What caused the large increase in expenses?
(1) increase in the cost of salaries and social security expenses due to the mandatory 13th month bonus for employees (2) increase in professional fees dues to the first year of SOX-404 implementation and the convertible debt capital raised (3) additional 4 months of expenses from our Denong Zhengcheng acquisition and (4) additional six months of Jilin Changrong acquisition in our expenses (5) severance fees and salaries as a result of the reorganization. Our average headcount during 2007 was 1047. Our current headcount is 930, as some of the payroll elimination has already taken place at the end of fiscal year 2007.
