These financial statements have been prepared
assuming that Company will continue as a going concern, which contemplates the realization of assets and the discharge of liabilities
in the normal course of business for the foreseeable future.
As of June 30, 2012, the Company had no working capital but current
liabilities exceeding current assets by $14,894,314 and an accumulated deficit of $ 28,641,040 due to the fact that the Company
continued to incur losses over the past several years. Management has taken certain action and continues to implement
changes designed to improve the Companys financial results and operating cash flows. The actions involve certain
cost-saving initiatives and growing strategies, including (a) reductions in headcount and corporate overhead expenses; and (b)
development of e-commerce business. Management believes that these actions will enable the Company to improve future
profitability and cash flow in its continuing operations through June 30, 2013. As a result, the financial statements do
not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts
and classification of liabilities that may result from the outcome of the Companys ability to continue as a going concern.