Qkl Stores Inc (OTC:QKLS)

Item 4.01 Changes in Registrant's Certifying Accountant.

QKL Stores, Inc. (the “Company”) was notified that, effective April 30, 2016, AWC (CPA) Limited (“AWC”) merged (the “Merger”) with Dominic K.F. Chan & Co (“DKFC”) and formed DCAW (CPA) Limited (“DCAW”), which is registered with the Public Company Accounting Oversight Board (PCAOB).

As a result of the Merger, AWC resigned as the Company’s independent registered public accounting firm on April 30, 2016. On May 6, 2016, the Company engaged DCAW (CPA) Limited as its independent registered public accounting firm. The engagement of DCAW was approved by the Company’s board of directors on May 6, 2016.

The audit reports of AWC on the financial statements of the Company as of and for the years ended December 31, 2015 and 2014 did not contain any adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles but modified to a going concern.

Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing

On November 3, 2015, The Nasdaq Stock Market, Inc. (“Nasdaq”) notified QKL Stores Inc. (the “Company”) that for the previous consecutive 30 trading days the market value of its publicly held shares had been below the minimum US$1,000,000 required for continued listing as set forth in Listing Rule Listing Rule 5550(a)(5) (the “Rule”). Therefore, in accordance with Listing Rule 5810(c)(3)(D), the Company was provided 180 calendar days, or until May 2, 2016, to regain compliance with the Rule. However, the Company has not regained compliance with the Rule. Accordingly, its securities will be delisted from Nasdaq. In that regard, trading of the Company’s common stock will be suspended at the opening of business on May 12, 2016, and a Form 25-NSE will be filed with the Securities and Exchange Commission, which will remove the Company’s securities from listing and registration on Nasdaq. The Company’s securities may be eligible to continue to be quoted on the OTC Bulletin Board or in the Pink Sheets in the future.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

On May 3, 2016, Tsz Fung Philip Lo, Cheng Kam Ho and Jingyuan Gao provided the Company with notices of their resignation from the Board of Directors (the “Board”), effective immediately. In addition, on that same date, Tsz-Kit Chan resigned as the Company’s CFO. There were no disagreements between Mr. Chan and the Company on any matter relating to the Company’s operations, policies or practices which resulted in his resignation. Zhuangyi Wang, the Company’s CEO, will also assume the position of the Company’s CFO, effective immediately.

Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing

On April 21, 2016, QKL Stores Inc. (the “Company”) received a letter from the Nasdaq Stock Market LLC (“Nasdaq”). Nasdaq explained in its letter that companies listed on the Nasdaq Capital Market (the “Capital Market”) are required to maintain a minimum of $2,500,000 in stockholders’ equity for continued listing. Since the Company’s Form 10-K for the period ended December 31, 2015 reported stockholders’ equity of ($5,510,186), and as of April 20, 2016, the Company does not meet the alternatives of market value of listed securities or net income from continuing operations, the Company no longer complies with Nasdaq’s Listing Rule.

The Company has 45 calendar days to submit a plan to regain compliance. If the plan is accepted, Nasdaq has the right to grant an extension of up to 180 calendar days from April 21, 2016 to evidence compliance. In the event the Company does not regain compliance, it will receive written notification from Nasdaq that its securities are subject to delisting.

Fourth Quarter 2015 Financial Results

• Revenue in the fourth quarter of 2015 decreased by 17.7% to $62.4 million from $75.8 million in the fourth quarter of 2014.
• We had a net loss of $18.3 million in the fourth quarter of 2015 compared with net loss of $14.7 million in the fourth quarter of 2014.

Mr. Zhuangyi Wang, Chairman and CEO, said, "As QKL expands its market presence in northeast China, we are uniquely positioned against our local competitors through our large product offering, strong supplier relationships, efficient distribution network and state-of-the-art IT system. We are comfortable with our opportunities in 2015 and believe we'll see an improvement in operating expenses and profit growth in coming quarters.

"In 2015, we closed three stores; as of December 31, 2015, we operated 25 supermarkets, 16 hypermarkets, 4 department stores and 5 distribution centers situated in Daqing, Harbin Changchun and Jiamusi, respectively.

"As we advance into 2015, we expect to open one new supermarket this year. We maintain confidence in our strategy of strengthening our store presence in Tier 4 and 5 cities in northeastern China as well as in our core region of operation around Daqing where the majority of our older stores are based."

Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing

On January 15, 2016, QKL Stores Inc. (the “Company”) received a letter from the Nasdaq Stock Market LLC (“Nasdaq”). Nasdaq indicated in its letter that Listing Rule 5550(a)(2) (the “Rule”) requires listed securities to maintain a minimum bid price of US$1.0 per share. Based upon Nasdaq’s review of the Company’s closing bid price for the last thirty (30) consecutive business days, the Company no longer meets this requirement. Consequently, a deficiency exists with regard to the Rule.

Consistent with Nasdaq’s rules, Nasdaq indicated that it will provide the Company a cure period in order to regain compliance. The Company has until July 13, 2016 to regain compliance. In the event the Company does not regain compliance by this date, it will receive written notification from Nasdaq that its securities are subject to delisting.

Item 4.01 Changes in Registrant's Certifying Accountant.

 
(a) Former Independent Registered Public Accounting Firm

On December 28, 2015, Albert Wong & Co. LLP (“Albert Wong”) resigned as the independent registered public accounting firm of QKL Stores Inc. (the “Company”). On that same day, the Audit Committee of the Board of Directors approved AWC CPA Limited as the Company’s new auditors.

The reports of Albert Wong on the Company’s financial statements for the fiscal years ended December 31, 2013 and 2014 did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles. During the fiscal years ended December 31, 2013 and 2014, and in the subsequent interim periods through December 28, 2015, there were no disagreements with Albert Wong on any matter of accounting principles or practices, financial statement disclosure or auditing scope and procedure which, if not resolved to the satisfaction of Albert Wong, would have caused Albert Wong to make reference to the matter in its report.

During the fiscal years ended December 31, 2013 and 2014, and in the subsequent interim periods through December 28, 2015, there were no “reportable events” as that term is defined in Item 304(a)(i)(v) of Regulation S-K promulgated under the Securities Exchange Act of 1934, as amended (“Regulation S-K”).

The Company provided Albert Wong with a copy of the foregoing disclosures and requested Albert Wong to furnish the Company with a letter addressed to the Securities and Exchange Commission stating whether or not it agrees with the above disclosures. A copy of the letter furnished pursuant to that request is filed as Exhibit 16.1 to this Current Report on Form 8-K.

