic Capital,
LLC, a boutique merchant bank focusing on originating and executing cross border transactions with China, which he founded in
2001. Through AmPac, he established many strong relationships with various leading financial institutions in China to support
advisory practices such as the State Development and Investment Corporation (SDIC) and China International Trust and Investment
Company (CITIC). Prior to founding AmPac, Albert was a Director of Financial Advisory Services at PricewaterhouseCoopers' (PwC)
and member of the Chairman's Key Account Management (KAM) team, responsible for the daily operations of their cross border transactions
group operating during the Asian Financial Crisis from 1999 &ndash; 2001. Mr. McLelland, from 1993 &ndash; 1998, founded and became
the Managing Director of Pearl Delta Capital Corporation in Taipei, Taiwan, a specialty investment bank that focused on raising
funds and executing cross border transactions from direct investments to mergers and acquisitions for or with Greater China-based
venture capital firms. He ran corporate finance at CEF Taiwan Limited, the Taiwan branch of a large regional merchant bank that
was a joint venture between Canadian Imperial Bank and Cheung Kong (a leading Hong Kong conglomerate) and began his investment
banking career at Shearson Lehman underwriting bond issues. He currently serves as the Audit Chair China Housing and Land Development,
Inc. (CHLN) and also served as the Chairman of the Special Committee for the sale of China Fire &amp; Security Group (CFSG). He
is an Adjunct Professor teaching &ldquo;Venturing in China&rdquo; at the Caruth Institute for Entrepreneurship at the Cox School
of Business at Southern Methodist University as well as serving as a Guest Lecturer at the Fudan University School of Management
in Shanghai. Mr. McLelland received his MBA from the University of Chicago and a Master of International Affairs from Columbia
University. &nbsp;He did his undergraduate studies at the University of South Florida and also studied Mandarin at the National
Normal University in Taiwan. In nominating Mr. McLelland for election as a director, our Board focused on his expertise in financing,
auditing, cross border transactions, investment banking, mergers and acquisitions and strategic alliances within Greater China.
Mr. McLelland&rsquo;s extensive experience, as well as his financial and operational expertise, qualifies him to serve on our
Board and led the Board to conclude that he should be nominated to serve another term as a director.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">All directors hold
office until the next annual meeting of stockholders and until their successors have been duly elected and qualified. There are
no membership qualifications for directors.&nbsp;&nbsp;&nbsp;Pursuant to the Shareholders Agreement,&nbsp;(i) Carlyle Asia Growth
Partners III, L.P and CAGP III Co-Investment, L.P., collectively, have the right to designate up to two members of the Board for
so long as they remain investors in the Company;&nbsp; and (ii) China Cinda (HK) Asset Management Co., Ltd. has the right to designate
up to two members of the Board, one of which must qualify as an independent director pursuant to the listing rules of NASDAQ, for
so long as they remain investors in the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;There are no
other arrangements or understandings pursuant to which our directors are selected or nominated.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-transform: uppercase"><B>The
Board recommends that the stockholders vote &ldquo;FOR&rdquo; the election of each of the director nominees named in this proxy
statement</B></FONT><B>.</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">CORPORATE
GOVERNANCE</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Leadership Structure and Role in Risk Oversight</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27pt">The Company&rsquo;s
current board leadership structure separates the board chair and principal executive officer roles into two positions. Mr. Ku has
served as both Chairman of the Board and CEO of the Company since April 1, 2009. Our Board continues to believe there are important
advantages to Mr. Ku serving in both roles at this time. Mr. Ku is the director most familiar with our business and industry and
is best situated to propose Board agendas and lead Board discussions on important matters. Mr. Ku provides a strong link between
management and the Board, which promotes clear communication and enhances strategic planning and implementation of corporate strategies.
Another advantage is the clarity of leadership provided by one person representing us to employees, stockholders and other stakeholders.
The Board has not named a lead independent director.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27.35pt">Our Board is responsible
for oversight of the Company&rsquo;s risk management practices while management is responsible for the day-to-day risk management
processes. In the Board&rsquo;s opinion, this division of responsibilities is the most effective approach for addressing the risks
facing the Company. The Board receives periodic reports from management regarding the most significant risks facing the Company.&nbsp;
In addition, the Audit Committee assists the Board in its oversight of our risk assessment and risk management policies. Our Audit
Committee is empowered to appoint and oversee our independent registered public accounting firm, monitor the integrity of our financial
reporting processes and systems of internal controls and provide an avenue of communication among our independent auditors, management,
our internal auditing department and our Board.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Diversity</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Board does not
have a formal policy with respect to Board nominee diversity.&nbsp;&nbsp;In recommending proposed nominees to the full Board, the
Corporate Governance and Nominating Committee is charged with building and maintaining a board that has an ideal mix of talent
and experience to achieve our business objectives in the current environment.&nbsp;&nbsp;In particular, the Corporate Governance
and Nominating Committee is focused on relevant subject matter expertise, depth of knowledge in key areas that are important to
us, and diversity of thought, background, perspective and experience so as to facilitate robust debate and broad thinking on strategies
and tactics pursued by us.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Director Independence</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Timothy Driscoll, Julian
Ha, Yilin Ma, Albert McLelland and Chungui Shi are our only non-employee directors, and our Board has determined that, with the
exception of Mr. Ma, each of them is independent pursuant to the listing rules of NASDAQ.&nbsp;&nbsp;All of the members of each
of the Audit Committee, Compensation Committee and Corporate Governance and Nominating Committee are independent are independent
as defined in NASDAQ Rule&nbsp;5605(a)(2).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Board Meetings and Committee Meeting; Annual Meeting Attendance</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">During the year ended
December 31, 2011, the Board held 6 meetings and acted through unanimous consent on 6 different occasions. In addition, the Audit
Committee held 5 meetings; the Corporate Governance and Nominating Committee held 1 meeting and acted through unanimous consent
on 1 different occasion; and the Compensation Committee held 2 meetings and acted through unanimous consent on 2 different occasions.
During the year ended December 31, 2011, each of the directors attended, in person or by telephone, more than 75% of the meetings
of the Board and the committees on which he or she served. We encourage our Board members to attend our Annual Meetings, but we
do not have a formal policy requiring attendance. All of our then sitting Board members, with the exception of Dr. Robert Chanson
and Yilin Ma, attended the 2011 Annual Meeting.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Corporate Governance and Nominating
Committee</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">The Corporate Governance
and Nominating Committee currently consists of Dr. Robert Chanson, Timothy Driscoll and Albert McLelland. Mr. Driscoll is the chairman
of our Corporate Governance and Nominating Committee. As a result of Mr. Chanson&rsquo;s decision not to stand for re-election
to our Board, there will be a vacancy. Our Board has identified Julian Ha, as a qualified and suitable candidate to replace Mr.
