Tongxin Intl (PINK:TXIC)

The following issue is still lingering:

As disclosed on July 15, 2010 the Company was in the process of obtaining adequate documentation to support and determine the appropriate accounting treatment of certain related-party transactions of approximately $7.7 million with a related party, Meihua Bus ("MB"). As a result of the foregoing, the Company's completion of its annual consolidated financial statements and required disclosures were delayed pending the Company's review of these related-party matters. The Company's Audit Committee has obtained a third-party, KPMG, LLP on April 26, 2010, to assist in obtaining adequate documentation for this review. The Company has completed this review and has accounted for the transactions on its income statement and balance sheet. See Extraordinary Net Income Items Incurred During 4th Quarter 2009 for further details.

The Company is discussing with its subsidiary, Hunan Tongxin Enterprise Co Ltd. the resolution of certain related party transactions of $7.7 million and anticipates resolving these issues as soon as possible allowing the company to file its 2009 audited financial statements. While these discussions are on going, the Company has elected to provide to its investors unaudited financial statements. The Company does not anticipate any material changes between the unaudited and audited financial statements when filed.