(b) New Independent Registered Public Accounting Firm

On December 28, 2015, the Company appointed AWC CPA Limited (“AWC”) as the Company's new independent registered public accounting firm, effective immediately. During the fiscal years ended December 31, 2013 and 2014, and during all subsequent interim periods through December 28, 2015, the Company did not consult AWC regarding the application of accounting principles to a specified transaction, either completed or proposed, the type of audit opinion that might be rendered on the Company’s financial statements or any matter that was the subject of a "disagreement" with its former accountants or a "reportable event" as those terms are defined in Item 304 of Regulation S-K.

Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing

On November 3, 2015, QKL Stores Inc. (the “Company”) received a letter from the Nasdaq Stock Market LLC (“Nasdaq”). Nasdaq indicated in its letter that Listing Rule 5550(a)(5) (the “Rule”) requires listed securities to maintain a minimum market value of publicly held shares (“MVPHS”) of US$1,000,000. Based upon Nasdaq’s review of the Company’s MVPHS for the last thirty (30) consecutive business days, the Company no longer meets this requirement. Consequently, a deficiency exists with regard to the Rule.

Consistent with Nasdaq’s rules, Nasdaq indicated that it will provide the Company a cure period in order to regain compliance. The Company has until May 2, 2016 to regain compliance. In the event the Company does not regain compliance by this date, it will receive written notification from Nasdaq that its securities are subject to delisting.

Disclosure: GeoInvesting is providing this information for your edification and in no way has any affiliation with any promoters and/or newsletters disseminating information on QKLS, nor is GeoInvesting being paid to post this information. At times, the GeoTeam may trade P&D's on a long or short basis, depending on how we feel the momentum of the stocks will be affected by the efforts of stock promoters and any ensuing dumps.

Second Quarter 2015 Financial Results

-- Revenue increased by 9.2% to $56.4 million from $51.7 million in 2Q14 --

-- Our net loss for the second quarter of 2015 was $4.5 million, or $2.98 per diluted share, from net loss of $3.8 million, or $2.47 per diluted share in the prior year period

DAQING, China, August 14, 2015 /PRNewswire/ -- QKL Stores Inc. (the "Company") (Nasdaq: QKLS), a leading regional supermarket chain in Northeastern China and Inner Mongolia, today announced its financial results for the second quarter ended June 30, 2015.

Mr. Zhuangyi Wang, Chairman and CEO, said, "In the second quarter, we were more active with the level of promotional activities among our existing stores opened at least one year in order to strengthen our competitive position. We plan to slow down the pace of our new store openings. Currently, we expect to open two new supermarket stores this year. We maintain confidence in our strategy of strengthening our store presence in Tier 4 and 5 cities in northeastern China as well as in our core region of operation around Daqing where the majority of our older stores are based."

"As QKL expands its market presence in northeast China, we are uniquely positioned against our local competitors through our large product offering, strong supplier relationships, efficient distribution network and state-of-the-art IT system. We are comfortable with our opportunities in the second half of the year and believe we'll see an improvement in operating expenses and net result from the current quarter."

Fourth Quarter 2014 Financial Results

• Revenue in the fourth quarter of 2014 increased by 12.3% to $75.8 million from $67.5 million in the fourth quarter of 2013.
• We had a net loss of $14.7 million in the fourth quarter of 2014 compared with net loss of $11.6 million in the fourth quarter of 2013.

Mr. Zhuangyi Wang, Chairman and CEO, said, "As QKL expands its market presence in northeast China, we are uniquely positioned against our local competitors through our large product offering, strong supplier relationships, efficient distribution network and state-of-the-art IT system. We are comfortable with our opportunities in 2015 and believe we'll see an improvement in operating expenses and profit growth in coming quarters.

"In 2014, we closed one store and opened five stores. As of December 31, 2014, we operated 26 supermarkets, 18 hypermarkets, 4 department stores and 5 distribution centers situated in Daqing, Harbin Changchun and Jiamusi, respectively.

As we advance into 2015, we expect to open two new supermarket or hypermarket stores this year. We maintain confidence in our strategy of strengthening our store presence in Tier 4 and 5 cities in northeastern China as well as in our core region of operation around Daqing where the majority of our older stores are based."

Third Quarter 2013 Financial Results

• Revenue in the third quarter of 2014 increased by $1.9 million, or 3.2%, to $61.1 million for the three months ended September 30, 2014 from $59.2 million for the three months ended September 30, 2013. 
• For the three months ended September 30, 2014, our net loss was $5.5 million, or$(3.60) per diluted share, compared to net loss of $1.7 million, or ($1.11) per diluted share, for the three months ended September 30, 2013.

Mr. Zhuangyi Wang, Chairman and CEO, said, "Our third quarter results generally met our levels of expectation. The variety, value and freshness of our products continue to resonate with our customers, driving sales higher. This store growth was also driven by in-store promotional events such as store anniversary celebrations.

"We plan to open two stores before year end. The new stores we will open in the future will be located in Daqing City where we have stronger relationships with local vendors and the cost of goods is slightly lower than the other cities in which we operate.

"The retailing business environment is still challenging, mainly due to rising costs andemerging e-commerce channels. However, we are still confident in domestic needs;because of the urbanization of third- and fourth-tier cities we will achieve a fundamental improvement in consumer purchasing power during the process.

"We look forward to the upcoming holiday season as we have a number of exciting marketing initiatives planed. Our balance sheet is healthy with a strong cash position, low level of debt and stable flow of cash from operations. We continue to make progress with our store operations and that can result in greater sales and profits over time."

• 2Q14 Revenue decreased by 12.4% to $51.7 million from $59.0 million in 2Q13
• Our net loss for the second quarter of 2014 was $3.8 million, or $2.47 per diluted share, from net loss of $1.5 million, or $0.96 per diluted share in the prior year period.

Mr. Zhuangyi Wang, Chairman and CEO, said, "The second quarter was a period in which we focused on improving efficiency in our business. Our existing stores opened for more than a year continued to show stable gross profit margin of 16.8% which helps support the ramp up period of our newer stores, which typically take longer to reach profitability.

"We plan to open 2 additional stores this year. These two new stores we will open in the future will be located in the Heilongjiang Province where we have stronger relationships with local vendors and the cost of goods is slightly lower than the other two provinces (Liaoning and Jilin) in which we operate."

