As previously disclosed, the property, we got bank loans of RMB50,000,000 (approximately $8,135,373) with the Bank of China Lianyungang Branch. On December 25, 2014, China Orient Asset Management Corporation, an organization authorized by the People’s Bank of China to dispose of bad assets from banks, primarily from the Bank of China, transferred the loan to Lianyungang Chao Yang Construction Development Co., Ltd. (“ Lianyungang Chao Yang ”). On March 6, 2015, Lianyungang Chao Yang agreed to waive 50% of the loan (RMB25,000,000, or approximately $4,060,617), thereby reducing the principal balance to RMB25,000,000 (approximately $4,075,205, accounting for the change in the foreign currency translation of RMB to U.S. dollars) (the “ Loan ”). In connection therewith, we recognized a one-time gain on forgiveness of debt of $4,081,366. Lianyungang Chao Yang also modified additional terms of the Loan, which included an obligation to make minimum repayments of not less than RMB5,000,000 in April 2015 and thereafter of not less than RMB2,500,000 per month until the maturity date of the Loan on December 31, 2015. At June 30, 2015 we owed $4,092,457 under the Loan (the “ Loan Balance ”). We failed to make the scheduled repayments. On August 25, 2015 we entered into a Guaranty for the benefit of Lianyungang Chao Yang pursuant to which we guaranteed the repayment of the Loan by Renewable Metals.

On August 25, 2015, Lianyungang Chao Yang entered into a Debt Purchase Agreement with Shanghai Wisdom & Wealth Investment & Management Co., Ltd., an entity organized under the laws of the People’s Republic of China (“ Wisdom & Wealth ”) pursuant to which Wisdom & Wealth purchased the Loan from Lianyungang Chao Yang and the Guaranty was transferred to Wisdom & Wealth in connection with its acquisition of the Loan. As described below, we were recently informed that Wisdom & Wealth failed to tender payment for the Loan to Lianyungang Chao Yang under the terms of the Debt Purchase Agreement. We are negotiating with Wisdom & Wealth to terminate the agreements.

On May 10, 2016 we ceased all operations associated with the Lianyungang Subsidiaries as well as ceasing all operations associated with the further development of our OTO Platform. Lianyungang subsidiaries are running independently and we are still doing trading business for steel ore. Revenue for the trading business during the past 6 months is approximately $ 12 million and gross profit at this period is $301,835. Last trading occurred at middle June. The reason for ceasing all operations in Lianyungang Subsidiaries and OTO platform is due to lack of funds and an application for unpaid bills from the debtors has been filed, which is approximately $3.8 million. No action from the authorities till now.