Qingdao Footwear (PINK:QING)

On August 2, 2010, the Board of Directors of the Registrant concluded that the unaudited consolidated financial statements included in the Registrant’s Quarterly Report on Form 10-Q for the three months ended March 31, 2010, originally filed with the Securities and Exchange Commission on May 10, 2010 (the “Original Filing”), should no longer be relied upon due to an understatement of the Registrant’s general and administrative expenses. Specifically, the Registrant determined that its general and administrative expenses were understated by $442,611 for the three month period ended March 31, 2010 due to the fact that compensation expense related to shares transferred by a shareholder to certain service providers upon the closing of the Registrant’s reverse merger on February 12, 2010 were not recorded in the Original Filing.

On October 12, 2010, the Board of Directors of the Registrant concluded that the Registrant failed to recognize significant tax liabilities (including value added tax and income taxes), which liabilities are expected to have a material impact on the Company's balance sheets, statements of cash flows and statement of shareholders' equity.

As a result, the Company's previously filed financial statements cannot be relied upon for the years ended December 31, 2008 and 2009 and the periods ended March 31 and June 30, 2010. Specifically, the Registrant determined that its taxes payable were understated by $11,369,569 due to the fact that the Company may have liability for VAT and income taxes from prior years.