Chanson following the 2012 Annual Meeting. The Corporate Governance and Nominating Committee oversees all aspects of the Company&rsquo;s
corporate governance functions on behalf of the Board, including identifying individuals qualified to become directors, recommending
to the Board the selection of director nominees for each meeting of the stockholders at which directors are elected and overseeing
the monitoring and evaluation of the Company&rsquo;s corporate governance practices. The Corporate Governance and Nominating Committee
reviewed the performance of all of the current members of the Board and determined and recommended to the Board that, with the
exception of Dr. Robert Chanson and Nicholas Shao, all of the current directors should be nominated for re-election.&nbsp;&nbsp;No
other candidates were recommended or evaluated. The Corporate Governance and Nominating Committee operates under a written charter,
which is available on our website at www.creg-cn.com under the links &ldquo;Investor Relations&nbsp;&ndash; Corporate Governance.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><I>Selection of Board Nominees</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our Corporate Governance
and Nominating Committee is responsible for identifying, selecting and evaluating Board candidates. In selecting candidates for
appointment or re-election to the board of directors, the Corporate Governance and Nominating Committee of the Board considers
the following criteria: (i) personal and professional ethics and integrity, including a reputation for integrity and honesty in
the business community; (ii) experience as an executive officer of companies or as a senior leader of complex organizations, including
scientific, government, financial or technological organizations; (iii) financial knowledge, including an understanding of finance,
accounting, the financial reporting process, and company measures for operating and strategic performance; (iv) ability to critically
and independently evaluate business issues, contributing a diverse perspectives or viewpoints, and making practical and mature
judgments; (v) a genuine interest in the Company, and the ability to spend the time required to make substantial contributions
as a director; and (vi) no conflict of interest or legal impediment that would interfere with the duty of loyalty to the Company
and its stockholders. In addition, the Corporate Governance and Nominating Committee reviews the qualifications of the directors
to be appointed to serve as members of the Audit Committee to ensure that they meet the financial literacy and sophistication requirements
under the NASDAQ rules and that at least one of them qualifies as an &ldquo;audit committee financial expert&rdquo; under the rules
of the SEC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Audit Committee</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Audit Committee
currently consists of Timothy Driscoll, Julian Ha and Albert McLelland, each of whom is independent under NASDAQ listing standards.
Prior to our 2011 Annual Meeting, held on June 21, 2011, Sean Shao served as chairman of our the Audit Committee. The Board had
determined that Mr. Shao qualified as an &ldquo;audit committee financial expert,&rdquo; as defined by NASDAQ Rule 5605(a)(2).
However, Mr. Shao decided not to stand for re-election to our Board at the 2011 Annual Meeting. Following his election as a director
at the 2011 Annual Meeting, Mr. McLelland replaced Mr. Shao as a member of the Board, the Audit Committee and as Chairman of the
Audit Committee. The Board determined that Mr. McLelland qualified as an &ldquo;audit committee financial expert,&rdquo; as defined
by NASDAQ Rule 5605(a)(2). The Audit Committee is responsible for assisting the Board in fulfilling its oversight responsibilities
with respect to: (i) the financial reports and other financial information provided by us to the public or any governmental body;
(ii) our compliance with legal and regulatory requirements; (iii) our systems of internal controls regarding finance, accounting
and legal compliance that have been established by management and the Board; (iv) the qualifications and independence of our independent
registered public accounting firm; (v) the performance of our internal audit function and the independent registered public accounting
firm; and (vi) our auditing, accounting and financial reporting processes generally. The Audit Committee has been established in
accordance with Section 3(a)(58)(A) of the Exchange Act. In connection with its responsibilities, the Board has delegated to the
Audit Committee the authority to select and hire our independent registered public accounting firm and determine their fees and
retention terms. The Audit Committee operates under a written charter, which is available on our website at www.creg-cn.com under
the links &ldquo;Investor Relations&nbsp;&ndash; Corporate Governance.&rdquo;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Compensation Committee</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">The
Compensation Committee members currently consists of Dr. Robert Chanson,</FONT> Chungui Shi<FONT STYLE="color: black"> and Julian
Ha. Mr. Ha is the chairman of our Compensation Committee. </FONT>As a result of Dr. Chanson&rsquo;s decision not to stand for re-election
to our Board, there will be a vacancy. Our Board has identified Timothy Driscoll, as a qualified and suitable candidate to replace
Mr. Chanson following the 2012 Annual Meeting.<FONT STYLE="color: black"> </FONT>The Compensation Committee&rsquo;s purpose is
(i) to oversee the Company&rsquo;s efforts to attract, retain and motivate members of the Company&rsquo;s senior management team,
(ii) to carry out the Board&rsquo;s overall responsibility relating to the determination of compensation for all executive officers,
(iii) to oversee all other aspects of the Company&rsquo;s compensation policies, and (iv) to oversee the Company&rsquo;s management
resources, succession planning and management development activities. The Compensation Committee operates under a written charter,
which is available on our website at www.creg-cn.com under the links &ldquo;Investor Relations &ndash; Corporate Governance.&rdquo;<FONT STYLE="color: black">
</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Compensation Committee Interlocks and Insider Participation
in Compensation Decisions</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">All members of the
Compensation Committee are independent directors. No member of our Compensation Committee is a current or former officer or employee
of the Company or any of its subsidiaries, and no director or executive officer of the Company is a director or executive officer
of any other corporation that has a director or executive officer who is also a director of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Stockholder Communication with the Board of Directors</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">Stockholders may
communicate with the Board by writing to the attention of Mr. Zhigang Wu, our Vice President of Finance, at 12/F, Tower A, Chang
An International Building, No. 88 Nan Guang Zheng Jie, Xi&rsquo;an City, Shaanxi Province, 710068 China.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Code of Ethics</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">We have adopted a
&ldquo;code of ethics&rdquo; as defined by regulations promulgated under the Securities Act of 1933, as amended, and the Exchange
Act that applies to all of our directors and employees worldwide, including our principal executive officer, principal financial
officer and principal accounting officer. A current copy of our Code of Business Conduct and Ethics is available on our website
at www.creg-cn.com under the links &ldquo;Investor Relations&mdash;Corporate Governance.&rdquo; We intend to disclose any amendments
to the Code of Business Conduct and Ethics, as well as any waivers for executive officers or directors, on our website.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">The following table
sets forth certain information provided to us by each of the following as of April 25, 2012 (unless otherwise indicated) regarding
their beneficial ownership of our common stock:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>each person known by us to be the beneficial owner of more than 5% of our common stock;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>each of our directors and named executive officers;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>each of our officers and directors that served in such capacity during 2011, but no longer served in that capacity at the end
of the fiscal year; and</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 1in; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>all of our directors and executive officers as a group.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">Beneficial ownership
is determined in accordance with the rules of the SEC and includes voting and investment power with respect to the securities.
