1261888--3/16/2009--CHINACAST_EDUCATION

related topics

{operation, international, foreign}

{regulation, change, law}

{interest, director, officer}

{acquisition, growth, future}

{product, market, service}

{condition, economic, financial}

{cost, regulation, environmental}

{system, service, information}

{personnel, key, retain}

{financial, litigation, operation}

{competitive, industry, competition}

If we and the Satellite Operating Entities do not manage growth successfully, our growth and chances for continued profitability may slow or stop. Future financings may dilute stockholders or impair our financial condition. If we and the Satellite Operating Entities fail to keep pace with rapid technological changes, especially in the satellite and distance learning education industries, our competitive position will suffer. Unexpected network interruptions caused by system failures, natural disasters, or unauthorized tamperings with systems could disrupt our operations. If we and the Satellite Operating Entities lose key management personnel, our business may suffer. We may not compete successfully with large, well-funded state-owned and private enterprises in its industry, which could result in reduced revenue. Our stockholders may have securities law claims against us for rescission or damages that are not extinguished by consummation of the acquisition of CCH. We may be subject to securities laws claims regarding past disclosures. We may be subject to fines and other potential penalties as a result of filings made in connection with acquisitions of PRC companies. Changes in the conversion rate between the RMB and foreign currencies, such as Hong Kong or United States dollars, may adversely affect our profits. Chinese foreign exchange controls may limit our ability to utilize CEC s revenues effectively and receive dividends and other payments from our Chinese subsidiaries. Risks Relating to Doing Business in China Introduction of new laws or changes to existing laws by the Chinese government may adversely affect our business. Our business will be adversely affected, if Chinese regulatory authorities view CEC s and the Satellite Operating Entities corporate activities not complying with applicable Chinese laws and regulations, including restrictions on foreign investments, change applicable laws and regulations, or impose additional requirements and conditions with which they are unable to comply. We may be unable to enforce our agreements with the Satellite Operating Entities. We are exposed to certain tax risks with respect to tax benefits enjoyed by certain of our subsidiaries in China under the new Enterprise Income Tax Law of the PRC, or the EIT Law Our success depends on stable political, economic and social environments, which are subject to disruption in the PRC. Because our executive officers and directors reside outside of the U.S., it may be difficult for you to enforce your rights against them or enforce U.S. court judgments against them in the PRC. Weakened political relations between the U.S. and China could make us less attractive. Our operations may not develop in the same way or at the same rate as might be expected if the PRC economy were similar to the market-oriented economies of OECD member countries. The Chinese economic slow-down may negatively impact our operating results. The economy of China had been experiencing unprecedented growth before 2008, which could be curtailed if the government tries to control inflation by traditional means of monetary policy or its return to planned-economy policies, any of which would have an adverse effect on the combined company.

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1261888--3/16/2009--CHINACAST_EDUCATION_CORP