"As QKL expands its market presence in northeast China, we are uniquely positioned against our local competitors through our large product offering, strong supplier relationships, efficient distribution network and state-of-the-art IT system. We are comfortable with our opportunities in the second half of the year and believe we'll see an improvement in operating expenses and net result from the current quarter."

DAQING, China, June 30, 2014 /PRNewswire/ -- QKL Stores Inc. (the "Company") (Nasdaq: QKLS), a leading regional supermarket chain in Northeastern China, today announced that on June 26, 2014, it received a letter from The NASDAQ Stock Market LLC ("NASDAQ") notifying the Company that, as a result of the appointment of Mr. Cheng Kam Ho on June 25, 2014 to the Company's Board of Directors and the Audit, Nominating and Corporate Governance, and Compensation Committees, the Company has regained compliance with the independent director and audit committee requirements for continued listing on The NASDAQ Capital Market as set forth in NASDAQ Listing Rules 5605(b)(1) and 5605(c)(2). With Mr. Cheng's appointment to the Company's Board of Directors as an independent director, the Company's Board of Directors is again comprised of a majority of independent directors.

First Quarter 2014 Financial Results

• Revenue decreased by $11.1 million, or 11.4%, to $86.0 million for the three months ended March 31, 2014 from $97.1 million for the three months ended March 31, 2013.
• Our net loss for the first three months of 2014 was $3.1 million, or $2.01 per diluted share, from net income of $0.4 million, or $0.27 per diluted share in the prior year period

Mr. Zhuangyi Wang, Chairman and CEO, said, "We opened two hypermarkets in the first quarter, and finished the first quarter operating a total of 47 stores, comprised of 27 supermarkets, 16 hypermarkets and 4 department stores. As our new store opening plan slows for 2014, the two more new stores are going to open in the second half of the year, we expect our profitability to improve as we benefit from our improving new store sales, increased same store sales at existing stores and reduced store opening and promotional expenses."

"We were also pleased with the improvement of our operating cash flows in the first quarter due to a reduction in inventory after the peak Chinese New Year season and a decrease in other receivables attributable to cash recovery from our vendors after the busy holiday season. We are pleased with our execution in the first quarter and are setting the stage for increased top and bottom line growth in the coming quarters."

Fourth Quarter 2013 Financial Results

• Revenue in the fourth quarter of 2013 decreased by 21.5% to $67.5 million from $86.0 million in the fourth quarter of 2012.
• net loss of $11.6 million in the fourth quarter of 2013 compared with net loss of $30.8 million in the fourth quarter of 2012.

Mr. Zhuangyi Wang, Chairman and CEO, said, "As QKL expands its market presence in northeast China, we are uniquely positioned against our local competitors through our large product offering, strong supplier relationships, efficient distribution network and state-of-the-art IT system. We are comfortable with our opportunities in 2014 and believe we'll see an improvement in operating expenses and profit growth in coming quarters.

"In 2013, we closed three stores that have approximately 6,500 square meters of space. As of December 31, 2013, we operated 27 supermarkets, 14 hypermarkets, 4 department stores and 2 distribution centers situated in Daqing, and Harbin, respectively.

"As we advance into 2014, we expect to open three new supermarket or hypermarket stores this year. We maintain confidence in our strategy of strengthening our store presence in Tier 4 and 5 cities in northeastern China as well as in our core region of operation around Daqing where the majority of our older stores are based."

DAQING, China, Jan. 22, 2014 /PRNewswire/ -- QKL Stores Inc. (the "Company") (Nasdaq: QKLS), a leading regional supermarket chain in Northeastern China, today announced the opening of two new hypermarkets.

The Company's 46^th new store, situated in Zhalantun City, Inner Mongolia, was opened on January 8, 2014. Zhalantun City, with a population of approximately 450,000 residents, is known as the political, economic, culture and medical centers of east Xing'anling area, Inner Mongolia. The hypermarket is located in a new shopping mall in the center of the commercial district of the city, serving about 160,000 potential Chinese customers. This hypermarket occupies approximately 8,500 sq. meters of gross space.

The Company's 47^th new store, situated in Jiansanjiang City, Heilongjiang Province, was opened on January 16, 2014. Jiansanjiang City, with a population of approximately 200,000 residents, is known as the "big farm land" which has 15 large-sized state-owned farms. The hypermarket is located in the center of the commercial district of the city, serving about 200,000 potential Chinese customers. This hypermarket occupies approximately 10,300 sq. meters of gross space.

Mr. Zhuangyi Wang, Chairman and CEO, said, "Opening new stores in new cities is an important part of our long-term growth strategy. We look forward to playing an integral role in the retail communities of Zhanlantun and Jiansanjiang City by offering their residents a wide range of high-quality grocery products. We are pleased to open our first two stores in this quarter and are encouraged with the schedule of our 2014 store opening plan."

Item 3.01             Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing

On January 4, 2014, China time, QKL Stores Inc. (the “Company) received a letter dated January 3, 2014 from the Nasdaq Stock Market LLC (“Nasdaq”). Nasdaq indicated in its letter that as a result of the resignation of Mr. Chaoying Li from the Company’s Board of Directors, effective January 1, 2014, the Company no longer complies with Nasdaq’s independent director and audit committee requirements as set forth in Listing Rule 5605, which requires that a majority of the Company’s board of directors be comprised of independent members and its audit committee be comprised of three independent members.

Consistent with Listing Rules 5605(b)(1)(A) and 5605(c)(4), Nasdaq indicated that it will provide the Company a cure period in order to regain compliance. The Company has until the earlier of the Company’s next annual shareholders’ meeting or January 1, 2015 to regain compliance.  Alternatively, if the next annual shareholders’ meeting is held before June 30, 2014, then the Company must evidence compliance no later than June 30, 2014.  The Company must submit to Nasdaq documentation, including biographies of any new directors, evidencing compliance with the rules no later than this date.  In the event the Company does not regain compliance by this date, Nasdaq rules require its staff to provide written notification to the Company that its securities will be delisted.  At that time, the Company may appeal the delisting determination to a Hearings Panel.

The Company is conducting a search for a new director who meets the requirements of Nasdaq and is available for appointment to the Company’s board of directors and audit committee within the cure period allowed under the Listing Rules.  The Company fully expects to regain compliance prior to the end of the cure period.

