China Unlimited

[RealDutch]

KGJI. We are not just dealing with crooks here. They are idiots as well.

Secondly, because bank loans required the Company to pledge gold in favor of the lenders, such pledged gold should have been reflected as investment in gold (restricted). The Company determined that certain gold reflected as inventory for production in 2016 should instead be reflected as investment in gold (restricted) since the Company had excess gold not to be used for production. The result of this reclassification is to record the value of such gold at the fair market value of the gold, rather than at the lower of cost or market value, as would be the case for inventory used for production. Because the fair market value of gold has increased during the three and nine months ended September 30, 2016, such reclassification resulted in an unrealized gain and therefore caused an increase in equity.