Case 8:10-cv-01299-AG -JCG Document 7 Filed 08/24/10 Page 2 of 50 Page ID #:336

I, Kexuan Yao, declare as follows:

2 1. I am over eighteen years old. I have personal knowledge of the facts
3 stated herein and if called on would and could testify competently thereto.
4 2. I am the Chief Executive Officer of China Armco Metals, Inc.
5 ("China Armco"). China Armco is a publicly traded U.S. company that imports,
6 sells and distributes a variety of metal ore to the metal refinery industry and
7 recycles metal in China. China Armco's common stock is quoted on the NYSE
8 Amex under the symbol "CNAM".
9 3. Although I speak and read English, I am not completely fluent in
10 English.
11 4. I own more than 5 million shares of China Armco stock, which is
12 greater than 34% of all the issued and outstanding shares of China Armco.
13 Attached hereto at Exhibit 1 is a true and correct copy of an excerpt from China
14 Armco's May 17, 2010 periodic filing with the Securities and Exchange
15 Commission ("SEC") documenting that China Armco had a total 14,355,532
16 shares issued and outstanding as of May 10, 2010.
17 5. My China Armco stock has not been registered with the United States
18 Securities and Exchange Commission ("SEC").
19 6. Raymond Xia ("Xia") is an employee of China Armco whom I often
20 ask to help me with certain tasks. Beginning in late May, I asked Xia to assist me
21 in obtaining a loan using my China Armco Stock as collateral. I have reviewed
22 Xia's declaration submitted concurrently herewith having to do with my attempt to
23 obtain a stock loan and to the best of my knowledge, all of Xia's attestations in his
24 declaration are true and correct.
25 7. On or about May 21, 2010, Xia showed me an email purportedly from
26 Ed Furman ("Furman") with an attachment the described financial services
27 provided by Ayuda Funding Corp. ("Ayuda"), which included loans collateralized
28 by restricted stock, such as Yao's. Attached hereto at Exhibit 2 is true and correct
CORRIGAN & MORRIS, LLP
ATTORNEYS AT LAw
201 SANTA MONICA BLVD.
SUITE475 DECLARATION OF KEXUAN YAO - 2
SANTA MONICA. CA. 90401
1310) 394·2800