Third Quarter 2013 Financial Results

• Revenue in the third quarter of 2013 decreased by $25.1 million, or 29.8%, to $59.2 million from $84.3 million for during the same quarter of 2012.
• Net loss was $1.7 million, or $(1.112) per diluted share, compared to net loss of$1.1 million, or ($0.842) per diluted share, for the three months ended September 30, 2012.

Mr. Zhuangyi Wang, Chairman and CEO, said, "Our third quarter results generally met our levels of expectation. The variety, value and freshness of our products continue to resonate with our customers driving sales higher. This store growth was also driven by in-store promotional events such as store anniversary celebrations.

"We plan to open one additional store before Chinese New Year. The new stores we will open in the future will be located in Daqing City where we have stronger relationships with local vendors and the cost of goods is slightly lower than the other cities in which we operate."

"The environment of retailing business is still challenging mainly due to the rising costs and the emerging e-commerce channel. However, we are still confident on the domestic needs because of the urbanization of the third and fourth tier cities that we will achieve a fundamental improvement in the consumer purchasing power during the process. For the remaining one quarter of 2013, we believe our gross margin will remain stable in the 17.0%-17.5% range"

"We look forward to the upcoming holiday season as we have a number of exciting marketing initiatives planed. Our balance sheet is healthy with a strong cash position, low level of debt and stable flow of cash from operations. We continue to make progress with our store operations and that can result in greater sales and profits over time."

Second Quarter 2013 Financial Results

• Net sales decreased by $24.2 million, or 29.1%, to $59.0 million for the three months ended June 30, 2013 from$83.2 million for the three months ended June 30, 2012.
• Gross profit, or total revenue minus cost of sales, decreased by $4.4 million, or 30.3%, to $10.1 million, or 17.2% of net sales, in the second quarter of 2013 from $14.6 million, or 17.5% of net sales, in the second quarter of 2012
• Net loss of approximately $1.4 million or $(0.955) per diluted share, compared with net income of $9,611, or $0.006 per diluted share, for the same period in 201

Mr. Zhuangyi Wang, Chairman and CEO, said, "The second quarter was a period in which we focused on improving efficiency in our business. Our existing stores opened for more than a year continued to show stable gross profit margin of 17.2% which helps support the ramp up period of our newer stores, which typically take longer to reach profitability.

"We plan to open 3 additional stores this year. Most of the new stores we will open in the future will be located in the Heilongjiang Province where we have stronger relationships with local vendors and the cost of goods is slightly lower than the other two provinces (Liaoning and Jilin) in which we operate."

"As our new store opening plan modifies from the first half of the year, we believe that preliminary new store opening expenses will decrease in the coming quarters as our total store sales rise, labor & utility costs stabilize and new store marketing expenses ease. For the remaining two quarters of 2013, we believe our gross margin will remain stable in the 17%-17.5% range, selling expenses as a percent of total revenue will move back into the 15%-16% range and we'll return to profitability."

"As QKL expands its market presence in northeast China, we are uniquely positioned against our local competitors through our large product offering, strong supplier relationships, efficient distribution network and state-of-the-art IT system. We are comfortable with our opportunities in the second half of the year and believe we'll see an improvement in operating expenses and profit growth from the current quarter."

On April 10, 2013, the Audit Committee of the Board of Directors of QKL Stores Inc. (the “Company”), after consultation with and upon recommendation from management of the Company, concluded that the Company’s financial statements for certain prior periods identified below, each as filed with the Securities and Exchange Commission, should be amended to correct accounting errors. The errors relate to the Company’s former practice of not consolidating Daqing Longqing Microcredit Co., Ltd., a People’s Republic company (the “QKL-LQ”) in its financial reports, which the Company controls, through arrangement that absorbs operations risk, as if QKL-LQ were a wholly-owned subsidiary of the Company, under ASC 810, “Variable Interest Entity”.

The Audit Committee concluded that, in light of the accounting errors discussed above, the previously issued unaudited interim financial statements for the quarters ended March 31, 2012, June 30, 2012 and September 30, 2012 included in the Company’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2012, June 30, 2012 and September 30, 2012 should no longer be relied upon.  The Company will file an amendment on Form 10-Q/A for each of the quarters ended March 31, 2012, June 30, 2012 and September 30, 2012 as soon as practicable.

The Company’s authorized officers and the Audit Committee have discussed the foregoing matters with the Company’s current independent registered public accounting firm, Albert Wong & Co. LLP. The Board of Directors has authorized and directed that the officers of the Company take the appropriate and necessary actions to restate the Quarterly Reports on Form 10-Q for the quarters ended March 31, 2012, June 30, 2012 and September 30, 2012. 

DAQING, China, September 7, 2012 /PRNewswire/ -- QKL Stores Inc. (the "Company") (Nasdaq: QKLS), a leading regional supermarket chain in Northeastern China, today announced that onSeptember 5, 2012, China time, it received a letter from Nasdaq Stock Market LLC ("Nasdaq"), indicating that based on the Company's closing bid price for the last 30 consecutive business days, the Company was not in compliance with the $1.00 minimum bid price requirement as set forth in Nasdaq Listing Rule 5550(a)(2). The Nasdaq notification letter has no immediate effect on the listing or trading of the Company's common stock on the Nasdaq Capital Market.

According to the Listing Rule 5810(c)(3)(A), the Company now has a period of 180 calendar days from such letter, or until March 4, 2013, to regain compliance. Compliance can be achieved by meeting the standard of a minimum bid price of $1 per share for a minimum of 10 consecutive business days at any time during the 180 day period. The Company is currently looking at all of the options available with respect to regaining such compliance.

DAQING, China, August 22, 2012 /PRNewswire-Asia/ -- QKL Stores Inc. (the "Company") (Nasdaq: QKLS), a leading regional supermarket chain in Northeastern China, today announced the opening of a new supermarket.

The Company's 54th new store, situated in Kaiyuan City, Liaoning Province, was opened on August 22, 2012. Kaiyuan City, with a population of approximately 580,000 residents, is known as the national grain producing base, and has a history of over 1300 years. The supermarket is located in the center of the commercial district of the city, serving about 200,000 potential Chinese customers. This supermarket occupies approximately 5,700 sq. meters of gross space.

Mr. Zhuangyi Wang, Chairman and CEO, said, "Kaiyuan City is a growing city in the Northeast China region that can benefit from the varied assortment of quality fresh food and grocery products that are carried within our store locations. We are pleased to open our first store in this location and are encouraged with the schedule of our 2012 store opening plan."

