CMQ Cathay Merchant Grp.

Cathay Merchant Group, Inc. (AMEX: CMQ) (the �Company�) -- on February 27, 2007, the Company received notice from the American Stock Exchange (�Amex�) indicating that the Company is not in compliance with Section 704 of the Amex Company Guide (the �Guide�), which requires a listed company to hold meetings of its shareholders annually to elect directors and take action on other corporate matters. The Company was afforded the opportunity to submit a plan of compliance to Amex by March 13, 2007, that demonstrates the Company�s ability to regain compliance with Section 704 of the Guide by May 29, 2007. If the Company does not submit a plan or if the plan is not accepted by Amex, the Company may be subject to delisting procedures as set forth in Section 1010 and Part 12 of the Guide.