On January 26, 2006, CHAMCO AUTO signed a definitive, exclusive agreement with Hebei Zhongxing Automobile Company, Ltd. ( ZXAUTO China).

Both CHAMCO AUTO and our Chinese partners are absolutely committed to quality. We selected ZXAUTO China because of its high quality manufacturing and assembly standards. Our contract with ZXAUTO China includes a provision whereby CHAMCO AUTO's quality engineers will monitor assembly at approximately 187 critical inspection points (one for each 18 inspection points), and must signify their personal approval by laminating 10 Gold Quality Seals on each vehicle. CHAMCO AUTO will not launch any vehicle unless and until it is proven to get on the road and stay on the road. Our subsidiary, SMS, Ltd., one of the leaders in automotive design, engineering, testing and certification is in China now, working with ZXAUTO China to ensure that safety ratings, crash testing, and road worthiness meet regulations in Mexico, Canada, and the U.S. and exceed customer expectations. SMS, Ltd., has redesigned the Chinese products and guarantees that those vehicles will be certified during 2008.

The certification project is under the direction of Steve Saleen, an automotive icon. Steve, the creator of the world's fastest production car, the Saleen S7, as well as the Saleen Mustang, has many years of compliance expertise. He is confident that our schedules will hold, and he is on record stating that we will enter the U.S. market in 2008 with fully homologated vehicles, world-class quality, and unequalled value.

As homologation engineering work continues, CHAMCO AUTO and ZXAUTO China are also making feature changes to address North American consumers' tastes. Many of these changes, which reflect feedback from hundreds of dealers who have seen and test driven our demo vehicles, are already incorporated in a "new generation" of the SUV and Pickup, which have now arrived in the U.S. (please contact us if you would like to see the new demo vehicles). These consumer enhancements will continue as further feedback is received.

CHAMCO AUTO will aggressively promote our Chinese vehicles, beginning about 100 days before they arrive. Jerry Della Famina, one of the most famous names in the advertising/PR business together with the Berline Agency, one of the leaders in advertising placement and management of auto events, will ensure creative, attention-getting ads and favorable press coverage. However, by being first to sell Chinese-made cars in North America and by CHAMCO AUTO's newly formed subsidiary, Green Motor Vehicle Corporation, which is in the process of retrofitting to full electric all ZXAUTO vehicles as green, we expect hundreds of millions of dollars of free publicity - through talk shows, media "buzz" and good old-fashioned word of mouth.

About twelve months after the SUVs and Pickups arrive in the U.S., and as a result of ZX AUTO's joint venture with the city of Changchun we plan to follow with fully loaded Sedans and Crossovers. In addition, negotiations are currently underway with several Chinese automobile manufactures for additional vehicles types to complete our entry-level product line.

To further expand our capacity, CHAMCO AUTO intends to set up three SKD plants, one in the Southeast of the U.S. and/or Puerto Rico, Canada, and Mexico. In addition, CHAMCO AUTO, together with its Chinese partners, plans to build a 500,000 Sq. Ft., assembly plant facility in a location in North America where the local and federal government gives CHAMCO AUTO the best tax benefits and other incentives, and to qualify under NAFTA.