Financial Results for the Second Quarter

•  Revenue decreased by 0.3% to $83.2 million from $83.5 million
• Gross Profit decreased by 0.4% to $14.6 million from $14.6 million.

Mr. Zhuangyi Wang, Chairman and CEO, said, "The second quarter was a period in which we focused on improving efficiency in our business. Our existing stores opened for more than a year continued to show stable gross profit margin of 17.5% which helps support the ramp up period of our newer stores, which typically take longer to reach profitability. "We plan to open 3 additional stores this year. Most of the new stores we will open in the future will be located in the Heilongjiang Province where we have stronger relationships with local vendors and the cost of goods is slightly lower than the other two provinces (Liaoning and Jilin) in which we operate. "As our new store opening plan modifies from the first half of the year, we believe that preliminary new store opening expenses will decrease in the coming quarters as our total store sales rise, labor & utility costs stabilize and new store marketing expenses ease. For the remaining two quarters of 2012, we believe our gross margin will remain stable in the 17%-17.5% range, operating expenses as a percent of total revenue will move back into the 14%-15% range and we'll return to profitability with net income as a percent of total revenue in the 0.5%-1.0% range. "As QKL expands its market presence in northeast China, we are uniquely positioned against our local competitors through our large product offering, strong supplier relationships, efficient distribution network and state-of-the-art IT system. We are comfortable with our opportunities in the second half of the year and believe we'll see an improvement in operating expenses and profit growth from the current quarter."

DAQING, China, June 27, 2012 /PRNewswire-Asia/ -- QKL Stores Inc. (the "Company") (Nasdaq: QKLS), a leading regional supermarket chain in Northeastern China, today announced that on June 26, 2012, China time, it received a letter from The NASDAQ Stock Market LLC ("NASDAQ") notifying the Company that it has regained compliance with the minimum bid price requirement for continued listing set forth in NASDAQ Listing Rule 5550(a)(2), as its common stock has achieved a closing bid price of $1.00 or more for 10 consecutive business days.

On December 28, 2011, NASDAQ Staff notified the Company that its common stock failed to maintain a minimum bid price of $1.00 over the previous 30 consecutive business days as required by the Listing Rules of The Nasdaq Stock Market. The Staff also notified the Company that it had been granted a grace period of 180 calendar days in which to regain compliance. In the letter dated June 26, 2012, the Staff informed the Company that it had determined that for the last 10 consecutive business days, from June 12, 2012 to June 25, 2012, the closing bid price of the Company's common stock has been at $1.00 per share or greater. Accordingly, the Company has regained compliance with NASDAQ Listing Rules 5550(a)(2) and this matter is now closed

DAQING, China, June 12, 2012 /PRNewswire-Asia/ -- QKL Stores Inc. (the "Company") (Nasdaq: QKLS), a leading regional supermarket chain in Northeastern China, today announced that on June 11, 2012, the Company filed a Certificate of Amendment to the Company's Certificate of Incorporation, as amended to date (the "Certificate of Amendment"), with the Secretary of State of the State of Delaware to effect a one-for-three reverse stock split (the "Reverse Split") of the issued and outstanding common stock of the Company, so that every three (3) outstanding shares of common stock before the Reverse Split represents one (1) share of common stock after the Reverse Split. The Reverse Split became effective on and as of June 11, 2012. The Reverse Split was duly approved by the Board of Directors of the Company and the Company's shareholders entitled to vote a majority of the shares of common stock pursuant to Delaware General Corporation Law.

As a result of the Reverse Split, the number of outstanding shares of common stock of the Company will be reduced to approximately 10.5 million shares. Fractional stockholdings will be rounded up to the nearest whole number. Each shareholder's percentage ownership interest in the Company and proportional voting power remains unchanged after the Reverse Split except for minor changes and adjustments resulting from rounding of fractional interests. The rights and privileges of the holders of common stock are substantially unaffected by the Reverse Split. The shareholders of common stock should contact their broker or the Company's transfer agent, Empire Stock Transfer Inc. at (702) 818-5898, for instruction relating to the reverse split procedures. The Reverse Split is part of the Company's strategy to maintain the listing of its shares on the NASDAQ Capital Market.

At the market opening on June 12, 2012, the Company's common stock expects to begin trading on The NASDAQ Stock Market on a post-split adjusted basis under a new CUSIP number. The Company's ticker symbol of "QKLS" will remain unchanged as a result of the Reverse Split, although it is expected that NASDAQ will append a "D" to the Company's ticker symbol for approximately 20 trading days following the effective date of the Reverse Split to indicate the completion of the Reverse Split.

DAQING, China, May 29, 2012 /PRNewswire-Asia/ -- QKL Stores Inc. (the "Company") (Nasdaq: QKLS), a leading regional supermarket chain in Northeastern China, today announced that on May 19, 2012, China time, it received a letter from Nasdaq Stock Market LLC ("Nasdaq") indicating that the Company no longer complies with Nasdaq's independent director and audit committee requirements as set forth in Listing Rule 5605 as a result of the vacancy caused by the resignation of Mr. Zhiguo Jin as a member of the Company's board of directors and the audit committee. Listing Rule 5605 requires that a majority of the Company's board of directors be comprised of independent members and its audit committee be comprised of three independent members. The letter also indicated that Nasdaq will provide the Company a cure period in accordance with Listing Rules 5605(b)(1)(A) and 5605(c)(4), respectively.

As we previously disclosed on April 25, 2012, Mr. Zhiguo Jin resigned as a member of the board of the Company on April 19, 2012. Mr. Jin also served as Chairman of the nominating and corporate governance committee and as a member of the audit and compensation committees.

The Company is conducting a search for a new director who meets the requirements of Nasdaq and is available for appointment to the Company's board of directors and audit committee within the cure period allowed under the Nasdaq Listing Rules.

First Quarter 2012 Financial Results

• Revenue in the first quarter of 2012 increased 10.6% to $112.0 million from $101.3 million in the first quarter of 2011.
• Gross profit increased 5.3% year over year to $19.1 million, compared to $18.1 million in the prior year period
• Operating expenses increased 18.8% to $17.5 million compared to $14.7 million in the prior year period.
• First quarter 2012 net income was approximately $0.8 million, or $0.02 per diluted share, compared with $2.6 million, or $0.07 per diluted share, for the same period in 2011.