Except as indicated by footnote, and subject to applicable community property laws, the persons and entities named in the table
below have sole voting and sole investment power with respect to the shares set forth opposite each person&rsquo;s or entity&rsquo;s
name.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="5" STYLE="border-bottom: black 1pt solid; font-weight: bold; text-align: center">Common&nbsp;Stock&nbsp; <BR> Beneficially&nbsp;Owned</TD>
    <TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold">Beneficial&nbsp;Owner</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; text-decoration: none; text-align: center"><B>Number</B>&nbsp;<B>of<BR>
 Shares</B></TD>
    <TD STYLE="padding-bottom: 1pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Percent&nbsp;of</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Class</B></P></TD>
    <TD STYLE="padding-bottom: 1pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCFFCC">
    <TD STYLE="width: 65%">Carlyle Asia Growth Partners III, L.P. <BR>
c/o The Carlyle Group <BR>
1001 Pennsylvania Avenue, NW, Suite 220 <BR>
Washington, DC 20004</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 15%; text-align: right">16,215,938 </TD>
    <TD STYLE="width: 1%"><SUP>(1)</SUP></TD>
    <TD STYLE="width: 1%; text-align: center"><SUP>&nbsp;</SUP></TD>
    <TD STYLE="width: 1%; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 15%; text-align: right">34.89</TD>
    <TD STYLE="width: 1%; text-align: center">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD>China Cinda Asset Management Co., Ltd. <BR>
c/o Room 1101, 11/F <BR>
Tower 1 Admiralty Centre <BR>
18 Harcourt Rd, Hong Kong</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">1,610,554&nbsp; </TD>
    <TD><SUP>(2)</SUP></TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: right">3.47</TD>
    <TD STYLE="text-align: center">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCFFCC">
    <TD>Guohua Ku</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">18,756,943 </TD>
    <TD><SUP>(3)</SUP></TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: right">40.36</TD>
    <TD STYLE="text-align: center">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD>Lanwei Li</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">300,000 </TD>
    <TD><SUP>(4)</SUP></TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: right">*</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCFFCC">
    <TD>Chungui Shi</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">40,000 </TD>
    <TD><SUP>(5)</SUP></TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: right">*</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD>Xiaogang Zhu</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">120,000 </TD>
    <TD><SUP>(6)</SUP></TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: right">*</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCFFCC">
    <TD>Zhigang Wu</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">160,000 </TD>
    <TD><SUP>(7)</SUP></TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: right">*</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD>David Chong</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">100,000 </TD>
    <TD><SUP>(8)</SUP></TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: right">*</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCFFCC">
    <TD>Dr. Robert Chanson</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">40,000</TD>
    <TD><SUP>(9)</SUP></TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: right">*</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD>Timothy Driscoll</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">40,000 </TD>
    <TD><SUP>(10)</SUP></TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: right">*</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCFFCC">
    <TD>Julian Ha</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">40,000 </TD>
    <TD><SUP>(11)</SUP></TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: right">*</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD>Yilin Ma</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&mdash;</TD>
    <TD><SUP>&nbsp;</SUP></TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: right">*</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCFFCC">
    <TD>Nicholas Shao</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&mdash;</TD>
    <TD><SUP>&nbsp;</SUP></TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: right">*</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD>Albert McLelland</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&mdash;</TD>
    <TD><SUP>&nbsp;</SUP></TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: right">*</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCFFCC">
    <TD>All executive officers and directors as a group (12&nbsp;persons)</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">19,596,943</TD>
    <TD><SUP>(12)&nbsp;</SUP></TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: right">42.17</TD>
    <TD STYLE="text-align: center">%</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<!-- Field: Rule-Page --><DIV ALIGN="LEFT"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 20%; margin-left: 0.25in">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">*</TD><TD STYLE="text-align: justify"><SUP>Less than one percent (1%)&nbsp;of outstanding shares.</SUP></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(1)</TD><TD STYLE="text-align: justify">The amount shown and the following information is derived from Amendment No. 1 to the
                                                           Schedule 13D filed jointly by (i) Carlyle Asia Growth Partners III, L.P., a Cayman Islands exempt limited partnership
                                                           (&ldquo;Asia Growth&rdquo;), (ii) CAGP III Co-Investment, L.P., a Cayman Islands exempt limited partnership
                                                           (&ldquo;Co-Investment&rdquo;), (iii) CAGP General Partner, L.P., a Cayman Islands exempt limited partnership, (iv) CAGP
                                                           Ltd.,                                                            a Cayman Islands exempt company, (v) TC Group Cayman, L.P.,
                                                           a Cayman Islands exempt limited partnership (vi) TCG Holdings
                                                           Cayman, L.P., a Cayman Islands exempt limited partnership, and (vii) Carlyle Offshore Partners II, Ltd. A Cayman Islands
                                                           exempt company, reporting beneficial ownership as of July 21, 2011. According to the amended Schedule 13D, Asia Growth and
                                                           Co-Investment are the record owners of 11,935,014 and 530,924 shares of our common stock, respectively. DBD Cayman Holdings,
                                                           Ltd. exercises investment discretion and control over the shares held by each of Asia Growth and Co-Investment through its
                                                           indirect subsidiary, CAGP General Partner, L.P., which is the general partner of both Asia Growth and Co-Investment. DBD
                                                           Cayman Holdings, Ltd. is the sole shareholder of DBD Cayman, Ltd. DBD Cayman, Ltd. is the general partner of TCG Holdings
                                                           Cayman II, L.P. TCG Holdings Cayman II, L.P. is the general partner of TC Group Cayman Investment Holdings, L.P. TC Group
                                                           Cayman Investment Holdings, L.P. is the sole shareholder of CAGP, Ltd. CAGP Ltd. is the general partner of CAGP
                                                           General Partner, L.P. As such, each of DBD Cayman Holdings, Ltd., DBD Cayman, Ltd., TCG Holdings Cayman II, L.P., TC Group
                                                           Cayman Investment Holdings, L.P., CAGP Ltd., and CAGP General Partner, L.P. may be deemed to beneficially own the shares
                                                           held                                                            of record by Asia Growth and Co-Investment. This number
                                                           includes a 8% Secured Convertible Promissory Note in the amount of
                                                           $3,000,000 with an interest rate of 8% and a maturity date of April 29, 2012, convertible into our Common Stock at $0.80 per
                                                           share (approximately 3,750,000 shares of our Common Stock). Upon conversion of such note, the Company shall issue 3,590,288
                                                           shares of our Common Stock to Asia Growth and 159,712 shares of our Common Stock to Co-Investment. </TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(2)</TD><TD STYLE="text-align: justify">The amount shown and the following information is derived from Amendment No. 1 to the Schedule
13D filed jointly by China Cinda Asset Management Co., Ltd. (&ldquo;Cinda&rdquo;) and its subsidiary, China Cinda (HK) Asset Management
Co., Ltd. (&ldquo;Cinda HK&rdquo;). According to the amended Schedule 13D, Cinda and Cinda HK have shared voting and dispositive
power over 1,610,554 shares of our common stock, which is the maximum number of shares of our common stock (excluding interest
convertible into common stock) into which the remaining outstanding principal amount of a secured convertible note, dated December
28, 2010 (the &ldquo;Note&rdquo;), between the Company and Cinda HK may be converted, after giving effect to the redemption of
the U.S. dollar equivalent of RMB 25 million principal amount of the Note pursuant to a Notes Supplemental Agreement dated as of
December 9, 2011 between the Company and Cinda HK. Pursuant to the Shareholders Agreement,&nbsp; Cinda HK has the right to designate
up to two members of the Board, one of which must qualify as an independent director pursuant to the listing rules of NASDAQ, for
so long as Cinda HK remains an investor in the Company.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(3)</TD><TD STYLE="text-align: justify">Includes 1,500,000 shares pledged to secure the Company&rsquo;s obligations to China Cinda
                                                           Asset Management Co., Ltd. Includes 3,750,000 shares pledge to secure the Company&rsquo;s obligations under the above
