Cathay Merchant Group, Inc. Submits Plan of Compliance with the American Stock Exchange

  
    
  
  
    
      On February 27, 2007, Cathay Merchant Group, Inc. (AMEX:CMQ) (the “Company”) 
      received notice from the staff of the American Stock Exchange (the “Exchange”) 
      indicating that the Company is not in compliance with Section 704 of the 
      Amex Company Guide, which requires a listed company to hold meetings of 
      its shareholders annually to elect directors and take action on other 
      corporate matters. Specifically, the Company did not hold an annual 
      meeting of its stockholders during the five month transition year ended 
      December 31, 2005, and the year ended December 31, 2006. The Company was 
      afforded the opportunity to submit a plan of compliance to the Exchange 
      and presented the plan on April 11, 2007. On April 24, 2007, the 
      Exchange notified the Company that it accepted the Company’s 
      plan of compliance and granted the Company an extension until May 29, 
      2007, to regain compliance with the continued listing standards. The 
      Company will be subject to periodic review by staff of the Exchange 
      during the extension period. Failure to make progress consistent with 
      the plan or to regain compliance with the continued listing standards by 
      the end of the extension period could result in the Company being 
      delisted from the Exchange.