Mr. Zhuangyi Wang, Chairman and CEO, said, "We finished the first quarter operating a total of 53 stores, comprised of 33 supermarkets, 16 hypermarkets and 4 department stores. As our new store opening plan slows for 2012, the new stores are going to open particularly in the second half of the year, we expect our profitability to improve as we benefit from our new store sales, increased same store sales at existing stores and reduced store opening and promotional expenses."

"We were also pleased with the improvement of our operating cash flows in the first quarter due to a reduction in inventory after the peak Chinese New Year season and a decrease in other receivables attributable to cash recovery from our vendors after the busy holiday season. We are pleased with our execution in the first quarter and are setting the stage for increased top and bottom line growth in the coming quarters."

Fourth Quarter 2011 Results

• Revenue in the fourth quarter of 2011 increased 20.9% to $103.7 million from $85.8 million in the fourth quarter of 2010
• Excluding the non cash impairment charge on goodwill and changes in the fair value of warrants, adjusted net income for the three months ended December 31, 2011 was $0.9 million, or $0.03 per diluted share, compared to $2.4 million, or $0.06 per diluted share, in the period prior year.

Mr. Zhuangyi Wang, Chairman and CEO, said, "In the fourth quarter, we were more active with the level of promotional activities among our existing stores opened at least one year in order to strengthen our competitive position. Our 35 older stores that have been operating for more than one year have outperformed our younger stores as many of our new store locations are in new smaller markets which typically take longer to ramp up sales and profit. We believe our product quality, assortment and value can result in improved performance over time."

"During the fourth quarter, we opened up one new store, a 2,400 sq. meter supermarket in Daqing City, Heilongjiang province. We successfully opened 14 new stores in 2011 bringing our store total to 54 locations, comprised of 34 supermarkets, 16 hypermarkets and 4 department stores. We opened a 9,000 sq. meter distribution center in the Liaoning province in the fourth quarter and now have 3 distribution centers situated in the Heilongjiang and Liaoning provinces to better support our growing base of stores."

As we advance into 2012, we plan to slow down the pace of our new store openings. Currently, we expect to open five new supermarket or hypermarket stores this year. We maintain confidence in our strategy of strengthening our store presence in Tier 4 & 5 cities in northeastern China as well as in our core region of operation around Daqing where the majority of our older stores are based."

Restatement of EPS Results for the Year Ended December 31, 2010 and First Two Quarters of 2011

The Company also announced estimated amounts for the restatement of its earnings per share information for the fiscal year ended December 31, 2010 and the first two quarters of 2011. The Company originally filed an 8-K related to this restatement with the SEC on February 23, 2012. This restatement will have no financial impact on the Company's historically reported revenue or net income for the preceding financial reporting periods.

This restatement occurred because the Company should have calculated earnings per share for the relevant periods in accordance with ASC 260, Earnings Per Share, which requires presentation of earnings per share using the two class method when a company has securities that participate in common stock dividends. Specifically, the Company's issued and outstanding convertible preferred stock, which participates in dividends of the Company on the same basis as holders of the Company's common stock, should have been but was not included in the calculation of basic earnings per share for the relevant periods using the two class method.

A summary of the restatement, which impacts fiscal quarters ended December 31, 2010, March 31, 2011 and June 30, 2011, is as follows:

• The estimated impact of the restatement for the full year 2010 resulted in a decrease in basic earnings per share from $0.59 to $0.47 and a decrease in diluted earnings per share from $0.44 to $0.24.
• The estimated impact of the restatement for the three months ended March 31, 2011 resulted in a decrease in basic earnings per share from $0.09 to $0.07. There was no change to diluted earnings per share for the period ended March 31, 2011.
• The estimated impact of the restatement for the three months ended June 30, 2011 resulted in a decrease in basic earnings per share from $0.07 to $0.06. There was no change to diluted earnings per share for the period ended June 30, 2011.
• The estimated impact of the restatement for the six months ended June 30, 2011 resulted in a decrease in basic earnings per share from $0.09 to $0.07. There was no change to diluted earnings per share for the six month period ended June 30, 2011.

ITEM 4.02 NON-RELIANCE ON PREVIOUSLY ISSUED FINANCIAL STATEMENTS OR A RELATED AUDIT REPORT OR COMPLETED INTERIM REVIEW.

On February 17, 2012, the Audit Committee of the Board of Directors of QKL Stores Inc. (the “Company”), after consultation with and upon recommendation from management of the Company, concluded the Company’s previously issued audited financial statements for the year ended December 31, 2010 included in its Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 31, 2011 and the unaudited financial statements for the three months ended March 31, 2011 and June 30, 2011 included in its Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission on May 16, 2011 and August 15, 2011 should no longer be relied upon and that disclosure should be made and action should be taken to prevent future reliance. The Company will restate its financial statements for the year ended December 31, 2010, the three months ended March 31, 2011 and the three and six months ended June 30, 2011 due to issues raised by the Staff of the SEC in a series of comment letters regarding the Company’s Annual Report and Quarterly Reports filed during 2011 relating to the calculation of earnings per share in the financial statements and related notes.

The reason for the conclusion regarding the non-reliance is that the Company should have calculated earnings per share in accordance with ASC 260, Earnings Per Share, which requires presentation of earnings per share using the two class method when a company has securities that participate in common stock dividends. Therefore, the Company’s issued and outstanding convertible preferred stock, which participates in dividends of the Company on the same basis as holders of the Company’s common stock, should have been but was not included in the calculation of basic earnings per share using the two class method.

The Company’s authorized officers and the Audit Committee, have discussed the foregoing matters with the Company’s former and current independent registered public accounting firms, BDO China Shu Lun Pan Certified Public Accountants LLP and Albert Wong & Co LLP. The Board of Directors has authorized and directed that the officers of the Company take the appropriate and necessary actions to restate the Annual Report on Form 10-K for the year ended December 31, 2010 and the Quarterly Reports on Form 10-Q for the quarters ended March 31, 2011 and June 30, 2011.

Red Flag Alert: change in auditor after the conclusion of the company's 2011 year, but before its audit.

DAQING, China, February 14, 2012 /PRNewswire-Asia/ --QKL Stores Inc. (the "Company") (Nasdaq: QKLS), a leading regional supermarket chain in Northeastern China, today announced that in order to significantly reduce its accounting expenses, the Company has dismissed BDO China Shu Lun Pan Certified Public Accountants LLP ("BDO"), as its principal accountant, and engaged Albert Wong & Co LLP ("Albert Wong") as its new independent registered public accounting firm effective immediately. The Company has had no disagreements with BDO during their tenure.