                                                           mentioned 8% Secured Convertible Promissory Note.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(4)</TD><TD STYLE="text-align: justify">Includes 300,000 shares issuable upon the exercise of options.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(5)</TD><TD STYLE="text-align: justify">Includes 40,000 shares issuable upon the exercise of options</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(6)</TD><TD STYLE="text-align: justify">Includes 120,000 shares issuable upon the exercise of options.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(7)</TD><TD>Includes 111,000 shares issuable upon the exercise of options.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(8)</TD><TD>Includes 100,000 shares held by Sino Way Limited, 100% of the shares of which are held by Mr. Chong.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(9)</TD><TD>Includes 40,000 shares issuable upon the exercise of options.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(10)</TD><TD>Includes 40,000 shares issuable upon the exercise of options.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(11)</TD><TD>Includes 40,000 shares issuable upon the exercise of options.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(12)</TD><TD>Includes 18,756,943 shares held directly, 100,000 shares held indirectly, and 740,000 shares issuable upon the exercise of
options.</TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">EXECUTIVE
COMPENSATION</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Summary Compensation Table</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&#9;The following table summarizes
the compensation earned during the years ended December 31, 2011 and 2010, by those individuals who served as our Chief Executive
Officer, or Chief Financial Officer during any part of fiscal year 2011 or any other executive officer with total compensation
in excess of $100,000 during fiscal year 2011.&nbsp;&nbsp;The individuals listed in the table below are referred to as the &ldquo;named
executive officers.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">Name&nbsp;and&nbsp;Principal&nbsp;Position</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">Year</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">Salary
    <BR>($)</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">Bonus
    <BR>($)</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">Stock
    <BR>Awards <BR>($)</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">Option
    Awards<BR>
($)(3)</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">Non-Equity<BR>
    Incentive <BR>Plan<BR> Compensation<BR> ($)</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">Nonqualified<BR>
    Deferred Compensation<BR> Earnings<BR> ($)</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">All
    <BR>Other <BR> Compensation<BR> ($)</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 7pt">Total
    <BR>($)</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 10%; text-align: left"><FONT STYLE="font-size: 7pt">Guohua Ku (1)</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="width: 7%; text-align: right"><FONT STYLE="font-size: 7pt">2011</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 7pt">$</FONT></TD><TD STYLE="width: 7%; text-align: right"><FONT STYLE="font-size: 7pt">17,876</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="width: 7%; text-align: right"><FONT STYLE="font-size: 7pt">&mdash;</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="width: 7%; text-align: right"><FONT STYLE="font-size: 7pt">&mdash;</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 7pt">$</FONT></TD><TD STYLE="width: 7%; text-align: right"><FONT STYLE="font-size: 7pt">1,499,870</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="width: 7%; text-align: right"><FONT STYLE="font-size: 7pt">&mdash;</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="width: 7%; text-align: right"><FONT STYLE="font-size: 7pt">&mdash;</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="width: 7%; text-align: right"><FONT STYLE="font-size: 7pt">&mdash;</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 7pt">$</FONT></TD><TD STYLE="width: 7%; text-align: right"><FONT STYLE="font-size: 7pt">1,517,746</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-style: italic; text-align: left"><FONT STYLE="font-size: 7pt">Chief Executive Officer <BR>and Chairman of
    the Board</FONT></TD><TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">2010</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">17,876</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">1,927,497</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">1,945,373</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">David Chong (2)</FONT></TD><TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">2011</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">90,900</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">Nil</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">90,900</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-style: italic; text-align: left"><FONT STYLE="font-size: 7pt">Chief Financial <BR>Officer and Secretary</FONT></TD><TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">2010</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 7pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 7pt">&nbsp;</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(1)</TD><TD STYLE="text-align: justify">Guohua Ku was appointed as Chief Executive Officer of the Company on December 10, 2008.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(2)</TD><TD STYLE="text-align: justify">On December 30, 2010, the Board of Directors approved the appointment of David Chong as Chief Financial
Officer and Secretary of the Company to replace Xinyu Peng, effective December 30, 2010. Even though Mr. Chong held the position
of CFO and Secretary of the Company for 2 days in fiscal year ended 2010, Mr. Chong did not receive compensation from the Company
in fiscal year ended 2010. Mr. Chong&rsquo;s compensation arrangement with the Company began January 1, 2011.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(3)</TD><TD STYLE="text-align: justify">The amounts in this column were calculated based on the grant date fair value of our common stock,
in accordance with FASB ASC Topic 718. Award to Mr. Ku was granted by our Board on August 13, 2010.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Narrative to Summary Compensation Table</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In fiscal 2011, the
primary components of our executive compensation programs were base salary and equity compensation. We use base salary to fairly
and competitively compensate our executives, including the Named Executive Officers, for the jobs we ask them to perform.&nbsp;We
view base salary as the most stable component of our executive compensation program, as this amount is not at risk.&nbsp;We believe
that the base salaries of our executives should be targeted at or above the median of base salaries for executives in similar positions
with similar responsibilities at comparable companies, consistent with our compensation philosophy.&nbsp;Because of our emphasis
on performance-based compensation for executives, base salary adjustments are generally made only when we believe there is a significant
deviation from the market or an increase in responsibility. Our Compensation Committee reviews the base salary levels of our executives
each year to determine whether an adjustment is warranted or necessary.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Employment Contracts</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Mr. Guohua Ku entered
into an employment agreement with the Company to serve as its CEO on December 10, 2008.&nbsp;&nbsp;The agreement has a two-year
term starting December 10, 2008 that includes a one-month probationary period.&nbsp;&nbsp;In accordance with the terms and conditions
of Mr. Ku&rsquo;s employment agreement, on December 10, 2008, the Company and Mr. Ku agreed to renew Mr. Ku&rsquo;s employment
agreement for an additional two-year term. Mr. Ku receives a salary of $17,876 annually for his service as CEO.&nbsp; The Company
may terminate the employment agreement at any time without any prior notice to the employee if Mr. Ku engages in certain conduct,
including, but not limited to (i) the violation of the rules and procedures of the Company or breaches the terms of the employment
agreement; (ii) neglecting his duties or engages in malpractice for personal gain that damages the Company; (iii) entering into
an employment relationship with any other employer during his employment with the Company; or (iv) the commission of a crime. The
Company also may terminate the employment agreement upon 30 days written notice to Mr. Ku under certain other conditions, including
but not limited to (i) inability to continue position due to non-work-related sickness or injury; (ii) incompetence; and (iii)
the need for mass layoffs or other restructuring.&nbsp;&nbsp;&nbsp;Mr. Ku has the right to resign at any time upon a 30 days written
notice to the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Mr. David Chong, our
current CFO and Secretary, entered into an employment agreement with the Company on January 1, 2011. The employment agreement,
effective January 1, 2011, has a two-year term and includes a one-month probationary period. During the term of his employment,
Mr. Chong will be paid a base salary of $7,575 per month and will be entitled to receive customary employee benefits available
to all full time employees of the Company.&nbsp;The Company may terminate the employment agreement, at any time, without any prior
notice, if Mr. Chong engages in certain conduct, including, but not limited to (i) the violation of the rules and procedures of
the Company or breaches the terms of the employment agreement; (ii) neglecting his duties or engages in malpractice for personal
gain that damages the Company; (iii) entering into an employment relationship with any other employer during his employment with
the Company; or (iv) the commission of a crime. The Company also may terminate the employment agreement upon 30 days written notice
to Mr. Chong under certain other conditions, including but not limited to (i) inability to continue position due to non-work-related
sickness or injury; (ii) incompetence; or (iii) the need for mass layoffs or other restructuring.&nbsp;&nbsp;&nbsp;Mr. Chong has
the right to resign at any time upon a 30 days written notice to the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Nonstatutory Stock Option Plan &ndash; Equity Compensation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">At our 2010 Annual
Meeting of Stockholders, our stockholders approved the adoption of the China Recycling Energy Corporation Amended and Restated
2007 Nonstatutory Stock Option Plan (the &ldquo;2007 Plan&rdquo;), increasing the number of shares available for issuance to 5,200,000.
