China Energy Corp. (fka CHGY)

[Steuvin]

You are absolutely correct, there is no dilution. Ding had an option to purchase shares of Fortune from Ms. Xu when certain conditions were met. Those conditions were met and Ding exercised his right (his option) to purchase shares of Fortune. Fortune owns shares of CHGY; therefore, Ding acquired additional COMMON SHARES of CHGY (about 8 million additional shares) through his purchase of shares of Fortune.

This is clearly explained in footnote (2) on page 51 of the most recent 10k:

http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=8483586-839-350476&type=sect&dcn=0001144204-12-014840

The shares held by Fortune were not newly created and no dilution occurred. The total outstanding shares is as stated in the recent 10K and 10Q.

There are only a minimal amount of CHGY stock options outstanding (about 100,000) and all of them have strike prices above the current market, many at well over $1.

So helpme_hanna