Buddha Steel Inc Common (PINK:AGVO)

PRC finally challenges VIE structure:

On March 22, 2011, Buddha Steel, Inc., a Delaware corporation; the majority shareholder of Buddha; Gold Promise (Hong Kong) Group Co., Limited, a Hong Kong Corporation (“Gold Promise”); Hebei Anbang Investment Consultation Co., Ltd., a Chinese company (“HAIC”); and Dachang Hui Autonomous County Baosheng Steel Products Co., Ltd., a Chinese company (“Baosheng Steel”) entered into a Termination Agreement pursuant to which the parties terminated the Consulting Services Agreement; Operating Agreement; Voting Rights Proxy Agreement; Option Agreement and Equity Pledge Agreement all dated as of April 2, 2010.

In March 2011, Baosheng Steel was advised by local governmental authorities in Hebei Province of the People’s Republic of China that the Control Agreements contravene current Chinese management policies related to foreign-invested enterprises and, as a result, are against public policy.

Tax Issue:

On December 31, 2010, the Chief Financial Officer of the Registrant (who is authorized to take such action) concluded that the unaudited consolidated financial statements included in the Registrant’s Quarterly Reports on Form 10-Q for the three months ended June 30, 2010 and September 30, 2010 and in the Registrant’s Current Report on Form 8-K filed on April 30, 2010, which included audited financial statements for the years ended December 31, 2009 and 2008 (the “Original Filings”), should no longer be relied upon due to an understatement of provisions for income taxes in such periods. This understatement resulted in an overstatement of net income, comprehensive income and income per share of common stock, and an understatement of tax liability during each period presented.