The 2007 Plan is intended to further our growth and financial success by providing incentives, in the form of nonqualified stock
options to acquire our common stock, to selected employees, officers, directors, and consultants of the Company or its subsidiaries
so that their interests are aligned with the best interests of our stockholders. To date, we have achieved our business objectives,
which we attribute, in part, to the 2007 Plan. <FONT STYLE="color: black">The Board has delegated the administration of the 2007
Plan to the Compensation Committee of the Board.<B> </B></FONT><FONT STYLE="font-family: Times New Roman, Times, Serif">Among other
powers and duties, the Compensation Committee determines the persons who will be eligible to receive awards and establishes the
terms and conditions of all awards. </FONT>The 2007 Plan provides for the issuance of nonqualified stock options.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The vesting terms of
options granted under the 2007 Plan are subject to Non-Statutory Stock Option Agreements.<FONT STYLE="font-family: Times New Roman, Times, Serif">
The exercise price of each option granted under the 2007 Plan is at least 100% of the fair market value of a share of our common
stock on the date of grant. For purposes of option awards, fair market value of a share of our common stock means the closing sale
price of a share of our common stock on the relevant date on the principal exchange on which the common stock is then listed or
admitted to trading. If no reported sale of common stock takes place on the relevant date on the principal exchange, then the reported
closing asked price of a share of our common stock on such date on the principal exchange shall be the fair market value. If our
common stock is not at the time listed or admitted to trading on a stock exchange, the fair market value of a share of our common
stock means between the lowest reported bid price and highest reported asked price of a share of our common stock on the relevant
date in the over-the-counter market, as such prices are reported in a publication of general circulation selected by the Board
or the Compensation Committee and regularly reporting the market price of a share of our common stock. If our common stock is not
listed or admitted to trading on any stock exchange or traded in the over-the-counter market, the Board shall determine the fair
market value in good faith. The maximum term of any option is 5 years from the date of grant. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Outstanding Equity Awards at 2011 Fiscal Year-End </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
sets forth information regarding all outstanding equity awards held, as of December 31, 2011, by those individuals who served as
our named executive officers during any part of fiscal year 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="17" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 6pt">Option&nbsp;Awards</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="14" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 6pt">Stock&nbsp;Awards</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 6pt">Name</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 6pt">Number&nbsp;of<BR>
    Securities<BR> Underlying<BR> Unexercised<BR> Options<BR> (#)<BR> Exercisable</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 6pt">Number&nbsp;of
    <BR>Securities <BR>Underlying <BR>Unexercised <BR>Options<BR> (#)<BR> Unexercisable</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 6pt">Equity
    <BR>Incentive&nbsp;Plan <BR>Awards: <BR>Number&nbsp;of <BR>Securities <BR>Underlying <BR>Unexercised <BR>Unearned <BR>Options&nbsp;(#)</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 6pt">Option<BR>
    Exercise<BR> Price<BR> ($)</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 6pt">Option<BR>
    Expiration<BR> Date</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 6pt"><B>Number</B>&nbsp;</FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 6pt"><B>of&nbsp;Shares&nbsp;or</B>&nbsp;</FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 6pt"><B>Units&nbsp;of</B></FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 6pt"><B>Stock&nbsp;That</B></FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 6pt"><B>Have&nbsp;Not</B></FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 6pt"><B>Vested&nbsp;(#)</B></FONT></P></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 6pt"><B>Market<BR>
                                                                               Value&nbsp;of</B>&nbsp;</FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 6pt"><B>Shares&nbsp;or</B>&nbsp;</FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 6pt"><B>Units&nbsp;of<BR>
                                                                                                                                                                                                                                                                             Stock<BR>
                                                                                                                                                                                                                                                                             That<BR>
                                                                                                                                                                                                                                                                             Have&nbsp;Not<BR>
                                                                                                                                                                                                                                                                             Vested<BR>
                                                                                                                                                                                                                                                                             ($&nbsp;)</B></FONT></P></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 6pt"><B>Equity<BR>
                                                                               Incentive<BR> Plan<BR> Awards:</B></FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 6pt"><B>Number
                                                                                                                             of<BR>
                                                                                                                             Unearned<BR>
                                                                                                                             Shares,<BR>
                                                                                                                             Units&nbsp;or<BR>
                                                                                                                             Other&nbsp;</B></FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 6pt"><B>Rights&nbsp;That</B>&nbsp;</FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 6pt"><B>Have&nbsp;Not</B>&nbsp;</FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 6pt"><B>Vested&nbsp;(#)</B></FONT></P></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 6pt">Equity&nbsp;Incentive
    <BR>Plan&nbsp;Awards: <BR>Market&nbsp;or&nbsp;Payout <BR>Value&nbsp;of<BR> Unearned <BR>Shares,&nbsp;Units&nbsp;or <BR>Other&nbsp;Rights&nbsp;That
    <BR>Have&nbsp;Not&nbsp;Vested <BR>($)</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 12%; text-align: left"><FONT STYLE="font-size: 6pt">Guohua Ku &nbsp;(1)</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 7%; text-align: right"><FONT STYLE="font-size: 6pt">&mdash;</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 7%; text-align: right"><FONT STYLE="font-size: 6pt">&mdash;</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 7%; text-align: right"><FONT STYLE="font-size: 6pt">1,460,000</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 7%; text-align: right"><FONT STYLE="font-size: 6pt">3.05</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 7%; text-align: center"><FONT STYLE="font-size: 6pt">08/12/2015</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 7%; text-align: right"><FONT STYLE="font-size: 6pt">&mdash;</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 7%; text-align: right"><FONT STYLE="font-size: 6pt">&mdash;</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 7%; text-align: right"><FONT STYLE="font-size: 6pt">&mdash;</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="width: 7%; text-align: right"><FONT STYLE="font-size: 6pt">&mdash;</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">David Chong</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">Nil</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">Nil</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 6pt">Nil</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 6pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 6pt">&nbsp;</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(1)</TD><TD>Award was granted on August 13, 2010 with a three year vesting period; however, vesting of the stock options is dependent upon
the Company at least meeting minimum revenue and earnings thresholds for fiscal years 2010, 2011 and 2012.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(2)</TD><TD>There were no stock option exercises by our named executive officers during 2011.</TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Potential Payments Upon Termination
or Change of Control</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-weight: normal"><I>Employment
Agreements</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Certain of our executive
officers, including our CEO, have an employment agreement with the Company.&nbsp;&nbsp;Under Chinese law, we may only terminate
employment agreements without cause and without penalty by providing notice of non-renewal one month prior to the date on which
the employment agreement is scheduled to expire. If we fail to provide this notice or if we wish to terminate an employment agreement
in the absence of cause, as defined in the agreement, then we are obligated to pay the employee one month&rsquo;s salary for each
year we have employed the employee. We are, however, permitted to terminate an employee for cause without penalty pursuant to the
employment agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>2007 Plan</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On August 13, 2010,
the Company granted 2,200,000 options to acquire the Company&rsquo;s common stock at $3.05 per share to thirty six (36) managerial
and non-managerial employees as new equity awards pursuant to the 2007 Plan, which increased the number of shares available under
the plan from 3 million to 5.2 million. According to the vesting terms, the options granted were divided into three tranches, (i)
1/3 (one third) of the total number of shares subject to the options shall vest and become exercisable if the Company meets its
minimum revenue and earnings goals in the Company&rsquo;s guidance for 2010 as delivered in its earnings releases and/or conference
calls in the first quarter of 2010, such vesting to occur immediately upon completion of the annual audit confirming the financial
results for 2010;&nbsp;&nbsp;and (ii) an additional 1/3 (one third) of the total number of shares subject to the options shall
vest and become exercisable if the Company meets certain financial goals of 2011 which will be set out and decided by the Compensation
Committee, such vesting to occur immediately upon Compensation Committee&rsquo;s determination that the Company has met such goals
for 2011; and (iii) the remaining 1/3 (one third) of the total number of shares subject to the options shall vest and become exercisable
if the Company meets certain financial goals of 2012 which is set out and decided by the Compensation Committee, such vesting is
to occur immediately upon Compensation Committee&rsquo;s determination that the Company has met such goals for 2012.&nbsp; The
options may only be exercised to the extent that the options have become vested and exercisable. The management used its estimates
for determining the probability of achieving each year&rsquo;s financial goals; these goals were 100%, 50% and 50% for 2010, 2011
and 2012, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company did not
meet its financial goals for fiscal year ended December 31, 2011; accordingly, the second tranche (one third of the total number
of 2,200,000 options) was forfeited.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 37.45pt">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">NON-EMPLOYEE DIRECTOR COMPENSATION</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Non-Employee Director Compensation</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The following table sets forth certain information
