China Kangtai Cactus Bio-Tech Inc (fka CKGT)

[Florinda]

A response from Hawk Associates.

Earlier today I emailed CKGT's investor relations firm, Hawk Associates, to see if I might hear a bit of encouraging news that was in the wings. I didn't hear anything of the sort, but I did appreciate getting a quick response. I posed essentially two concerns: the loss of the extra land use, and managements' seeming lack of concern to promote itself to a western audience. Here is the response I got:

"Your questions are understandable.

"They did lose the land, but in exchange they received a some valuable working capital, which will help fuel their growth. As for the Roth conference, there was a conflict that was unavoidable.

"As to the impact of the loss of land right on its production, China Kangtai CEO Jinjiang Wang said, “This transfer has no impact on our current operations. We continue to produce cactus extracts and powder through our own facilities and existing manufacturing partners. We are currently looking for additional third parties for cooperative production agreements. Under such agreements, we will provide patented technology, raw materials, quality control guidelines and technical support. The other party will provide processing facilities and production labor and we will pay production fees to the other party.”

"The good news is the demand for their products is strong. But we believe they will be able to expand capacity.

"I believe you had read their earnings guidance issued earlier this month, go to:

http://www.hawkassociates.com/clients/press/full_news.cfm?client_id=23&news_id=1809

"Their 10-K is due by end of this month, so please stay tuned.

Susan"
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Well, nothing particularly new here. But I've written other IR firms and never heard anything at all from them. So, as I said, I appreciated the immediate response, and Susan did touch upon both issues I had inquired about.

I was hoping she might shed some light on the company's efforts to secure more land use. But with the 10-K coming out soon, it probably would be inappropriate for her to say anything if there was some progress to report. So highlighting the positive spin the company put on the matter struck me as the most constructive thing she could pass along and bring back into focus.

If CKGT hadn't cancelled their participation in the Roth Conference last year, Susan's veiled reference about an unavoidable situation that arose this year to prevent anyone from the company participating in the Roth Conference would have seemed more credible. Of course the implication is that they were intending to come but their hand was forced so they couldn't attend. But to have such circumstances arise two years in a row seems to reflect a lack of conviction on managements' part that attending such events are truly worth the time and expense. But what do I know? Unexpected things happen all the time.

Anyway, I'm glad I got an immediate response, and, like Pappy, have every intent to let things unfold in their own time. Indeed, I haven't sold any shares along the way, and don't intend to start doing so any time soon.

Steve