1165780--3/30/2006--COUGAR_HOLDINGS

related topics

{operation, international, foreign}

{stock, price, share}

{product, market, service}

{interest, director, officer}

{gas, price, oil}

{stock, price, operating}

{cost, regulation, environmental}

{loss, insurance, financial}

{regulation, change, law}

Competition in our industry is intense and is likely to continue to increase, which could result in price reductions, decreased customer orders, reduced product margins and loss of market share, any of which could harm our business. The market for our products is constantly changing as a result of development of alternative products and processing technologies. If we do not respond to changes in a timely manner, our company likely will no longer be competitive. We may not be able to pass on all cost increases from rising crude oil prices. Our operations may be adversely affected by the cyclical nature of the petroleum and petrochemical market and by the volatility of prices of crude oil and refined oil products. If we do not successfully establish strong brand identity in the international markets, such as the United States and Europe, we may be unable to achieve widespread acceptance of our products outside of the PRC. Our insurance coverage may not be adequate to cover risks related to our production and other operations. Our international sales will likely account for a significant amount of our revenue in the future, which may expose us to political, regulatory, economic, foreign exchange and operational risks. Risks Related to Doing Business in the People s Republic of China A slow-down of economic growth in China may adversely affect our growth and profitability. Any changes in Chinese laws and regulations may have a material and adverse impact on our business. You may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing original actions in China based on United States or other foreign laws against us, our management or the members of our board of directors. Governmental control of currency conversion may affect the value of your investment. Fluctuation of the RMB could materially affect our financial condition and results of operations. The PRC government will likely open markets to foreign competitors. Political and economic policies of the PRC government could affect our business. We may be adversely affected by environmental regulations. Risks Concerning Investing In Us We expect our stock price to be volatile. The market for our shares may be illiquid. Because our executive officers and directors liabilities are limited, your rights against them in a civil lawsuit may be limited. Our management owns a majority of our outstanding common stock and their interests may be different from, and conflict with, your own. We do not expect to pay dividends to our common shareholders. The issuance of additional shares of common stock will dilute the interests of our shareholders.

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1165780--3/30/2006--COUGAR_HOLDINGS_INC