regarding the compensation earned by or awarded during the 2011 fiscal year to each of our non-executive directors:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid">Name</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fees&nbsp;Earned <BR>or&nbsp;Paid&nbsp;in <BR>Cash&nbsp;($)</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Stock <BR>Awards <BR>($)</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Option <BR>Awards <BR>($)&nbsp;(1)(2)</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Non-Equity <BR>Incentive&nbsp;Plan <BR>Compensation <BR>($)</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Nonqualified <BR>Deferred <BR>Compensation <BR>Earnings</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">All&nbsp;Other <BR>Compensation <BR>($)</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total <BR>($)</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 30%; text-align: left">Nicholas Shao</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 7%; text-align: right">24,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; text-align: right">&mdash;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; text-align: right">0</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; text-align: right">&mdash;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; text-align: right">&mdash;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; text-align: right">&mdash;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; text-align: right">24,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Dr. Robert Chanson</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">24,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">24,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Timothy Driscoll</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">24,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">24,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Julian Ha</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">24,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">24,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Sean Shao (3)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">12,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Yilin Ma</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Chungui Shi</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">24,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">24,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Albert McLelland (4)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">25,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<!-- Field: Rule-Page --><DIV ALIGN="LEFT"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 20%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%">(1)</TD>
    <TD STYLE="width: 93%; text-align: justify">The amounts in these columns reflect the full grant date fair value of option awards for the year ended December 31, 2011, in accordance with ASC Topic 718. Assumptions used in the calculation of these amounts are described in Note 16 to our audited financial statements for the fiscal year ended December 31, 2011 included in our Annual Report on Form 10-K filed with the SEC on March 22, 2012.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>(2)</TD>
    <TD STYLE="text-align: justify">In setting director compensation, we consider the significant amount of time that directors expend in fulfilling their duties to the Company, as well as the skill level required to serve as a director and manage the affairs of the Company. With the exception of Yilin Ma and Albert McLelland, each director receives a monthly Board fee of $2,000. Mr. Ma does not receive a monthly fee for his services on the Board. Mr. McLelland receives compensation in the amount of $50,000 per year for his services to the Board and Board Committees. Non &ndash;employee directors do not receive additional fees for attendance at Board or Board committee meetings or for serving on Board Committees. No grants of stock options were made to non-employee directors in 2011, pursuant to the Board&rsquo;s authority to grant such awards.&nbsp;&nbsp;The option awards outstanding for Dr. Robert Chanson and Mr. Chungui Shi were each awarded in fiscal year 2010. The option awards outstanding for Mr. Sean Shao, Mr. Julian Ha and Mr. Timothy Driscoll were each awarded in fiscal year 2009. The option award granted to each non-employee director vests six months from the date of grant and expires on the fifth anniversary of the grant date. There were no stock option exercises by non-employee directors in fiscal year 2011.&nbsp; &nbsp;The aggregate number of option awards outstanding, as of December 31, 2011, for each of the directors was as follows:</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 70%; font: 10pt Times New Roman, Times, Serif; margin-left: 1in">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold">Name</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Options</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 87%; text-align: left">Nicholas Shao</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">0</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Dr. Robert Chanson</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">40,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Sean Shao</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">50,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Julian Ha</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">40,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Timothy Driscoll</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">40,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Yilin Ma</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Chungui Shi</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">40,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Albert McLelland</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%">(3)</TD>
    <TD STYLE="width: 93%">As a result of Mr. Shao&rsquo;s decision not to stand for re-election at the 2011 Annual Meeting, Mr. Shao only received six months of compensation for his service in 2011.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;(4)</TD>
    <TD>Mr. McLelland was appointed to the Board on June 21, 2011, and, as such, Mr. McLelland only received half of his annual compensation for his service in 2011.</TD></TR>
</TABLE>
<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">EQUITY COMPENSATION PLAN INFORMATION</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The table below sets forth information with
respect to shares of our common stock that may be issues under the 2007 Plan, as of December 31, 2011:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Plan&nbsp;Category</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Number&nbsp;of<BR> securities <BR>to&nbsp;be&nbsp;issued<BR> upon <BR>exercise&nbsp;of <BR>outstanding<BR> options</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Weighted-average <BR>exercise&nbsp;price&nbsp;of <BR>outstanding&nbsp;options</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Number&nbsp;of <BR>securities <BR>remaining<BR> available <BR>for&nbsp;future<BR> issuance <BR>under&nbsp;equity <BR>compensation<BR> plans</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 52%; text-align: left">Equity compensation plans approved by security holders</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 13%; text-align: right">4,466,667</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 13%; text-align: right">1.64</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 13%; text-align: right">733,333</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Equity compensation plans not approved by security holders</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 2.5pt">Total</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: right; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">4,466,667</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">1.64</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">733,333</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-weight: normal; text-transform: none">The
Company has not implemented a written policy concerning the review of related party transactions; however, the Company&rsquo;s
policy is that the Board must approve all related party transactions. Further, all material related party transactions will be
made or entered into on terms that are no less favorable to us than can be obtained from unaffiliated third parties. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: justify"><FONT STYLE="font-weight: normal; text-transform: none">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A &ldquo;related party
transaction&rdquo; is a transaction, arrangement or relationship (including any indebtedness or guarantee of indebtedness) or any
series of similar transactions, arrangements or relationships in which the Company (including any of our subsidiaries) was, is
or will be a participant, the amount involved exceeds $120,000, and in which any related person had, has or will have a direct
or indirect interest.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For fiscal year ended
December 31, 2011, the Company was involved in two related party transactions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Erdos TCH sold power
generation stations through sales type leases to Erdos.&nbsp;&nbsp;Total sales and interest income for the Company for this non-controlling
interest was $11.88 million and $6.94 million for the year ended December 31, 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On September 27, 2011,
David Chong, our Chief Financial Officer and Secretary, in a private transaction exempt from registration under the Securities
Act, became the sole stockholder of Sino Way Limited, an entity that owns 100,000 shares of our common stock. The 100,000 shares
of our common stock directly owned by Sino Way Limited, and beneficially owned by Mr. Chong. were included in a resale Form S-3
registration statement, initially filed by the Company with the SEC on February 22, 2012 and a Form S-3/A was filed on April 12,
2012. The resale Form S-3 registration statement has not yet been declared effective by the SEC.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">REPORT OF
THE AUDIT COMMITTEE</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">The Audit Committee
has furnished the following report on its activities during the fiscal year ended December 31, 2011. The report is not deemed to
be &ldquo;soliciting material&rdquo; or &ldquo;filed&rdquo; with the SEC or subject to the SEC&rsquo;s proxy rules or to the liabilities
of Section 18 of the Exchange Act, and the report shall not be deemed to be incorporated by reference into any prior or subsequent
filing under the Securities Act or the Exchange Act except to the extent that the Company specifically incorporates it by reference
into any such filing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">The primary function
of the Audit Committee is to assist the Board in its oversight and monitoring of our financial reporting and auditing process.
The Audit Committee charter sets forth the responsibilities of the Audit Committee. A copy of the Audit Committee charter is available
on our website at www.creg-cn.com under the links &ldquo;Investor Relations&mdash;Corporate Governance.&rdquo; For fiscal year
2011, the Audit Committee was comprised of Albert McLelland (Chairman), Timothy Driscoll and Julian Ha, each of whom is independent
under applicable SEC and NASDAQ listing standards.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">Management has primary
responsibility for our financial statements and the overall reporting process, including maintaining effective internal control
over financial reporting and assessing the effectiveness of our system of internal controls. The independent registered public
accounting firm audits the annual financial statements prepared by management, expresses an opinion as to whether those financial
statements fairly present our financial position, results of operations and cash flows in conformity with U.S. generally accepted
accounting principles, and discusses with the Audit Committee any issues they believe should be raised with the Audit Committee.
These discussions include a discussion of the quality, not just the acceptability, of the accounting principles, the reasonableness
of significant judgments, and the clarity of disclosures in the financial statements. The Audit Committee monitors our processes,
relying, without independent verification, on the information provided to it and on the representations made by management and
the independent registered public accounting firm.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">In 2011, the Audit
Committee held 5 meetings. Representatives of Goldman Kurland Mohidin, LLP, our independent registered public accounting firm,
attended each meeting of the Audit Committee that involved the discussion of financial statements. The Audit Committee reviewed
and discussed with management and Goldman Kurland Mohidin, LLP our audited financial statements for the year ended December 31,
2011 and discussed Goldman Kurland Mohidin, LLP&rsquo;s judgments as to the quality, not just the acceptability, of our accounting
principles and such other matters as are required to be discussed with the Audit Committee by Statement on Auditing Standards No.