Red Flag Alert: change in auditor after the conclusion of the company's 2011 year, but before its audit.

DAQING, China, February 14, 2012 /PRNewswire-Asia/ --QKL Stores Inc. (the "Company") (Nasdaq: QKLS), a leading regional supermarket chain in Northeastern China, today announced that in order to significantly reduce its accounting expenses, the Company has dismissed BDO China Shu Lun Pan Certified Public Accountants LLP ("BDO"), as its principal accountant, and engaged Albert Wong & Co LLP ("Albert Wong") as its new independent registered public accounting firm effective immediately. The Company has had no disagreements with BDO during their tenure.

Mr. Zhuangyi Wang, Chairman and CEO, said, "We are appreciative of BDO's service during their tenure and welcome Albert Wong as our new accounting firm. As we constantly monitor our business in an effort to manage costs and improve our profitability where appropriate, we believe the change of our accounting firm will significantly reduce our accounting expenses. We remain committed to improving the profitability of our company on behalf of our shareholders."

The Company and BDO have not had any disagreements on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures that, if not resolved to the satisfaction of BDO, would have caused BDO to make reference to the subject matter of the disagreement in connection with its report on the Company's consolidated financial statements. Further information is available in the Current Report on Form 8-K which was filed with the Securities and Exchange Commission on February 14, 2012.

DAQING, China, December 27, 2011 /PRNewswire-Asia/ -- QKL Stores Inc. (the "Company") (Nasdaq: QKLS), a leading regional supermarket chain in Northeastern China, today announced the opening of one supermarket in Heilongjiang Province.

The Company's 54th store, situated in Daqing city, Heilongjiang Province, was opened on December 24th, 2011. The Company's store is located in Daqing city and occupies approximately 2,400 sq. meters of gross space with capacity to serve over 30,000 customers.

Including its new supermarket, the Company now operates 54 stores totaling 324,400 sq. meters of store space. This is comprised of 34 supermarkets, 16 hypermarkets and 4 department stores.

Mr. Zhuangyi Wang, Chairman and CEO, said, "We are delighted to open another store in our 'home' city of Daqing city, where the QKL brand is widely recognized. Our business has developed rapidly since we opened our first store in Daqing city in 1999 and we believe the value and convenience of our stores in Daqing has resulted in strong customer loyalty in the local community. Our new store will provide the opportunity to introduce our broad assortment of high quality products and unique shopping experience to a new group of customers in Daqing city, and we are pleased to open our final store to be opened in 2011 before the Chinese holiday season, our busiest time of year.

On October 28, 2011, QKL Stores Inc. (the “Company) received a letter from the Nasdaq Stock Market LLC (“Nasdaq”). Nasdaq indicated in its letter that as a result of the resignation of Mr. Gary Crook from the Company’s Board of Directors, effective October 21, 2011, the Company no longer complies with Nasdaq’s independent director and audit committee requirements as set forth in Listing Rule 5605.

The Company had provided Nasdaq with notice of such non-compliance with Listing Rule 5605 in a letter dated October 24, 2011. The Company intends to fill the vacancy on its board of directors no later than the earlier of the Company’s next annual shareholders’ meeting or October 21, 2012.

Third Quarter 2011 Results

• Revenue in the third quarter of 2011 increased 26.5% to $82.1 million from $64.9 million in the third quarter of 2010.
• The Company reported a net loss of approximately $(0.8) million, or $(0.03) per diluted share, compared with net income of $1.0 million, or $0.03 per diluted share, for the same period in 2010.

First Quarter 2011 Financial Results

• Revenue in the first quarter of 2011 increased 24.1% to $101.3 million from $81.6 million in the first quarter of 2010.

Revenue performance reflected the growth of 34 comparable stores, which are stores that have been open for at least one year before the beginning of the comparison period, or by January 1, 2010, as well as sales from the opening of 15 new stores since January1, 2010. Same-store sales were approximately $84.1 million in the first quarter of 2011, an increase of 8.5% from $77.5 million in the first quarter of 2010.The 15 new stores opened since January 1, 2010 generated approximately $17.2 million in the first quarter of 2011.

• Gross profit increased 24.6% year over year to $18.1 million, compared to $14.5 million in the prior year period. Gross margin for the first quarter of 2011 was 17.9%, compared to 17.8% for the first quarter of 2010. The increase in gross profit was primarily attributable to the increase in net sales over the prior year period.

• Operating expenses increased 63.2% to $14.7 million compared to $9.0 million in the prior year period.

This was primarily a result of additional salary, rent and utility expenses, the hiring of more employees, and other operating costs related to the Company's increased store count over the past year as well as from pre-opening expenses from six new stores opened in the 2011 first quarter.

• Operating income was $3.4 million, or 3.3% of sales, from $5.5 million, or 6.7% of total sales, in the first quarter of 2010. 
  
• First quarter 2011 net income was approximately $2.6 million, or $0.07 per diluted share, compared with $11.9 million, or $0.29 per diluted share, for the same period in 2010.

• Excluding changes in the fair value of warrants, adjusted net income for the three months ended March 31, 2011 was $2.6 million, or $0.07 per diluted share, compared to $4.1 million, or $0.10 per diluted share, in the period prior year.

Mr. Zhuangyi Wang, Chairman and CEO, said, "We made a lot of progress in the first quarter with our store opening activity. The opening of six new stores in the first quarter was our most active store opening quarter to date. We have since opened another five stores in April which brings us close to completing our plan to open twelve new stores for the year. While this has resulted in higher pre-opening expenses, we believe we are setting the stage for increased top and bottom line growth in the coming quarters. We finished the first quarter operating a total of 49 stores, comprised of 33 supermarkets, 13 hypermarkets and 3 department stores. As our new store opening plan slows for the remainder of the year, particularly in the second half, we expect capex spending to slow and our profitability to improve as we benefit from our new store sales, increased same store sales at existing stores and reduced store opening and promotional expenses."

"We were also pleased with the improvement of our operating cash flows in the first quarter due to a reduction in inventory after the peak Chinese New Year season and a decrease in other receivables attributable to cash recovery from our vendors after the busy holiday season. We are pleased with our execution in the first quarter and are setting the stage for increased top and bottom line growth in the coming quarters."

