787251--3/31/2008--CHINA_NORTH_EAST_PETROLEUM_HOLDINGS

related topics

{operation, international, foreign}

{stock, price, share}

{regulation, change, law}

{gas, price, oil}

{debt, indebtedness, cash}

{control, financial, internal}

{investment, property, distribution}

{interest, director, officer}

{stock, price, operating}

Risks Related To Our Business Oil prices fluctuate significantly, and lower prices for an extended period of time are likely to have a material adverse impact on our business. Our future success depends on our ability to find, develop and acquire oil and gas reserves. We may need to raise substantial additional capital, which may result in substantial dilution to existing stockholders. Risks Related To Doing Business In China Our operations are primarily located in China and may be adversely affected by changes in the policies of the Chinese government. The PRC s economic, political and social conditions, as well as governmental policies, could affect the financial markets in China and our liquidity and access to capital and our ability to operate our business. The Chinese government exerts substantial influence over the manner in which the Company must conduct its business activities. Future inflation in China may inhibit economic activity and adversely affect the Company s operations. We may be restricted from freely converting the Renminbi to other currencies in a timely manner. We may suffer from exchange rate risks that could result in foreign currency exchange loss. We may be unable to enforce our rights due to policies regarding the regulation of foreign investments in China. Because our assets are located overseas, stockholders may not receive distributions that they would otherwise be entitled to if we were declared bankrupt or insolvent. Our acquisitions of LongDe and Yu Qiao were structured to attempt to fully comply with PRC rules and regulations. However, such arrangements may be adjudicated by relevant PRC government agencies as not being in compliance with PRC governmental regulations on foreign investment in oil and gas industries and such structures may limit our control with respect to such entities. Recent PRC regulations relating to offshore investment activities by PRC residents may increase our administrative burden and restrict our overseas and cross-border investment activities. If our shareholders who are PRC residents fail to make any required applications and filings under such regulations, we may be unable to distribute profits and may become subject to liability under PRC laws. PRC regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from raising finance to make loans or additional capital contributions to our PRC operating subsidiaries and affiliates. Risks Related To Corporate And Stock Matters Our authorized preferred stock exposes stockholders to certain risks The market for the Company s common stock is illiquid. Our stock is a penny stock. Trading of our stock may be restricted by the SEC s penny stock regulations which may limit a stockholder s ability to buy and sell our stock. NASD sales practice requirements may also limit a stockholder s ability to buy and sell our stock. Stockholders should have no expectation of any dividends All of our directors and officers are outside the United States, with the result that it may be difficult for investors to enforce within the United States any judgments obtained against us or any of our directors or officers. If we or our independent registered public accountants cannot attest our adequacy in the internal control measures over our financial reporting, as required by Section 404 of the U.S. Sarbanes-Oxley Act, for the fiscal year ending December 31, 2007, we may be adversely affected.

Full 10-K form ▸

787251--3/31/2008--CHINA_NORTH_EAST_PETROLEUM_HOLDINGS_LTD