114 (which superseded Statement on Auditing Standards No. 61), other standards of the Public Company Accounting Oversight Board
(United States), rules of the SEC, and other applicable regulations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">The Audit Committee
also received the written disclosures and the letter from Goldman Kurland Mohidin, LLP required by applicable requirements of the
Public Company Accounting Oversight Board regarding the firm&rsquo;s independence from our management and has discussed with Goldman
Kurland Mohidin, LLP its independence. The members of Audit Committee considered whether the services provided by Goldman Kurland
Mohidin, LLP, for the year ended December 31, 2011, are compatible with maintaining their independence. The Board has delegated
to the Audit Committee the authority to approve the engagement of our independent registered public accounting firm.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">Based upon its review
of the audited financial statements and the discussions noted above, the Audit Committee recommended that the Board include the
audited financial statements in our Annual Report on Form 10-K for the year ended December 31, 2011 for filing with the SEC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 70%">&nbsp;</TD>
    <TD STYLE="width: 30%">Audit Committee:</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Albert McLelland (Chairman)</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Timothy Driscoll</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Julian Ha</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center; text-indent: 0in"><FONT STYLE="color: black">PROPOSAL
No. 2 &ndash; </FONT>RATIFICATION OF APPOINTMENT OF INDEPENDENT registered<BR>
public accounting firm</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Audit Committee,
in accordance with its charter and authority delegated to it by the Board, has appointed the firm of Goldman Kurland Mohidin, LLP<B>
</B>to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2011, and the Board has
directed that such appointment be submitted to our stockholders for ratification at the 2012 Annual Meeting. Goldman Kurland Mohidin,
LLP has served as our independent registered public accounting firm since March 12, 2008 and is considered by our Audit Committee
to be well qualified. If the stockholders do not ratify the appointment of Goldman Kurland Mohidin, LLP, the Audit Committee will
reconsider the appointment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Representatives of
Goldman Kurland Mohidin, LLP will be present at the 2012 Annual Meeting and will have an opportunity to make a statement if they
desire to do so. They also will be available to respond to appropriate questions from stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="text-transform: uppercase"><B>&nbsp;</B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="text-transform: uppercase"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-transform: uppercase"><B>The
Board, upon the recommendation of the Audit Committee, recommends that the stockholders vote &ldquo;FOR&rdquo; THE APPROVAL AND
RATIFICATION of Goldman Kurland Mohidin, LLP as our independent registered public accounting firm FOR FISCAL YEAR ENDING DECEMBER
31, 2012</B></FONT><B>.</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center; text-indent: 0in">principal
accountant fees and services</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in"><B>Audit and Non-Audit Fees</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Aggregate fees and
expenses for professional services rendered for us by Goldman Kurland Mohidin, LLP for the fiscal years ended December 31, 2011
and 2010 are set forth below. The aggregate fees and expenses included in the Audit category are fees and expenses billed for<I>
</I>the fiscal years for the integrated audit of our annual financial statements and review of our interim financial statements
and statutory and regulatory filings. The aggregate fees and expenses included in each of the other categories are fees and expenses
billed in<I> </I>the fiscal years.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="width: 60%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fiscal Year 2011</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fiscal Year 2010</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 58%; text-align: left">Audit Fees</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 18%; text-align: right">268,304</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 18%; text-align: right">217,979</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Audit-Related Fees</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,050</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15,500</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Tax Fees</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">All Other Fees</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold">Total</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">274,354</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">233,479</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Audit Fees </I>for
the fiscal years ended December 31, 2011 and 2010 were for professional services rendered for the audit of our annual financial
statements and of our internal control over financial reporting and quarterly review of the financial statements included in our
Quarterly Reports on Form 10-Q.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Audit-Related Fees
</I>as of the fiscal years ended December 31, 2011 and 2010 were for services associated with the restatement of our financial
statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Tax Fees </I>as
of the fiscal years ended December 31, 2011 and 2010 were for services related to tax compliance and preparation of international
tax returns.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>All Other Fees.</I>
There were no fees in this category for the fiscal years ended December 31, 2011 and 2010.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">The Audit Committee
of the Board of Directors has determined that the provision of these services is compatible with the maintenance of the independence
of Goldman Kurland Mohidin, LLP.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Pre-approval Policies and Procedures</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">The Audit Committee
has adopted a policy to pre-approve all audit and permissible non-audit services provided by the independent registered public
accounting firm. The pre-approval policy is detailed as to the particular service or category of services and is subject to a specific
budget. The services include the engagement of the independent registered public accounting firm for audit services, audit-related
services, and tax services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">If we need to engage
the independent registered public accounting firm for other services, which are not considered subject to the general pre-approval
as described above, then the Audit <FONT STYLE="text-transform: uppercase">C</FONT>ommittee must approve such specific engagement
as well as the projected fees. If the timing of the project requires an expedited decision, then the Audit Committee has delegated
to the Chairman of the <FONT STYLE="text-transform: uppercase">C</FONT>ommittee the authority to pre-approve such engagement, subject
to fee limitations. The Chairman must report all such pre-approvals to the entire Audit Committee for ratification at the next
Audit<FONT STYLE="text-transform: uppercase"> C</FONT>ommittee meeting<FONT STYLE="text-transform: uppercase">. </FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">SECTION 16(A) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">Section&nbsp;16(a)
of the Exchange Act requires our executive officers, directors and holders of more than 10% of our common stock to file with the
SEC initial reports of ownership and reports of changes in ownership of our common stock and other equity securities.&nbsp;&nbsp;Based
solely on our review of the copies of these reports and on information provided by the reporting persons, we believe that during
the fiscal year ended December 31, 2011, all filing requirements for reporting persons were met, except for: (i) two late Form
4 filings for Mr. Guohua Ku, our Chief Executive Officer and Chairman of our Board, and (ii) a late Form 4 filing for Mr. Chungui
Shi, a member of our Board. Each director and officer set forth herein filed a Form 4 reporting the transaction promptly upon discovery
of the inadvertent error.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">STOCKHOLDER PROPOSALS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">Stockholders may
present proper proposals for inclusion in the proxy statement for our 2013 Annual Meeting by submitting their proposals to us in
a timely manner and in accordance with rules and regulations promulgated under our Bylaws and the Exchange Act. Our Bylaws, as
amended, provide that advance notice of a stockholder&rsquo;s proposal must be delivered to our Secretary, David Chong, at our
principal executive offices, located at at 12/F, Tower A, Chang An International Building, No. 88 Nan Guang Zheng Jie, Xi&rsquo;an
City, Shaanxi Province, 710068 China, not less than ninety (90) days nor more than one hundred twenty (120) days prior to the one-year
anniversary of the preceding year&rsquo;s annual meeting; provided, however, that if the date of the annual meeting is more than
thirty (30) days before or more than sixty (60) days after such anniversary date, notice by the stockholder to be timely must be
so delivered, or mailed and received, not earlier than the one hundred and twentieth (120th) day prior to such annual meeting,
and not later than the ninetieth (90th) day prior to such meeting or tenth (10th) day following the day on which public disclosure
of the date of such annual meeting was first made. Therefore, in order to be included in the proxy statement for 2013 Annual Meeting,
stockholder proposals must be received by us no earlier than January 28, 2013, but no later than February 26, 2013, and must otherwise
comply with the notice requirements set forth under our Bylaws and all applicable Exchange Act and SEC rules.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>ANNUAL REPORT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A copy of the Company&rsquo;s
Annual Report on Form 10-K for the year ended December 31, 2011, which has been filed with the SEC pursuant to the Exchange Act,
is being mailed to you along with this Proxy Statement. Additional copies of this Proxy Statement and/or the Annual Report, as
well as copies of any Quarterly Report may be obtained without charge upon written request to Mr. Zhigang Wu, our Vice President
of Finance, at 12/F, Tower A, Chang An International Building, No. 88 Nan Guang Zheng Jie, Xi&rsquo;an City, Shaanxi Province,
710068 China, or on the SEC&rsquo;s internet website at <I>www.sec.gov</I>.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">OTHER MATTERS THAT MAY COME BEFORE
THE ANNUAL MEETING</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.45pt">Our Board knows of
no matters other than those referred to in this Proxy Statement and in the accompanying Notice of Annual Meeting of Stockholders.