Fourth Quarter Results:

• Revenue in the fourth quarter of 2010 increased 17.3% to $85.8 million from $73.2 million in the fourth quarter of 2009.
• Gross profit increased 18.6% year over year to $15.4 million, compared to $13.0 million in the prior year period.
• Excluding changes in the fair value of warrants, adjusted net income for the three months ended December 31, 2010 was $2.4 million, or $0.06 per diluted share, compared to $2.6 million, or $0.07 per diluted share, in the period prior year.

"As we enter 2011, we believe the northeast China region will continue to benefit from solid economic growth, increased urbanization and growing levels of disposable income which bodes well for our existing retail stores and new stores we plan on opening. We have already opened 6 new stores in the first quarter and the plan to add 12 total new store locations for an aggregate total of approximately 70,000 square meters of space in 2011.  We believe our full year gross margin trends can gradually increase as we benefit from greater sales of non-food items, a larger size store format, bulk buying power, greater private label sales and the opening of our second distribution center.  We also will continue to focus on minimizing our expenses to generate additional profit growth opportunities."

Our principal liquidity requirements are for working capital, capital expenditures and cash dividends. We fund our liquidity requirements primarily through cash on hand, cash flow from operations and borrowings from our revolving credit facility. We believe our cash on hand, future funds from operations and borrowings from our revolving credit facility will be sufficient to fund our cash requirements for at least the next twelve months.

We had cash on hand of $17.5 million at December 31, 2010. We expect capital expenditures for fiscal 2011 primarily to fund the opening of new stores, store-related remodeling and relocation. We anticipate an opening of 70,000 square meters of new stores in fiscal 2011 compared to 74,189 square meters of new stores in fiscal 2010.

We believe we will be able to fund our cash requirements, for at least the next twelve months, from cash on hand, operating cash flows and borrowings from our revolving credit facility.

DAQING, China, March 21, 2011 /PRNewswire-Asia/ -- QKL Stores Inc today announced the opening of a new supermarket store.

The Company's 49th store, situated in Shuangcheng City, Heilongjiang Province, was opened on March 20th, 2011. Shuangcheng City, with a population of approximately 820,000 residents, is well known for its food industry, represented by Nestle, Wahaha, and Huiyuan factories among others. QKL's supermarket utilizes approximately 3,300 sq. meters of gross space and is located in a new shopping mall center in the business district which can serve over 300,000 potential customers.

Mr. Zhuangyi Wang, Chairman and CEO, said, "We are excited to bring our concept of offering high quality, fresh and nutritious food at affordable prices to customers in Shuangcheng City. This is our first store in this city, where we plan on opening another two stores this year. This store opening brings the total number of Company store locations to 49 for an aggregate total of approximately 260,000 sq. meters of store space. This is comprised of 33 supermarkets, 13 hypermarkets and three department stores. We look forward to additional store openings this year."

Preliminary Fourth Quarter 2010 Financial Results

• Revenue in the fourth quarter of 2010 to be in the range of $83-85 million compared to $71.7 million in the fourth quarter of 2009.
• Gross margin to be in the range of 17.8%-17.9% compared to 17.4% for the third quarter of 2010 and 17.8% in the fourth quarter of 2009.
• Net income margin to be in the range of 2.5%-2.7% compared to 1.5% in the third quarter of 2010.
• Same-store sales increased 8% to approximately $72 million compared to the fourth quarter period of the prior year.

Mr. Zhuangyi Wang, Chairman and CEO, said, "We are pleased to have either met or exceeded the fourth quarter analyst consensus forecast for revenue, gross margin and net income margin.  This strong performance was driven by solid same store sales growth as well as from the new stores opened in recent months.  We look forward to providing our investors with further updates on our business when we report our official fourth quarter and full year financial results toward the end of March."

QKL Stores Inc., today announced the opening of one department store and one supermarket in Jilin Province.

The openings of the two new stores bring the total number of the Company's store locations to 39 for an aggregate total of 188,000 sq. meters of store space. This is comprised of 30 supermarkets totaling 93,000 sq. meters, six hypermarkets totaling 43,000 sq. meters and three department stores totaling 43,000 sq. meters.  

Mr. Zhuangyi Wang, Chairman and CEO, said, "We are excited about the new store openings and are confident our two new stores in Ji'an will prove to be an outstanding addition to our existing retail locations. We are on track with our expansion plan of completing 20 new store openings totaling 100,000 sq meters of new store space in 2010, which will provide a solid base for revenue and profit growth as we head into the 2011 fiscal year. We continue our focus on fresh and high quality products, further operational efficiency and store expansion in northeastern China and Inner Mongolia."

As previously announced, the Company opened two stores in the first quarter of 2010, compared to none in the first quarter of 2009. Its 35th supermarket, opened on March 24th, 2010, is located in Tangyuan, Heilongjiang, and has floor space of approximately 6,200 square meters. The Company's 36th supermarket, opened on March 31, 2010, is located in Daqing, Heilongjiang and has floor space of approximately 2,655 square meters. Both stores carry items in all three of the Company's core product categories.

Mr. Wang continued, "Our store opening plan, which targets opening 20 locations and a minimum total of 100,000 sq. meters of new store space in 2010, remains on track and should accelerate as we move into the second half of this year. We are confident that our strategic operational initiatives and store growth plan can expand our position as a leading chain in northeast China."

"We remain quite excited about the future prospects for our company. We have a highly capable management team, a sound balance sheet, and a profitable enterprise with strong top-line revenue growth. We have a solid retail growth plan and uniquely differentiated product offering which provide us with a strong foundation to leverage a growing market opportunity and enhance our future growth. We have the capability to establish QKL Stores as the leading supermarket chain in northeast China."

"We remain highly encouraged with our opportunities in 2010. We plan to open 20 new stores having an aggregate of 100,000 sq. meters of new store space this year. We opened our first store of the year in March and believe our store opening schedule will rapidly accelerate as we head into the warmer weather months as well as open our second distribution center. This second distribution center, to be located in Harbin, is scheduled to open in April. Having a second distribution center will allow us to better support our retail locations with fresher products and greater selection, strengthen supplier relationships and lower our cost of goods sold thereby enhancing gross margin. We have a tremendous market opportunity to further expand our business and ensure that we enhance our position as the leading supermarket and hypermarket retail chain serving tier 2 and tier 3 cities in the northeast China region. We are well capitalized to achieve our store growth targets this year and look forward to achieving many positive developments in 2010."

Source: PR Newswire (April 1, 2010)