However, if any other matter should be properly presented for consideration and voting at the 2012 Annual Meeting, it is the intention
of the persons named as proxies on the enclosed form of proxy card to vote the shares represented by all valid proxy cards in accordance
with their judgment of what is in our best interest.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>YOUR VOTE IS IMPORTANT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>You are cordially
invited to attend the 2012 Annual Meeting. However, to ensure that your shares are represented at the meeting, please submit your
proxy or voting instructions by mail. Please see the instructions on the proxy and voting instruction card. Submitting a proxy
or voting instructions will not prevent you from attending the 2012 Annual Meeting and voting in person, if you so desire, but
will help the Company secure a quorum and reduce the expense of additional proxy solicitation</B>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 311pt; text-indent: -11.5pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 60%">&nbsp;</TD>
    <TD STYLE="width: 40%">By Order of the Board of Directors.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>/s/ Guohua Ku</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Guohua Ku</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Chief Executive Officer and</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Chairman of the Board of Directors</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Xi&rsquo;an City, Shaanxi Province, China</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>April 30, 2012</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 311pt; text-indent: -11.5pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; border-top: Black 1.5pt solid; border-bottom: Black 1.5pt solid"><B>FORM
OF PROXY &ndash; CHINA RECYCLING ENERGY CORPORATION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Proxy Solicited on Behalf of the Board
of Directors for the 2012 Annual Meeting of Stockholders to be held on May 28, 2012</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The undersigned hereby appoints <FONT STYLE="color: black">Guohua
Ku and Zhigang Wu</FONT>, and each of them, as proxies, with full power of substitution, to represent and to vote, as designated
herein, all shares of Common Stock of China Recycling Energy Corporation (the &ldquo;Company&rdquo;), at its 2012 Annual Meeting
of Stockholders to be held at the principal executive offices, located at 12/F, Tower A, Chang An International Building, No. 88
Nan Guang Zheng Jie, Xi&rsquo;an City, Shaanxi Province, 710068 China, and at all adjournments thereof, which the undersigned could
vote, if personally present, in such manner as the proxies may determine on any matters which may properly come before the meeting
and to vote on the items as specified on the reverse side<FONT STYLE="font-size: 10pt">.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">You are encouraged to specify your choices
by marking the appropriate boxes on the reverse side but you need not mark any boxes if you wish to vote in accordance with the
Board of Directors&rsquo; recommendation<FONT STYLE="font-size: 10pt">. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>THIS PROXY, WHEN PROPERLY EXECUTED,
WILL BE VOTED IN THE MANNER DIRECTED. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES FOR DIRECTOR
AND FOR RATIFICATION AND APPOINTMENT OF GOLDMAN KURLAND MOHIDIN AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM. THE PROXIES,
IN THEIR DISCRETION, ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Address change/comments:</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 90%; border-collapse: collapse; font-family: Times New Roman, Times, Serif; margin-left: 0.5in">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; border: windowtext 1pt solid; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border: windowtext 1pt solid; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border: windowtext 1pt solid; font-size: 10pt">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;(If you noted any Address Changes and/or Comments above,
please mark corresponding box on the reverse side.)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Important Notice Regarding the Availability
of Proxy Materials for the<BR>
Annual Meeting of Stockholders to be held on May 28, 2012:</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>The Proxy Statement and our Annual Report
on Form 10-K for the year ended December 31, 2011 are available at www.shareholdervote.info/.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Continued and to be signed on reverse
side </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>



<P STYLE="margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>THIS PROXY CARD IS VALID ONLY WHEN SIGNED
AND DATED.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 35%; font-weight: bold">The Board of Directors recommends</TD>
    <TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 10%">&nbsp;</TD>
    <TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 42%">To withhold authority to vote for any individual</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">that you vote FOR&nbsp;ALL of&nbsp;the following:</TD>
    <TD STYLE="font-weight: bold">For</TD>
    <TD STYLE="font-weight: bold">Withhold</TD>
    <TD STYLE="font-weight: bold">For All</TD>
    <TD>nominee(s), mark &ldquo;For All Except&rdquo; and write</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-weight: bold">All</TD>
    <TD STYLE="font-weight: bold">All</TD>
    <TD STYLE="font-weight: bold">Except</TD>
    <TD>the number(s) of the nominee(s) on the line below.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>1.&nbsp;&nbsp;Election of Directors:</TD>
    <TD STYLE="font-family: Wingdings">&uml;</TD>
    <TD STYLE="font-family: Wingdings">&uml;</TD>
    <TD STYLE="font-family: Wingdings">&uml;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>__________________________________</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 25%; font-weight: bold; padding-left: 0.24in">Nominees</TD>
    <TD STYLE="width: 25%">&nbsp;</TD>
    <TD STYLE="width: 25%">&nbsp;</TD>
    <TD STYLE="width: 25%">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: top">
    <TD>01 &ndash; Guohua Ku</TD>
    <TD>02 &ndash; Timothy Driscoll</TD>
    <TD>03 &ndash; Albert McLelland</TD>
    <TD>04 &ndash; Lanwei Li</TD>
    </TR>
<TR STYLE="vertical-align: top">
    <TD>05 &ndash; Julian Ha</TD>
    <TD>06 &ndash;&nbsp;Yilin Ma</TD>
    <TD>07 &ndash; Chungui Shi</TD>
    <TD></TD>
    </TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Board of Directors recommends you vote FOR the following
proposals:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 76%">&nbsp;</TD>
    <TD STYLE="width: 8%; font-weight: bold">For</TD>
    <TD STYLE="width: 8%; font-weight: bold">Against</TD>
    <TD STYLE="width: 8%; font-weight: bold">Abstain</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>2.&nbsp;&nbsp;Ratification of appointment of Goldman Kurland Mohidin LLP as independent registered public accounting firm.&nbsp;&nbsp;</TD>
    <TD STYLE="font-family: Wingdings">&uml;</TD>
    <TD STYLE="font-family: Wingdings">&uml;</TD>
    <TD STYLE="font-family: Wingdings">&uml;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">NOTE:&nbsp;&nbsp;Such other business as may properly come before
the meeting or any adjournment thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">For address change/comments, mark here.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="font-family: Wingdings">o</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(see reverse for instructions)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 40%">&nbsp;</TD>
    <TD STYLE="width: 10%">Yes</TD>
    <TD STYLE="width: 10%">No</TD>
    <TD STYLE="width: 40%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP>Please indicate if you plan to attend this meeting.</TD>
    <TD STYLE="font-family: Wingdings">&uml;</TD>
    <TD STYLE="font-family: Wingdings">&uml;</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Please sign exactly as name(s) appear(s) hereon.&nbsp;&nbsp;When
signing as attorney, executor, administrator, or other fiduciary, please give full title as such.&nbsp;&nbsp;Joint owners should
each sign personally.&nbsp;&nbsp;All holders must sign.&nbsp;&nbsp;If a corporation or partnership, please sign in full corporate
or partnership name, by authorized officer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 40%; border: black 1pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></TD>
    <TD STYLE="width: 10%; border: black 1pt solid">&nbsp;</TD>
    <TD STYLE="width: 5%; border-left: black 1pt solid">&nbsp;</TD>
    <TD STYLE="width: 35%; border: black 1pt solid">&nbsp;</TD>
    <TD STYLE="width: 10%; border: black 1pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Signature (PLEASE SIGN WITHIN BOX)</TD>
    <TD>Date</TD>
    <TD>&nbsp;</TD>
    <TD>Signature (Joint Owners)</TD>
    <TD>Date</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>



<P STYLE="margin: 0"></P>

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